HKSAR v. Yu Wai Man

Case No.CACC 248/2008[2009] 4 HKLRD 558

Court

Court of Appeal

Date12 May 2009

Judge—

Case Document

100%Judiciary

[English Translation – 英譯本]
CACC 248/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 248 OF 2008

(ON APPEAL FROM DCCC NO. 937 OF 2007)

_________________

BETWEEN

	HKSAR	Respondent
	and
	YU WAI MAN (余偉文)	Applicant

_________________

Before: Hon Tang VP, Yeung JA and Tong J in Court

Dates of Hearing: 19 February and 29 April 2009

Date of Judgment: 12 May 2009

_________________

JUDGMENT

_________________

Hon Tang VP (giving the judgment of the Court):

1.The Applicant herein (Yu Wai Man) was convicted on the following three charges after trial before District Judge Li:

Charge 1: “Bookmaking”, contrary to section 7(1)(a) of the Gambling Ordinance, Cap. 148 of the Laws of Hong Kong; and

Charges 2 & 3: “Dealing with property knowing or having reasonable grounds to believe that it represented the proceeds of an indictable offence”, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455 of the Laws of Hong Kong.

2.Charge 1 alleged that the Applicant “engaged in bookmaking between 8 March 2006 and 30 June 2006 (both dates inclusive) in Hong Kong”. Charge 2 alleged that “between 1 January 2004 and 22 June 2006 (both dates inclusive) and in Hong Kong, the Applicant dealt with a property, namely, a total sum of HK$1,000,393 in an account with the Hong Kong and Shanghai Banking Corporation Limited (Account 1), knowing or having reasonable grounds to believe that such property in whole or in part directly or indirectly represented the proceeds of an indictable offence”. Charge 3 alleged that “between 29 January 2004 and 21 June 2006 (both dates inclusive) and in Hong Kong, the Applicant dealt with a property, namely a total sum of HK$809,765 in an account with the Hong Kong and Shanghai Banking Corporation Limited (Account 2), knowing or having reasonable grounds to believe that such property in whole or in part directly or indirectly represented the proceeds of an indictable offence”.

3.In respect of Charge 1, the Applicant was sentenced to 15 months’ imprisonment and fined $56,500. In respect of Charges 2 and 3, he was sentenced to 27 months’ imprisonment for each charge. The sentences for Charges 2 and 3 were ordered to run concurrently, and 10 months of the sentence for Charge 1 was ordered to run consecutively to the sentences for Charges 2 and 3, making a total term of 37 months.

4.The Applicant now applies to this Court for leave to appeal against conviction.

Synopsis of the prosecution case

5.At the time of the incident, the Applicant was a senior police constable and resided with his family at Ngau Chi Wan Disciplined Services Quarters. On the evening of 1 July 2006, the police arrived at the Applicant’s residence to execute an anti-gambling authorization and conduct a search.

6.As those inside the Applicant’s premises refused to open the door, the police had to break into the premises. After gaining entry into the premises, police officers saw the Applicant and his wife standing in the living room, where a football match was being broadcast on the television. Among the exhibits seized from the living room were a notebook of A4 size and two sheets of paper (Exhibit P6).

7.Police officers found two ATM cards from a wallet on the Applicant’s person. They also found in the living room two passbooks relating to the bank accounts referred to in Charges 2 and 3. One of the passbooks belonged to the Applicant, and the other to one Yu Wai Keung. Subsequently, the police seized from a drawer of the Applicant’s writing desk at Kwun Tong Police Station, where he was attached to, a private and confidential letter dated 23 February 2004 from the Hong Kong Bank to Yu Wai Keung, informing him that the ATM card of the account referred to in Charge 3 and the relevant PIN number were ready for collection.

8.Between 1 January 2004 and 22 June 2006 (both dates inclusive), the Applicant dealt with a total sum of HK$1,000,393 in Account 1; between 29 January 2004 and 21 June 2006 (both dates inclusive), he dealt with a total sum of HK$809,765 in Account 2. The said two figures were net of items such as wages.

Charge 1

9.In respect of Charge 1, the thrust of the prosecution case was that Exhibit P6 contained “bookmaking records” of the bookmaker.

