HKSAR v. Chan Ka Kin and Another

CACC 474/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

criminal APPEAL NO. CACC 474 OF 2004 

(ON APPEAL FROM NO. HCCC 34 of 2004)

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Before: Hon Yeung, Yuen JJA and Suffiad J in Court

Date of Hearing: 1 December 2005

Date of Judgment: 1 December 2005

Date of Handing Down Reasons for Judgment: 12 December 2005

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Reasons for Judgment

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Hon Yeung JA (giving reasons for judgment of the Court):

1.On 1 December 2005, we dismissed the 1^st applicant’s application for leave to appeal against conviction. We granted leave to the 1^st and 2^nd applicants to appeal against sentence. Treating their applications as the appeal proper, we allowed their appeals and reduced their sentences. We indicated that we would give our reasons in writing and this we now do.

Background Facts

2.The 1^st applicant – Chan Ka Kin (Chan) was married and he ran a company – Ching Wah agency that he started in late 2001. Ching Wah’s business included visa applications for clients. The 2^nd applicant – Lai Ying (Lai) was Chan’s girlfriend.

3.On 17 July 2003 at shortly after 10 p.m., a party of police officers arrived at Room A on the 2/F, No 4 Shim Luen Street (“the flat”) to execute a search warrant. The police knocked on the door, but there was no response. They broke open the door to gain entry into the flat whereupon they found Chan and Lai inside together with a baby girl.

4.The police also found, scattered quite openly in the flat, a number of objects suitable for making counterfeit bank notes, including a colour inkjet printer, a transparency bearing three watermark images of $100 bank notes issued by the Standard Chartered Bank, a large number of white A4 paper, a rubber template pad bearing sculptured images of watermarks of Hong Kong currency notes and a roller studded with staples.

5.According to an expert, the roller was used to create indentations on the paper in order to mimic genuine $100 bank notes.

6.In the mean time, a plastic bag was thrown out of the bedroom of the flat. Inside the plastic bag, there was a piece of white paper stuck with three genuine Standard Chartered Bank $100 notes and 52 pieces of white paper each printed with three images of Standard Chartered Bank $100 notes with identical serial numbers.

7.From the rubbish bin outside the flat, the police found strips of paper, which had been cut from printed counterfeit banknotes as the ink matched.

8.A paper seller – Mr Ng confirmed that on three occasions in May 2003, he sold A4 parchment papers in lots of 1000 pieces to Chan and on 16 July 2003, he also sold 1,500 pieces of A4 parchment papers to Chan. 

9.Mr Ng said that the papers he sold to Chan were only available in specialist shops. He also confirmed that the same papers were used to print the counterfeit bank notes seized by the police.

10.Chan’s finger and palm prints were found on the colour printer inside the flat. According to the police Chan said the things did not belong to him, but belonged to his “wife” (referring to Lai) and Lai said the things belonged to her and had nothing to do with her “husband” (referring to Chan).

11.Two days before the police raid, on 15 July 2003, the police had found, from the rubbish bin outside the flat, gloves with Lai’s DNA and possibly that of Chan.

12.Shortly after the police raid, Madam Tam Lamai (Tam) informed the police that Lai had left a suitcase, a lamp box and a fax machine in her flatat Room 2, No 2 Shim Luen Street.

13.Inside the suitcase, the police found a folder containing large number of documents, including copies of documents of identity, passport size photographs of unknown people and a name list of eight persons with what appeared to be their dates of birth and education levels.

14.There were also a forged Canadian Passport inside a brown envelop and two false Hong Kong Immigration chops. There was also a third chop with “Visitor Permitted to Remain Until.”

15.Chan’s fingerprints were also found on some blank forms, a sketch of photo inside the suitcase and on the lamp-box found in Tam’s apartment.

The Charges

16.Chan and Lai were jointly charged with having custody and control of the counterfeit currency notes with intent and of materials and equipments for producing those counterfeit currency notes with intent (the 1^st and 2^nd charges).

17.They were also jointly charged with the offence of possession of the false Canadian Passport and the two false Hong Kong Immigration chops (the 3^rd and 4^th charges).

