HKSAR v. Pau Kwok Ping

CACC 238/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 238 OF 2011

(On Appeal From District Court Criminal Case

Nos. 265 & 266 of 2009 (consolidated))

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BETWEEN

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Hon Cheung JA (giving Decision of the Court) :

1.The 3^rd applicant Pau Kwok Ping applies for an order certifying that two points of law of great and general importance are involved in the judgment of this Court handed down on 17 April 2013. The two questions are :

1)   Is the offence created by section 342F(1) of the Companies Ordinance, Cap. 32, one of strict liability subject to the defendant establishing the defence provided for in the said subsection on the balance of probabilities? and

2)  Is the common law defence of ‘honest and reasonable belief’ available with regard to such offence?

2.These two questions were raised before us by the 3^rd applicant in his application for leave to appeal.  We, however, did not deal with them because we were of the view that they were not engaged on the facts of this case.  This is what we said :

‘ 161. In the light of our reasons thus far, it will be clear that we do not accept Mr. Duncan S.C’s primary or secondary positions in presenting Pau’s appeal. We see no reason for holding that Pau’s conviction on Charge 4 was either unsafe or unsatisfactory. Accordingly, we are entirely satisfied with the Judge’s finding that Pau knew full well that Iris was not to be the beneficial owner of the 8,844,800 Eco-Tek shares which he had asked Iris to hold for the company; thereby dishonestly making the false representations to the Hong Kong Stock Exchange averred in Charge 4. That being the case, a consideration of the remaining grounds of Pau’s appeal is somewhat academic. By ground 4 it is suggested that if the finding of dishonesty and Pau’s consequent conviction on Charge 4 is unsustainable, then so is the conviction on Charge 5. And by ground 5 it is argued that the Judge was wrong to rule that section 342F of the Companies Ordinance was an offence of strict liability imposing upon the defence the persuasive burden of establishing the statutory defence on the balance of probabilities and depriving him of the common law defence of honest and reasonable belief.

162. In reality, once it was found that Pau knew that Iris was not the beneficial owner of the shares in question and that he was dishonest in representing otherwise to the Hong Kong Stock Exchange, any statement to that effect in the company prospectusof Eco-Tek, the issuance of which he authorised, would have been untrue. Accordingly, he would have been guilty of Charge 5, whether he had a persuasive burden or merely an evidential burden to show that he did not believe that the statement was untrue.  (As to the other limb of the statutory defence, it has never been argued, nor could it sensibly have been argued, that thestatementwasimmaterial).  As the Judge, rightly in our view, found:

“In the circumstances of the present case, (the argument about strict liability) is irrelevant since I have found both (Chiang) and (Pau) authorised the issue of the prospectus with full knowledge that it contained the untrue statement. I find (Chiang) the author of the dishonest scheme and (Pau) had knowingly acted in concert with her.

Learned counsel for (Pau) also argued that the common-law defence of honest and reasonable belief is also available having regard to the Court of Final Appeal decision in Hin Lin Yee, I do not agree to this view.  In any case, in the light of my finding, it is again not relevant.”

163. We respectfully agree.  In the circumstances of the Judge’s finding as to the full knowledge of the untrue statement on the part of both Chiang and Pau - a finding we are not disposed to upset - it is not necessary for us to proffer a view on an issue which is entirely academic. Grounds 4 and 5 must fail.’

3.The 3^rd applicant argued that a finding that the 3^rd applicant was not guilty of Charge 4 (a matter which is subject to an application under the substantive and grave injustice ground to the Court of Final Appeal) would not necessarily lead to an acquittal on Charge 5.  In such an event the determination of his guilt on Charge 5 would depend on whether the offence charged was one of strict liability, subject to him establishing the defence provided for by the Companies Ordinance, on the balance of probabilities.  It could also depend on whether the defence of ‘honest and reasonable belief’ was available to him.  He argued that these are the matters raised in the point of law sought to be certified.

4.This Court will only deal with the position as it is and will not certify questions of law in anticipation of the unknown outcome of the 3^rd applicant’s application to the Court of Final Appeal under the substantive and grave injustice ground.

5.Accordingly we will refuse the application with costs to the respondent.

Mr Anthony Chau, Ag SADPP of Department of Justice, for the Respondent

Mr Shahmim K. Khattak (Kelly Lam), instructed by Howell & Co., for the 3^rd Applicant