HKSAR v. Kong Wai Chun and Others

CACC 252/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 252 OF 2009

(ON APPEAL FROM DCCC NO. 760 of 2007)

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BETWEEN

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Before: Hon Stock VP, McMahon and Wright JJ in Court

Date of Hearing: 15, 16 and 17 February 2011

Date of Judgment: 20 May 2011

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JUDGMENT

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Hon Wright J (giving the judgment of the Court):

1.These applications for leave to appeal conviction and sentence all arose from a trial which lasted 117 days before Deputy Judge Merinda Chow in the District Court. We refer to the applicants as they were referred to at trial.

The charges

2.10 accused were tried, all of whom, save for the 7^th accused, faced a charge (Charge 1) of conspiring with one another and other persons unknown between 16 February 2006 and 14 February 2007 to sell, without the licences of the copyright owners, infringing copies of copyright works, contrary to s. 118(1)(e)(ii) and 119(1) of the Copyright Ordinance, Cap. 528 (“the Ordinance”) in three separate premises: first , in Kwun Tong Plaza,  Shop 138; second , also in Kwun Tong Plaza, Shops 134 and 139, those two latter premises having been physically consolidated, to which we shall refer simply as “Shop 139”; and, third , Shop 441B at 441 Kwun Tong Road.  Each was convicted. The 1^st to 6^th accused each sought leave to appeal both conviction and sentence, the remaining accused either having abandoned their applications or not sought leave.

3.The 1^st accused also faced a charge (Charge 7) of dealing with property known or believed to represent the proceeds of an indictable offence, contrary to s. 25(1) and (3) of the Organised and Serious Crimes Ordinance, Cap 455 (“OSCO”). That offence was said to have occurred between 3 June 2002 and 14 February 2007 and related to an amount of $7,193,960.00. The 2^nd accused faced a similar charge (Charge 8) covering the same period which was alleged to have involved an amount of $23,297,693.57. Each was convicted and sought leave to appeal both conviction and sentence.

4.The 3^rd and 4^th accused together with the 7^th accused faced a further single charge of exposing for sale,  contrary to s. 118(1)(e)(ii) and 119(1) of the Ordinance, infringing copies of copyright works in Shop 441B. The 5^th and 6^th accused faced two similar charges (Charges 2 and 3)  in respect of Shops 138 and 139 respectively alleged to have been committed on 14 February 2007. All were convicted and all, except the 7^th accused, sought leave to appeal both conviction and sentence: the 3^rd and 4^th accused subsequently abandoned their applications.

5.The 8^th and 9^th accused each also faced separate charges (Charges 6 and 5 respectively) of possession of infringing copies of copyright works, also on 14 February 2007, with a view to committing an act infringing the copyright of the copyright owners of them, contrary to  s. 118(1)(d) and 119(1) of the Ordinance), the 8th  accused in premises situated at Room 916, Rainbow Industrial Building, 149 Wai Yip Street and the 9^th accused in premises situated at Room B, 6/F, 66 Yu Man Square.

6.There was no application by either of these accused but we make reference to this not only for the sake of completeness but also because these two premises were found by the judge to be storerooms maintained for the purposes of supplying infringing discs to the three shops. It was also the prosecution's case, and so found by the judge, that a motor van, bearing registration GH 5473, parked in a parking bay rented on the 7^th floor of Kwun Tong Plaza provided a further storage facility.

7.The 1^st accused elected not to testify but called three witnesses, essentially in regard to Charge 7. The 2^nd accused testified and called four witnesses, essentially in regard to Charge 8.  None of the other accused testified.

8.The 1^st accused was unrepresented on appeal in respect of conviction but was represented as to sentence. We indicated to the 1^st accused that we would take into account on his behalf the submissions of other accused insofar as they might benefit the outcome of his appeal against conviction.

The background

9.Although it will be necessary to revisit certain aspects of the evidence, a broad summary suffices at this stage. There has been no serious suggestion, either at trial or before us, that this is not what occurred.

10.Prior to April 2006 there had been seizures of suspected infringing optical discs from the shops, albeit that none had been submitted to the copyright owners for examination. The Customs and Excise Department (“C&E”) then launched an operation, named “Touchdown”, which was to involve covert surveillance being maintained on the three shops and the persons suspected to be involved in the commission of offences. Those persons, the various premises and other places or areas were allocated a series of codenames for the purposes of the operation. Operation Touchdown commenced on 24 April 2006 and turned overt on 14 February 2007 when all of the accused, except the 10^th, were arrested: the 10^th accused was arrested in April 2007. Surveillance on Shops 138 and 139 commenced on 24 April 2006 and on Shop 441B on 11September 2006.

11.The surveillance revealed that the system being used in each shop was the same - that the shop was ostensibly unattended: racks were fitted to the walls, upon which racks were displayed various types of optical discs; the discs were allocated code numbers; a member of the public was free to enter the shop to make a selection; notices were displayed directing customers to make payment according to a price list; a box, into which money was to be placed, was located close to the entrance of the shop; men were positioned to watch the shops, to restock them and to collect and deal with the moneys; if a customer needed change, one of the watchers would come forward to assist. 

12.A particular place from which watch was kept on Shops 138 and 139 was from outside Shop 102, which was a matter of metres away from, and diagonally opposite to, those two shops. The 2^nd accused had become the owner of the premises of Shop 102 in June 2002 along with, in terms of title registration, the wife of the 1^st accused. However, for convincing reasons the judge found that it was the 1^st accused, and not his wife, who was joint beneficial owner of the premises with the 2^nd accused.

13.There had been seizures of discs from Shop 102 between 29 June 2002, when it had been purchased by the 2^nd   accused, and 1 March 2006 when the whole premises had been rented out to a third  party.  Between 16 February 2006 and 12 February 2007 periodic raids were carried out on the three shops during which stock was confiscated. On a number of occasions there was more than one raid on the same shop on any one day. None of the seized discs was examined by copyright  owners or licensees. Notices were posted up by C&E inviting the owners of the seized goods to claim them: no one ever did. The evidence was that shortly after a raid the racks in the shops were restocked.  A number of test purchases were made in the shops.  Examination of the discs seized on 14 February 2007 revealed approximately 34% of the discs to be infringing copies.

THE APPEALS AGAINST CONVICTION

14.In respect of the conspiracy charge and charges relating to the exposure of infringing discs for sale, the fundamental issue before the judge, and the prime ground of appeal advanced before us by all except the 1^st accused who largely accepted the accuracy of the identifications made of him and the 2^nd accused, against whom there was no such evidence, was that of identification of the various accused with particular emphasis on the propriety of the courtroom identifications permitted by the judge. A second common ground of appeal related to the sufficiency of the evidence against each accused in the event that the identifications were upheld. The 2^nd accused further submitted that the proceedings were time-barred.

15.We propose to deal, first , with the identification issue; then with the submission that the prosecution is time barred; lastly, with the remaining grounds of appeal of each applicant.  In this latter connection there is a complaint common  to the applicants that there was insufficient evidence to sustain the individual convictions: this will be addressed insofar as may be necessary when dealing with the individual applicants’ application.

16.We shall then deal with the money laundering charges against the 1^st and 2^nd accused.

1.      THE CHARGES OF CONSPIRACY AND EXPOSING INFRINGING COPIES FOR SALE

1.1     The identification issue

17.It is clear from her Reasons for Verdict that the judge was fully alive, throughout the trial, to the importance of the issue of identification.  In introductory passages to her Reasons for Verdict, under a heading "Assessment of Evidence" she said:

46.  The issues at trial of the surveillance witnesses are mainly credibility and identifications.

i. The defence said that there was no ID parade held after arrest of the defendants, this is a case of dock identification and to allow the witnesses to identify the defendants in court was unsatisfactory, undesirable and more importantly the prejudicial effects outweigh the probative value.

ii. The Prosecution said it was a case of recognition as the Customs officers had put these defendants under observations for a period of time. Therefore, no ID parade was held for any of the defendants.

The lines of contention were thus clearly drawn and obvious to the judge.

18.No identification parade had been held prior to the commencement of the trial. Up to that date, the prosecution had taken the view that, because this had been an ongoing surveillance of specific premises, and specific persons in connection with those premises, over a substantial period of time and because at least some of the officers involved in the surveillance exercise had been present when a number of the accused had been arrested, to hold an identification parade would have been superfluous. It regarded the situation as being akin to that where a witness recognised an accused person.

19.The accused, on the other hand, took the view that they remained as total strangers to the surveillance officers; that the fact that the officers had maintained surveillance did not change the situation to equate to recognition; that as the prosecution had failed to arrange an identification parade, well-established principles precluded the judge from admitting evidence of the witnesses identifying the accused in court.

20.We were told by counsel for the respondent, both of whom appeared below, that the decision not to hold identification parades had been taken by C&E on an "operational" basis. We say without hesitation that that decision was plainly wrong. There was simply no justification for the failure to hold parades in these circumstances. It is quite clear that they should have taken place.

21.Prosecuting counsel were aware of the implications of the decision. As a consequence, once the trial was under way and at a stage when only one or two C&E officers had testified, but it was apparent that identification would be the primary issue, they offered to arrange identification parades.  This offer was not taken up by any of the accused.

22.In reality, the present situation was an amalgam of identification and recognition. Preliminary investigations had been carried out by C&E prior to the commencement of Touchdown.  By the time the operation commenced C&E was in possession of a limited number of fairly poor quality photographs of the 1^st, 5^th, 6^th and 10^th  accused.  When a particular person was to be observed for the first time by one of the surveillance officers, that surveillance officer was provided with a nickname for him and a description of him and, if one existed, shown a photograph of him, before himself setting out to locate the person concerned and commence the surveillance.

23.Once the officer had located that person and kept him under observation he would return to his superior and make a report which was duly recorded. In this way a log was built up covering the cumulative effect of a particular officer’s surveillance of a particular accused. When the officer returned, on occasions subsequent to the first, to continue his observation it was unnecessary for him to seek that person out afresh as he was already familiar with his appearance from his previous observations. He could recognize him. Inevitably, as time went by and the number of observations increased, the officer concerned became progressively more familiar with the individual accused and his level of recognition improved.

24.Some attempt, seemingly more by way of accident than design, was also made during the hearing to reduce any possible prejudicial effect on the accused. Because of their numbers, there was insufficient seating for the accused in the dock in the courtroom. Consequently, they had to be accommodated in the public gallery, where they were not separated from members of the public. We were told that they seated themselves in the order in which their names appeared on the charge sheet despite the fact that they had been told that they could sit in whatever order they wished.

25.The suggestion was made on behalf of the accused that this meant that it would have been possible for a witness to have worked out which person he was required to identify simply by looking at their positions. Whilst, obviously, that notionally would have been possible it ignores the fact that the judge found the witnesses to be truthful in their testimony, paying particular attention to the question of whether they were able to point out that person known to them by a particular nickname. She specifically rejected that the witnesses had calculated which accused was which from where they were seated. It was suggested that the witnesses were being dishonest when testifying about their ability to identify the accused, especially after the lapse of time: that was denied by the witnesses to whom it was put - the judge accepted their evidence.

