HKSAR v. Choi Sui Hey
Read the full judgment text of CACC 277/2007 on BabelCite. This Court of Appeal judgment was delivered on 17 October 2008 before Stuart-Moore VP, Stock JA and Wright J.
Criminal law – money laundering – dealing with property knowing or having reasonable grounds to believe it represents proceeds of an indictable offence – s.25(1) and (3) of the Organised and Serious Crimes Ordinance, Cap 455 – s.25(1) and (3) of the Drug Trafficking (Recovery of Proceeds) Ordinance, Cap 405 – ss.159A and 159C of the Crimes Ordinance, Cap 200 – conspiracy – defendant remitted US$140,000 in six transactions to bank account in Fiji used by company renting warehouse where methylamphetamine was manufactured – $750,000 cash found in defendant's wardrobe – defendant had not filed tax returns since 2000 – 'reasonable grounds to believe' involves both objective and subjective elements – whether funds were sent to the place of manufacture rather than received from it raised question whether they facilitated drug manufacture rather than represented proceeds of trafficking – insufficient evidence defendant knew of drug activities in Fiji to support conviction on Charge 1 – conviction on Charge 1 set aside and conviction on alternative Charge 2 substituted – sentencing – starting point of 24 months manifestly inadequate for settled ongoing course of conduct involving substantial sums – 3 years appropriate starting point after trial – discount for 'good character' wrong in principle where no evidence of positive good character – delay in international investigation not exceptional circumstance justifying suspension – sentence of 18 months suspended for 3 years set aside and 2 years imprisonment imposed in its stead – fresh evidence admitted under s.81B(3) and 83V of the Criminal Procedure Ordinance, Cap 221.
Legal issues: Sufficiency of evidence for conviction on Charge 1 (drug trafficking proceeds) · Sufficiency of evidence for conviction on Charge 2 (proceeds of indictable offence) · Adequacy of sentencing starting point · Discount for good character · Delay as exceptional circumstance for sentence suspension
Outcome: Appeal against conviction allowed in part: conviction on Charge 1 (drug trafficking proceeds) set aside and substituted with conviction on Charge 2 (proceeds of indictable offence). Application for review of sentence allowed: original sentence of 18 months' imprisonment suspended for 3 years set aside and replaced with 2 years' imprisonment.
Cited by 33 cases · Cites 5 cases
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CACC 277/2007 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CRIMINAL APPEAL NO. 277 OF 2007 (ON APPEAL FROM DCCC NO. 1117 OF 2006) ---------------------- BETWEEN
---------------------- CAAR 10/2007 APPLICATION FOR REVIEW No. CAAR10/2007 (ON REVIEW FROM DCCC No. 1117 OF 2006) ---------------------- BETWEEN
---------------------- Before: Hon Stuart-Moore VP, Stock JA and Wright J in Court Date of Hearing: 17 October 2008 Date of Judgment: 17 October 2008 Date of handing down Reasons for Judgment: 31 October 2008 ---------------------------------------- REASONS FOR JUDGMENT -------------------------------------- Hon Wright J (giving the judgment of the Court): 1.The appellant in CACC277/2007, to whom, for the sake of clarity, we shall refer throughout as "the defendant", was convicted after trial in the District Court before Deputy District Judge Rickie Chan on a single charge of conspiring to deal with property knowing or having reasonable grounds to believe it to represent proceeds of drug trafficking, contrary to s. 25(1) and (3) of the Drug Trafficking (Recovery of Proceeds) Ordinance, Cap 405 and ss. 159A and 159C of the Crimes Ordinance, Cap 200 (Charge 1). The judge returned no verdict on an alternative charge of dealing with property knowing or having reasonable grounds to believe it to represent proceeds of an indictable offence, contrary to s. 25(1) and (3) of the Organised and Serious Crimes Ordinance, Cap 455 (Charge 2). The defendant applied for leave to appeal the conviction. 2.We granted the application, treated the hearing as the appeal and allowed the appeal to the extent that we set aside the conviction on Charge 1 and substituted therefor a conviction on Charge 2. 3.The defendant had been sentenced to serve a period of 18 months imprisonment which then had been suspended for a period of three years. The Secretary for Justice was granted leave by the Chief Judge, on 10 August 2007, to apply to review the sentence. In response to the Application for Review, CAAR10/2007, the defendant applied for leave to adduce fresh evidence pursuant to the provisions of s. 81B(3) and 83V of the Criminal Procedure Ordinance, Cap 221. 4.We granted the application to adduce fresh evidence. We then granted the application of the Secretary for Justice, set aside the period of imprisonment and the order suspending its operation and imposed, in its stead, a period of two years imprisonment. 5.We indicated that we would give reasons for our decisions. These are they. THE APPEAL AGAINST CONVICTION : CACC277/2007 6.The charges which appeared on the charge sheet were:
7.It was unnecessary for the prosecution to lead oral evidence as the defendant agreed its entire case. It comprised facts admitted pursuant to the provisions of s. 65C of the Criminal Procedure Ordinance, six affirmations from Fiji, two bankers’ affirmations from Hong Kong and two records of interviews with the defendant. An appreciation of the prosecution case is as important for the proper understanding of the application for review as it is for the appeal against conviction. We reproduce the agreed facts in full:
8.The defendant elected not to give or call any evidence. The defendant relied upon what he had said during the course of his interviews, the salient aspects of which the judge summarised thus:
9.Unsurprisingly, the judge rejected the defendant’s explanation as to the circumstances in which he came to make the remittances to Fiji. He gave cogent reasons as to why he did so. 10.In the first ground of appeal the judge was criticised by the defendant for observing that, in regard to the defendant’s means, "... other than his bare assertions that he is earning a good income from a Macau casino, there is nothing to support what he says. " This formed the cornerstone of the ground which was that the judge had erred in finding that the defendant was not a person of wealth and that the moneys remitted to Fiji by him and the $750,000 in cash found in his home did not belong to him: the submission was that the judge had reversed the onus of proof. 11.This submission ignored the context in which the judge’s observation was passed and the circumstances in which the defendant came to participate in the second interview. The judge said:
12.The judge was not reversing the burden of proof but simply expressing an entirely commonsense view. We note, too, that the judge had expressly directed himself correctly earlier in his Reasons for Verdict as to the standard and burden of proof. There is nothing in this ground. 13.The third ground was interwoven with the first ground in the sense that it complained that the judge had erred in finding that the $750,000 in cash seized in the defendant’s bedroom was retained by him with a view to making further remittances to Fiji. The submission was that there was no evidence regarding either the provenance or retention of the sum of money, just the mere fact that it had been seized in the applicant's bedroom. 14.Viewed in isolation, that may be so but when considered in the light of the rejection of the defendant’s explanation and of all the evidence before the judge, in particular the pattern demonstrated by the applicant’s bank account of cash deposits preceding the transfers to Fiji, the inference which the judge drew was entirely justified. There is nothing in this ground. 15.The second ground of appeal asserted that the judge had erred in finding that a reasonable person would have realised that the moneys had "... something to do with proceeds of crime, crime such as drug trafficking" [emphasis added] in that there was no evidence to support a finding that there existed reasonable grounds to believe that the moneys were the proceeds of the drug trafficking. Mr Zervos SC who appeared for the respondent in the appeal against conviction faintly suggested that the judge had been justified in arriving at his conclusion but pointed out, with considerably more vigour, that, even if there were insufficient evidence to support the first charge, there was an abundance of evidence that properly would have led to conviction on the alternative, second, charge. 16.There was, in our view, insufficient evidence for the judge to have made a finding that the defendant knew or had reasonable grounds to believe that the moneys with which he dealt directly or indirectly represented the proceeds of drug trafficking. It may be that upon reading the summary of facts the conclusion would be reached that the funds remitted by the defendant were directly connected with the manufacture/trafficking of drugs in Fiji but there was simply no evidence before the judge that the defendant was cognizant of those facts: the only evidence before the judge as to the extent of the defendant’s knowledge was the fact of his remittances to the Fiji account. 17.An aspect which the judge did not address in his Reasons for Verdict was the fact that the moneys, which were remitted on a monthly basis, were being sent to the very place where drugs were being manufactured rather than being received from that location. This obviously raised the real question of whether the funds were being used for the purposes of facilitating drug manufacture/trafficking rather than being the proceeds of such trafficking. 18.It is well settled that the concept of having "reasonable grounds to believe" involves both objective and subjective elements: the objective element necessitates proof of the existence of grounds which a commonsense, right-thinking member of the community would regard as sufficient to lead a person to believe that property in whole or in part represented proceeds of an indictable offence; the subjective element requires proof that those grounds were known to the particular accused. See, for example, HKSAR v SHING Siu-ming & Others [1999] 2 HKC 818 at 825H-I; HKSAR v WONG Ping-sing & Anor. (2001) 4 HKCFAR 29 at 31I-32C; HKSAR v MA Zhujiang & Anor. [2007] 4 HKLRD 285 §32-64. 