The Conviction and Sentence

18.Lai pleaded guilty to the 1^st and 2^nd charges and not guilty to the 3^rd and 4^th charges. The prosecution decided not to proceed with the 3^rd and 4^th charges against Lai and she was acquitted of the same.

19.Chan pleaded not guilty, but was convicted of all four charges after trial before Deputy Judge Toh in the High Court sitting with a jury.

20.In respect of each of the 1^st and 2^nd charges, Lai was sentenced to 4 years’ imprisonment to run concurrently. The judge adopted a starting point of 4 years and reduced it by one-third to 32 months for the guilty plea. She then enhanced the sentence by 16 months under s 27 of the Organized and Serious Crimes Ordinance, Cap 455 (“OSCO”) to take it back to 4 years. Lai had to serve a total sentence of 4 years’ imprisonment.

21.As for Chan, the judge also adopted a starting point of 4 years for each of the 1^st and 2^nd charges and then enhanced them by 16 months under OSCO to bring them up to 5 years and 4 months. For the 3^rd and 4th charges, the judge sentenced Chan to 12 months’ and 2 years’ imprisonment respectively.

22.The judge ordered the sentences on the 1^st and 2^nd charges, and on the 3^rd and 4^th charges to run concurrently. However, of the 2 years’ concurrent sentence on the 3^rd and 4^th charges, 14 months would be served consecutively to the concurrent term of 5 years and 4 months on the 1^st and 2^nd charges. The total sentence on Chan was 6 years and 6 months’ imprisonment.

23.In deciding to enhance the sentences on the 1^st and 2^nd charges on the basis of the prevalence of the offences, the judge took into consideration the evidence given by Chief Inspector Yu that, between 1999 and 2004, the number of counterfeit notes printed with colour inkjet printers, and seized by the police had increased substantially. The figures rose from 102 pieces in 1999 to 11,654 pieces in the first seven months of 2004.

24.There was no indication as to the number of occasions in which the counterfeit banknotes were seized or the number of persons arrested for those counterfeit banknotes in the period between 1999 and 2003. However, there was a breakdown of the number of counterfeit banknotes seized in each of the months from January to July 2004.

The Applications

25.Chan sought leave to appeal against both conviction and sentence. Lai also sought leave to appeal against sentence.

Chan’s Defence

26.Chan did not dispute much of the prosecution evidence. He even agreed that possibly his DNA was present on the gloves found in the rubbish bin outside the flat. He said he had used similar gloves when he took care of the baby girl.

27.Chan said he did not live in the flat but was only Lai’s daily visitor. He said he would go to the flat in the morning after he finished work at a nightclub and would stay for a few hours until noon before going home in Lok Fu.

28.Chan said he brought the colour printer to print photographs of his daughter. He also said the A4 parchment papers were bought at Lai’s request for the purpose of photocopying children’s books. He said Lai was having depression and he bought the papers to amuse her. He also said he thought that Lai was using the request for papers as a pretext in order to see him more often.

29.Chan said the suitcase belonged to Lai and he had no idea about the real nature of its contents. He said those contents were given to him by a friend – Mr Lau who told him to keep them whilst he went to China.

30.Chan said Mr Lau had given his company, in the past, clients’ passports to get China Visas. In February 2002, Lau said he was closing down his business and asked Chan to collect a cheque. When Chan collected the cheque, Mr Lau requested Chan to keep a plastic bag containing the documents for him. 

31.Chan said he found the documents in a mess, so he sorted them out and put them properly in the folder before putting them inside the suitcase. Chan said that explained the presence of his fingerprints on some of the documents.

32.Chan also said he bought the parchment papers because Lai told him to as she wanted to photocopy some books. He also said he accepted Mr Ng’s recommendation to buy more as it would be cheaper.

33.According to Chan, Lai rejected the first lot of papers and told him to buy another lot. Chan said he did not know what Lai did with the second lot and on the recommendation of Mr Ng, he also bought the third lot, which was of a different type. Chan said he bought the fourth lot of 1500 pieces because Lai told him that the third lot had got wet.

34.Chan said he tried to please Lai as she was suffering from depression and was suicidal. He said he was unaware that the papers would be used to manufacture counterfeit bank notes.