26.Courts have consistently displayed antipathy towards permitting a courtroom identification where the identification is not a case of recognition or where there has been no earlier identification by the witness. The reason for this is well-known but recently has been encapsulated by Lord Rodger of Earlsferry in Holland v Her Majesty's Advocate (Devolution) [2005] UKPC D1 (11 May 2005), an appeal which concerned whether a dock identification by a witness who had been unable to identify an accused at an earlier identification parade infringed the accused’s Art. 6(1) European Convention right to a fair trial.  He said:

47.   In the hearing before the Board the Advocate Depute, Mr Armstrong QC, who dealt with this aspect of the appeal, accepted that identification parades offer safeguards which are not available when the witness is asked to identify the accused in the dock at his trial. An identification parade is usually held much nearer the time of the offence when the witness's recollection is fresher. Moreover, placing the accused among a number of stand-ins of generally similar appearance provides a check on the accuracy of the witness's identification by reducing the risk that the witness is simply picking out someone who resembles the perpetrator. Similarly, the Advocate Depute did not gainsay the positive disadvantages of an identification carried out when the accused is sitting in the dock between security guards: the implication that the prosecution is asserting that he is the perpetrator is plain for all to see. When a witness is invited to identify the perpetrator in court, there must be a considerable risk that his evidence will be influenced by seeing the accused sitting in the dock in this way. So a dock identification can be criticised in two complementary respects: not only does it lack the safeguards that are offered by an identification parade, but the accused's position in the dock positively increases the risk of a wrong identification.

27.He continued:

58.   One potentially important safeguard lies in the judge's directions to the jury. … It is necessary, however, to distinguish between directions which a judge gives on the approach to be adopted in relation to eye-witness identification evidence in general and directions on the dangers of dock identification evidence, in particular. The Lord Justice Clerk referred to the Lord Justice General's 1977 Practice Note and to a series of decisions in which the appeal court has given guidance on eye witness identification in general. Important as these are in relation to that matter, they do not deal with the peculiar dangers of a dock identification where a witness previously failed to identify at an identification parade. Nor is there anything in the excerpts from the Judicial Handbook to suggest that judges should give a direction of this kind. Doubtless, in practice, judges often do so. In my respectful view, however, given the importance of the safeguard, judges should give an appropriate and authoritative direction in all cases of this kind. The general lines of such a direction are obvious, but, ideally, in any given case its precise form will reflect the particular circumstances.

28.This trial, of course, was by a professional judge sitting alone. Her introductory caution was followed by a passage headed "Turnbull warning" which it is helpful to quote in full:

47.  This is a case of identification. I am fully aware of the duty of this court to pay special regard to the Turnbull warning. It is fundamental to warn myself according to the Turnbull guidelines in a case of identification when this case depends wholly or substantially upon the correctness of identification evidence. When I assess the evidence of the prosecution witnesses, I do not simply place weight on the fact that these prosecution witnesses are trained witnesses because a honest and convincing witness can still make a mistake in their observation and several witnesses may make the same mistake. Such as close relatives/friends could still be mistaken. There is a special need for caution when examining the evidence closely, the circumstances of observations such as busy hours, a lot of pedestrians in the way when identifications were made.

48.  ...

49.  In the present case, all witnesses were specially briefed to conduct surveillance duties... They were shown photos of the code-named persons D1,  D5,  D6,  D10 and the surveillance reports before they started their duties. For those witnesses they have the benefit of seeing the images of D1, D5,  D6,  D10 before they identified them, their duties to observe these defendants all shared the same purpose of observing their activities and to collect evidence. When these witnesses observed these defendants, they did not do it "casually". They paid particular notice to these defendant’s faces, build, height and appearances.

50.  Therefore, the qualities of evidence of identification by prosecution witness carried a stronger weight than a stranger casually encounters someone in the street without any particular purpose.

...

53.  In assessing their evidence, I bear in mind that they were professional and trained witnesses and I take a common sense approach because these "walking pedestrians" were just like "moving traffic". They moved along and they moved on, they did not stay. These pedestrians did not really affect their observation as such because they were moving, they did not stay in the way of the witnesses’ observation path permanently.

54.  ...

55.  With these information in mind, when I assessed the identification evidence by the prosecution witnesses, I also considered the following before I placed weight on their evidence:

(1)   they were briefed and shown with daily reports and photos;

(2)   they confirmed the identities of the code-named persons before their surveillance duties;

(3)   the number of times they observed;

(4)   each time when they observed the defendant, there was no elements of excitement; and

(5)   they can tell this Court the duration of observations.

29.Whilst it is correct that the judge did not, in this particular passage, repeat the fact that she was dealing with a courtroom identification, nothing turns on her lack of repetition of that phrase. She had shown herself, in the immediately preceding paragraph, to be well aware of the nature of the evidence which she was to consider and she then proceeded to set out, in detail, the issues which she should take into account in arriving at a conclusion that the identifications, which had been made in court, were safe.

30.It is to be noted that, in Holland,  Lord Rodger added:

57. I respectfully agree that, except perhaps in an extreme case, there is no basis, either in domestic law or in the Convention, for regarding such evidence as inadmissible per se.

31.This court, differently constituted, took a similar view in The Queen v Hoang Duc Hoa & Ors [1997] 1 HKLRD 12 where Mortimer JA (as he then was) said:

This is not to say that in a proper case, a dock identification cannot be allowed. A dock identification is admissible in evidence. We sound a note of warning, however, because judges should not allow the identifications and prosecuting counsel should not seek to rely upon such, if the identification is the 1st  time that the witness is called upon to identify an accused person unless there is some very good reason. The obvious reason is that an accused has refused to attend an identification parade and that no other proper means of identification has been possible before trial, such as a group identification or a structured identification by means of photographs or some other recognised and proper procedure. Normally, the only time that a dock identification is permitted is in a true recognition case where the accused is well known to the witness and has been described by him at the time or shortly after the offence and so at trial, he simply confirms that this is the person about whom he speaks. [Emphasis supplied.]

32.The approach indicated by Mortimer JA recognises that whether to admit first-time dock identification evidence is a matter for the discretion of the trial judge, a discretion which is to be exercised rarely: a view which was reiterated in HKSAR v LAU Wing Kun & Anor. CACC524/1999.

33.That was recognised to be so, also, in the decision of the Court of Appeal in England in R v Reid [1994] Crim. L.R. 442 at 443, a matter in which no identification parade had been held ostensibly because the accused was recognised by the complainant. There had been a delay of a year between the event and the apprehension of the accused. The court indicated that the issue was not whether the dock identification should have taken place but whether the fact that it had should be admitted at the trial. The judge had a discretion, which he exercised by hearing evidence on a voir dire as to the extent of the witness’s familiarity with the accused. In those circumstances it could not be said that the discretion had been wrongly exercised. Before the judge's decision could be challenged it would have to be shown that no judge in all the circumstances of the case could reasonably have arrived at the conclusion he did.

34.In the present matter, although the judge did not hold a separate voir dire, she required full evidence to be detailed from each identifying witness in respect of each individual identification of the same accused as to the nature, extent, frequency, duration and circumstances in which that witness had had opportunities of identifying a given accused before she would entertain any application for that accused person to be pointed out by the witness. Each witness was cross-examined at length. This was a procedure which was effectively the same as the ‘alternative procedure’ used by a judge sitting alone when determining a voir dire. Such was the nature of cross-examination in many instances that the view may well be taken that the judge allowed far more latitude than was necessary, but that can only redound to the advantage of the accused.

35.It is to be noted that counsel appearing for the prosecution did not seek permission for every surveillance witness who testified to identify a particular accused in court but only where counsel were of the  view that the evidence given by the witness justified such a request. Even so, it is abundantly clear that the judge brought her mind to bear upon the sufficiency of the evidence given by each individual witness against each individual accused in regard to identification before allowing the witness to point out that accused.

36.This is evident from the fact that in a number of instances, despite an application being made by prosecuting counsel, the judge refused to allow it to be done: for example, 15 witnesses were called as to their observations of the 3^rd accused during the period of surveillance, in respect of two of whom the prosecution did not apply for an identification to be made in court and in respect of a further two of whom the judge declined such an application; for example, 13 witnesses were called regarding their observations of the 4^th accused in respect of one of whom the prosecutors did not make an application and in respect of a further four of whom the judge declined such an application. A similar pattern is discernable in respect of the other accused.

37.Another aspect is the factors which the judge took into account in arriving at her decision to admit the evidence. These may be summarised as being that the witnesses had been especially briefed to conduct surveillance duties; their specific duty was to observe the accused with the express purpose of observing their activities and to collect evidence; they paid particular notice to the faces, build, height and appearance of the accused; and the witnesses themselves were professional and trained witnesses. She later came to the conclusion that the quality of the identification evidence “…by prosecution witness carried a stronger weight than a stranger casually encounters someone in the street without any particular purpose.”

38.In our judgment she was justified in adopting that approach. She was not alone in doing so. In R v Ramsden [1991] Crim. L. R. 295 a police officer’s attention had been drawn to a vehicle coming towards him pursued by a police car. He made a concentrated effort to look at the driver. The court accepted that whilst it was true that the same rules applied to police officers as any other witness it might be that an officer, due to the fact that he was a police officer, might have paid particular attention to the identity, facial features and so on of the person whom he was observing. The court concluded that in those circumstances it would not be wrong to direct the jury specifically as to the likelihood of the officer being correct when a mere casual observer may not be. An identifying witness who happened to be involved in the criminal justice system was likely to have a greater appreciation of the importance of identification, and so look for some particular identifying feature.

39.Further, in Tyler and Others (1993) 96. Cr. App. R 332  -  a decision to which the judge referred in her Reasons for Verdict  - Farquharson  L.J. addressed a ground of appeal which complained about a passage in a summing up in which the trial judge had indicated that the jury would be entitled to take into account that it might be more likely that a police officer’s evidence in regard to identification of an accused person arrested during a riot may be more reliable than that of a non-police witness, an ordinary member of the public. He said:

The identification made by the police witness in the present case was related to the evidence. They were observing the crowd and were concentrating on who was throwing things at them and also, as they said, on the distinctive appearance of Hester. The training of police officers to carry out their duties when a riot is taking place and to observe what is happening around them is a point which can properly be made in the restrained way the judge expressed it.

40.We emphasize that what the judge took into account and what is considered in the two decisions cited is the likelihood of greater reliability being able to be placed on the observations of a trained observer engaged in a deliberate observation exercise as opposed to a member of the public not possessed of those additional skills. This in no way detracts from the well-established principle that it is inappropriate for a judge to regard the evidence of a police officer, or member of other disciplined forces, as being more creditworthy than that of any other witness simply by virtue of his position.

41.There is then the added feature in the instant matter that none of the accused persons was identified simply by one witness but, in every instance, by a multiplicity of surveillance officers albeit that the numbers of identifying officers varied from accused to accused. Commonsense dictates that the fact that a number of witnesses are able positively to identify any given individual must lend weight to the evidence of identification of that particular individual, particularly where there was specific surveillance and the opportunities of surveillance were in good conditions. The judge showed herself to be aware of the caveat in Turnbull that even a number of honest witnesses may be mistaken yet, for the cogent reasons she gave, accepted that the witnesses were honest and was prepared to rely on the evidence of those whom she permitted to identify the accused in court.