19.Although there was insufficient evidence on the question of drug trafficking upon which the judge could properly draw the necessary inference in respect of the first charge, there was overwhelming evidence that justified a finding that there existed reasonable grounds for the defendant to believe that the moneys with which he was dealing were the proceeds of an indictable offence. 20.If a person either allows another to use his bank account for the transmission of funds or accepts substantial funds from others which he then remits, without enquiry by him or explanation by the others, to third parties unknown to him then, in the absence of evidence to the contrary, the inevitable inference will arise that the holder of the bank account has reasonable grounds to believe that the funds passing through the account or the funds with which he has dealt represent proceeds of an indictable offence. 21.The evidence before the judge showed that: between 1 January 2003 and 9 June 2004 the aggregate amount of deposits into and withdrawals from the defendant's bank accounts were approximately equal; in each of January, February, March and April 2004 the defendant remitted US$30,000 to Fiji; in May 2004 the defendant remitted two further amounts each of UD$10,000 to Fiji; in January, February and May 2004 those remittances were made on the same day as substantial cash deposits had been made to his account; during the period January to May 2004 total deposits amounting to $1,120,000.00 were made to the defendant’s bank account, all in cash; during that same period the defendant’s account was debited with $1,092,200.00 in respect of the remittances to Fiji – all but $27,800.00 of the cash deposits; the defendant rendered no return and paid no income-tax between January 2000 and October 2005; the defendant was in possession of $750,00.00 in cash. 22.Those facts, if known to a commonsense, right-thinking member of the community would be regarded as sufficient to lead a person to believe that property in whole or in part represented proceeds of an indictable offence. Those facts were known to the defendant. The judge correctly rejected the defendant’s explanation concerning them. The irresistible inference was that the defendant had grounds to believe that the moneys with which he was dealing were the proceeds of an indictable offence. THE APPLICATION FOR REVIEW OF SENTENCE : CAAR10/2007 23.We turn now to the Application for Review by the Secretary for Justice in regard to the sentence imposed on the defendant and the order suspending that sentence. We are able to deal with this shortly as, in view of the substitution of a conviction on the alternative charge, it is necessary, in any event, to revisit the question of sentence. 24.We are satisfied that in approaching the question of sentence the judge erred in three respects: first, the starting point which he adopted was manifestly inadequate; secondly, the reduction of six months from the starting point for a lack of previous convictions and "good character" was wrong in principle; thirdly, the finding that there had been delay and that that delay constituted an exceptional circumstance justifying the suspension of the sentence was wrong in principle. We deal with each in turn. 25.In addressing the starting point the judge said:
26.The judge was correct to recognize that the offence is a serious one, albeit that at that time he was thinking of the offence of conspiracy to launder the proceeds of drug trafficking. In our view, a conviction on the first charge should have attracted a starting point in the region of 5 years imprisonment. 27.In regard to the reduction of six months from the starting point, the judge said:
28.There was nothing before the judge which properly could be considered as evidence of "positive good character" on the part of the defendant such as would justify any discount from an otherwise appropriate starting point. In particular, the letter from a Legislative Councillor was of no value at all, given that it did not even suggest that the defendant was known to the author. 29.The judge then turned to the question of whether the sentence should be suspended, saying:
30.Such unexplained delay as there may have been in this matter was comparatively short, once it was appreciated that the prosecution needed to obtain evidence from overseas. Indeed, the judge recognized this saying:
31.If, as he expressed himself, the judge understood the necessity for the prosecution to wait before laying charges, it is difficult to appreciate how he then came to the conclusion that that understandable delay amounted to a circumstance so exceptional that it justified suspending the sentence. 32.Before considering the sentence to be imposed, we allowed the defendant 's application in terms of ss. 81B(3) and 83V of the Criminal Procedure Ordinance to lead additional evidence. This was initially expected to be confined to the tendering of three letters, one of which was written by his present employer, and a letter from a psychiatrist. Because there was some suggestion that the employment letter might not be genuine, we heard evidence from a witness. We then proceeded on the assumption that the defendant indeed was employed. 33.It is now well recognised that offences of this nature attract immediate custodial sentences even for a first offender. We regard it as unnecessary to repeat the reasoning for this approach which has been expressed repeatedly by this court: see, for example, HKSAR v WONG Ping Shui, Adam & Anor. [2001] 1 HKC 600; HKSAR v Mak Shing CACC322/2001; HKSAR v Javid Kamran CACC400/2004 (unreported, dd. 12 April 2005); HKSAR v Xu Xia Li & Anor. [2004] 4 HKC 16; HKSAR v CHEN Zhen Chu [2007] 5 HKC 505. 34.We would observe only that where a court is dealing with an offence under section 25 of the Organised and Serious Crimes Ordinance and the nature of the indictable offence which generated the funds dealt with by the convicted person is not proven before the court, that should not be regarded as a matter for the mitigation of sentence: rather, if that indictable offence is identified to the court then, depending upon its nature, that may be an aggravating feature. 35.There are, of course, no guidelines for this offence. 36.The defendant willingly transmitted $1.1 million, a substantial although not huge, sum of money to Fiji on six separate occasions over a six-month period. He pursued a settled, ongoing course of conduct. He had in his possession $750,000, a further substantial amount of money which, the judge found, similarly would have been remitted. In our view an appropriate starting point in the circumstances of this case involving these sums of money, after trial, was one of 3 years imprisonment. 37.There was, as we have indicated, no substantial delay in bringing the defendant to court. Frequently, where a defendant seeks to rely on delay as a mitigating feature, the prosecution provides either to the sentencing court or to this court a chronology detailing the steps which were taken during the period criticized: there was none in this case although both counsel on fiat at trial and Mr Zervos suggested that, given the necessity of gathering evidence overseas, the prosecution had acted as expeditiously as possible. 38.The defendant had been arrested on 9 June 2004 and then released on bail. On 7 July 2005, 13 months later, the defendant was released unconditionally. This is a peculiar feature particularly in view of the fact that the persons who had been arrested in Fiji also on the 9 June 2004 were to be sentenced less than three weeks later, a fact which, we apprehend, would have been known to the prosecution. Nothing happened for another 13 months, until 31 August 2006, when the defendant caused a request to be made to the police to return the cash seized in his flat. By this time it would not be unreasonable for the defendant to have come to believe that no further action was taken against him and to make this request. That hope would have been dashed when, two weeks later, on 14 September 2006, he was rearrested and charged with the present offences. The trial commenced on 30 May 2007. 39.Although the period from 9 June 2004 to 14 September 2006 is on the long side absent any detailed explanation it is to be remembered that the case had an international dimension and that there was no cooperation from the defendant in the investigation that had to be pursued. There was not justification in such delay for suspending the sentence although when the unconditional release of the defendant and the dashing of his subsequent expectations are factored in, we are of the view that a discount of six months is appropriate. 40.This being an application for review, we are able to reduce the sentence further. Some 15 months has elapsed since the imposition of the suspended sentence on the defendant. In effect, his hopes, this time of not being imprisoned, are dashed for a second time. A further discount of six months is appropriate. 41.We have closely examined the reports and do not agree with the finding of the judge that, since the commission of the offence, the defendant "…has reformed himself.", a factor upon which he appears to have relied in order to find special circumstances to justify suspending the sentence. In particular, the assertion that the defendant is a “non-gambler” sits uneasily with the defendant’s case that the very reason he remitted the moneys was to discharge a debt of $1,000,000.00 which had incurred through gambling. There are, in our view, no other mitigating factors. 42.As a consequence we imposed the sentence of 2 years imprisonment.
Mr K P Zervos SC, DDPP, and Mr David Leung, SPP, Department of Justice, for Respondent in CACC277/2007 and the Secretary for Justice in CAAR10/2007 Mr Gary Plowman SC and Mr Derek Chan instructed by M/s Lam, Lee & Lai for the Appellant in CACC277/2007 and the Respondent in CAAR10/2007 |
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