10.For the purpose of proving that P6 contained bookmaking records, the prosecution called as its principal witness Sergeant 46070 Ling Sai Kei (PW4). His evidence, which he gave as a gambling expert, was not disputed.

11.Sergeant Ling’s evidence was that the betting records were kept in an A4 size single line writing pad (Exhibit P6), of which tens of pages contained handwritings on both sides. There was no dispute that Exhibit P6 was written by the Applicant. For the sake of convenience, the pages in P6 which contained handwritings were individually marked with the numbers 1 to 47. The police subsequently took photographs of P6 and those photographs formed Exhibit P90. The photographs were enlarged (Exhibit P91A) for easy reference at trial. P6, P90 and P91A had the same subject-matter.

12.According to Sergeant Ling’s expert evidence, 43 pages of P6 were soccer betting records which detailed the kick off time, the classification of the matches, the names of the teams (or referred to in short as “handicap”), the odds and the wagers etc. The sergeant deduced from the contents and layout of P6 that the bets fell into the following two categories:

(1) Soccer bookmaking (see Exhibit P104A for details). Exhibit P104A contained 9 photographs showing bookmaking records and, on Sergeant Ling’s analysis, a total of 19 bets were involved. The exhibit P104A showed that the code names of the two punters were H and T.

(2) Soccer bets.

13.Sergeant Ling pointed out that the first type of betting records were made by the author thereof in respect of bets he accepted from the punters as a bookmaker and banker, involving wagers totalling HK$56,500. The second type of betting records related to the bets placed with other bookmakers by the author of the records on behalf of himself or other punters, involving wagers totalling approximately HK$650,000. Sergeant Ling pointed out that there was insufficient evidence to show whether the second type of betting records had anything to do with illegal gambling.

14.The key issue in the present case was whether the first type of records constituted bookmaking records, as section 7(1)(a) of the Gambling Ordinance provides that:

“(1) Any person who ―

(a) engages in bookmaking, whether on one occasion or more than one occasion;

...

commits an offence …”

15.District Judge Li, the trial judge, stated in his judgment that:

“3. The defendant neither gave evidence nor called any defence witness. In respect of Charge 1, defence counsel mainly queries whether the betting records in question involve any bets accepted by the author of the records as a bookmaker. Defence counsel raises several other possibilities including ‘betting against each other’, ‘joint betting’ and ‘bets placed with other bookmakers’ etc. In respect of Charges 2 and 3, defence counsel argues that there is no evidence proving that the defendant knew what the ‘indictable offence’ referred to in the charges was.”

16.In paragraph 17 of his judgment, the trial judge had this to say:

“c. In respect of the 19 bets referred to by PW4, the defence has raised other possibilities:

i. The first possibility is ‘betting against each other’. The defence submitted that if ‘H’ and ‘T’ were the defendant’s friends, their bets in private should not be regarded as bookmaking on the part of the defendant as there was no element of trade or business. PW4 accepted such a possibility existed but pointed out that if they were merely betting against each other, the odds would not have to be so complicated. On my analysis in paragraphs 19 to 21 below, the odds in most of these 19 bets were better than those offered by the Hong Kong Jockey Club. Some of the handicaps were different from those of the Jockey Club, and some even adopted the Asian handicap odds of Macauslot. I agree with PW4 that things would not have to be so complicated if they were friends ‘betting against each other’.

ii. The second possibility is ‘joint betting’. The defence submitted that these 19 bets were possibly made jointly by the defendant, ‘H’ and ‘T’. PW4 tried to disprove that assumption by using photograph 16 of Exhibit P90A as an example. Two of the entries on that page read: ‘0345, UEFA Champions League, Chelsea, –0.5, 2B’ and ‘Barcelona, 0.5, 10/3B, H’. Chelsea and Barcelona were the two opposite teams in the soccer match on that day. In the former entry, the defendant bet on Chelsea; in the latter entry, on the defence’s assumption, the defendant and ‘H’ placed a joint bet on Barcelona. PW4 said it would be irrational for the defendant to bet on the two opposite teams at the same time. I agree with PW4’s analysis that it would be irrational for the defendant to bet in this way. The bets were contradictory, the winnings would be reduced even if either team won the match, and in the event of a draw, the defendant would lose even more.