42.This is by no means a novel proposition. It was considered by the English Court of Appeal in Thomas Henry Weeder (1980)  71 Cr. App. R. 228, the Lord Chief Justice saying at 230:

[The trial judge in his summing up] dealt in detail with the street identification and then said this: "The basic confirmation of Tierney’s evidence is, of course, the evidence of Susan Massam. It rather depends on which one you begin with. They both say essentially the same thing, that Weeder was the assailant and one can go - obviously, two identifications are better than one - one can in your eyes go to support the other but those are matters entirely for you members of the jury."

In the short adjournment which followed this observation Mr. Locke suggested that the learned judge might have been wrong in law in suggesting that one identification can act as supporting evidence for another. The learned judge disagreed and after reference to Turnbull's case said that he accepted that Mr. Locke was right to this extent, that the judge should warn the jury that because the identification is supported by another one it does not mean that the possibility of a mistake has disappeared. This satisfied Mr. Locke and the point was then made by the learned judge when he resumed his summing up.

Mr. Locke, however, now returns to the charge and the main ground of this appeal is that the learned judge was wrong to direct the jury that an identification by one witness can constitute support for the identification by another. He submits that because a number of identifying witnesses can all be mistaken, the jury should be instructed to look at the evidence of each such witness separately in, so to speak, a hermetically sealed compartment and that they should be warned not to allow themselves to be affected by the accumulation of such evidence.

If this court were to accept Mr. Locke’s submissions, we would be imposing upon trial judges the obligation to pronounce a wholly useless incantation in the course of his summing up. No jury, urged to use their common sense, could realistically be expected to follow, let alone understand, the reasoning of such direction. Take the simple case of violence at football match. If a dozen witnesses, all of whom had in satisfactory conditions a good opportunity of observing who was committing the particular act of violence complained of, all identified the accused, is their evidence not to be viewed as capable of supporting each other?

43.Farquharson LJ also addressed this issue in Tyler and Others at 399:

Before the trial judge, the prosecution had conceded that the circumstances of identification were difficult. Furthermore, argues Mr. Jobling, the evidence of one police officer afforded no support for the identification of Tyler by the other. The features which rendered the identification of poor quality were the same for both of them as their observations were made from the same position.

This Court is unable to accept these arguments. There can be a good identification even when conditions are difficult. The fact that two witnesses are observing the same event does not, so to speak, merge their evidence into one. There are still two separate and individual identifications, provided they are honestly made, as the jury must have accepted they were. In those circumstances the fact that their observations were made from the same place does not prevent the identification by one being supported by the other. Putting it shortly, an identification of a suspect by two different witnesses carries more weight than one. [Emphasis supplied]

44.In summary, the judge was abundantly alive to the inherent difficulties of identification in general and the dangers of court identification in particular; she ensured that full and detailed enquiries were made of the facts relating to each individual identification of each individual accused by each individual officer before allowing any officer to identify an accused in court; she was satisfied that each of the officers whom she allowed to make the identification was properly in a position to do so; she was satisfied that the officers were being truthful in their evidence, their credibility having been challenged in cross-examination; she took cognizance of the fact that these witnesses were trained observers rather than inexperienced members of the public.

45.Argument was also addressed to the fact that the identifications in court had been made almost two years after the surveillance had concluded, the submission being that this was an additional factor which would have rendered the identifications unreliable. The lapse of time is a factor of which the judge was aware. She was satisfied that the witnesses whom she allowed to perform the identifications were truthful and reliable and she found herself able to accept their evidence of identification notwithstanding the lapse of time. Given the consistency of the identifications of each accused by numerous surveillance witnesses during the surveillance period the judge was entitled to arrive at this conclusion. There is nothing, therefore, in this further leg.

46.In the circumstances, it neither has been shown that the judge exercised her discretion incorrectly in admitting the evidence, nor that she was wrong to place reliance upon it.

47.We believe it necessary, however, to emphasise what we have said to the effect that the failure of C&E to arrange identification parades in this matter is to be deprecated. There was no justification, nor reason, for it. Apart from any other consideration, it had the effect of wildly exaggerating the length needed for this trial. It is only against the very specific factual matrix of this matter and the chance occurrence that the courtroom identifications themselves took place in circumstances bearing some similarity to those in a formal identification parade, together with the fact that the judge clearly demonstrated that she had cautiously approached the exercise of her discretion, that this otherwise arguable ground of appeal fails. We add this: nothing in what we have said should be read as undermining the statement of principle expressed in HUONG Duc Hoa and Others. In this specific matter, perhaps more by chance than design, there exist good reasons for the judge to have allowed the courtroom identifications and be satisfied that those identifications were safe.

1.2        The issue of time bar

48.We turn now to the first ground of appeal advanced by the 2^nd  accused. It was asserted that the judge erred in failing to hold that the prosecution was time barred. The further complaint was made before us by the 2^nd accused that the judge failed to consider “anywhere” the arguments of the 2^nd accused. That second proposition is, simply, incorrect. The judge considered the submissions and the issue in respect of all of the accused and found, in terms, “…the time bar issue against all defendants is not established.”.

49.S. 120A of the Ordinance read, at the time of the offence:

No prosecution for an offence under this Ordinance shall be commenced after the expiration of 3 years from the date of commission of the offence or 1 year from the date of discovery of the offence by the prosecutor, whichever is the earlier.

50.The section prohibits prosecution in two circumstances; first, after the expiry of three years from the date of commission of the offence; second, after one year from the date of discovery of the offence. The argument fails on both limbs.

51.In respect of the three year period the argument ignores the fact that the offence of conspiracy is well-settled to be a continuing offence (see, for example, DPP v Doot [1973] A.C. 807, applied in Attorney-General v YEUNG Sun-shun and Anor.  CACC75/1987;  Boyle and Mears (1992) 94 Cr. App. R. 158 at 163; R v LAI Chi-man CACC365/1988;  HKSAR v SZE Suen-tin and Anor. CACC208/2002).

52.It therefore follows that the three year period will not commence to run until the cessation of the conspiracy.  In the instant matter the conspiracy remained extant as at the date Touchdown went overt, 14 February 2007. That brought the conspiracy to an end with the consequence that the three year period started to run from that date. Each accused, save for the 10^th,  was charged on 16 February 2007.

53.In respect of the one year period, reliance was placed upon the decision of Hartmann J in Viva Magnetics Ltd & Ors v Secretary for Justice [2002] 3 HKLRD 571 and, in particular, the passage at §36(iii):

(iii) As to the state of knowledge that constitutes 'discovery' in terms of section 120A, it must, viewed objectively, be knowledge of facts upon which reliance may be placed and which cover the essential elements of the offence, including the identity of the offender.

54.The argument ran that because: the 2^nd accused became the owner of Shop 102 on 3 June 2002; thereafter suspected infringing discs had been seized from that shop; it always had been open to C&E to conduct a Land Registry search to ascertain the fact that the 2^nd accused was the owner of Shop 102; it followed that C&E “must have” had knowledge of the identity of the 2^nd accused at that early stage and, therefore, had discovered the commission of the offence.

55.The first flaw in this argument was that there is nothing in the Ordinance to sustain the suggestion that because the 2^nd accused’s ownership of Shop 102 was a matter of public record C&E should be taken to have known that fact from June 2002. Moreover, the evidence is that C&E only conducted a Land Search after the commencement of Touchdown.

56.The second is that the accused were charged with the offence of conspiracy on 16 February 2007, an offence which C&E had only commenced investigating in April 2006: time would therefore not start to run against an accused until he or she had been “discovered” to be a participant in that conspiracy no matter what previous evidence there may have been or suspicions may have existed in regard to the commission of other offences. It thus follows that the identity of none of the accused was “discovered” in respect of this offence until 24 April 2006 or thereafter.

57.With respect to the judge, if, as appears to be so from the Reasons for Verdict, she was of the view that time ran against no conspirator until the identity of all the conspirators had been established  then she was wrong. It runs, in respect of a conspiracy, from the date upon which the individual conspirator’s participation is “discovered”.

1.3       The remaining grounds of appeal

1.3.1   The 1^st accused

58.The second ground advanced by the 1^st accused in his home-made grounds of appeal against his conviction on Charge 1 read:

I oppose the trial judge in accepting the prosecution witness’s tracking record that is not within the dates of disk checking to be the basis of the consideration of Charge 1. This is because the activities of the target people under surveillance by the prosecution witness together with the discs suspected to be counterfeits by the prosecution could simply be unconcerned with any copyrights problem. This is because from paragraph 186 of the judgment one could know the compact discs bought by the customs at the suspected shop are not always counterfeits. The charge judge accepted a large amount of evidence (and exhibits) not yet confirmed by copyright owners as counterfeits under Charge 1 and made inferences. This is not proper.

59.We understood this to be a reference to the fact that the evidence showed that C&E had periodically confiscated discs from the premises and destroyed them without, as mentioned earlier, having ascertained from the copyright holders or licensees whether the discs were infringing copies. Insofar as it amounted to a complaint that the judge was influenced by this evidence, this may be rejected immediately due to the fact that the judge specifically indicated in her judgment that, precisely because the seized discs had not been inspected, she drew no inference that they were infringing discs.

60.Further, the judge was well aware of the fact that a majority of the discs (some 66%) seized in various premises on 14 February 2007 were not found to be infringing discs. This was set out in detail, in respect of each set of premises, in the 1^st and 2^nd admitted facts.

61.Obviously, the fact that the judge drew no such inference concerning the discs seized prior to 14 February 2007 is an approach which benefits the accused. We feel constrained to say that, on the evidence which she detailed concerning the circumstances of those seizures and the evidence as a whole, had she drawn the inference that the seized discs, or some of them, were infringing discs she could not have been criticised for doing so. Be that as it may, there is nothing in this aspect of the 1^st accused’s complaint.

62.As to the sufficiency of the evidence against the 1^st accused on Charge 1, we are satisfied that there was overwhelming  evidence upon which the judge was entitled to conclude that the 1^st accused was one of the co-conspirators. We do not intend to detail every facet of the evidence in this regard, especially that of the surveillance evidence which the judge detailed and which was effectively undisputed.  We will refer to some of the more prominent features of the evidence as related by the judge.

63.It is to be noted that eight of the C&E officers who testified as to identification of the 1^st accused and gave details of what he had been seen doing during the period of observation were not challenged as to his identity.

64.The 1^st accused had purchased the premises of Shop 139, ostensibly together with the brother of the 2^nd accused, but the judge was satisfied for reasons she expressed that the 1^st and 2^nd accused were, in fact, the beneficial owners. Apart from anything else, the 2^nd accused was a guarantor for repayment of the bank loan which had financed the purchase. $1.4 million of the downpayment had been transferred from the 1^st accused to 2^nd accused. The evidence showed the repeated presence of the 1^st accused  -  as well as, from time to time, other accused  -  outside of Shop 102 within a matter of metres of Shops 138 and 139.

