HKSAR v. Chim Pui Chung
Read the full judgment text of CACC 402/1998 on BabelCite. This Court of Appeal judgment was delivered on 8 December 1998.
1. This applicant faced three charges of conspiracy to defraud, one charge of offering an advantage and two charges of conspiracy to forge.
Cited by 2 cases · Cites 1 case
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CACC000402/1998 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL 1998, No.402
------------------------------- Coram: Hon. Power, V.-P., Mortimer, V.-P. & Stuart-Moore, J.A. Date of Hearing: 12, 13, 17 & 18 November 1998 Date of Delivery of Judgment: 8 December 1998 ---------------------- J U D G M E N T ---------------------- Power, V.-P. (giving the judgment of the Court): 1. This applicant faced three charges of conspiracy to defraud, one charge of offering an advantage and two charges of conspiracy to forge. 2. The first count alleged that the applicant and Chan Kai-fung (second defendant), between 1st April 1991 and 30th November 1992, conspired together and with other persons unknown to defraud any one or more of Mandarin Resources Corporation Limited ("Mandarin Resources"), its directors and shareholders by dishonestly:
3. The second count alleged that the same parties, between the same dates, conspired to defraud the directors and shareholders of Lucky Man by dishonestly:
4. The third count, offering an advantage, alleged that the applicant, between 1st March 1991 and 1st May 1993, offered an advantage, namely a sum of $5,000,000 to James Lee, the director of Lucky Man and of Mandarin Resources, as a reward for procuring an increase of the plot ratio of Fairmount Terrace and arranging for the sale of the said property and forbearing to disclose to the shareholders and directors of Lucky Man the increase of plot ratio and the offers to purchase the property and the directors and shareholders of Mandarin the true commercial open market value of the property. 5. The fourth count against the applicant and the second defendant alleged that between 1st September 1992 and 17th April 1993, they conspired together with other persons unknown, to make false instruments, namely "Form of Transfer" documents and "Sold Note" and "Bought Note" documents, purporting to evidence the sale of shares in Lucky Man to named transferees, those shares having been held by Janyee Investments Limited ("Janyee") and Thai Yuen Investments Limited ("Thai Yuen"), with the intention that the false instruments be used to induce the Inland Revenue Department and Progressive Registration Limited to accept them as genuine and, by reason of so accepting them, in the case of the Inland Revenue Department, to accept payment of stamp duty in respect of the false documents to cause them to be stamped and endorsed and in the case of Progressive Registration Limited to enter the information contained in the "Form of Transfer" documents into the computer records of shares issued by Lucky Man and to cause the existing share certificates in the names of Thai Yuen and Janyee to be cancelled and to issue 6,000 new share certificates in the names of the 199 transferees named in the "Form of Transfer" documents. 6. The fifth count alleged that the applicant and the second defendant, between 1st September 1992 and 17th April 1993, conspired with persons unknown to defraud the Securities and Futures Commission by prejudicing it in the exercise of its public duty of administering the Hong Kong Codes on Takeovers and Mergers and Share Repurchases by dishonestly causing Janyee and Thai Yuen to appear each to sell 6,000,000 shares in Lucky Man by means of forged "Form of Transfer" documents and "Sold Note" and "Bought Note" documents enabling the applicant to acquire a controlling interest in Janyee and Thai Yuen without there being apparent the extent of his true beneficial interest or shareholding in Lucky Man and failing to disclose the Janyee and Thai Yuen held shares exceeding 35% in Lucky Man and to obey the requirement to make a cash offer to other shareholders of Lucky Man and failing to disclose the true beneficial interest of the applicant in Lucky Man and preventing the Securities and Futures Commission from taking proper steps in relation to the ownership of the 12,000,000 shares in Lucky Man. 7. The sixth count alleged that the applicant and Chan Kai Fung, between 1st July 1994 and 25th August 1994, conspired with persons unknown, to make false instruments of the type referred to in Count 4 purporting to evidence the sale of shares in Lucky Man by named transferors to Power Master Development Limited , with the intention that the documents be used to induce the Inland Revenue Department and Progressive Registration Limited to accept them as genuine and, by reason of so accepting them, in the case of the Inland Revenue Department, to accept payment of stamp duty in respect of the false documents and to cause them to be stamped and endorsed and, in the case of Progressive Registration Limited, to enter the information in the false documents into the computer records of shares issued by Lucky Man, thus causing the 6,000 share certificates in the names of 199 persons to be cancelled and one new share certificate to be issued in the name of Power Master Development Limited. 8. The applicant after trial before Pang J. and a jury was acquitted on the first five charges but found guilty of the sixth charge. The second defendant was acquitted on the charges he faced. The Prosecution Case 1991 9. In December 1991, the applicant, through Day & Day, which was funded by his private company Silver Mountain, acquired two-thirds of the shares in Lucky Man. The total amount of shares was about 32,000,000 for which Day & Day paid $32,500,000. Day and Day had then to comply with the requirement to make a cash offer for the other Lucky Man shares. By November of that year, the applicant through Rich World had acquired 51% of the shares in another company known as Mandarin Resources ("Mandarin") and by an unconditional cash offer, which Rich World was required to make, to the remaining shareholders, Rich World increased its interest to 73% of the shares in that company. Lucky Man and Mandarin were closely linked as each owned separate halves of multi-storey residential blocks known as Fairmount Terrace at Repulse Bay. Mandarin, through an entity called Markle, owned Blocks A and B and Lucky Man owned Blocks C and D. 1992 10. In about February 1992, the applicant transferred his shareholding in Day and Day to a Mr. James Lee, thereby, on the face of it, divesting himself of his interest in Lucky Man. Day and Day, in due course, made the required offer and obtained a further 156,000 shares, bringing the total holding in Lucky Man to 67%. It was the prosecution case that Lee was a nominee of the applicant and that the sale was made to hide the applicant's beneficial interest in Lucky Man so as to avoid a conflict of interest in relation to the sale of Blocks C and D in Fairmount Terrace by Mandarin to Lucky Man. The applicant was acquitted of any wrongdoing in relation to these transactions. 11. In June 1992, Day and Day transferred 7.5 million shares in Lucky Man to a company known as Janyee and 7.6 million shares to a company known as Thai Yuen. The funding for both those companies came from Silver Mountain, the applicant's private company. The appointed directors and shareholders of those two companies were associates of the applicant and they authorized him to sign documents in their names. 12. The consideration was $9,000,000 for the shares transferred to Janyee and $9,120,000 for those transferred to Thai Yuen. However, no moneys were paid. It was accepted by the defence at trial that the directors and shareholders of the two companies were nominees of the applicant. 13. On 19th August 1992, Mandarin, of whose shares the applicant held 73%, agreed to sell its half of Fairmount Terrace, Blocks C and D, to Lucky Man. On 16th September 1992, a buyer offered $350 million for the site. On 8th and 12th September, Lucky Man issued circulars seeking the approval of its shareholders to the raising of funds for the purchase from Mandarin. 14. On 2nd October 1992, Mandarin issued a circular to seek the approval of its shareholders to sell its half of Fairmount Terrace. The shareholders approved on 19th October 1992. 15. None of the circulars mentioned the fact that, after an application by a Mr. Kai-lun Lee, the District Lands Office had offered to increase the plot ratio to 3.0 from 2.1, a fact which was known by Mr. James Lee, nor did they mention the offer to buy the whole site for $350 million. 