iii. Another assumption of the defence is that ‘H’ might be the bookmaker. If this assumption were valid, then according to the two bets cited above, i.e. ‘0345, UEFA Champions League, Chelsea, –0.5, 2B’ and ‘Barcelona, 0.5, 10/3B, H’, the defendant would have placed bets with different bookmakers on both sides of the same match. I consider this irrational for the same reason.

iv. The defence has pointed out that the above scenario only applies to one of the 19 bets and hence cannot be relied upon to rule out the possibility that the other bets related to joint betting. Were this assumption valid, it would mean that ‘H’ sometimes bet against the defendant, sometimes placed bets with the defendant jointly, and sometimes acted as a bookmaker. This proposition about the shifting roles of ‘H’ is in my view far-fetched and irrational.

v. Yet another assumption of the defence is that the defendant placed bets on behalf of ‘H’ and ‘T’. I accept PW4’s argument that it would be irrational for the defendant to place bets on behalf of others in his own name because he would then run the risk of being dunned by the bookmakers for payment and his own betting limit would then be lowered.

vi. The various possibilities raised by the defence are sheer assumptions, and I find nothing in the evidence before me which supports those possibilities. It is true that the defence does not bear the burden of proof, but there must be some evidence to support the assumptions it makes. In the absence of such evidence, and in light of the analysis in sub-paragraphs (i) to (v) above, I do not accept the defence’s assumptions.

d. I notice that those 19 betting records contain only the names of the teams but not the dates and times of the matches. The defence points out that they do not look like bookmaking records as they are very different from the detailed records kept by the Hong Kong Jockey Club. According to PW4, off-course bookmakers normally accept bets only one day before the match, and so it is sufficient to record the names of the teams without more. And according to PW5, the Hong Kong Jockey Club starts accepting bets about one week before the matches and simultaneously accept bets relating to matches held on several dates, and it is therefore necessary to specify the date and code number of each match. I accept the evidence of the two prosecution witnesses. In my view, as off-course bookmakers accept bets only one day before the matches, and they do not operate on a scale comparable to that of the Hong Kong Jockey Club, their betting records cannot be mentioned in the same breath with ― and need not be as detailed as ― those of the Hong Kong Jockey Club. Exhibit P6 does contain sufficient information, and there should be no question of any confusion on the part of the bookmaker.”

17.Apart from Sergeant Ling, the prosecution also called another gambling expert (PW7) upon request of the defence. The trial judge made the following observations on PW7’s evidence:

“18. Another gambling expert in the present case (PW7) reached a preliminary conclusion after examining Exhibit P6 that it related to illegal off-course soccer betting activities and that the author (i.e. the defendant) acted as a ‘punter’. As to why he only conducted a preliminary analysis, PW7 explained that his superior had asked him to ascertain as soon as possible whether the relevant exhibit related to illegal soccer betting activities, so that his superior could decide whether to transfer the defendant to another post. PW7 therefore submitted his report in about two days’ time without carrying out a detailed analysis. He did notice what he suspected to be bookmaking items, but as he was not sure about it, he made no mention of it in his report. Subsequently, upon request of the defence, he attended court to hear PW4’s evidence, and after consideration, he agreed with PW4’s conclusion that Exhibit P6 showed that the defendant accepted bets as a bookmaker and placed bets with off-course bookmakers at the same time. This notwithstanding, there is nothing improper with his preliminary conclusion. The defence called into question PW7’s reliability as a witness for the reason that he had failed to submit further reports to explain his change of views. I have carefully considered what PW7said. His report stated clearly that it contained his preliminary analysis and preliminary conclusion. Moreover, it was unlikely for PW7 to have overlooked the 19 betting records in question which were conspicuous. I accept his explanation that he made no mention of them in the preliminary report as he was still not sure. As to the defence’s complaint that he changed his views, I do not think this affected his evidence. Having heard PW4’s analysis and cross-examination in court, he had sufficient information to enable him to reconsider his views. I see nothing improper with this. Furthermore, it was only after hearing what PW4 said and making his own assessment that he arrived at his conclusions. I accept his evidence.”