65.Shop 138 had been rented by the 8^th accused, who was known to associate with the 1^st accused: this was evidenced by telephone calls between them as well as various photographs taken on overseas trips. The 8^th  accused had been present on 14 February 2007 inside Room 916 of Rainbow Industrial Building when the infringing discs were seized: he had also rented those premises.

66.The judge found that the 8^th accused had been in receipt of a daily wage of $300. There was evidence that the rental in respect of Shop 138 was $11,150 per month whilst the rental for Room 916, Rainbow Building, was $2,100 per month. Understandably, the judge concluded that the 8^th  accused was but a "front".

67.Two photograph albums seized from the 2^nd accused contained photographs taken during overseas holidays depicting various accused together. Together with immigration records which were admitted, the judge found that the 1^st accused had been on holiday with all of the other accused, except the 7^th and 9^th accused, between 2005 and 2006 and that, during the period of the conspiracy, he had been on holiday with the 2^nd , 3^rd, 4^th, 5^th and 6^th accused. Plainly, they were all well known to one another. Of course mere association is neither a criminal offence nor proof of involvement in one but the nature and extent of their relationship is a matter to which the judge was fully entitled to have regard.

68.The 9^th accused had been present inside Room B, 6/F,  66 Yu Man Square on 14 February 2007 when infringing discs were seized. The 1^st accused had been seen in August 2006 to enter 66 Yu Man Square, the inference being that he visited the store room there.

69.Code lists corresponding with lists stored on the 2^nd accused’s computer were found in the three shops, in motor vehicle GH 5473 and in Room 916.

70.There was evidence, also from the holiday photographs, that the 1^st accused associated also with the 6^th accused. The 6^th accused had previously operated a business in Shop 138. He was also known to the 2^nd accused’s husband who operated, with the assistance of the 2^nd accused, a computer accessories business from Shop 138 during the initial period the shop was being rented by the 8^th accused.

71.At the time of surveillance, Shops 138 and 139, which were adjacent to one another, shared a cardboard box into which customers would place their money, that box being placed outside of and between the two shops, as well as a price list which was pasted above the box for the money. The judge, correctly, described both shops being operated as one.

72.Shop 441B was operated in the same manner as Shops 138 and 139. The judge was satisfied that the 3^rd and 4^th accused were operating Shop 441B: the 1^st accused was seen to receive bags from them from time to time and on another occasion at the dead of night the driver of the 1^st accused’s vehicle, whom the judge inferred to be the 1^st accused, was seen to receive a stack of $1000.00 notes from the 3^rd accused.

73.The judge concluded, again for cogent reasons, that the three retail outlets enjoyed a high turnover of discs and that the business was a lucrative one taking into account the monthly expenses, the continual loss of discs as a result of the frequent raids by C&E and the failure of anyone to lay claim to the seized discs.

74.In the light of the evidence as a whole against the 1^st accused the judge was entirely justified in drawing the inference that he was one of the conspirators and, indeed, one of the prime organisers.

1.3.2   The 2^nd accused

75.The 2^nd accused is in a different position to the others in the sense that she was not a subject of the surveillance operation.

76.The first ground of appeal by the 2^nd accused was the issue of time bar dealt with previously. The second ground was twofold and asserted that the judge had failed to analyse sufficiently or at all why she did not accept the 2^nd accused’s explanation of the circumstantial evidence against her and failed to give proper or adequate reasons for convicting the 2^nd accused.

77.The judge went to considerable lengths in a large number of paragraphs in the course of a careful and detailed judgment to deal with the case of the 2^nd accused, as well as the other accused, after a trial which had been lengthened very largely by microscopic cross-examination of witnesses over the issue of identification. Whilst it is well settled that there is a duty on a District Judge to give reasons for a decision, just what is necessary in any given trial depends entirely upon the nature of the evidence and the issues in the case concerned. (see, e.g., Oriental Daily Publisher Ltd v Commissioner for Television and Entertainment Licensing Authority [1997-1998] 1 HKCFAR 279 at 290J; HKSAR v. POON Chun Kit and Anor [2007] 4 HKLRD 12). All that needs to be said is that the judge's analysis of the evidence, including that relating to the 2^nd accused, was sufficient.

78.The third ground, which to a certain extent overlaps with the second, complained that the judge erred in relying on circumstantial evidence, the prejudicial effect of which outweighed its probative value. Seven specific areas of evidence are categorised. There was no merit in the complaint about any of the areas of evidence categorised, each of which was a matter which the judge was entitled to take into account looking at the evidence in the round. Only two of the categorized items are deserving of any comment and then solely to demonstrate their lack of merit: items (f) and (g) complain about the judge mentioning seizures of discs at Shop 102 prior to the commencement of Touchdown and at Shops 138, 139 and 441B during the operation. The latter were relevant facts which enabled the judge to infer, correctly, that the business generated a large profit. As noted earlier, the judge specifically indicated she drew no inference that the discs which had been seized either from Shop 102 or Shops 138 and 139 were infringing copies although, of course, she still was entitled to rely on the fact of the seizures coupled with the fact that there had been no claim for the seized discs.

79.There was no merit, either, in any of the additional criticisms which were voiced at the hearing of this appeal of the judge's assessment of the evidence, which largely chose to ignore the fact that the judge did not accept the 2^nd accused’s evidence.

80.The fourth ground advanced complained that the evidence only went so far as demonstrating the 2^nd accused’s knowledge of the offence being committed by others, as opposed to her participation in it. The judge carefully set out what it was necessary for the prosecution to prove in regard to each of the accused, including the 2^nd accused, in order to found a conviction for an offence of conspiracy. It was not necessary for there to be proof that the substantive offence contemplated by the conspirators was actually carried out, simply that each accused intended that it be carried out at the time each agreed. In particular, but contrary to the submission made during the hearing, it was not necessary for the prosecution to prove any overt acts in furtherance of the conspiracy by the 2^nd accused.

81.Having correctly identified the elements of the offence the judge then made extensive findings of facts in regard to the 2^nd accused which included, but were not limited to: the evidence of the nature and extent of her relationship with the other accused, garnered from the immigration records as well as the photographs of their overseas trips together; the nature and extent of financial transactions between her and the 1^st, 5^th and 6^th accused; the nature of the activities of the other individual accused in connection with the shops and storage areas as revealed by the surveillance evidence, which was admissible against the 2^nd accused by virtue of the co-conspirators rule; her ownership of Shops 102 and 134/139 in common with, as the judge found, the 1^st accused; her association, with her husband, with Shop 138; the fact that in a safety deposit box rented in the name of the 2^nd accused and her sister, but which had only been accessed by the 2^nd accused, were found a duplicate copy of the forged licence disc displayed on GH 5473 which was found being used for the purposes of storing almost 10,000 discs; in that same safety deposit box was found the tenancy agreement of a unit rented by the 8^th accused in Yan Oi Court as well as documents relating to Shop 139; the fact that the 2^nd accused regularly visited Shop 102 to collect rent which, the judge was satisfied, meant that she would have known the nature of the business being conducted in Shops 138 and 139 given their proximity; and, perhaps of particular significance, the presence on the 2^nd accused’s computer in her residence of data files containing code lists which matched stock lists and the codes attached to the discs located in, inter alia, Shop 139, Shop 441B, the vehicle GH 5473, and storerooms at 916 Rainbow Building and 6/F, B, 66 Yue Man Square.

82.The 2^nd accused elected to testify. The judge did not accept the explanations which she gave in respect of the findings of fact which the judge made adverse to her. The cumulative effect alone of the circumstantial evidence almost would have compelled the judge to have rejected her evidence.

83.The judge plainly drew the irresistible inference that the 2^nd  accused was a party to the conspiracy, which was a single conspiracy amongst all except the 7^th accused. In the light of the facts she found proved, she could not have done otherwise.

84.The fifth ground of appeal advanced on behalf of the 2^nd accused suggested that the judge had "... failed to direct herself that there existed lurking doubt..." as to whether it was she or her husband who had been a party to the conspiracy.

85.Two particular matters were advanced in support of this submission: the fact that her husband and 7 year old child had access to the computer at the residence of the 2^nd accused which, it was suggested, meant that there was a possibility that one of them had created the lists - notwithstanding that the 2^nd accused acknowledged in her testimony that she was aware of the existence of the lists; and that the judge had failed to "eliminate" a possibility that the forged vehicle licence and the 8^th accused’s rental agreement had been placed in the safe deposit box by the 2^nd accused’s husband.

86.The judge did not find that the 2^nd accused was the author of the lists on her computer, merely that she had knowledge of their presence. Similarly, she did not reject the fact that the 2^nd accused’s husband may have had some control over the contents of the safety deposit box but did reject the suggestion that the documents concerned might have been hidden within an envelope. In our judgment, in the light of the evidence as a whole the judge assessed these two aspects of the evidence correctly.

87.In reality Grounds 2 to 5 of the grounds of appeal depended on the judge's assessment of the 2^nd accused as a witness. The judge repeated the evidence of the 2^nd accused in a number of aspects, indicating her awareness of the importance of that. Even being deprived of seeing and hearing her testify, a reading of the transcript of the testimony of the 2^nd accused supports the rejection of her evidence by the judge.

1.3.3   The 3^rd and 4^th accused

88.The 3^rd and 4^th accused filed identical grounds of appeal.  Each made application for leave to appeal his conviction on Charge 1 only. The 1^st ground related to the fact of identification in court with which we have already dealt, but also asserted that, in any event, the quality of the identification was such as to render it and, thus, the conviction, unsafe and unsatisfactory. The 2^nd ground asserted that the judge erred in finding only a single conspiracy in respect of all of the premises. The appeals were argued, together, by the same counsel on behalf of each of of the 3^rd and 4^th accused and we propose to deal with them in a similar manner, albeit that there were differences in the surveillance evidence.

89.Insofar as the second limb of the first ground was concerned, that relating to the quality of the identification, a particular complaint was that the surveillance officers had testified regarding the duration of particular observations yet had no personal contemporaneous records relating to those periods. The judgewas aware of that fact when she heard the evidence but, nonetheless, was satisfied that the officers whom she allowed to make the courtroom identifications were able to recall the incidents involving the individual accused. That was a matter of credibility and reliability about which the judge was satisfied having seen and heard the witnesses  -  and at some length as a result of the nature of the cross-examination.

90.It was also submitted that there was no evidence to show that, other than on those occasions when test purchases were conducted and on the day Touchdown went overt and the accused were arrested, infringing discs were being sold in Shops 138 and 139. There was not, of course, direct evidence that seizures of infringing discs were made on other days but that is of no consequence for two reasons: first, the charge was that of conspiracy, with the offence being complete once that agreement had been concluded so that it matters not at all whether infringing discs were sold in pursuance of that agreement at any stage; second, in any event the submission ignores the evidence as a whole, which clearly shows that the proper inference to be drawn from the conduct of the accused is that there were ongoing sales of infringing discs in those premises throughout the period of surveillance.