35.Chan also said he used gloves when handling the baby’s nappies or food and that explained the possible presence of his DNA on the gloves found in the rubbish bin.

36.Lai gave evidence as a defence witness. Lai said she was a gambler and owed a person called Wilson $8,000. She was unable to repay the debt and Wilson lent her the tools to enable her to make counterfeit bank notes.

37.Lai said Wilson also gave her the three genuine $100 Standard Chartered banknotes. She said she tried to print it, but was unable to match both sides of the bank notes. Lai said the printer was bought by Chan to print pictures of the daughter. She said she told Chan to buy the paper to print pictures of her children. She also said she needed papers to photocopy some expensive Disney books.

38.Lai admitted to have taken the suitcase to Tam as a means to prevent Chan leaving her. She claimed not to know anything about the contents of the suitcase.

39.Lai also admitted having thrown the plastic bag out of the bedroom widow when the police arrived. She said Chan knew nothing about the manufacturing of forged banknotes.

Chan’s Grounds of Appeal Against Conviction

40.Mr Christopher Grounds together with Mr Anthony Butt, on behalf of Chan, raised three grounds of appeal, namely (i) that the judge misdirected or had failed to properly direct the jury on the issue of inference; (ii) that the judge failed to direct the jury, as suggested by defence counsel, that Chan’s guilt in respect of the 1^st and 2^nd charges were entirely irrelevant to his guilt in respect of the 3^rd and 4^th charges and vice versa; and (iii) that the judge misdirected or had failed to properly direct the jury on the issue of possession in relation to the 3^rd and 4^th charges.

41.Mr Grounds suggested that the judge’s direction to the jury on inference was “rambling, confusing, misleading and inadequate”. He suggested that when the judge did not direct the jury on inference together with a direction on the burden and standard of proof, there was a risk that the jury might apply a different burden of proof when considering inferential evidence.

42.Mr Grounds pointed to the following passage in the judge’s summing up relating to “inference” and attacked it as being wrong in law:

“What I mean by this is that if you have a set of primary facts and you say to yourself, ‘Well, there is only one reasonable inference to draw from this.’ Fine, then draw that inference. It does not require you to get bogged down with theoretical or possible or remote inference’” (Emphasis added)

43.Mr Grounds also emphasized that the 1^st and 2^nd charges, and the 3^rd and 4^th charges were different and distinct and therefore the judge should have, in line with counsel’s suggestion, expressly told the jury that “their deliberations and conclusions upon 1 set of counts should ‘play no part’ in the jury’s deliberations and conclusion on the other.” The suggestion was that by failing to follow counsel’ s suggestion, the judge erred in law.

44.Mr Grounds even suggested that the judge might not really have understood the concept of possession. He suggested that the judge had equated possession with custody and physical control. He emphasized that errors by the judge in parts of the summing up could not be remedied or put right by other parts of the summing up.

Discussion

45.The way Chan conducted his defence meant that the issues for the jury’s deliberation were quite narrow. They had to decide if what Chan and Lai said in his defence were true or might be true. If what Chan said was or might be true, they must of course acquit Chan of all the charges. If what Lai said was or might be true, the jury should at least acquit Chan of the 1^st and 2^nd charges.

46.Even if they rejected the evidence of Chan and Lai, the jury would still have to be satisfied, on the prosecution evidence, that Chan had control and custody of the counterfeit banknotes and materials and implements, and was in possession of the forged passport and the false instruments.

47.The 1^st charge of having custody or control of counterfeit bank notes with intent required proof of Chan’s knowledge or belief that the bank notes were counterfeit notes and that Chan intended to use them as genuine.

48.The 2^nd charge of having custody or control of counterfeiting materials and implements also required proof of Chan’s intention to use those materials and implements for the purpose of making counterfeit bank notes and his intention to use the counterfeit banknotes as genuine.

49.The 3^rd and 4^th charges of possession of a false travel document and possession of false instruments also required proof of Chan’s knowledge of the existence and the nature of the travel document and the instruments as well as his intention and ability to render them into his physical possession.

50.Knowledge and intention are not normally susceptible to direct proof by evidence and very often require the drawing of inferences to be established.