16. On 26th October 1992, the applicant entered into a procurement agreement with agents for the sale of Fairmount Terrace for $350 million and a fee of $35 million was paid to him. These transactions were neither known by or authorized by Mandarin or Lucky Man. 17. In November 1992, Janyee and Thai Yuen were each allocated just over 27 million Lucky Man shares, making their combined holding 35.7% of the issued shares of Lucky Man. The interest of the applicant in these two companies was not revealed. 1993 18. In March 1993, 6 million shares of Lucky Man were transferred from Thai Yuen and the same number from Janyee into the names of 199 transferees and new share certificates were issued on 17th April 1993. This transaction was the subject of Count 4. 19. On 16th April 1993, the applicant acquired in his own name by allotment, 8 shares in Thai Yuen and 8 in Janyee. His nominees held the remaining 2 shares in each company. 20. On 19th April 1993, the applicant filed an SDI notice in which he claimed 80% interest in the shares of Thai Yuen and Janyee which, of course, gave him the same proportional interest in the shares of Lucky Man which were held by them. 21. In November 1993, the Securities and Futures Commission served notices on the applicant under section 33 of the Ordinance requiring him to supply details of his Lucky Man shares. 1994 22. In March and April 1994, further Section 33 notices were served on Thai Yuen and Janyee requiring details of their dealings in Lucky Man shares. The applicant responded on their behalf but made no mention of the transfer of 6 million Lucky Man shares by each of the two companies to the 199 transferees. In August 1994, the applicant acquired a company called Power Master and on 23rd of that month, all 12 million Lucky Man shares held by the 199 transferees were transferred to Power Master. This transaction was the subject of Count 6. The Grounds of Appeal Ground 1 23. The applicant's first ground of appeal was that the judge had failed to give a fair and balanced summing-up to the jury. It was submitted that the approach of the judge when summing up was unfair as he first read the count, then gave directions in law, then read a part of the evidence of the applicant, and then, and this is the complaint, almost verbatim, read to the jury the submission which the prosecution had made when contending that there was a case to answer. The applicant contends that the judge failed properly to analyse the relevant issues and to put before the jury the evidence of and arguments made by the defence and, in particular, failed to deal with the evidence of the applicant himself. It is submitted that a substantial defence was raised which was never, in any adequate way, put by the judge to the jury while, on the other hand, the prosecution case was dealt with at length and was underpinned by observations from the judge. 24. It was finally argued, in this ground, that the judge made an improper comment by saying that "the fact he was the owner of the shares still remained concealed from the SFC and the SEHK behind Power Master and why? But the risk of having them in the names of 199 transferees who were totally strangers was removed. Instead of holding the 199 risks, they are now with Wai Yiu-ki and Power Master." 25. Before dealing with this ground it is necessary to look with care at the summing-up. It must be remembered when so doing that the judge was dealing with six counts and with evidence that had been given from 5th January 1998 to 1st August 1998. No complaint is made of his outline of the factual matrix which occupied the first 10 pages of his summing-up. The judge then said:
26. He went on to say:
The judge then set out the categories of witnesses who had given evidence: the expert witnesses, the police witnesses, the witnesses from the Securities and Futures Commission, the witnesses as to the "purchase of Fairmount", the witnesses who represented the present owners of Lucky Man, the government witnesses, from the Stamp Duty Office, the two witnesses from Progressive Registration, the witnesses who gave evidence as to the acquisition of Janyee and Thai Yuen, the witnesses who had worked for the applicant, Miss Blondie Lee and Miss Gloria Wong, the professional witnesses from the financial world, and finally the 7 directors of companies that had been mentioned in the trial. Having concluded what he described as his "very brief summary of the prosecution witnesses of this trial" he turned to the evidence of the applicant. He spent more than 13 pages setting out his evidence in which the applicant told how he came to know of the existence of Lucky Man and Mandarin; how he had come into association with Mr. James Lee and Mr. Kai-lun Lee; how he had acquired Lucky Man's shares from the liquidator; how he had transferred his interest in Lucky Man to James Lee; how he had come to transfer the Lucky Man shares to Janyee and Thai Yuen to protect his own interest; how Lucky Man had resolved to make a Rights Issue to acquire Markle Land from Mandarin Resources. It will be remembered that after the Rights Issue, Janyee and Thai Yuen had held 35.71% of Lucky Man shares, a figure which would have triggered the general offer provision under the Takeover and Merger Code. The applicant said that he had not been aware that the percentage had exceeded the 35% mark and how he would, had he been aware, have either sold the excess shares or made an application to the SFC or to the Stock Exchange for a waiver of the mandatory provisions. The applicant went on to say how he had not been aware of any offer to purchase the Fairmount Terrace property until about 24th October 1992; how the payment of $5 million to Mr. James Lee after the sale was an agency fee, project manager fee and a consultant fee but was never a bribe or a corrupt payment; how his negotiation for a joint venture in China required payment of $6 million by Lucky Man; how, in consequence of that, he had instructed his office staff to transfer 6 million shares in Lucky Man from Thai Yuen and 6 million from Janyee to make provision for the payment of $60,000,000 to Rong Shi Da, the joint venture partner; how it was agreed that the 12 million shares be broken into small lots so that they could be transferred to numerous units of Rong Shi Da, as requested; how he gave instructions to his office staff but was not aware of the exact mechanism by which the shares were to be broken up; how, because real estate development in China slowed to a halt, the transfers of shares from Thai Yuen and Janyee turned out to be a futile exercise; how some time in 1994, as a result of a meeting with Miss Judy Vas of the Securities and Futures Commission he became aware that the initial transfers of Lucky Man shares from Janyee and Thai Yuen were made without the authority of the transferees; how, when he learnt of this, he immediately instructed his employee Mr. Wai Yiu-ki to receive the shares back but was not involved in the preparation of the documents for the transfer of the shares to Power Master; how Chan Kai-fung, the second defendant, was a "hau san" in his office which indicates, so the judge told the jury, that he was a person occupying a very lowly position within the office. The judge summed up this evidence by saying that the applicant regarded the second defendant as a person who "did not have the experience, qualification, position, or calibre even to discuss business matters with him." 27. The judge finally detailed Mr. Chim's allegation that his arrest and trial was a conspiracy by the then British administration against him which had been carried over after the resumption of sovereignty. He said that the applicant stressed that he was a victim of his political views and that the present proceedings were the "culmination of deliberate political persecution by the British Administration". 28. The judge then set out five matters for the jury's consideration when assessing the credibility of the applicant's evidence. He then commented on the demeanour of the applicant reminding the jury of the way in which he had at times evaded giving direct answers to the questions asked in cross-examination. 29. After dealing with the second defendant, the judge directed the jury on the offence of conspiracy saying:
No complaint is made of this direction. 30. He then outlined four situations. At this point we need only refer to the third which was described in the following terms:
31. The judge, up to this point, had summarized the evidence, had set out the evidence of the defendant, had told the jury how they could properly draw inferences and had defined the law relating to conspiracy. The above directions occupied more than a third of the summing up. He then dealt with Count 1 and Count 2 giving a Ghosh direction as to "dishonesty" and saying, inter alia:
He later said, still referring Mr. Griffiths' suggestion:
32. The judge devoted the next 23 pages of his summing-up to Counts 1 and 2. 33. He then turned to Count 3 devoting the next 19 pages of his summing-up to that count. 34. He then turned to Counts 4 and 6. These counts were, of course, interlocking. Count 4 was concerned with the false instruments whereby the shares were transferred to the 199 names and Count 6 was concerned with the false instruments whereby the shares were transferred by the 199 names to Power Master. The judge referred to section 69 of the Crimes Ordinance which deals with false instruments. When dealing with the evidence in relation to Count 4, he set out lengthy answers by the applicant explaining how it came about that he had entered into an arrangement to pay $60 million to Rong Shi Da, his partner in the joint China venture. He set out, in full, his answer explaining how this venture foundered. This evidence was, in part, as follows:
35. He then set out two exchanges which occurred in cross-examination:
36. As can be seen from the above, the judge had set out, in terms, the applicant's explanation as to how it was that he had no knowledge of the mechanics of the share transfer. He then set out the evidence of a Mr. Kwok from mainland China who said that Rong Shi Da had a lot of branches; that he wanted the shares to be broken up to about 200 parts for distribution to various branches spread across mainland China so that every branch would get some; that eventually the deal did not go through because of the economic downturn. The judge then said:
37. It cannot be said that the judge failed to detail the evidence of the applicant in relation to the fourth count. He went on over the next 7 pages to set out the evidence which the prosecution contended was relevant to that count. 38. He then turned to Count 6. He first told the jury that the law applicable to Count 6 was the same as that applicable to Count 4 but that they must consider each count separately and consider the evidence for and against each defendant separately. He then said:
39. He first set out the following passage in evidence-in-chief which was at the heart of the applicant's defence:
40. The judge's comment upon this passage was:
41. This clearly stated Mr. Chim's defence, i.e. that he knew a transfer was done but that he had no idea whatsoever how it was done. We pause to observe that, if that was so, he could not have had any intention of misleading anyone by using a particular method of transfer. The judge went on to underline this defence by referring to the following question which he had asked the applicant during cross-examination:
42. He then set out the following passage from cross-examination:
43. The judge then said:
44. The judge, in the next four pages, set out the prosecution evidence on Count 6. He reminded the jury that it had been admitted that none of the transferors named in the instruments of transfer dated 23rd August 1994 were aware of the transactions and suggested that they should have no difficulty in finding that the documents were forged or false instruments. He reminded them that a person whose voice appeared to be that of the second defendant had instructed Daykin, Secretarial Services, to acquire Power Master; that Daykin was paid for their services by a cheque drawn on the account of Silver Mountain dated 7th September 1994 signed by the second defendant. He set out the evidence of Mr. Wai Yiu-ki that the applicant had told him that a company had to be set up to hold the batch of Lucky Man shares and that he was to be responsible for managing the business of the company; that he managed Power Master at the applicant's request and that the applicant always made it clear that Power Master belonged to him; that he identified his signature on the chop of Power Master as the transferor in all 199 instruments of transfer which he said had been given to him to sign by either Debbie Chui or Finny Tong; that he had obtained the chop of a mainland company called Tung Fong Metal Wire Company, which "he thought" he had affixed to the instruments of transfer at the same time that he signed them; that he was not involved and knew nothing of the negotiations to acquire Lucky Man's shares, the payment of consideration for them or the stamp duty or registration fee in relation to them; that he had been given the share certificates for the 12 million shares dated 6th September 1994 in the name of Power Master and that he had kept them. The judge pointed out that the stamp duty payable in respect of the instruments of transfer by both transferor and transferee was paid by a cheque drawn in favour of the Hong Kong Government dated 23rd August 1994 signed by the applicant in the amount of $180,995 and that a debit entry for that cheque appears in the Silver Mountain bank account on 24th August 1994; that a fee payable to Progressive for effecting the transfer of the 12 million shares into the name of Power Master was paid by cheque dated 19th September 1994 drawn on the account of Silver Mountain and signed by the applicant and that the payment is described in the Silver Mountain general ledger as a transfer fee and debited to the applicant's current account. The judge commented:
He pointed out that, if the evidence of the witnesses from the Stamp Duty Office and Progressive was accepted, then the witnesses who worked in those offices were in fact induced to and did act upon the false instruments to their prejudice. 45. Having referred to the evidence that concerned the second defendant, he observed to the jury that
46. He said finally:
47. We return to the consideration of this ground in which it is complained that the judge failed in his summing-up to refer to issues raised and points made in the final speech by counsel for the applicant. Mr. Griffiths S.C., with him Mr. Richard Wong and Mr. Richard Leung, referred to R. v. Lawrence, (1982) A.C. 510 at 519, where Banks J. said that it was the duty of a judge to
We accept this correctly to state that it is the duty of the judge to give a balanced summing-up. Mr. Griffiths in particular complains of a failure by the judge to refer to eleven points which he made in his final speech. 48. We feel it necessary to say no more than that we are satisfied that all, except two, while quite proper observations to be made by Mr. Griffiths to the jury, were not such as required repetition by the judge when summing up. 49. We turn to deal with the remaining two points. In the first complaint is made that there was no mention by the judge of the following submission which was made in relation both to Count 4 and Count 6:
50. In the second, complaint is made that there was no mention of the following four possible scenarios to which counsel adverted in his address:
The real complaint being advanced here is that the "other persons unknown" who were included in the count were never properly dealt with by the judge. 51. We will deal more fully with the words "other persons unknown" when we come to Ground 4. Suffice at this stage to say that the jury were told by the judge at the outset that it was the prosecution case "that the 1st defendant is the mastermind behind an elaborate scheme which involved the defendant's conspiring between themselves and with others unknown" to transfer the shares to the 199 names and then from them to Power Master. 52. When the judge was outlining the applicant's evidence, he said that the 12 million shares that were to be transferred to Rong Shi Da were to be broken up into small lots and that the applicant "gave instructions to his office staff but he was not aware of the exact mechanism of how the shares were to be broken up into small lots". 53. It seems unarguably clear, even on the evidence of the applicant, that some person or persons in his office staff, and it will be remembered that in his own evidence he exonerated the second defendant, had forged signatures or had so instructed others, who may, perhaps, unwittingly, have done so. What the jury had to decide was whether he had knowledge of and approved of what was being done. The prosecution were in no position to know who it was but it was their case that it was open to the jury to find that such person or persons existed, that he, she, or they acted knowing that the forged signatures would be used to mislead the authorities and that this was in pursuance to an agreement with the applicant. 54. The trial judge, when he came to deal with conspiracy, set out situation number 3 as "a conspiracy between the 1st defendant and other person or persons unknown only. Then D1 is guilty and D2 is not guilty provided, of course, all the other elements are proved." (Emphasis supplied.) 55. When dealing with Counts 1 and 2, the judge had said:
56. This observation had equal application to Count 6. 57. Subject to what we have to say in relation to ground 4, we are satisfied that the defence was put squarely before the jury and that there was no failure by the judge to sum up the facts in a balanced way. 58. Finally, under Ground 1, complaint is made of the following passage which came at the end of the section of the summing-up which dealt with Count 6. The judge said:
59. It is suggested that this ignored the defence which was that what had occurred was a "commercial mistake" and ignored the applicant's evidence that he had never intended to conceal his beneficial interest in the shares in Lucky Man or to mislead the authorities. We do not agree. The observation was a perfectly proper one. The jury were fully aware what the applicant had said in his own defence. It was a matter for them to decide whether he was acting in a continuing endeavour to conceal the true ownership of the shares or was acting, as he said, without any thought that the complicated manoeuvers in which he was indulging might have that effect. Ground 2 - the judge's directions on intent 60. Mr. Griffiths S.C., contends that the judge's directions to the jury upon the necessary intent in conspiracy to forge (Count 6) were in the circumstances of this case inadequate. He focused first upon the directions relevant to the applicant as a defendant and then more generally upon the directions relevant to the guilt of "persons unknown" as co-conspirators. 61. He accepts that the directions upon the elements of the offence were correct as far as they went at p94F-L of the summing-up:
Indeed, these directions were repeated in a written handout which the judge provided for the jury's assistance. 62. However, Mr. Griffiths suggests that these directions do not go far enough. He points out that in this case as in almost every other the proof of intent depends upon inferences drawn from established facts. A standard direction was given upon the way in which the jury were to approach the drawing of inferences at 16K-17I:
Mr. Griffiths does not suggest that standing on its own, this direction is other than impeccable, but contends that the defence advanced by the applicant required a further direction. The basis for the argument is that the necessary intent in forgery under s71 of the Crimes Ordinance (Cap. 200) is, as it was explained by P. Chan J (as he then was) in R v Chiu Sin-wai [1996]3 HKC 535. Therefore, he submits that the necessary intent is that the accused intended that he or another person:
With respect, however, the introduction of the concept of what was within the accused's contemplation is unnecessary. On the necessary intent, the words of the Ordinance are clear. The section reads as follows:
The same words appear in s1 of the Forgery and Counterfeiting Act 1981 in England and in R v Campbell (1985) 80 Cr.App.R. 47 at 48 Ackner LJ (as he then was) summarised the necessary intention as follows:
However, after reading to the jury the statutory definition of "false instrument", the judge added that:
Mr. Griffiths contends that this direction - which also appeared in the written directions handed to the jury - was wrong or at least so misleading as to render any verdict based upon it unsafe. We consider this submission later when dealing with the directions on intent related to "persons unknown". It suffices to say that for the reasons there set out, we reject the submission. A like point was rejected in R v Campbell (supra). The judge's directions on intent follow the words in the Ordinance. They are correct. 63. Nevertheless, Mr. Griffiths submits that the judge's directions failed to take account of s65A of the Criminal Procedure Ordinance (Cap. 221) which provides:
It is therefore suggested that the jury should have been directed that they should not consider an inference irresistible merely because it was a natural and probable consequence of an act which had been proved. 64. The need to give such a direction was related to a passage in the applicant's evidence at p1274E-1275p :
If proper weight is given to the judge's direction on inferences open to the jury in the passage cited earlier, there was no basis upon which the jury could have thought that they were bound to infer that the applicant intended the natural or probable consequences of his acts or omissions. 65. In these circumstances, a direction in accordance with s65A of the Criminal Procedure Ordinance was unnecessary and indeed could have been contrary to the applicant's interests. In order to balance the direction following the words of the section, it would be necessary for the jury to be told that although they were not bound to infer intent from the natural and probable consequences of an act, it was open to them to do so provided that all other evidence was taken into account. Did the judge fail to leave to the jury a specific defence on intent raised by the applicant? 66. In his summing-up the judge did not refer to the passage in the applicant's evidence at p1274E-1275P (above) in which he said that the Inland Revenue Department and Progressive Registration never crossed his mind when giving his staff instructions to correct the "commercial mistake" and to transfer the shares into Power Master. It is suggested that this raised a further defence in law which the judge failed to leave to the jury thereby rendering the conviction unsafe. Reliance is placed upon a passage in the judgment of R v Hung Man Chit [1996] 3 HKC 25 at 28D:
The defence to Count 6 was left to the jury in the summing-up by citing certain passages of the applicant's evidence and then summarising the defence. For example at p110A-O:
67. Later, the judge read a passage in which the applicant denied knowledge that any certificates or instruments of transfer were to be forged and he finally summarised the defence as follows at p111I-L:
The question is whether the applicant's denial that he had the Inland Revenue or the Registrar in mind when asking for the "commercial mistake" to be rectified raised a separate defence to the count or whether this was a passage in which he advanced a detail of his overall defence which was that he gave orders for the shares to be transferred to Power Master without taking part in or knowing how this was to be achieved or what procedures or formalities were involved. 68. Whereas the judge must leave each defence raised to the jury so that they consider it, this does not involve the obligation to remind the jury of each facet or detail of the defence. The judge's duty is to direct the jury to fully consider the defence raised. Here the judge left the applicant's defence to the jury. In the circumstances of this case, it was unnecessary for the judge to specifically deal with this short passage of evidence. Clearly, if the jury took the view that the applicant did not, or may not, have known the procedure or formality undertaken by the witness Wai Yiu-ki for transferring the shares to Power Master and did not know that this involved forgery, the jury could not have imputed to him any intention to use false instruments to induce the Inland Revenue or the Registrar to accept them as genuine, or any intention that they should do any act to their prejudice. The directions on intent relating to "persons unknown" 69. The final point taken on the judge's directions on intention is that they were misleading and inaccurate upon what had to be proved against co-conspirators who were "persons unknown". (We consider further submissions concerning "persons unknown" as co-conspirators under ground 4.) 70. As the second defendant was acquitted at trial, the conviction of the applicant depended upon the jury being satisfied that at least one person unknown - not the second defendant - was proved on the evidence to have been guilty of the conspiracy with the applicant. It is submitted on the applicant's behalf that even if the directions were sufficient to indicate what it was necessary to establish against a defendant, they left it open to the jury to convict on the basis of a conspiracy with another party who was innocently involved. 71. Mr. Griffiths invites an examination of both the written and oral directions. First, it is contended that no direction was given that it was necessary to prove an intention to play a part in furtherance of the agreed criminal purpose. This, it is said, taken together with the direction that no dishonest mens rea was necessary in forgery left it open to the jury to conclude erroneously on the evidence that a person working in the office on the documents which led to the transfer of shares was a co-conspirator even though that person may have thought that the documents were filled in with the authority of the persons whose names were used. 72. In evaluating this ground, it is necessary to consider the allegation in the indictment under Count 6 together with the oral and written directions of the judge. 73. The indictment clearly alleges that the two accused "conspired together and with other persons unknown". 74. The judge did not indicate to the jury that it would be possible to accept a verdict of guilty against one defendant alone unless he was found to have conspired either with his co-defendant or a person unknown. He left a number of hypothetical possibilities including that which he described as:
The jury can have had little doubt that in order to convict the applicant they had to be sure of a conspiracy to forge between him and at least one person unknown. But, was it open to them on the other directions to conclude that the other person could be an innocent agent and yet be part of the conspiracy? 75. As to the suggestion that no sufficient direction was given that a conspirator must intend that the criminal purpose will be carried out, the jury were directed orally that:
The written directions were to the same effect and contained the following passages:
When the judge came to deal with Counts 4 and 6, he gave more specific directions upon the intention required for those particular counts. On these, he said:
Then he read to the jury the definition of "false instrument" as defined in s.69 of the Crimes Ordinance (Cap. 200) about which there is no dispute but finally added the term "dishonestly does not appear in these two counts. It is not an element which the prosecution has to prove". In the written directions on Count 6 the same words appear but relate to "this count". 76. The essential point taken by Mr. Griffiths is that even if, contrary to his main submission, the directions were sufficient for a defendant as a co-conspirator, they were not adequate and not sufficiently focused upon "persons unknown". Inevitably the summing-up was directed primarily to the participation and guilt of the two defendants - but not exclusively so. The jury was specifically directed in "situation no. 3" that it was open to convict the applicant if the jury concluded that he conspired only with other persons unknown. Moreover, the judge made it clear that "the offence is committed when two or more persons agreed that they will do the unlawful act"; "it is the agreement to commit the offence and the intention to take part that forms the offence"; and, "It would be sufficient if the prosecution is able to prove beyond reasonable doubt that there has been a meeting of minds between more than one person that an offence will be committed by them". 77. These are examples only. The written directions were amplified by these oral directions. They include adequate directions upon intention in conspiracy as required in R v Anderson [1986]1 AC 27 and Yip Chiu-cheung v R (1994) 99 CrAppR 406 (PC) and clear directions that the agreement must be with a person who intends to participate in the crime. 78. But even if these directions were sufficient, could the jury have been misled by the judge's directions, both oral and in writing, that it was not necessary for the prosecution to prove dishonesty in this count when it came to consider persons unknown as co-conspirators? Mr. Griffiths took this point as a refinement of his general submission to which we have already referred. He submits that on these directions, it was open to the jury to be misled and to conclude that a person innocently taking part in the forgery of the documents or the submission of them to the Inland Revenue and the Registrar was a conspirator and therefore provide the basis for convicting the applicant. In brief, the point is that although the statutory definition of forgery does not specify dishonesty as an element, the making of a false instrument with the intention of using it to induce another to accept it as genuine, and the intention that by accepting it that person would act to his prejudice is, to any right-thinking person, dishonest. Therefore, it is said, the direction is conflicting, confusing and misleading when applied to other persons unknown. 79. Although some judges would not have given this direction because it is unnecessary, as we have already pointed out, the directions on intent were correct. They followed the Ordinance and are supported in R v Campbell (supra) in which a similar point was argued. 80. The prosecution do not have to prove dishonesty. It has to prove the falsity of the instrument and the two specific intentions to establish mens rea. The judge dealt with the elements both clearly and correctly. The jury had the elements of the substantive offence before them in writing. They must be taken to have followed those directions. Having regard to the clarity of those directions, there is no basis upon which the jury could have been misled or confused especially when the judge was contrasting these directions with the full R v Ghosh [1982] QB 1053 directions on dishonesty which he had given on Counts 1 and 2. 81. The final criticism of the directions concerning persons unknown as co-conspirators, contends that what the judge said about the specific inferences which the jury were entitled to draw from the primary facts was inadequate. Reliance is placed upon the combined effects of two much cited and well known passages. The first is in the speech of Lord Hailsham in R v Lawrence (H.L.(E)) [1982] AC 510 at 519G:
The second appears in the speech of Lord Diplock in R v Kwan Ping Bong (PC) [1979] AC 609 at 615G:
But in giving appropriate weight to these authorities and respect to the detailed submissions presented to us, we must also consider the relevant effect of all the directions in the summing-up. There were careful and accurate directions on the burden and standard of proof. The jury were reminded of the absence of direct evidence on state of mind and were correctly directed upon the approach to the drawing of inferences from established facts. They were correct directions upon the necessary elements and intent to be proved on Count 6 and correct directions upon the necessary involvement of "persons unknown" as co-conspirators. On these directions, it was not open to the jury to approach their task when considering "other persons" as co-conspirators other than correctly and in accordance with principle. 82. For these reasons, we are unable to accept that the judge's directions, relating to "other persons" as conspirators challenged in ground 2, were either wrong in law or were otherwise flawed or inadequate so as to render the conviction unsafe. Ground 3 We turn next to ground 3. Mr. Griffiths has submitted that the trial judge failed to give a direction of the kind which is contemplated in R v Brown, (1984) 79 Cr.App.R. 115, when summing up to the jury on Count 6. A so-called Brown direction in Hong Kong informs the jury that not only must a majority of the jury (in the sense of the minimum number needed to convict) be satisfied of each ingredient of the offence but also, where a number of matters are particularised as going to the proof of one ingredient, the jury must be satisfied by at least a majority of one of those particulars. 83. The prosecution alleged in Counts 4 and 6 that there were two intended victims of the conspiracy to forge false instruments, namely the Inland Revenue Department and Progressive Registrations Limited. Mr. Griffiths' contention has been that there was a discernible risk that the jury may not have been satisfied by the required majority that at least one of these separate and distinct bodies was induced to act to its prejudice having accepted the false instruments as genuine. 84. We do not need to dwell upon this ground in any depth. As Mr. Lunn has correctly pointed out, the prosecution's case could be established without identifying the particular party or parties who it was intended should be induced to accept the false instruments of transfer as genuine. However, in the particular circumstances of this case, it is abundantly apparent that officers of the Inland Revenue Department and employees of Progressive Registration Limited were the bodies (and in this sense the 'victims') to whom it was necessary to send the false instruments of transfer so that the directive given by the Applicant for shares to be transferred to Power Master could be carried out. Whilst, therefore, the victims did not have to be particularized, in reality they could only have been those two bodies. It was obviously desirable, in the interests of clarity, that they were identified in the charge. 