91.The judge summarised the details of the surveillance evidence as it related to the respective accused and also, in the form of annexures to her Reasons for Verdict, analysed the evidence of each of the surveillance officers setting out the product of the surveillance in respect of each accused. It is unnecessary for us to repeat that evidence: suffice it to say that, in respect of the 3^rd accused, 15 witnesses were called as to their observations concerning the person known to them by the nickname allocated to him, Ah Shui, 11 of whom were permitted to identify him in court whilst 13 witnesses testified concerning their observations of the person known to them by the nickname allocated to the 4^th accused, Ngan Chai, of whom eight were permitted to identify him in court. The judge was correct when she concluded that that evidence, including the evidence of their flight when raids by C&E were conducted, showed their direct physical involvement in the operation of Shops 138 and 139 and, on the evidence overall, concluded that they were part of the whole conspiracy.

92.This leads on to the second ground advanced by these two applicants, that the judge erred in concluding that there was only one conspiracy. The 3^rd and 4^th accused complained that the judge "... relied on the relationship between the defendants to prove the existence of the global conspiracy." In part, that iss true. That, however, was not the only evidence upon which she relied. To take into account the nature and extent of their relationship was an entirely appropriate approach. The point the judge was making was that the interwoven nature of the relationships that existed between all the accused, except perhaps the 7^th  and 9^th accused, albeit not in the same form in every instance, demonstrated that it was not mere chance that the 3^rd and 4^th accused were regularly found in the vicinity of Shop 441B -  and, come to that, that the 5^th and 6^th accused were regularly found in the vicinity of  Shops 138 at 139  -  and that they were more than mere casual acquaintances.

93.Although the 3^rd accused had not been seen outside Shops 138 and 139 he had been seen to meet the 4^th and 5^th accused on the footbridge close to them. There was also direct evidence that the 4^th accused had been seen both outside Shops 138 and 139 and Shop 441B. The 4^th accused had been seen outside Shops 138 and 139 with the 5^th, 6^th  and 10^th accused, who appeared to be the runners serving Shop 441B. The 3^rd accused was plainly aware of the delivery system as he was observed handing an order list to the 8^th accused, then waiting with the 4^th accused until the discs were delivered to Shop 441B for replenishment purposes. There was also evidence that he had gone to the storeroom at 66 Yu Man Square.

94.The judge also noted the modus operandi of the shops as well as, particularly, the commonality of the codes on the discs and the connection of the code lists between the storerooms, the vehicle GH 5473 and the shops. It was not necessary for the prosecution to prove that each of the accused was specifically aware of the sale of infringing discs at Shops 138 and 139, simply that he knew that the conspiracy extended beyond the sales at Shop 441B and involved others. On the evidence, it would be fanciful to suggest that this was not an inference which the judge was entitled to draw against the 3^rd and 4^th accused.

95.The error of the approach adopted by the applicants in regard to the evidence in this matter is, unfortunately and and unhelpfully, one frequently encountered both on appeal and at trial. It is encapsulated in §18 of the skeleton argument submitted on behalf of the 3^rd and 4^th accused, but by no means limited to their submissions, which for example, when dealing with the transfer of money between the 3^rd and 10^th accused’s bank accounts, reads "Taking this piece of evidence to the highest, it shows only that D3 and D10 know each other but [nothing] else" [emphasis supplied]. That, too, may be true in part if viewed in isolation.

96.Whilst it self-evidently is important for a judge to give proper consideration to the individual facets of evidence, to assess their respective strengths and weaknesses, their relevance and importance to the prosecution case and their specific probative value, it is equally important for the judge to stand back, having heard all the evidence, and to assess it as a whole, considering what overall mosaic emerges from the sum of the individual tiles comprising it. It may be that, in a given case, a number of individual facts established by the evidence each prove little by themselves, or may be capable of more than one interpretation individually, but, when viewed together as a whole, slot cumulatively into places where, when viewed together, they paint a comprehensive and comprehensible picture of the overall conduct.

97.It is, with respect, a failure to appreciate the necessity for a trier of fact to have regard to the evidence as a whole or, in simple terms, to look at the big picture, which leads to this ground of appeal. The judge did not fall into similar error but, correctly, considered the totality of the admissible evidence against each accused, that evidence including such evidence as was admissible by virtue of the operation of the co-conspirators rule.

98.It is clear from the Reasons for Verdict that the judge adopted this approach. She was correct to do so. The arguments advanced in support of this ground by the 3^rd and 4^th accused in respect of specific areas of the evidence are all subsumed in the totality of it. The judge was correct in her conclusion that there was but one conspiracy.

1.3.4   The 5^th and 6^th accused

99.These accused, also, relied upon identical grounds of appeal against their conviction: submissions were made on their behalves jointly. They sought leave to appeal their convictions on Charge 1 as well as on Charges 2 and 3, the latter relating to exposing infringing copies for sale in Shops 138 and 139 respectively on 14 February 2007.

100.The first ground challenging the conviction on Charge 1 related to courtroom identification. It needs no further discussion save to say that, insofar as it might be said also to criticize the sufficiency and reliability of the identifications of them, we simply adopt what we said in this regard when dealing with the same issue in connection with the 3^rd and 4^th  accused  -  see §88.

101.The second ground asserted that there was insufficient evidence for the judge to have concluded that the 5^th and 6^th accused "... were aware that infringing discs were being sold..." in Shops 138 and 139 and that the only other evidence against them is that they knew other conspirators. That misrepresents the evidence, although their relationship with the other conspirators is, as previously noted, a matter which the judge was entitled to take into account.

102.In particular it ignores the evidence that during the period April 2006 to February 2007 the 5^th accused had been seen between 100 and 140 times and the 6^th accused some 60 times outside, in the vicinity of or inside Shops 138 and 139; the judge specifically found that they had been observed looking around and were acting as lookout men who needed to keep alert to the sudden arrival of C&E; they had been seen running away from the shops immediately prior to raids being carried out by C&E; during the period of observation the 5^th accused had been observed sorting out discs inside Shop 139, opening that shop and instructing another to put discs onto the racks; similarly, the 6^th accused had been seen replenishing discs on the racks inside Shop 139 as well as tidying up stock inside.

103.The applications in respect of Charges 2 and 3 may be taken together. The point is a short one: it is submitted there is no evidence to suggest that they were lingering around outside or watching the shops, or assisting in the running of the shops, on, specifically, 14 February 2007.

104.We have set out above some aspects of their conduct observed during the period of surveillance. It is quite plain that each of them had had continuing and close involvement both with the sale of the infringing discs from Shops 138 and 139 over the period of observation as well as with a number of other accused, particularly the 10^th accused. The shops were open for business at the time of the arrests. Infringing copies of discs were seized from the shops. Looking at the evidence as a whole, the judge was fully justified in drawing the inference, particularly in the absence of any evidence to the contrary, that they were continuing with their same activities on the day of their arrest.

2.   THE MONEY LAUNDERING CHARGES

105.Before dealing with the individual grounds advanced by the 1^st and 2^nd accused in respect of their convictions of what is commonly referred to as “money laundering”, it is convenient to note certain aspects of the evidence which are common to each of them.

106.The dates referred to in Charge 7 and charge 8 were different to those in Charge 1 relating to the conspiracy charge. The period during which the 1^st and 2^nd accused had dealt with the proceeds of the offence was said to commence on the date when the judge found that the 1^st accused, in the name of his wife, purchased Shop 102 together with the 2^nd accused and ran it until 14 February 2007.  It will be recalled that during the period June 2005 to June 2007 the 1^st and 2^nd accused, the latter through her brother so the judge found, were also the beneficial owners of Shop 139.

107.The judge concluded, for convincing reasons, that the 1^st  and 2^nd accused had owned Shop 139 for the purpose of selling discs which, she also concluded, included infringing copies. She was entitled, of course, to have regard to all of the evidence which she had heard during the trial which was relevant to the money laundering offences, including that on the conspiracy charge.

108.It was admitted by the 1^st and 2^nd accused, that during the period 29 June 2002 to 1 March 2006 791 raids had been carried out on Shop 102 in which over 184,000 suspected infringing copies were seized. It was further admitted that no one was arrested at the time of the seizures; after each seizure a standard notice inviting anyone related to the shop to contact C&E was posted in the shop; no one ever came forward to claim the suspected infringing discs; and none of the discs was examined by a representative of the copyright owners but was destroyed by C&E. It seems that it was the destruction of the seized discs that gave rise to the 1^st accused’s second ground of appeal.

109.The judge noted that despite the fact that there was no evidence that the 2^nd accused had any financial interest in “Seek For You Pet Shop” of which the 1st  accused was said to be the sole proprietor, and there was no evidence that the 1^st accused had any financial interest in the business known as “Sunshine Restaurant” which was operated by the 2^nd accused and her husband, there had been 24 deposits into the 2^nd accused’s account by the 1^st accused totalling just over half a million dollars and 66 deposits into the 1^st accused’s account by the 2^nd accused totalling just over $2.2 million. She analysed other evidence which was before her. She noted that “Their business in common... was the selling of suspected infringing discs in shop 102, 138/9 and 441B".

110.A Treasury Accountant testified as an expert witness having prepared a report and schedules covering the financial affairs of both the 1^st and 2^nd accused; Shops 102 and 139; the business Seek For You Pet Shop; a business known as “Disc Station”; and the spouses of the 1^st and 2^nd accused. The accuracy of the schedules relating to the consolidated bank deposits and withdrawals as well as the Inland Revenue Department’s records of the 1^st and 2^nd accused was not challenged.

2.1   The 1^st accused - Charge 7

111.Charge 7 against the 1^st accused alleged an offence between 3 June 2002 and 14 February 2007 during which he dealt with $7,193,960.00 knowing or having reasonable grounds to believe that it, in whole or in part, directly or indirectly, represented the proceeds of an indictable offence. The judge set out a correct analysis of the law, identifying the objective and subjective tests which she was required to apply.

112.The judge concluded, as she was so entitled on the evidence before her, that the records showed that Seek For You Pet Shop was not a profitable business. She noted that the Inland Revenue Department had assessed that that business had lost money on two out of the five years covered by the evidence before the judge and made small profits on a further two, no data being available for the remaining year. Bank records of the business showed that withdrawals exceeded deposits in three of the five trading years. She also noted that the 1^st accused had declared what she described as "very modest wages" of $564,000 over that period and that it was not until after his arrest that the 1^st accused had declared any rental income from Shop 139.

113.The judge accepted the Treasury Accountant’s evidence that cash in the total sum set out in the charge had been deposited into the 1^st   accused’s account during the period covered by the charge. She posed the question as to where that cash had come from and then set out the answer comprising the facts from which she concluded, correctly applying the objective test, that  reasonable grounds existed to believe that the moneys represented directly or indirectly, whether in whole or in part, of the proceeds of an indictable offence. She then found, correctly applying the subjective test, that the 1^st accused was aware of those reasonable grounds, those facts being known to him.

114.The 1^st accused’s grounds of appeal advanced before us at the hearing, in respect of this charge, were twofold: the first complained that of the three witnesses called to testify on his behalf, the judge had "... deleted one unreasonably.", had not mentioned whether that witness’s testimony had been considered or accepted and had drawn inferences against him which were unfair; second , that he objected to the judge having accepted as evidence records collected by the prosecution in the past but destroyed. It was the 1^st accused’s position that the moneys had been legitimately obtained by him from his operation of Seek For You Pet Shop and from the sale of dogs which he had bred.