51.The nature of the counterfeit banknotes and the nature of the material and implements – the subject matters of the 1^st and 2^nd charges could not be disputed and there was no attempt to do so. In the circumstances of the present case, anyone in control and custody of those counterfeit bank notes must have intended to use them as genuine and anyone in control and custody of the material and implements must have intended to use them for the purpose of making counterfeit bank notes and then to use them as genuine.

52.The prosecution case against Chan was that on the evidence, the only reasonable inference was that Chan not only was in control and custody of the counterfeit bank notes, and the material and implements, but also was aware of their nature.

53.The nature of the travel document and the instruments – the subject matter of the 3^rd and 4^th charges again was not disputed. The prosecution case was that on the evidence, the only reasonable inference was that Chan was in possession of them in that he was aware of their existence and their nature, and that he had the intention and ability to render them into his physical possession.

54.The judge’s summing up may have been lengthy and may not have been too well structured. The examples she used may not have been entirely appropriate.

55.We were not persuaded, however, that it had the defects alleged by Mr Grounds.

56.The judge had set out in great detail, the evidence of Chan and Lai. She reminded the jury in the following terms:

“Now, the defence also says that the defendant did handle the documents given to him by Mr Law, but he had no intention to exercise control over these things and he did not know that the passport was false and the chops were false because he thought the chops were company chops. If the defendant’s account is or may be true, then he is not guilty of counts 3 and 4, because you have to remember it is for the prosecution to prove the charges against him.

Now, the defendant also says that he is not in custody or control of the counterfeit notes and implements. And if what he says is true or may be true, you have to acquit him on counts 1 and 2.”

57.The judge reminded the jury repeatedly that they could only convict if they were sure of Chan’s guilt. The judge carefully directed the jury on the burden and standard of proof.

58.The submission of Mr Grounds that many jurors were confused by inferences because they had never heard of the word was far-fetched. Whilst it is true that one juror checked the dictionary meaning of the word, that was before the judge’s summing-up when it was explained. “Inference” is a simple concept based on logic and would not elude intelligent jurors we fortunately have in Hong Kong.

59.The judge certainly had repeatedly reminded them how they should approach the question of inference and had used many examples to demonstrate the points that she was making.

60.The judge reminded the jury:

Now, I now turn to inferences. You are permitted to draw inferences from facts that you find proved beyond a reasonable doubt. In other words, if you find certain facts proved on the evidence before you, you are permitted to say, ‘Well, on the basis of those facts about which I am sure, I can infer the existence of other facts…

…, it is important to stress this: you may only draw that inference if it is the only reasonable inference you can draw. In other words, we are not dealing with whether you can draw a particular inference; we are dealing with whether the facts are such that they cannot admit of any other inference being drawn.

In particular, you may only draw an inference of guilt or other inference against the defendant if you are satisfied that that inference of guilt or other inference against him is the only reasonable inference you can draw. What I mean by this is that if you have a set of primary facts and you say to yourself, ‘Well, there is only one reasonable inference to draw from this.’ Fine, then draw that inference. It does not require you to get bogged down with theoretical or possible or remote inference.

We are talking about reasonable inference. If, on the other hand, if you have a series of primary facts and you say, ‘Well, there is one reasonable inference that can be drawn from that and there is an inference and that is an inference against the defendant.’ But there is actually another reasonable inference I could draw which is not against him. Now, if you think this way, then you must not draw the adverse inference because it is not the only reasonable inference that you can draw.

So that if the fact which you find to be proved are capable of leading to a reasonable inference other than the one that is adverse to the defendant, then he must be given the benefit of the doubt—benefit of that, and you should not draw the adverse inference against him. Put another way, if the facts which you find proved are capable of leading you to another conclusion as well as to one of guilt, then you could not be satisfied of (his) guilt beyond a reasonable doubt.”

61.The judge’s reference to “possible or remote inference” is unfortunate. The judge should not have used those terms. However, looking at the summing up as a whole, there could be no doubt that the jury had been properly directed that they could only draw an inference of guilt or an inference adverse to the applicant if it was the only reasonable inference to be drawn.