85. Even if, as Mr. Griffiths contends, the prosecution only had to prove one of the particulars to succeed on this count, the fact of the matter is that the judge's directions indicated that both the particulars had to be established before a verdict of guilty could be reached. On the face of it, this was putting a higher burden on the prosecution than it was strictly necessary to do. The reason that the judge may well have done this is that there was no room for doubt as to the identity of the 'victims' for whom these false instruments were ultimately intended and Mr. Lunn was not overstating his argument when he said that it "beggars belief that this was ever an issue". Accordingly, the judge very sensibly did not give any special direction and summed up to the jury setting out the legal and factual matters of which proof was needed incorporating all the particulars set out in the charge. 86. It follows that there was not even the slightest risk that the jury, once they had found that the prosecution had established the double intent in forgery, would have then been unable to agree as to the intended victims of this conspiracy. 87. Finally, on this ground, Mr. Griffiths has argued that the jury may have been misled by directions which they had been given relating to other counts of the indictment which has aggravated the omission to give a Brown direction. As we have already indicated, such a direction was inappropriate in the present circumstances. The directions given on other counts of the indictment were irrelevant. 88. This ground fails. Ground 4 89. In ground 4, it is submitted that the trial judge erred in leaving it open to the jury to convict on Count 6 on the basis that the applicant had conspired with 'other persons unknown'. When Mr. Lunn came to reply to this, it emerged that he relied to an extent upon evidence given by the applicant which, as he put it, caused the issue of the unknown conspirators to be crystallised. Mr. Griffiths then sought leave to amend this ground, which was unopposed, by adding that the judge had erred in his failure to withdraw from the jury the issue of 'persons unknown' when a submission of 'no case' was made. 90. Although Mr. Griffiths conveniently divided his argument into seven separately lettered aspects, there is considerable overlap between the points he made. Essentially, he made the following criticisms which give an overview of the arguments he later developed at length:
91. The main thrust of Mr. Griffiths' submissions was directed at there being no evidence at any stage, and in particular when it was submitted there was no case to answer, that there was any other person with whom the applicant could have conspired apart from Nelson Chan; if the conspiracy failed against Nelson Chan, it failed against both. He submitted that while there were what he called "mechanics" who may have physically carried out the work involved in typing and signing the false instruments of transfer, there was nothing to suggest that what was done was part of any criminal conspiracy, in the sense that there was any evidence that the "mechanics" had the necessary dual intent required to make what they were doing the forgery of documents. Time and again, Mr. Griffiths emphasised the vagueness of the prosecution's approach to "other persons unknown" in both their speeches, in the evidence called as part of their case and in the cross-examination of the applicant. As can be observed from the general criticisms made about the way the trial proceeded which have been set out already, Mr. Griffiths even went so far as to suggest that the defence were misled by the way the case was presented against them into thinking that all they needed to answer was the allegation of a conspiracy between the applicant and Nelson Chan. 92. We were, in the light of these submissions which Mr. Griffiths developed from his most helpful skeleton argument, particularly concerned to know what evidence the prosecution relied upon in order to present its case against the applicant that he had conspired with some other person or persons unknown. We were equally concerned to know whether the nature of the case against the applicant, put on the footing that he had conspired with at least one other person unknown, must have been apparent to the defence. On this basis we called upon Mr. Lunn to deal firstly with this ground of appeal. 93. In the course of his reply, Mr. Lunn drew our attention to the transcript of the proceedings at trial where, after the conclusion of the prosecution's case, and after the 'no case' submissions had been made, there was specific reference to the issue relating to unknown persons. After the judge had ruled that there was a case to answer, he was then requested by Mr. Griffiths (at page 1840 in the transcript) to give a separate indication as to whether any of the particulars should be removed from the indictment on the ground that they were not justified by evidence. The judge then ruled that "everything" was to go before the jury. 94. Insofar as the 'other persons unknown' in Count 6 were concerned, Mr. Lunn has submitted that there was every justification for the judge to have ruled in this way and no justification whatever for the defence to suggest that they were under any illusions as to how the case was being presented against them. Looking at the evidence in the broadest sense, it was clear beyond any doubt, he submits, that there were those on the applicant's staff who had at one time or another appended to no less than 398 false documents, signatures that in the majority of cases were proved to have been forgeries. 95. Equally clearly, as we have had demonstrated to us by the samples at enclosure '4' in the respondent's bundle of exhibits, the member or members of staff who were forging the signatures and appending other false details to those documents must have realised that they would mislead the relevant authorities to whom they would in due course be presented. In the event, they were used and they did mislead the authorities. In this sense, Mr. Lunn submits, there was overwhelming evidence that at least one and probably more members of staff, in view of the enormity of the task, knew that forgery on a grand scale was involved. The inference to be drawn by a jury that the person or persons unknown, with the necessary dual intent, had been deeply involved in the offence was practically not an issue. To this extent also, it was hardly surprising that the culprits were not keen to be identified. The real issue, says Mr. Lunn, was whether the applicant himself, with or without Nelson Chan, could be proved to have been invovled in a conspiracy to make forged documents with those who were beyond question making them. 96. As the prosecution were able to point out in the trial, the applicant was closely involved with these events and he had a strong motive to be associated with the scheme. Not only were his staff, from the relatively small open-plan office they occupied with the applicant, responsible for making the instruments of transfer, but the 12 million Lucky Man shares were transferred in August 1994 on the strength of these forgeries to Power Master which, although managed and run by Wai Yiu-ki, was owned by the applicant. The only sensible explanation for this is that it was done entirely for the applicant's benefit as his ownership, following the interest shown by the SFC in the share dealings of Lucky Man in March 1994, was now restored to a company under his control. 97. Whilst the applicant's defence, to which we shall shortly turn, may have served to confirm in the minds of the jury some of the inferences that must have been already plain to them, some material parts of his defence did not emerge until he gave evidence. As Mr. Lunn pointed out with considerable force, the prosecution was never alerted to what the applicant might say until he testified that Blondie Lee (PW18) and Debbie Chui were given instructions to effect the transfer of the 12 million shares out of Thai Yuen and Janyee in March 1993 into the names of nominees. He stated that he had taken no further part in this matter and did not know by what method his instructions were carried out. Whilst this evidence was principally relevant to Count 4, the applicant went on to give evidence in relation to Count 6 that when he became aware in about April 1994 that the 199 nominees were people who actually existed, he then told his staff members (as he agreed at page 1371G of the transcript) immediately to transfer the shares back to Power Master. He said that he took no part in what they did. His description of what had happened was that a "commercial mistake" had been made. When he found out about it he was angry which gave rise to his instructions immediately to change the shares back to Power Master. 98. Mr. Lunn uses this situation to illustrate that, while evidence existed of an undoubted conspiracy between the applicant and persons unknown, there was nothing at the end of the prosecution's case which enabled the prosecution to identify those persons with any confidence. He submits that the position was more or less exactly that which is conveniently set out in the 1998 edition of Archbold at para.33-42 which reads:
99. It was, in fact, this principle that had led the prosecution at the conclusion of their case, to apply in respect of the first and second counts on the indictment to have James Lee added as a named conspirator. Objection was taken to this by the defence and the judge refused the application. 100. Bearing in mind what has already been said about the applicant's evidence of the involvement of Blondie Lee and Debbie Chui, it might be thought that the prosecution would have made an application after his testimony had concluded to have them named as conspirators. The reason why this appears not to have been done is that the applicant, as Mr. Lunn put it, adopted a "hear no evil, see no evil" approach in his evidence about these two women. Putting no finer point on it, the applicant back-tracked on what he had said as the passage in the transcript at page 1368H illustrates:
101. A little later, at page 1370R, there is this further passage:
102. In our judgment, on any view there was evidence fit for the jury to consider at the end of the prosecution's case of a conspiracy between the applicant, with or without Nelson Chan, and 'other persons unknown'. By the time the applicant had finished giving evidence, the existence of others involved in a conspiracy to forge documents was abundantly clear and there was ample evidence from which the jury could irresistibly conclude that the applicant was a party to it even though no evidence of substance had been produced to show who the others were. The applicant (at page 1125C of the transcript) described Nelson Chan at the material time relevant to Count 6 in this way:
103. The applicant later in his evidence portrayed Nelson Chan as someone who may not have known what was going on. This can only have given added force to the evidential distinction between the two defendants on trial. 104. None of these matters addresses the particular criticism levelled by Mr. Griffiths at the conduct of the prosecution and of the judge that the defence were led into believing that, despite the wording of the indictment, the case was being presented on the sole basis of a conspiracy with Nelson Chan. 105. The fallacy of this argument was quickly pointed out by Mr. Lunn so that we do not need to dwell long upon it. When the applicant gave evidence in chief, Mr. Griffiths specifically addressed the question of "persons unknown" relating to Counts 4 and 6 in a series of questions at page 1275E in the transcript. In particular, regarding Count 4, Mr. Griffiths enquired:
106. Again, in his final speech Mr. Griffiths turned to this subject as one of the four issues he invited the jury to keep at the front of their minds. At page 387R in the appeal bundle he said this:
107. Shortly after this, at page 388N, Mr. Griffiths said:
108. At page 390L, Mr. Griffiths went on to tell the jury:
109. Mr. Griffiths then continued to remind the jury at page 411K:
110. At page 412C, Mr. Griffiths encapsulated the defence with these words to the jury:
111. At page 413D, Mr. Griffiths went on to say:
112. With these passages in mind we have no hesitation in saying that the defence were made fully aware of the way in which the case was being put against the applicant, and that it was a potentially vital plank in the prosecution's case that 'other persons unknown' were alleged to be in a conspiracy with the applicant. This can be deduced not only from Mr. Griffiths' speech but also from the way in which Mr. Lunn had conducted his cross-examination of the applicant and the way in which he had addressed the jury in his final speech. In the course of the summing up, at page 110Q in the transcript, the judge reminded the jury of a passage in the cross-examination of the applicant where Mr. Lunn asked him:
113. The judge then continued by saying at page 111I:
114. Prior to this, regarding Count 4, Mr. Lunn had said in his closing address to the jury at page 652M in the transcript:
No doubt, what Mr. Lunn had intended to convey was that for the first time there was not merely inferential but direct evidence that at least Blondie Lee and Debbie Chui were candidates for consideration as conspirators. This was not a remark that was confined only to the evidence on Count 4. It had relevance Count 6 as well. This was brought home to the jury when Mr. Lunn continued at page 657J, when he was specifically addressing the evidence on Count 6, by saying:
Turning next to the criticism made by Mr. Griffiths that the judge did not interrupt him while he was making his final speech, to say that he proposed to sum up on a different basis than that which Mr. Griffiths appeared to be contending for in respect of a conspiracy with persons unknown, this is equally, in our judgment, without any foundation. Indeed, it was Mr. Lunn who very properly expressed concern at how far Mr. Griffiths was taking his speech from being a commentary on the evidence, within the framework of law, to what the jury might have perceived as an attempt by very experienced counsel to direct them on the law itself. 115. In this context, we observe with some dismay that leading counsel had not merely cited the names of decisions taken from several law reports when dealing with principles of law, but had (at page 317 of the transcript) quoted an isolated passage from R v To Kai-sui and others, (1980) HKC 112 at 119H:
116. We take this opportunity to remind counsel of what was said by Lawton L.J. in R v Chandler, (1976) Cr.App.R. 1 at page 3:
117. In the jury's absence part way through Mr. Griffiths' lengthy speech, Mr. Lunn (at page 368H in the transcript) was sufficiently concerned to invite the judge to intervene in order to indicate that it was for him and not Mr. Griffiths to direct the jury on the law. At page 370E, Mr. Lunn went on to say:
118. Mr. Griffiths' reply was that Mr. Lunn "is trying to ... shut me up in talking to the jury". He later went on at page 371P to say this:
119. In these circumstances, given the stance adopted by Mr. Griffiths, we are satisfied that he cannot now be heard to complain that the judge did, in due course, direct the jury in a manner that amounts to a correction of the submissions he had been making on this aspect of the case. In other words, Mr. Griffiths had been addressing the jury on the footing that the prosecution had not presented a case where it was possible to rely on an unknown person as another conspirator, whereas the judge in due course directed the jury that this course was open to them. 120. This matter was re-visited at the end of counsel's speech on behalf of Nelson Chan. The judge, in a passage at page 566M, said that the expression 'persons unknown' was causing him concern and he went on to say:
121. Following this, Mr. Griffiths invited the judge not to sum up on the basis that a conspiracy with others unknown could be established on the particular facts of this case. There is much to commend in Mr. Lunn's response to this at page 570A in the transcript, and in the opinion of this court he was entirely right, when he concluded by simply saying that this was still a "live issue". It always had been. 122. The final criticisms made in the context of this ground are that the judge failed to give proper directions as to the jury's approach when considering whether the applicant had been proved to be in a conspiracy with other persons unknown. 123. The way in which the judge directed the jury on this aspect of the case is to be found in the transcript at pages 50-52, where the judge summarised the law of conspiracy, incorporating a direction as to the variety of possible verdicts open to the jury in the event that they found the ingredients of conspiracy proved. He said:
124. Later on, turning to Counts 4 and 6 in particular, the judge said at page 94E in the transcript of the summing up:
125. At the end of the summing up the jury were handed a printed document (at pages 1064 to 1072 in the appeal bundle) setting out the ingredients of the offences to serve as a reminder of the salient points about which the jury had earlier been directed. 126. The judge gave a detailed summary of the evidence relating to Counts 4 and 6 between pages 96 and 115. It is not necessary to say much more than that the issues were placed fairly and squarely before the jury for their consideration. Summarizing the applicant's evidence on Count 4, the judge reminded the jury (at page 102H) with commendable clarity and conciseness that:
Similarly, with regard to the evidence on Count 6 given by the applicant, the judge said (at page 111 I):
127. We are satisfied that the jury could have been under no misapprehension, either legally or factually, as to the correct approach they should adopt towards Count 6. We have therefore concluded that no valid criticism of any kind has been established on this ground and that it must fail. Ground 5 - Inconsistent Verdicts 128. There is no merit in this ground. 129. The evidence against Chan was clearly different from that against the applicant. Further the applicant gave evidence and Chan did not and the applicant, in his evidence, stated in emphatic terms that Chan did not hold a position of authority in his organization. The jury were entitled to acquit one and convict another. Additional Ground - Apparent Bias 130. The applicant was allowed to argue an additional ground of apparent bias. It was submitted that the judge had failed to disclose to the parties his family connection with the Hong Kong Macau Development Company and with a Mr. Tsui Yiu-wah. Affidavit evidence, which was received de bene esse, indicated that the judge had once, in about 1968, worked for less than a year as an executive trainee in a company called Goodyear Investors Limited, which was ultimately and beneficially owned by his uncle, a Mr. Pang Kwok-chan. When Goodyear went into liquidation in about 1985, the applicant, through his private company, acquired one of Goodyear's subsidiaries, the Hong Kong Macau Development Company ("the Development Company") and 25% of the shares of its associated company Union V-techs Limited. It appears that The Development Company owned a building known as the HMD Building which was pledged by the applicant in 1992 to secure an overdraft facility which enabled him to issue cheques for certain transactions which the prosecution alleged during the trial were a "circulation of funds". During the trial, a feasibility report about the development of the site at Fairmount Terrace, prepared by Mr. Tsui Yiu-wah, a director of Lucky Man and of Mandarin, was produced in evidence. Mr. Tsui calculated that the value of the site per square foot was $3,500 and he consequently recommended to both companies that the development was not viable. 131. Mr. Tsui had formerly worked for Goodyear for more than 10 years. During the trial, the judge questioned many witnesses, including Mr. James Lee, in what Mr. Griffiths submitted was a sceptical way about the said report and the calculations therein. 132. It was the prosecution case that the applicant had conspired with other people to conceal the recommendation of an increased plot ratio of the said site by the District Land Office both from the shareholders of Lucky Man and Mandarin and had, by so doing, understated the true commercial value of the site and also that he had offered an advantage to the director and chairman of Lucky Man and a director of Mandarin for not disclosing the existence of the recommendation to the shareholders of the companies. It was submitted that the two companies acquired by the applicant from Goodyear were connected with the judge's family and that The Development Company was closely connected with the evidence in the case as it held an asset which was then pledged to finance transactions which the prosecution alleged was a "circulation of funds". It was submitted that the judge's connection with The Development Company and with Mr. Tsui Yiu-wah should have been made known to the parties. 133. Mr. Griffiths submitted that the law as set out in R. v. Sussex Justices ex parte McCarthy, (1924) 1 K.B. 256, which held that the test was whether "justice could be seen to be done" should be applied in Hong Kong. He contended that R. v. Gough, (1993) AC 646, would set out the test of apparent bias to be "whether in all the circumstances there appeared to be real danger of bias ... so that justice required that the decision should not stand" was not appropriate to the circumstances of Hong Kong and should not be applied. We are not sure what exactly was meant by this last submission. However that may be, we are satisfied that the test in Gough which has already been applied in Hong Kong is the proper one. We are satisfied, moreover, both that there was no real danger of bias and that, even if the earlier test was applied, the matters advanced not did begin to raise the possibility that justice might not be seen to be done. Ground 6 134. We turn finally to Ground 6. We are satisfied that the conviction was neither unsafe nor unsatisfactory and the application is dismissed. Sentence 135. When sentencing, the trial judge said:
136. It is submitted, firstly, that the judge was wrong not to have indicated a starting point. That criticism is correct. This court has indicated on a number of occasions that a starting point should be indicated when sentencing so that it can be seen on appeal whether credit given for mitigating factors was properly assessed. Mr. Griffiths goes on to submit that the sentence of three years was manifestly excessive as it was not calculated in accordance with the criminality involved. He points out, correctly, that the other offences on which the applicant was acquitted must be put wholly out of mind when sentence is being assessed and the offence did not involve any economic loss. He refers to the case of A.G. v. Tai Chin-wah, (1993) 1 HKC 1, suggesting that the criminality was much greater and continued over a very much longer period but the court, taking into account the loss of standing and reputation that the defendant suffered, was satisfied that 9 months' imprisonment was a proper sentence. He points to the applicant's past good character, to his public service and to the fact that he has lost his seat in the Legislative Council. He submits that the judge placed too much emphasis on the number of documents involved rather than upon the criminality and that he failed to remind himself that the applicant owned all the shares and that no third party suffered. He submits that the fact that the applicant was a Legislative Councillor at the time was in no way material as the offence was not connected with any duties that he had to carry out because of that office and, indeed, should have told in his favour because of the consequential loss of office that he has suffered. He suggests that the political accusations which the applicant made should not have played any part in the assessment of sentence. He finally asks that, whatever sentence be imposed, it should be suspended. 137. The matter must be dealt with upon the basis that the motive for this convoluted deception has not been established. This is known only to the applicant. There was however clearly an elaborate and calculated attempt to mislead the authorities which, given the effort and planning involved, must have been intended to achieve some substantial benefit. 138. We are satisfied that the judge was right when he said an immediate custodial sentence was called for. The judge must have started with a sentence of 3 1/2 years which, we are satisfied, was out of proportion to the criminality involved. We are satisfied that a sentence of 15 months would have been appropriate and this could properly be discounted for good character by three months, making a sentence of 12 months. 139. The application for leave to appeal against sentence is allowed. The hearing of the application is treated as the hearing of the appeal and the sentence is varied from one of three years to one of one year.
Representation: Mr. Michael Lunn, S.C. leading Mr. Kevin Zervos, S.G.C. & Miss Winne Ho, G.C. (D.P.P.) for the Respondent. Mr. John Griffiths, S.C. leading Mr. Richard Wong & Mr. Richard Leung instructed by Messrs. Dixon Tang & Co. for Applicant. Remarks: |
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