115.The 1^st accused called three persons to testify in his defence. One was the caretaker of an industrial building in which the 1^st accused rented premises. It was this evidence that the 1^st accused complains the judge "deleted". We accept that in the body of her Reasons for Verdict she made no specific mention of that evidence. However, the judge produced the Reasons for Verdict in an uncommon format. In the main document which she styled “Reasons for Verdict” she dealt with an overview of the evidence. She made findings of fact based upon the evidence. She identified the legal principles which she needed to apply in arriving at her decision. She then set out the way by which she arrived at her conclusions.

116.She attached to that document a series of annexures, one in respect of each of the witnesses who testified either for the prosecution or the accused. In those annexures the judge dealt in detail with the evidence given by the particular witness to whom it related. She also dealt with the issue of the witnesses’ credibility. It is an unusual way of presenting a decision but we do not say that in any critical sense: in a trial as long as this, and involving so many witnesses, the utility of this approach is apparent.

117.The judge did refer to the evidence of the other two witnesses called by the 1^st accused in the body of the Reasons for Verdict. Even so, she merely noted, which was all that was required, the evidence of one, a student , who had been employed as a part-time worker. She dealt in some detail with the evidence of the 3^rd witness who was a man who asserted that he bought dogs from the 1^st accused, his evidence being that he paid some $400,000 - $500,000 each year in cash to the 1^st accused. She effectively, and understandably, rejected this witness’s evidence.

118.So whilst it is correct that in the body of the Reasons for Verdict the judge did not specifically refer to the evidence of the remaining witness, the caretaker, she did note, at the commencement of summarising the evidence of the defence witnesses, that the 1^st accused had called three witnesses to testify on his behalf  and she also set out the caretaker's evidence in that annexure  -  thereby clearly showing that she was alive to, and had taken into account, his evidence. Given the nature of his evidence, there was no necessity for the judge to have referred to it again as, in truth, it simply took the matter nowhere. As a result, there is no substance in the first ground of appeal.

119.As to the 2nd  ground, all that need be said is that the area of evidence complained of was evidence which came from the 4th  set of agreed facts, specifically agreed by, and only by, the 1st  and 2nd  accused. It was relevant evidence which the judge was entitled to take into account.

2.2   The 2^nd accused – Charge 8

120.The money laundering charge which the 2^nd accused faced covered the same period as that of the 1^st accused but the amount was substantially greater being $23,297,693.57.  The judge plainly bore in mind, as it was appropriate for her to do, that the 2^nd accused was the sole signatory to the accounts through which these moneys, together with others, passed.

121.The 2^nd accused advanced two grounds of appeal against her conviction. The first asserted that the judge had erred in finding that the 2^nd accused had failed to discharge her evidential burden in explaining the cash deposits into her accounts, by rejecting four aspects of the evidence relating to a business, known as Disc Station, in which she had been involved. Thesecond ground complained that the reason the judge gave for rejecting the evidence of a witness called by the 2^nd accused, concerning the continuation of aspects of the operation of Disc Station on a "cash" basis after it otherwise apparently had ceased business, was wrong.

122.The judge noted that the 2^nd accused had had some six years working experience after which she opened a business known as Disc Station, selling CDs, VCDs and CDRs, which had a number of outlets. The 2^nd accused also had obtained a Diploma in Business Administration.

123.Her evidence was that between June 2002 and December 2003 there had been a turnover in Disc Station of $23 million which generated a profit of 5%. The business was closed in 2005. The fact that the profitability of this business dropped was confirmed by the first of the witnesses called by the 2^nd accused, Tsang Chui Man, who managed to recoup all of his investment in the business by selling his share to the 8^th   accused.

124.It was the 2^nd accused’s evidence that, after the closure of the retail outlets, she and her husband continued to operate what was described as "the wholesale business” of Disc Station of buying and selling CDRs. She testified that the income from that wholesale business, which she said showed a daily turnover of some $30,000 per day with a 3% profit, had been deposited into her personal account.  It was the case of the 2^nd accused that the cash deposits shown in her personal account, amounting to more than $23 million during the period set out in the charge, had been generated by the business of Disc Station despite the very obvious trading decline it had suffered prior to its closure in 2005 and despite the fact that there had been no returns rendered by the 2^nd   accused to the Inland Revenue Department to cover the profits she said had been made.

125.In addition the judge noted that although there was an alleged absence of record-keeping in regard to the wholesale CDR activities, it was clear by contrast that the 2^nd accused had maintained "... very good accounts for Sunshine Restaurant." in which she was involved with her husband. The judge also noted that the 2^nd accused kept her daily deposit slips into the DBS bank accounts which showed an inflow of only low amounts compared to the amount referred to in Charge 8.

126.The only income which the 2^nd accused had declared for tax purposes during the period covered by the charge was a little over half a million dollars as being the rental income from Shop 102. The 2^nd accused had not rendered any returns for personal income tax during the period because, so she said, she did not know that she had to do so. The judge, quite understandably, found this evidence to be unbelievable.

127.A part of the 2^nd accused’s submissions in regard to the trading of Disc Station was that the records for 2002/2003 and 2003/2004, on which she relied but which illustrated the decline in trading, showed the income derived from what was described as the legitimate business of Disc Station. The income reflected was respectively $9.8 million and $4.8 million, including, in each instance, non-cash receipts exceeding 50% of the total receipts. The charge, of course, focused only on cash receipts which amounted, in total, for the two years to just under $7,000,000.00.

128.The claim by the 2^nd accused that the trading activities of Disc Station constituted legitimate business was unsupported by any independent, acceptable evidence  -  there also had been no returns to Inland Revenue Department.  The second of the witnesses called on her behalf, Chan Wai Kong, did not produce any documentation which supported the 2^nd accused’s contention that wholesale business of Disc Station was profitable. The third of her witnesses, Michael Chung, related how his dealings had largely been with the 2^nd accused’s husband who had not normally asked for invoices or receipts. He produced copies of some invoices during the trial but, the judge noted, they had no unit price or the total price entered in them. He had not been able to find any receipts from his company records he said.

129.The fourth witness called by the 2^nd accused, Wong Chun Yu, testified as to substantial ongoing trade of the order of $50,000 per week, in cash, which he conducted with the 2^nd accused’s husband. He accepted that this did not appear in any tax return and he accepted that the profit he claimed he made had not been reported to the Inland Revenue Department even though he had told his accountant about it and said that it should be reflected. It was his practice not to issue invoices or receipts to the 2^nd accused’s husband and there was no record in any form of his alleged business dealings. The judge categorised his evidence as acting as a middleman between his customers and the 2^nd accused’s husband: she noted that he was unable to provide information of any of his customers and that there was no record of a tax return between 2002 and 2005. The judge concluded, unsurprisingly, that his evidence was not credible.

130.In support of her first ground of appeal the 2^nd accused set out four particular areas of the evidence which she contended the judge had ignored. The first simply repeated an argument before the judge which, in itself, was in error not least because it included in its arithmetical aspects non-cash deposits whereas the charge referred only to cash deposits. The second made further reference to the existence of non-cash transfers between accounts of Disc Station and the 2^nd accused whilst the third reflected payments made by Disc Station to the 2^nd  accused’s second  witness: the prosecution did not seek to suggest that only infringing discs were sold by Disc Station or, indeed, in any of the three shops. The final point made was that the absence of full accounting records of Disc Station and returns to Inland Revenue "were rather a matter of tax evasion": if that were so the 2^nd accused would clearly be a party to that evasion which, in itself, is an indictable offence. Be that as it may, the judge found on the evidence before her that the moneys arose, at least in part, from the sale of infringing discs.

131.The second  ground of appeal was a complaint that the judge rejected the evidence of the third witness called by the 2^nd accused, Michael Chong because, according to the submissions, the judge had rejected his evidence "... simply [because he] had himself evaded tax...". That takes out of context what the judge said. The judge had just dealt with the evidence of Wong Chun Yu, commenting upon his lack of returns to Inland Revenue, his lack of record-keeping and his inability to support any of his evidence concerning his cash dealings with the 2^nd   accused or her husband. The judge’s remarks concerning Michael Chong had to be read in the context of what just had gone before: she plainly was equating his position with that of Wong Chun Yu: her observation that she found him to be a "... very unreliable witness as his evidence/ documents showed all the dishonest declaration to IRD." was, when viewed properly and in context, a perfectly proper, sensible, remark for her to have passed. It was part and parcel of her assessment of his credibility as a whole. She was entitled to reject his evidence and was correct to do so.

Conclusion

132.Apart from the ground relating to the identification evidence, there is no merit in any of the other grounds of appeal against conviction advanced by any of the accused.

THE APPEALS AGAINST SENTENCE

133.The 1^st accused seeks leave to appeal sentence on Charge 7 only. He advances a single ground which is that the judge erred in principle by failing to consider the issue of whether the evidence showed that the conduct amounted to "organised crime" as defined in OSCO in respect of the individual charges, with special emphasis on Charge 7.

134.The 2^nd accused seeks leave to appeal sentence on Charge 8 on the grounds that the judge erred in: first, her finding that the conduct which gave rise to the charge involved substantial planning and organisation; secondly, she failed to take into account the effect of s.27(12) of OSCO; thirdly, her assessment of the quantum of the proceeds of the indictable offence.

135.The 3^rd and 4^th accused seek leave to appeal sentence on Charge 1 on the ground that it is manifestly excessive and on Charges 1 and 4 on the ground that the judge erred in finding that the charges fell within the definition of organised crime.

136.The 5^th and 6^th accused seek leave to appeal the sentence on Charges 1, 2 and 3 on the basis that the sentences are manifestly excessive.

The judge’s approach

137.The sentences imposed by the judge were arrived at in this manner: she first determined a starting point in respect of each charge; she then ordered that all of the sentences to be served by any accused were to be served concurrently with one another the effect of which, of course, was that the highest individual sentence she imposed became the total sentence for both/all of the charges; she then reduced that total sentence by a period of three months for each accused in recognition of his/her agreement of facts; she then determined that the offences constituted organised crime as defined in OSCO; she thereafter enhanced each total sentence by 30%. The actual figures looked like this:

Charge	1	2	3	4	7	8	Less 3 mths	30%	Total
A1	3 yrs				4 yrs		45 mths	13 mths	4 y 10 m
A2	3 yrs					5 yrs	57 mths	17 mths	6 y 2 m
A3	2 y 6 m			1 yr			27 mths	8 mths	2 y 11 m
A4	2 y 6 m			1 yr			27 mths	8 mths	2 y 11 m
A5	2 y 6 m	1 yr	1 yr				27 mths	8 mths	2 y 11 m
A6	2 y 6 m	1 yr	1 yr				27 mths	8 mths	2 y 11 m

138.There are two particular difficulties with the way the judge dealt with sentence.  First, she does not appear to have addressed the charges individually when considering whether any or all of them fell within the definition of an “organised crime” as set out in OSCO. Secondly, it is not possible to tell from the approach adopted by the judge whether she had reduced each of the sentences by three months or just the higher/total sentences, a factor which could be of importance if any of the accused had succeeded in appeal against his/her conviction on the charge which gave rise to the highest sentence. Sentencing practice requires that, where there is more than one charge, a judge imposes an appropriate sentence on each. Each of these is an error in principle and means that sentence must be approached afresh.