62.The judge’s direction to the jury on “inference” was comprehensive, correct and fair. The requirement as set out in HKSAR v Tang Kwok Wah Dixon [2002] 2 HKC 22 at p 18 had been complied with.

63.We were surprised by Mr Grounds’ submission that the judge must follow defence counsel’s suggestion of directing the jury in a particular manner. Chan was charged with four offences and the jury must consider them separately and return separate verdicts on those charges.

64.Defence counsel had sensibly suggested that the 1^st and 2^nd charges, and the 3^rd and 4^th charges should stand or fall together.

65.The judge accepted defence counsel’s approach and directed the jury in the following manner:

“Now, the defendant faces four counts in this indictment. You must consider the case against and for the defendant on each count separately. By that, I want to stress this: it does not follow necessarily that if he is guilty on one of the counts, he must be guilty of another, or necessarily of all of them. So you should consider each count separately. But as counsel had pointed out, both counsel say that realistically, that the four charges can be divided into two separate parts. The first two counts and the last two counts. And according to Mr Stirling, realistically, if you convicted of one, it possibly follow that two may follow, and if you convict of three, possibly four may follow, or if you acquit on one, two may follow and three and four would have to be decided, would have to be considered separately. So --  but I caution you that you do have to consider each charge separately, all right, although the evidence in relation to two counts may be similar..”

66.We did not accept Mr Grounds’ submission that the judge must follow counsel’s suggestion by telling the jury that “the jury’s deliberations and conclusion upon 1 set of counts should ‘play no part’ in the jury’s deliberations and conclusions on the other.” (Emphasis added)

67.The judge’s direction to the jury on dealing with different charges separately was clearly correct and adequate. The attack on this part of the direction was totally unjustified.

68.Mr Grounds complained against the judge’s summing up to the jury in relation to the 3^rd and 4^th charges on the issues of possession, and control and custody. He said the judge was wrong to have equated custody and control with possession.

69.The particulars of the 4^th charge refers to “their possession or under their control instruments which were, and which they knew or believed to be false” and possession, and control and custody in their legal contexts of the two charges are indeed the same. They both require proof of Chan’s knowledge of the nature and of the existence of the false instruments as well as his ability and intention to render them into physical possession if the need arose.

70.The judge, on a number of occasions, referred to the issues of possession, and control and custody. Mr Poll, for the respondent had helpfully identified, in his written submission, the following:

“Now, in relation to charge 3, it is very simple possession of false travel documents, and again, possession means that a person has possession of an object if he knowingly has it in actual immediate and physical custody, or otherwise, within his physical control. So possession means really, the basically, the same thing as custody or control.”

“What constitutes possession? As I have said possession really means custody or control. And a person has possession of an object if he knowingly has it in his actual, immediate and physical control or otherwise within his physical control and intends to have custody of it, and to exercise control of it as and when the occasion required. So therefore a person, a person has possession of an object if he knowingly…”

71.The judge further said:

“…it has to be proved that the defendant had possession of the object in that he had control over it, and he knows he has control over it and he knows what it is, and he intends to exercise control over that object as and when required..”

“So in order for him to be in possession of that folder and the things in there, he has to be aware of the nature of those things.”

“Mere suspicion is not enough. It is knowledge that must be proved. Knowledge that the passport and the chops were false.”

72.The judge also used a number of examples in which she emphasized the importance of knowledge of the existence and of the nature of the objects said to be in Chan’s possession or under his control and custody with  the repeated use of “knowingly”, “If he knew the nature of those things, namely that they were false passport and false immigration chops”, “that he knew the nature of it, of the contents, and he intended to possess it”, “Mere presence on its own without more in the company of an object is not by itself possession”.

73.Clearly the judge emphasized to the jury that they must be satisfied that Chan had control and custody of the false passport and false instruments in the sense that not only did he have knowledge of the existence and of the nature of the false passport and the false instruments, he also had the intention and ability to render them into actual custody or physical possession should the need arise.

74.The direction to the jury, we are satisfied, was comprehensive, correct and fair.

75.At the end of the day, the only real issue was whether the jury accepted Chan’s explanation or whether his explanation gave rise to any reasonable doubt on the prosecution’s allegations against him.