18.Mr Wong SC, Counsel for the Applicant on appeal, submits that it was unsafe for the trial judge to accept the evidence of Sergeant Ling and PW7 because the content of P6 was messy and included a number of inexplicable figures. Mr Wong also casts doubts about the reliability of Sergeant Ling’s evidence.

19.In his detailed judgment, the trial judge clearly explained why he accepted the evidence of Sergeant Ling and PW7. His conclusion on this point is in our view impeccable. Furthermore, this is a finding of fact which the appellate court should not lightly disturb.

20.In addition, in paragraph 17 of his judgment, the trial judge provided the following detailed, lucid and reasonable explanation on the more significant queries and possibilities raised by the defence:

“a. The defence submits that Exhibit P6, with its messy content, does not look like records of a bookmaker, who is expected to keep clear records to enable him to settle accounts with punters. I do notice quite a number of inexplicable figures in the exhibit, but on the whole, the various records of bets placed and bets received are clearly laid out, and the codes of the suspected punters are clearly recorded. I accept PW4’s evidence that bookmakers habitually settle accounts the day following the relevant match, so that before they record the bets accepted or placed for a match on another day, usually the balance has already been worked out clearly and hence there should be no question of the bookmakers being confused.

b. The defence submits that there are many inexplicable figures in the ‘ledger’ and that, contrary to PW4’s evidence that accounts are settled within one or two days, the ‘ledger’ covers matches spanning several months. PW4 has pointed out that, depending on the relationship between the bookmaker and the punter, there are many possible ways of settling accounts. Furthermore, the figures in Exhibit P6 are accompanied by ‘+’ or ‘-’ signs, for instance, photos 31 and 47 of Exhibit P90A clearly indicate settlement of accounts. I have examined Exhibit P6 carefully and notice that many pages have been torn out of it, and I believe photo 47 depicts one of those pages. Furthermore, this exhibit also includes a sheet of paper of a different size, with figures written on it in red ink. These indicate that the A4 size book in Exhibit P6 is not a complete record, and this, I believe, is one of the reasons why PW4 could not trace the figures. On the above analysis, I accept PW4’s evidence that Exhibit P6 contains the ‘ledger’ of punters ‘H’ and ‘T’.”

21.The trial judge said in paragraph 17(c)(vi) of his judgment that:

“... It is true that the defence does not bear the burden of proof, but there must be some evidence to support the assumption it makes. …”

In this respect, Mr Wong SC submits that the trial judge had erroneously imposed the burden of proof on the Applicant, in particular because the trial judge mentioned the term “evidential burden” in footnote 75. On this issue, we agree with what Mr Tam, Counsel for the prosecution, has said:

“33. It might strictly speaking not be proper for the trial judge to use the phrase ‘evidential burden’ in expressing what he had in mind, but what he intended to express was clear. Both of the expert witnesses gave evidence that the 19 records were ‘records of bets accepted’, and there was no evidence to support a reasonable inference that they are not ‘records of bets accepted’ as PW4 and PW7 had suggested. Anything is ‘possible’ in this world, but it does not mean that every possibility is a ‘reasonable inference’. The trial judge’s conclusion was that, in the absence of supporting evidence, the possibilities of ‘betting against each other’ and ‘joint bettings’ were not ‘reasonable inferences’.”

22.Mr Wong SC complains that Sergeant Ling based his conclusion in respect of those 19 bets on the form and contents of Exhibit P6, which were both “hearsay evidence”. However, in Oei Hengky Wiryo v HKSAR (No 2) (2007) 10 HKCFAR 98, the Court of Final Appeal gave a final judgment on this issue, which is that an expert witness can make inferences about the nature and contents of a document on the basis of its form and contents, and a witness who takes such an approach is not relying on “hearsay evidence” because the approach does not involve the making of any assumption concerning the truth or otherwise of the transaction that the document records.