139.There is a third difficulty which caused us concern which is that it is unclear from the Reasons for Sentence whether factors which the judge had taken into account for determining the starting points were taken into account for a second time in determining the question of enhancement of sentence. In considering the application for enhancement of sentence she went into some detail in regard to the conduct of the various accused which she earlier had covered in broad outline at the beginning of her Reasons for Sentence.

140.We were concerned that the judge may have "double counted" aggravating features which she might have taken into account in fixing the starting points by relying upon them a second time when considering the question of enhancement of sentence. This was a particular danger in regard to Charge 1, the conspiracy, as many of the features which it would be proper to take into account in assessing an appropriate starting point for that offence - for example, the number of persons involved, the duration of the activities, the level of sophistication, the amount of money apparently generated - including matters which would potentially aggravate the starting point, would all be matters which it would be proper to take into account either in fixing the starting point or in considering enhancement. It is particularly important in circumstances such as this to ensure that the same factors are not relied upon twice.

141.The judge called for a background report in respect of each accused after conviction. She set out, and we take into account, the essential contents of each of those reports none of which, it must be said, showed anything exceptional either for or against any of the accused in this appeal. This seems to have been an unnecessary course for the judge to have followed given that, as the judge was well aware, there is ample authority that offences of this nature carry immediate custodial sentences in the absence of circumstances which can truly be said to be exceptional: all the accused were represented by counsel none of whom laid before the judge any exceptional circumstances which were claimed to exist.

142.The 1^st accused had two spent convictions whilst the 2^nd accused was of previous clear record. Both the 3^rd and 4^th accused each had two similar previous convictions; the 6^th accused had one; the 5^th accused had a greater number of convictions, two of which were not dissimilar to the present offences in the sense that they related to possession and sale of goods bearing false trademarks.

The starting points

143.After reciting a brief summary of the evidence and facts which she had found proven, the judge referred to the decision of this Court in HKSAR v CHOI Sai Lok  CAAR2/1999 quoting the well-known passage indicating that distinctions are to be drawn, for sentencing purposes, between the different roles played by accused persons. She noted that a starting point of 12 months imprisonment for a courier who had pleaded guilty to possession of 719 pirated discs was regarded as appropriate and for another courier, who possessed 544 discs but had a key to a storage room where 22,963 discs were found, 18 months imprisonment would have been appropriate. The Court there noted that "The roles played by storemen, packers, delivery men and salesmen may be different..." but indicated that there would likely be little difference between the sentences as between them.

144.She then turned her attention immediately to the question of enhancement under s. 27 of OSCO without identifying any starting points for the individual offences at that stage. She eventually settled on the starting points set out in a table in §136 without indicating just how it was she had arrived at those figures.

145.It is clear from the evidence, as the judge found, that the 1^st and 2^nd accused played much more major and significant roles in the execution of the conspiracy: they owned, the judge found, Shop 139 from which actual sales of infringing copies were carried on; the 1^st accused was seen in the vicinity of that shop and Shop 102; he was seen receiving money from the 3^rd accused in the vicinity of Shop 441B; they also owned Shop 102 which the 2^nd accused visited - she would have been familiar with the trading activities in Shops 138 and 139; she was in possession of rental agreements in the name of the 8^th accused in respect of Shop 138 as well as a store room; there was a direct link between her and GH 5473 which was used for storage of infringing copies; there was a further link between her and the outlets by way of the computerised list of codes for discs; there were very substantial amounts of unexplained moneys passing into their respective bank accounts which were consistent with the sales generated, albeit that not all of the sales were of infringing copies.

146.There is nothing, in our view, on the evidence which demands any distinction be drawn between them in terms of their culpability. In this instance we agree with the judge that the appropriate starting point on Charge 1 for each of them was a period of 36 months imprisonment.

147.In respect of the remaining four accused, once again there appears to us to be nothing to choose between them in terms of their respective levels of culpability. Each was plainly an employee and at a relatively mundane level at that. Each supervised the respective shops: albeit that the 4^th accused was seen in the vicinity of both sets of shops, the majority of the evidence against him related to Shop 441B. Their role appears to have been to keep watch for potential raids; make sure that customers paid for the discs which they acquired; replenish stocks as and when necessary; and, generally, ensure the smooth running of the scheme. We note that evidence in respect of the 7^th, 8^th and 9^th accused indicate that they were receiving wages of the order of $300 - $400 per day: there is no evidence to suggest that the 3^rd to 6^th accused were not receiving similar levels of wages, as their duties were similar if not identical. This plainly was a lucrative business; the measure of their salaries is an indicator of their level of involvement.

148.In our judgment the appropriate starting point for each of the 3^rd to 6^th accused on Charge 1 is one of 24 months imprisonment.

149.In respect of Charges 2, 3 and 4, those of exposing infringing copies for sale on the day of arrest, We regard the appropriate starting point as one of 12 months imprisonment, a view which coincides with that of the judge. The number or frequency of their previous convictions have not reached the point, yet, where an enhanced starting point would be appropriate.

150.In regard to Charges 7 and 8, the two money laundering charges against the 1^st and 2^nd accused respectively, the judge took starting points of four and five years respectively. She gave no explanation in her reasons for verdict as to why she drew such a distinction between them but the only apparent distinguishing feature is the difference in the amount of money which passed through their respective accounts. It is well-established that whilst the quantum of the moneys involved in an offence of this nature does not play a definitive role in assessing sentence, it is a factor for the sentencer properly to take into account (see, e.g. R v Monfries [2003] EWCA Crim 3348; [2004] 2 Cr. App. R. (S) 3; HKSAR v LEE Wai-yiu and Ors. CACC100/2006;  Secretary for Justice v Jerome Yudal Arnold Herzberg [2010] 1 HKLRD 502).

151.This court has indicated previously that the nature of the indictable offence from which the property derived is one factor which a sentencing court is entitled to take into account (see, e.g., HKSAR v Javid Kamran CACC400/2004) but it is not one of any major significance unless it can be shown that the accused knew the nature of the crime and that the crime was of a serious nature: in those circumstances this would be an aggravating feature (see, e.g., HKSAR v Xu Xia Li and Anor. [2004] 4 HKC 16; HKSAR v CHEN Szu Ming CACC270/2005; HKSAR v CHOI Sui-hey CACC277/2007; Jerome Yudal Arnold Herzberg above).  

152.On the evidence before the judge the 1^st and 2^nd accused had reasonable grounds to believe that the moneys represented, in whole or in part, the proceeds of an indictable offence and also knew the nature of the underlying indictable offences which gave rise to at least a part of the moneys flowing into their accounts.

153.In our judgment the appropriate starting point on Charge 7 for the 1^st accused would be one of 48 months imprisonment and that on Charge 8 for the 2^nd accused would be one of 54 months imprisonment, which adequately reflects the difference in the amounts with which they dealt.

Agreement of evidence

154.The judge awarded a reduction in sentence for the agreement of a substantial number of facts by the accused. Such agreements are to be encouraged in the interests of efficient trials.  The judge decided that a blanket reduction of three months imprisonment was appropriate. Such a reduction should be applied prior to any enhancement of sentence: if applied afterwards the reduction itself is enhanced.

155.In a case such as the present, where there are substantially different levels of sentence imposed for different offences, it is inappropriate to reduce each sentence by the same amount by applying a reduction across the board. It is unnecessary to venture into precise arithmetical calculations as the amount of reduction is simply a recognition of a specific area of cooperation by an accused: in determining the level of reduction, regard should be had, insofar as it may be possible, to the effect of any agreement on the particular charge. In the instant matter the admissions of fact substantially impacted on the first, seventh and eighth charges but were of much less effect on the remaining charges.

156.The reduction of three months from the sentences imposed on Charges 1, 7 and 8 and of one month of the sentences imposed on Charges 2, 3 and 4 would be appropriate.

Enhancement of sentence

157.The next issue, then, is that of totality. The sentences as calculated this far are as follows:

1^st accused: Charge 1, 33 months; Charge 7, 45 months.

2^nd accused: Charge 1, 33 months; Charge 8, 51 months.

3^rd accused: Charge 1, 21 months; Charge 4, 11 months.

4^th accused: Charge 1, 21 months; Charge 4, 11 months.

5^th accused: Charge 1, 21 months; Charge 2, 11 months; Charge 3, 11 months.

6^th accused: Charge 1, 21 months; Charge 2, 11 months; Charge 3, 11 months.

158.It is be borne in mind that the judge found that Shops 138 and 139 were being run as a single entity so, although the 5^th and 6^th accused were charged correctly in respect of each of those premises separately, those sentences fall be served concurrently with one another in any event.

159.The offences committed by the first and second accused are separate and distinct from one another. In addition, the time period covered by Charges 7 and 8 differ from that covered by Charge 1: the period contemplated by those charges is substantially longer than the period during which the conspiracy was agreed and continued. It is consequentially appropriate to reflect this by ordering that a portion of the sentences in respect of Charges 7 and 8 be served consecutively. In respect of Charge 7 a period of 15 months imprisonment and in respect of Charge 8 a period of 18 months imprisonment is to be served consecutively to that on Charge 1.

160.Although the two offences committed by the 3^rd and 4^th accused and the three offences committed by the 5^th and 6^th accused were each separate and distinct offences they all arose from the conclusion of the agreement which gave rise to the conspiracy. In the circumstances it is appropriate that all those sentences be served concurrently with one another. This results in an aggregate period of imprisonment for each of the 3^rd to 6^th accused of 21 months.

161.The judge noted that the prosecution had given notice to all of the accused in respect of all of the charges on the charge sheet, pursuant to s. 27(5) of OSCO, of intention to seek a determination pursuant to the provisions of s. 27(4) that each of the offences was an “organised crime” in order that the court, pursuant to the provisions of s. 27(11), might take that fact into account and impose an enhanced sentence. Consequently, the sentencing procedure indicated as appropriate by this court in HKSAR v Tam Wai-pio [1998] 4 HKC 291 fell to be considered.  This court said at 298:

20.   ... we offer the following guidance in order to minimise the risk of confusion for cases where enhancement of sentence has to be dealt with under the procedure laid down in the Ordinance. This approach would, of course, have to be adapted as necessary where multiple offences are involved, some of which are not organized crimes. In such circumstances, a judge should consider, determine and set out in clear terms:

(1) (a) the appropriate starting point having regard to the part played by the defendant, and

(b) the sentence that the court would have imposed taking into account the defendant's mitigation and totality;

(2)  whether the specified offence was an organized crime within the meaning of section 2 of the Ordinance;

(3)  whether the crime calls for an enhancement of the sentence under the terms of section 27(11) having regard to the information supplied by the prosecution to the court under section 27(2)(a) to (e) or section 27(8) or the general nature of the organized crime itself;

(4)  if enhancement is called for, the percentage increase by way of enhancement of the sentence.

162.The definition of “organised crime” is contained in s. 2 of OSCO and reads, in its relevant parts:

"organised crime" means a Schedule 1 offence that

(a)...