76.The jury clearly rejected, quite rightly if we may say so, Chan’s explanation.

77.Once his explanation was rejected, the inference, based on the evidence adduced by the prosecution, which was largely undisputed, that he did have custody or control of the counterfeit notes, and the materials and implements for making those counterfeit notes, and that he had possession of the false passport and false immigration chops was inescapable.

78.We were convinced that Chan was rightly convicted. There was nothing unsafe or unsatisfactory about those convictions. Chan’s application for leave to appeal against conviction was therefore dismissed.

Lai’s Ground of Appeal Against Sentence

79.Mr John Dunn, on behalf of Lai, accepted that the starting point of 4 years’ imprisonment was right and proper. Mr Dunn even agreed that the judge was justified in enhancing the sentence by one-third under OSCO.

80.Mr Dunn’s only complaint was that the judge should have enhanced the sentence by one-third of the appropriate sentence instead of one-third of the starting point. He relied on HKSAR v Tam Wai-pio CACC 32 of 1998.

81.The Court of Appeal in Tam Wai-pio (supra) set out the correct procedure to adopt in an application for sentence enhancement under s 27(4) of OSCO.

82.The Court of Appeal laid down the principle that the enhancement should be a percentage of the appropriate sentence without taking into account the element of the enhancement, and not a percentage of the starting point.

83.Mr Michael Poll, for the respondent, readily conceded this point. He said no reference was made to Tam Wai-pio at the hearing before the judge. Mr Poll did not dispute Mr Dunn’s suggestion that the proper sentence should be 32 months plus one-third of it, namely about 42 months.

84.We see no basis for not adhering to the principle laid down in Tam Wai-pio.

85.Further, despite the concession made by Mr Dunn, we were not persuaded, for the reasons set out below, that the information provided by chief Inspector Yu could trigger the operation of s 27 of OSCO at all. Therefore Lai’s sentence for the 1^st and 2^nd charges should only be 32 months’ imprisonment.

86.We allowed Lai’s application for leave to appeal against sentence and we treated her application as the appeal proper.

87.Lai’s appeal against sentence was allowed and her sentence for each of the 1^st and 2^nd charges was reduced from 4 years to 32 months’ to run concurrently, making a total sentence of 32 months’ imprisonment.

Chan’s Application For Leave To Appeal Against Sentence

88.Mr Grounds suggested that there was in fact no valid basis upon which the judge could have enhanced the sentences on the 1^st and 2^nd charges under OSCO. He emphasized that s 27 of OSCO only permitted an enhancement based on the “the prevalence of that specified offence”. 

89.He further suggested that in imposing a four year sentence on the 1^st and 2^nd charges, the judge had already taken into consideration the element of deterrence and therefore she should not have further enhanced the sentence under OSCO without detailed explanation, otherwise Chan would unfairly suffer “double enhancement.”

90.Mr Grounds submitted that the judge could have refused to enhance the sentence under OSCO or enhanced it by a smaller percentage to prevent what he described as a manifestly excessive sentence of five years and four months on the 1^st and 2^nd charges.

91.In any event, Mr Grounds argued that the total sentence of six years and six months was manifestly excessive and/or wrong in principle.

92.Mr Grounds pointed out that Chan was convicted of offences contrary to ss 100(1) and 101(1) of the Crimes Ordinance Cap 200, and emphasized that there were other offences relating to counterfeit notes and counterfeiting materials and implements, such as ss 98(1), 99(1) and 105 of the Crimes Ordinance, which were not specified offences.

93.Mr Grounds therefore argued that the statistics provided by Chief Inspector Yu did not necessarily supported the prevalence only of the specified offences, namely offences contrary to ss 100(1) and 101(1) of the Crimes Ordinance.

94.A court is of course entitled to impose a deterrent sentence because of the nature of the offence, the circumstances in which the offence is committed and the background of the defendant. However, an enhancement of sentence under s 27 of OSCO is a separate and independent factor.

95.Mr Grounds complained that Chan had suffered a double enhancement. Mr Ground might well be right, but that was intended by the legislation. We rejected the “double enhancement” point.