23.Furthermore, McHugh NPJ said:

“63. In the present case, Sgt Ling Sai Kei identified the documents seized from Kam’s home and office as the type of records kept by a bookmaker betting on soccer matches. In his opinion, the documents appeared to record soccer matches, odds, handicaps and bets between bookmakers and punters and to have been prepared by a person who was a ‘teng jai’ or bookmaker’s agent. Sgt Ling Sai Kei reached his opinion by reference to the form and contents of the documents — by their numbers, letters, codes, columns and arrangement. As the decision of this Court inSecretary for Justice v. Lui Kin Hong (1999) 2 HKCFAR 510 shows, no breach of the hearsay rule occurs because a judge takes into account the form and contents of a document in determining its nature. Nor does using the contents of the documents for that purpose make any assumptions concerning the truth or falsity of the transactions that the document purports to record. Consequently, the learned trial judge committed no breach of the hearsay rule by adopting the opinion of Sgt Ling Sai Kei who had taken into account the form and contents of the documents in determining that they were bookmaking documents. Nor did Sgt Ling Sai Kei’s opinion or the learned judge’s acceptance of it rely on the truth of their contents in determining the nature of the documents.”

The principal ground of appeal put forward by Mr Wong SC cannot be sustained.

24.In passing sentence for Charge 1, the trial judge said:

“9. The first charge of bookmaking involves 19 bets and a wager of approximately $56,500. On the facts, they are illegal activities on a small scale. … As the present case only involves a small scale operation, I adopt a starting point of 15 months’ imprisonment, and for the first charge, I sentence the defendant to 15 months’ imprisonment and a fine of $56,500.”

25.On 29 April 2009, upon the invitation of this Court, Mr Wong SC made further submissions to this Court. He stressed that the fact that the Applicant was fined exactly $56,500 for Charge 1 illustrated that the trial judge convicted the Applicant by relying on the truth of the contents of Exhibit P6. Mr Wong SC asserted that the conviction in reliance on the contents of Exhibit P6 went against the principle that the court should not rely on “hearsay evidence”.

26.Mr Tam, Counsel for the Respondent, agrees that the trial judge did rely on the contents of Exhibit P6, but he also points out that the defence case at trial was that Exhibit P6 merely recorded bets placed by the Applicant on behalf of others rather than (as the prosecution suggested) recording bets accepted by the Applicant as a bookmaker. This explained why Mr Alan Hoo SC, Counsel for the Applicant at trial, did not take issue with the admissibility of Exhibit P6 at any stage of the trial.

27.The main issue in the present case is whether the court could in the circumstances of the case accept Exhibit P6 as evidence of bookmaking records.

28.As Mr Tam has pointed out, in cases such as HKSAR v Or Suen Hong [2001] 2 HKLRD 669 and Oei Hengky Wiryo v HKSAR, the issue under discussion was whether the relevant prosecution exhibits were bookmaking records. In the aforesaid two cases, the bookmaking records involved were not made by the respective defendants, and the prosecution was unable to prove that the bookmaking records were actually related to the matches that had been held. Hence, in adducing evidence on that issue, the prosecution could not violate the principle against admitting “hearsay evidence”. In the aforesaid cases, the courts also took the view that it was not a violation of that principle for the expert witnesses to conclude, on the basis of the form and contents of the relevant documents, that those documents were bookmaking records.

29.The present case differs from the aforesaid two cases in that the prosecution alleged that Exhibit P6 were the bookmaker’s bookmaking records, and those records were made by the Applicant. The defence case at trial was that Exhibit P6 merely recorded bets placed by the Applicant on behalf of others, whereas the prosecution asserted that it recorded bets accepted by the Applicant as a bookmaker. Paragraph 11-7 of Archbold Hong Kong 2009 discusses “hearsay evidence” and the circumstances in which evidence constitutes “hearsay evidence”, making reference to the case of R v Kearley [1992] 2 AC 228. The defendant in that case was charged with possession of drugs. After the defendant was arrested at home, police officers stayed at his home for several hours, during which time 15 incoming calls were received and 9 people visited the premises. Some of the callers and visitors intended to buy drugs from the defendant. The issue was whether what the callers or visitors said could be admitted as evidence proving the defendant had possessed drugs for the purpose of trafficking. Of the five judges sitting in the House of Lords, three concluded that the above evidence was hearsay and therefore inadmissible, but the other two judges considered the evidence admissible.