(b) is related to the activities of two or more persons associated together solely or partly for the purpose of committing two or more acts, each of which is a Schedule 1 offence and involves substantial planning and organisation; or

(c)...

163.Each of the charges relates to a specified offence. Each, on either the direct evidence or by inference, was committed by two or more persons. There were two or more acts. The question is whether each of the offences involved substantial planning and organisation: the judge found that each did and, consequently, was an organised crime.

164.Certainly insofar as Charges 1, 2, 3 and 4 are concerned the judge found, and it is self-evident, that this was a lucrative business venture which plainly involved a very large amount of stock: although it was impossible to determine exactly how many discs were involved one only has to have regard to the fact that over 800,000 discs were seized in various raids but never claimed from C&E . On 14 February 2007 33,269 discs were recovered from the various shops and storage facilities of which 11,152 prove to be infringing copies. It is plain from the evidence which was gathered during the period of surveillance that this was a sophisticated, well-organised, carefully run and efficient operation.

165.We recognise, of course, that it has never been the prosecution's position that every disc handled by the accused was an infringing copy: to the contrary, the discs which were infringing copies were mixed in with legitimate discs thereby making detection of the offences just that much more difficult. This was another indicator of the care which went into the planning of the ongoing operation.

166.There cannot be any doubt that substantial, indeed very substantial, planning and organisation was invested in the operation which gave rise to the first to fourth charges. Each was clearly an organised crime as contemplated by OSCO.

167.One of four points advanced by the 1^st accused in support of his appeal against sentence relates to the issue of whether there was substantial planning and organisation in respect of Charge 7: the 2^nd accused makes a similar complaint in regard to Charge 8. It is correct that the judge did not spell out, in detail, her thought processes in regard to either Charge 7 or 8 but it is clear that her finding that there had been substantial planning and organisation extended also to each of those charges. Whilst it certainly would have been preferable for her to have provided more detail for her conclusion, her brief review of the evidence in the course of her Reasons for Sentence shows that she addressed her mind to the issue. She demonstrated that she was aware that the application applied to Charges 7 and 8 and she made reference in the Reasons for Sentence to the general evidence before her. Further, she had dealt with all of the facts in considerable detail in her Reasons for Verdict and it is proper to have regard to what she said there as the basis for her conclusions in regard to this issue without her having to repeat it all. That evidence was available for her to rely on in respect of these two charges as it was in respect of any other charge.

168.The detail of the argument advanced on behalf of the 1^st accused on this point was that all that the evidence showed was that cash had been deposited into his bank accounts; that there was no evidence to show that two or more persons were involved in the money laundering activities; thus there was no evidence to show that that conduct amounted to an organised crime. With respect, that argument is out of touch with the picture revealed by the overall evidence which directly shows the involvement of both the 1^st and 2^nd  accused with others in the generation and receipt of substantial monies based upon the lucrative nature of the businesses.

169.The act of dealing with the proceeds of an indictable offence is not confined simply to the depositing of money into one's bank account nor does it require evidence of transfer of funds between different accounts or institutions - albeit that there was evidence of transfers between the 1^st and 2^nd accused’s accounts. There was certainly sufficient evidence to conclude, as did the judge, that Charges 7 and 8 fell within the definition of organised crime.

170.Although, as we have to approach sentencing afresh, it is not strictly necessary to deal with the criticisms levelled against the judge, we do so briefly as a matter of courtesy to counsel. The 1^st accused made four points in support of his appeal against sentence. The first was effectively the use of the word "discs" by the judge rather than the phrase "infringing copies of copyright works": this is a semantic quibble on which nothing turned in the overall context of the trial. The second, that it was necessary in considering enhancement to consider each specified offence separately, has been dealt with previously and, as has been seen, was one with merit.

171.The third, that the degree of planning and organisation differs between Charge 1 and Charge 7, was to a large extent an extension of the second complaint. That the planning and organisation in respect of one charge is greater than for another does not prevent the level of organisation and planning in respect of the other charge from still being substantial - that is a question of fact and degree in respect of each offence.

172.The fourth particular, which has already been dealt with in part, was that it had not been proved that there had been conduct which amounted to organised crime throughout the entire period covered by Charge 7. What this submission overlooked is both that the period of the charge is not an essential element of the offence so that the prosecution is not required to prove conduct throughout the entire duration of the period alleged, as well as the fact that it is not incumbent on the prosecution to prove the nature of the underlying offence.

173.Here the prosecution was able to prove that the 1^st accused and, come to that, the 2^nd accused actually knew the source of at least part of the cash which had flowed into his/her account over the period of the charge and that those monies were derived from criminal activities in which he/she was a participant: in respect of the balance the prosecution was entitled to rely upon the fact that the accused had reasonable grounds to believe that some or all of those monies represented the proceeds of an indictable offence.

174.Insofar as the 2^nd accused is concerned there are in essence three complaints: first, that the judge did not set out why she concluded that Charge 8 involved substantial planning and organisation: secondly that she failed to take into account the effect of section 27 (12) of OSCO; thirdly, that she had erred in calculating the proceeds of the indictable offence.

175.In addition to what we have already said which is common both to the 1^st and 2^nd accused, the judge found, correctly, that the 2^nd accused would have had reasonable grounds to believe that some or all of the monies represented the proceeds of an indictable offence. The evidence as a whole makes it quite clear that all or part of the cash in excess of $23 million was not generated from any legitimate business activity: the judge largely rejected the 2^nd accused’s evidence on this aspect. There was direct evidence of the considerable involvement between the 1^st and 2^nd accused in circumstances which would have given rise to the generation of monies. There was evidence of transfers, other than cash, between their respective bank accounts. It is proper to take into account also such of those facts as we detailed in §80 as the judge having found, insofar as they are relevant and admissible in regard to this issue. The observations in §167 above are of equal applicability to the 2^nd accused’s position.

176.As to the second point, s. 27(11) provides:

Subject to subsections (12) and (13), where a court is satisfied beyond reasonable doubt -

(a)   that the specified offence was an organised crime; or

(b)   ...

or..., the court shall have regard to such matter when it passes a sentence on the person for the relevant specified offence and may, if it thinks fit, pass a sentence on the person for that offence that is more severe than the sentence it would, in the absence of such matter, have passed.

whilst s. 27(12) provides, somewhat gnomically:

If an application has been made for a confiscation order under section 8, the court shall not have regard for the purposes of subsection (11) to any proceeds of a specified offence or organised crime to which the application for the confiscation order relates.

177.The Secretary for Justice made application on 6 July 2009 for a confiscation order to be made against both the 1^st and 2^nd accused. The notice was addressed to each of the accused and related to all of the charges contained in the charge sheet.

178.It seems to us that the purpose of s.27(12) is merely to remove the value of the property dealt with by a convicted person from the consideration of the sentencer as a factor in deciding upon an enhanced sentence under s.27(11). That of course does not preclude the sentencer from taking it into account as a factor, insofar as it may be relevant, in determining the appropriate starting point for a specified offence.

179.The third complaint may be dealt with shortly. It was that the judge erred in finding $22,751,720.17 to be the proceeds of an indictable offence. There is no duty upon the judge to make any finding of a particular monetary amount for the purposes of enhancement of sentence. Even if the amount happened to be incorrect, and the 2^nd accused has certainly not shown it to be so, it would have had no effect on sentence on the facts of this case.

180.We are satisfied that this is a matter in which enhancement of the total sentence imposed upon the accused is appropriate and that the judge did not fall into error by basing her decision to enhance the sentence upon matters she had previously taken into account in order to determine starting points.

181.The provisions of s. 27(11) are specifically designed to add an additional layer of deterrence over and above that normally factored in to an appropriate sentence. In HKSAR v WONG Fung-ming and Anor. CACC515/2001 the consequences of this section were considered:

We think the power given to a judge to add to the sentence he has otherwise considered to be appropriate, which will often already have incorporated an element for deterrence, can only have been intended to spell out to others who might otherwise commit the same type of offence in the future that to do so will entail a particularly severe penalty. Inevitably, it is a power which ought to be utilised sparingly.

182.The purpose of the conspiracy was to create a substantial and lucrative enterprise which sold infringing copies of copyright works. The manufacture, sale and distribution of infringing copies has long been recognised by the courts as an "enormous problem in Hong Kong" which damages its reputation and results in international pressure being put on Hong Kong to take firm measures against offenders. Little, if anything, has changed. (See the authorities collected at 337 D - I in CHOI Sai-lok.)

183.As to the extent of the enhancement appropriate, the judge determined that an enhancement of 30% of the sentences was appropriate. That figure accords with the general level of enhancement found to be appropriate by this Court in respect of offences involving infringing copies.

184.The resulting appropriate total sentence for each accused therefore would be, rounded down: 1^st accused, 5 years 2 months imprisonment; 2^nd accused 5 years 6 months imprisonment; 3^rd to 6^th accused inclusive, 2 years 3 months imprisonment. The result is that the appropriate sentence for the first accused is higher by four months than that imposed by the judge: in the circumstances, we do not propose to alter the sentence imposed by the judge. The sentences in respect of each of the other accused are below those imposed by the judge.

THE RESULT

185.For the reasons which we have given relating to the arguments advanced by the 3^rd to 6^th accused concerning the identification evidence against them, we allow their applications concerning conviction, treat the hearing as the appeals proper and dismiss the appeals. The applications of the 1^st and 2^nd applicants for leave to appeal conviction are dismissed.

186.Leave is granted to each applicant in respect of the application for leave to appeal sentence and, treating the hearing as the appeal proper the sentences imposed by the judge are set aside and in their stead are imposed the following sentences and concomitant orders:

First accused: Charge 1, 2 years 9 months; Charge 7, 3 years 9 months, of which 1 year 3 months is to be served consecutively to the sentence on Charge 1. The resulting sentence of 4 years imprisonment is enhanced by 10 months to 4 years and 10 months imprisonment.

Second accused: Charge 1, 2 years 9 months; Charge 7, 4 years 3 months, of which 1 year 6 months is to be served consecutively to the sentence on Charge 1. The resulting sentence of 4 years 3 months imprisonment is enhanced by 30%, 15 months, to 5 years and 6 months imprisonment.

Third and fourth accused: Charge 1, 1 years 9 months; Charge 4, 11 months, the sentences to be served concurrently. The resulting sentence of 1 years 9 months imprisonment is enhanced by 30%, 6 months, to 2 years and 3 months imprisonment.

Fifth and sixth accused: Charge 1, 1 years 9 months; Charge 2, 11 months; Charge 3, 11 months, the sentences to be served concurrently. The resulting sentence of 1 years 9 months imprisonment is enhanced by 30%, 6 months, to 2 years and 3 months imprisonment.

Ms. A P Campbell-Moffat and Mr Nicholas Adams, counsel-on-fiat, for the respondent.

1^st appellant, in person, on conviction.

Mr David Boyton and Mr Gary Lau of the Bar Fee Legal Service Scheme for 1^st appellant on sentence.

Mr Bruce Lau, instructed by Anthony Kwan & Co for 2^nd appellant.

Mr Chan Wai-ming instructed by Y T Chan & Co for 3^rd & 4^th appellants.

Mr Oliver Davies instructed by Tsand & Co for 5^th and 6^th appellants.