Read the full judgment text of FACC 2/2010 & FACC 3/2010 on BabelCite. This Court of Final Appeal judgment was delivered on 9 March 2011 before Bokhary PJ, Chan PJ, Ribeiro PJ, Mortimer NPJ, Hoffmann NPJ.
Criminal law – conspiracy to defraud – theft – fair trial – right to know the case to be met – judge widening basis of conviction beyond prosecution case – material irregularity – Court of Final Appeal – appeal from District Court – leave on point of law and grave and substantial injustice. The 1st appellant was chairman and executive director of a publicly listed telecommunications group, and the 2nd appellant an executive director and chief operating officer. Between 2000 and 2003 the group's subsidiary Netcom entered into three consultancy agreements with two BVI companies, Bioroad and Headwise, set up at the request of a co-conspirator and sharing the group's registered address but with no trading activity, no employees and no invoices. Netcom and CM Holdings paid large monthly fees that were diverted to corporate entertainment, overseas trips and other expenses disguised as consultancy payments, and four cheques totalling HK$8,972,000 paid to Headwise formed the basis of four theft charges. The appellants were charged in the District Court with one count of conspiracy to defraud and four counts of theft; the prosecution applied at the outset to amend the indictment so that the thefts were not alternatives to the conspiracy but separate charges, and conducted the trial on the basis that the thefts were separate from the conspiracy. The trial judge nonetheless convicted on a wider basis, finding the conspiracy was to divert funds to Bioroad and Headwise for use at the whim of the conspirators and that the thefts were overt acts of that conspiracy, and did not enter verdicts on the theft charges. The Court of Appeal upheld the conspiracy conviction, holding the appellants had not been disadvantaged or prejudiced. On further appeal the Court of Final Appeal held that the judge had convicted on a basis different from that presented by the prosecution, that this constituted a material irregularity depriving the appellants of a fair trial, and that the conspiracy conviction must be quashed. The Court then considered whether to substitute theft convictions under s.83A of the Criminal Procedure Ordinance (Cap 221), applied to District Court appeals by s.83 of the District Court Ordinance (Cap 336). The Court held that both conditions of s.83A were satisfied: the theft charges were plainly open on the indictment, and on the detailed reasons given by the trial judge sitting alone the Court was satisfied he must have been satisfied of the facts proving the thefts, with the evidence being strong and unaffected by the irregularity that tainted the conspiracy conviction. The Court further held that substitution was not unfair because the thefts had always been presented as separate charges the appellants had to face and they were not misled or wrongfooted in defending them. Each appellant was accordingly sentenced to four years' imprisonment on each theft charge, all concurrent (total of four years), with time already served on the conspiracy charge counted towards the total, subject to a 21-day right to make written submissions on sentence. Held, allowing the appeal in part: conspiracy conviction quashed; theft convictions substituted under s.83A; sentences as proposed.
Legal issues: Conviction on basis different from prosecution case · Fair trial – disadvantage or prejudice from widened basis · Substitution of theft convictions under s.83A CPO · Procedure where prosecution confines its case
Outcome: Appeal formally allowed to the extent of substituting convictions on the four theft charges for the conviction on the conspiracy charge. Conspiracy conviction quashed and sentence for that charge set aside.