30.However, Archbold Hong Kong 2009 says:

“If the defendant, while present when the police answer the incoming phone call but not close enough to hear the caller, shouts instructions to hang up because ‘it’s the police’, the ratio in Kearley still applies to prohibit the admissibility of what was said by the caller: R v O’Connell [2003] EWCA Crim 502, CA. However the observed response of the defendant to the fact of the call is admissible and ‘in themselves [on the facts of this case] provided powerful evidence of his involvement in the supply of drugs’ (at para 8).”

31.In R v O’Connell [2003] EWCA Crim 502, the English Court of Appeal also said:

“10. In Kearley what the caller had to say was purely hearsay. That would not be so if, of course, it is directly communicated to the hearer, the defendant or appellant as the case may be, and he responds to it.”

32.In his judgment, the trial judge did not clearly explain the basis on which he admitted Exhibit P6 as evidence. However, as mentioned above, there was no dispute as to the admissibility of Exhibit P6 at trial. Mr Tam has pointed out that the contents and records of P6 were written by the Applicant himself and not by any other person, and the nature of the exhibit was no different from a video recording showing the Applicant receiving bets on soccer matches over the phone. And as Sergeant Ling said in the course of giving evidence (transcript of recording T24T):

“... to my understanding, ‘H’ minus $1,700 denotes the win or loss of this punter ‘H’ after the soccer match on which he had placed bet took place. As to why it is minus $1,700, I have tried to do my own calculations but have no idea how the figure came about.”

P6 contained handwritten records by the Applicant of soccer bets that he accepted. The exhibit could therefore be admitted as evidence and was not “hearsay evidence” that the court was debarred from relying upon.

33.Needless to say, it was only upon the analysis of the expert witnesses that P6 could be held to contain records of bets accepted by the Applicant. In paragraph 19 of his judgment, the trial judge gave a detailed analysis of the factual matrix which, the judge stressed, lent support to what Sergeant Ling and PW7 said. The judge arrived at the following conclusion:

“22. On the above analysis, I am satisfied that the 19 items referred to by PW4 and PW7 are bookmaking records.”

34.After consideration, we take the view that P6 was in effect as if the Applicant had written the words “received from Mr X a wager of $1,000 on the soccer match”. Similarly, when the police broke into the premises, if the Applicant said of his own accord that:

“I have only accepted a few bets, please give me a chance.”

then such confession could also be admissible as evidence of what had actually happened.

Charges 2 and 3

35.With regard to Charges 2 and 3, the trial judge pointed out that the two main elements of the two charges were:

1) dealing with money in the bank,

2) having known or believed on reasonable grounds that the property represented the proceeds of an indictable offence.

36.As the trial judge pointed out, the case of Oei Hengky Wiryo has made it clear that it is not necessary for the prosecution to specify the indictable offence referred to in the charge. Mr Wong SC has not taken issue with the court’s finding that the Applicant is the person who dealt with the money in the bank.

37.The trial judge also stated clearly as follows:

“33. ... the decided cases have established that, in determining whether an inference can be drawn that the defendant ‘had reasonable grounds to believe’, the court should consider two matters: (a) whether there were objective factors which would lead a reasonable man to believe that the money in question represented, in whole or in part, the proceeds of an ‘indictable offence’; (b) whether the defendant was aware of these objective factors. If both questions are answered in the affirmative, the inference can be drawn, provided that it is the only reasonable inference.

Objective factors

34. As set out in paragraph 13 above, the information provided by the bank in its affirmation reveals that a total of 114 cash deposits and 65 transfers have been made to the two accounts in question. These deposits and transfers ranged from $500 to $30,000 and involved a total sum of over $1.3 million. There have also been four cheque/bank draft deposits involving approximately $400,000. The lack of any evidence showing the sources of these deposits would have led a reasonable man to believe that these sums stemmed from an ‘indictable offence’.

Whether the defendant was aware of these objective factors

35. The defendant, who kept the passbooks and ATM cards of the two accounts in question, must have been aware of the transactions in the accounts. Furthermore, as analyzed in paragraph 32 above, the defendant frequently made deposits to and transfers with the two accounts and therefore must have been aware of the transactions involving the sums in question in the two accounts.