96.The four-stage process, advocated in Tam Wai-pio (supra), suggests that the enhancement under s 27 of the Ordinance is an enhancement of the sentence imposed after considering the nature of the offence, the circumstances in which the offence is committed and the defendant’s mitigation and totality.

97.An enhancement under s 27 of OSCO involves the exercise of discretion by the trial judge. Unless there is no valid basis upon which the judge could exercise the discretion or the discretion was clearly wrongly exercised, the Court of Appeal should not interfere.

98.S 27 of OSCO empowers the court to enhance the sentence of a person convicted of a specified offence if the court is satisfied beyond reasonable doubt that the specified offence is an organized crime and one way of proving it is by showing its prevalence.

99.In determining the prevalence or otherwise of the specified offence, what should be considered is the substance of the offence. It is the prevalence of the conduct constituting the specified offence that we are concerned with. 

100.Whilst the prosecution need not prove prevalence in terms of the numbers of the offences contrary to a particular statutory provision, which is a specified offence, the prosecution must prove beyond reasonable doubt the prevalence of the conduct constituting the specified offence before s 27 of OSCO is triggered.

101.Chan was charged with offences contrary to ss 100(1) and 101(1) of the Crimes Ordinance and the substance of the allegation was that he had in his custody or control, counterfeit banknotes printed with colour inkjet printers with intent to pass them as genuine, and materials and implements to make such counterfeit notes again with intent to pass them as genuine. (Emphasis added)

102.However, Chief Inspector Yu’s evidence only referred to the number of seized counterfeit banknotes manufactured with colour inkjet printers. Such evidence was also consistent with the prevalence of the conduct constituting offences under s 100(2) and s 101(2) of the Crimes Ordinance – offences that do not require the element of “with intent to pass them as genuine”.

103.Ss 100(2) and 101(2) are of course not specified offences under OSCO. Indeed, even s 101(1) is not a specified offence at all.

104.On Chief Inspector Yu’s evidence, the judge was not entitled to conclude that the specified offence, namely the custody and control of counterfeit bank notes with intent to pass them as genuine was prevalent. The judge’s conclusion that the 2^nd charge was a specified offence was simply wrong.

105.Mr Michael Poll, counsel for the respondent, fairly conceded this point. He, however, properly referred us to HKSAR v Yip Kwok-Fai,unreported, CACC 306 of 2002, in which the Court of Appeal appeared to have simply relied on the evidence that the number of counterfeit $10 coins had risen significantly to justify the conclusion that the offence of having custody or control of counterfeit coins with intent, contrary to s 100(1) of the Crimes Ordinance, was prevalent.

106.We would only comment that the applicant in Yip Kwok-Fai was not legally represented and the point in issue was not argued or considered.

107.Offences involving counterfeit bank notes and offences involving false passport are extremely serious offences. Chan committed both types of offences and there was hardly any mitigating factor. The sentences imposed on Chan must reflect those aggravating factors.

108.However, we were not persuaded that the judge was right to enhance the sentences on the 1^st and 2^nd charges under s 27 of OSCO at all.

109.The 2^nd charge was not a specified offence. The evidence adduced by the prosecution did not prove beyond reasonable doubt that the 1^st charge was prevalent either. In the circumstances, the judge’s order, enhancing Chan and Lai’s sentences on the 1^st and 2^nd charges, must be set aside.

110.Whilst the 4-year concurrent sentences on the 1^st and 2^nd charges and the 12 months and 2 years’ concurrent sentences on the 3^rd and 4^th charges with 14 months to run consecutively to the 4 years remain, we set aside the enhanced 16 months’ consecutive sentence on the 1^st and 2^nd charges.

111.The total sentence for Chan should be reduced from 6 years and 6 months to 5 years and 2 months.

112.We therefore also granted leave to Chan to appeal against sentence. Treating his application as the appeal proper, we allowed his appeal against sentence and reduced his sentence to the extent indicated.

Mr Christopher Grounds and Mr Anthony Butt instructed by M/S Lee & Chow for the 1^st Applicant.

Mr John Dunn assigned by the Director of Legal Aid for the 2^nd Applicant.

Mr Michael Poll on fiat for the Respondent