36. According to another set of agreed facts, the defendant obtained cash advance of over $300,000 with his credit card between 16 December 2003 and 8 June 2006. However, there is no evidence showing any direct link between this sum of money and the two accounts in question, and in my view the cash advance cannot account for the transactions in the accounts in question. Even if I accepted all he said, the money only represents about one-sixth of the amount involved in the two charges, and there is no evidence on the sources of the rest of the money.

37. By reason of the analysis set out in paragraphs 29 to 36, I am satisfied that the defendant had reasonable grounds to believe that the money in the two accounts directly or indirectly represented the proceeds of an indictable offence, and that he dealt with the money. I convict the defendant on Charges 2 and 3.”

38.Mr Wong SC submits that the trial judge erred in paragraph 34 of his judgment by mentioning the sources of the deposits. In his submission made in both English and Chinese, Mr Wong SC said that “the source of the property”:

“... is only relevant to the knowing limb.”

39.With respect, we are of the view that Mr Wong SC has misunderstood the judgment in Oei Hengky Wiryo. The Court of Final Appeal said that in respect of the element of “having reasonable grounds to believe that the property represents the proceeds of an indictable offence”, the prosecution does not have to prove that the property actually represents proceeds of an indictable offence. This, however, does not mean that the source of the property is irrelevant to the question of whether there are “reasonable grounds to believe that the property represents proceeds of an indictable offence”. What the trial judge said in paragraphs 34 and 36 of his judgment is that the objective factor of the source of the property being unknown would lead a reasonable man to believe that the money in question came in whole or in part from “an indictable offence”. But as Mr Tam has pointed out, the trial judge never said in his judgment that the lack of any evidence showing the sources of the money would certainly lead a reasonable man to believe that the money in question represented the proceeds of an indictable offence.

40.Paragraph 4.4.1(d) and (e) of the skeleton submission of Mr Wong SC reads as follows:

“(d) However, whether or not the accused ‘had’ such grounds is not dependant upon what he had believed at the time. This was so held in HKSAR v MA Zhujiang & Anr [2007] 4 HKLRD 285 {5} where this Court said: [p.13, para 63]

‘… we are satisfied the correct construction of the terms of section 25(1) of the Ordinance [OSCO] is as stated in Shing Siu Ming in respect of section 25(1) of DTROP, and there is no reason to infer into the phrase ‘having reasonable grounds to believe’ the additional element of actual belief …’

(e) Since the issue must be determined irrespective of an accused’s ‘actual belief’, it follows that any explanation offered by an accused of what he believed at the time is irrelevant. And this is so even when a court accepts such explanation to be reasonably true.

(f) Accordingly, the failure of an accused to give any reasonable explanation (to the police or the court) about what he had believed in respect of the ‘origin’ of the property or the circumstances regarding his dealing with the property must be irrelevant.

(g) The direct consequence of the above must be that a court, with respect, is not permitted to rely upon such failure in anyway to hold that ‘grounds’ existed. Indeed, ‘origin’ only concerns the ‘knowing limb’ and not the ‘reasonable grounds limb’ [vide: HKSAR v WONG Ping-sui & Anr (2001) 4 HKCFAR 29 where the property was ICAC money.]”

41.With respect, the above submission shows that Mr Wong SC has misunderstood the judgment in MA Zhujiang. What the Court of Appeal held in that case is that the phrase “having reasonable grounds to believe” in section 25 means the defendant was aware of the relevant reasons, but the prosecution does not have to prove that the defendant actually believed that the money originated from an indictable offence. Mr Wong SC has taken the Court of Appeal’s judgment to mean that the court can convict the defendant no matter whether he knew what actually happened and that, for this reason, any explanation that the defendant may care to provide will not serve any purpose because it will not constitute a defence even if it may be true. Such an interpretation indicates that Mr Wong SC has misunderstood the Court of Appeal’s judgment. The judgment in MA Zhujiang does not say that any explanation offered by the defendant in respect of the money will never constitute a defence. The Court of Appeal merely pointed out that the prosecution does not have to prove that the defendant actually believed that the property originated from an “indictable offence”.

42.On the facts of the present case, Mr Wong SC has failed to put forward any argument to convince us that the trial judge’s verdict on Charges 2 and 3 was unsafe and unsatisfactory in any respect.

43.We dismiss the Applicant’s application for leave to appeal against conviction on all the three charges.