HKSAR v. Tam Lap Shek and Another
Read the full judgment text of CACC 199/2012 on BabelCite. This Court of Appeal judgment was delivered on 31 July 2013.
1. The applicants, who are long-term cohabitees, were convicted after trial by Deputy District Judge Gary Lam, as he was then, on 6 March 2012 of multiple charges of money-laundering, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455. The 1 st applicant was convicted of six charges and the 2 nd applicant of four charges. Each of the applicants seeks leave to appeal against those convictions and the sentences of imprisonment imposed upon them in consequence
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CACC 199/2012 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CRIMINAL APPEAL NO. 199 OF 2012 (ON APPEAL FROM DCCC 1212 OF 2008) ____________ BETWEEN
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____________ Hon Lunn JA (giving the judgment of the court) : 1.The applicants, who are long-term cohabitees, were convicted after trial by Deputy District Judge Gary Lam, as he was then, on 6 March 2012 of multiple charges of money-laundering, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455. The 1st applicant was convicted of six charges and the 2nd applicant of four charges. Each of the applicants seeks leave to appeal against those convictions and the sentences of imprisonment imposed upon them in consequence, namely a total of 5 years’ imprisonment in respect of the 1st applicant and 3½ years’ imprisonment in respect of the 2nd applicant. BACKGROUND 2.The offences were alleged to have been committed on various dates in the period from 1 July 2001 to 18 July 2007 and concerned dealings by the respective applicants with monies in bank accounts held in their respective names in Hong Kong. The applicants were arrested at their home on 19 July 2007. Stay of Proceedings 3.In advance of the substantive trial, District Judge Albert Wong refused applications from each of the applicants that the proceedings be stayed permanently. His ruling to that effect was made on 15 July 2011. Fitness to plead 4.Thereafter, on an application made on his behalf pursuant to section 75 of the Criminal Procedure Ordinance, Cap. 221 the court conducted a hearing, in which evidence was received to determine whether or not the 1st applicant was fit to be tried. In the result, the judge ruled that the 1st applicant was fit to be tried. Severance 5.In due course, the trial of the applicants commenced on 12 January 2012 before Deputy District Judge Gary Lam. At the outset, an application was made on behalf of the 1st applicant that his trial be severed from that of the 2nd applicant, it being contended that since it was intended to appeal the ruling of Judge Albert Wong to refuse a permanent stay of proceedings against the 1st applicant, it would be unfair to require the 1st applicant to undergo a trial. Judge Gary Lam refused the application and the trial of both applicants ensued. THE PROSECUTION CASE 6.Much of the prosecution case was adduced into evidence by Admitted Facts, in particular that each of the respective applicants maintained the accounts through which the impugned money passed as evidenced by the related bankers’ affirmations. Furthermore, the expert report of Mr John Lees, a forensic accountant, was adduced into evidence pursuant to section 65B of the Criminal Procedure Ordinance, Cap. 221, it being a specific admission that he was an expert forensic accountant. In addition, Mr Lees gave oral evidence. Mr Lees 7.In his report Mr Lees analysed the movements of monies into and out of all of the 10 accounts stipulated in the Particulars of Offence of the ten charges and expressed his opinion as to whether or not the operation of the various accounts evidenced characteristics of money-laundering. Charge 1 : 1st applicant 8.For example, Mr Lees noted that, in the period 1 July 2001 to 18 July 2007, $54,156,413.08 million had been deposited in a savings account in the name of the 1st applicant with the Hang Seng Bank, as particularised in the Particulars of Offence of Charge 1. In the same period of time over $53,755,813.29 had been withdrawn. However, having noted that the account number stipulated in the Particulars of Offence was an integrated bank account which, amongst other accounts, also comprised a current account, Mr Lees analysed deposits into and withdrawals from that account, in particular as to transfers to/from the savings account. Noting that over 25% of the deposits into those accounts had been in cash and over 18% of the other deposits were payments from casinos, it was his opinion that the pattern was consistent with the characteristics of ‘placement’, namely the process of moving illicit monies usually in cash and placing them in circulation through financial institutions including casinos. Furthermore, the significant amount of money that was transferred from/to different individuals indicated the use of ‘layering’, by which mechanism the provenance of the monies are concealed. In the result, it was his opinion that the pattern of transactions in the account displayed the characteristics of money-laundering. Charge 7 : 2nd applicant 9.Similarly, Mr Lees noted that in the same period, $33,274,813.88, as particularised in the Particulars of Offence of Charge 7, had been deposited into a savings account in the name of the 2nd applicant with the Hang Seng Bank, whilst a slightly smaller amount had been withdrawn. That account was also an integrated account which, amongst other accounts, comprised a current account. Given the movements of monies to and from the savings account, Mr Lees also considered that account. He noted that over 47% of the deposits in the accounts were in cash, whereas just under 10% were payments from a casino. Further, over 32% of the withdrawals were in cash. It was his opinion that the patterns of transactions in the account, being consistent with both placement and layering, displayed the characteristics of money-laundering. Overview 10.Overall, Mr Lees expressed the opinion that the patterns of transactions in three of the accounts in the name of each of the respective applicants displayed the characteristics of money-laundering. In the case of the 1st applicant those accounts were the subject of Charges 1, 2 and 6, whereas in the case of the 2nd applicant those accounts were the subject of Charges 7, 8 and 9. THE DEFENCE CASE 11.Whilst the 1st applicant did not give or call evidence, the 2nd applicant gave evidence and called three witnesses. The 2nd applicant testified that much of the money passing into her bank accounts came from the 1st applicant. She said that the 1st applicant told her that he could earn several million dollars a year, but he did not tell her the source of his earnings and she did not ask him. When she met the 1st applicant in Australia in the 1980s he told her that he ran his father’s antique business in Macau. In 1992, they returned to Hong Kong and lived together. She did not know why he gave her so much money or why he used her bank accounts instead of his own. 12.In respect of other movements of monies into an order of her accounts the 2nd applicant said that she was a member of a ‘chit fund’ which explained a deposit of $10,000 and a payment of just over $14,000 to and from Ms Wendy Ma. Five cheque deposits, to a total of just over $300,000 drawn on an account of Mr Ng Hon Ming, one of the witnesses called in the 2nd applicant’s case, were payments either in relation to the chit fund or in respect mahjong, as were cheques to a total value of just less than $400,000 drawn on an account of Mr Ip Wai Chung, another of the 2nd applicant’s witnesses. Finally, Madam Hong Mat testified that in 2006 the 1st applicant had become a shareholder in a mahjong club of which she was the licensee. REASONS FOR VERDICT 13.In his Reasons for Verdict, having noted that there was, “no evidence of any underlying criminal activities”, the judge stated that the prosecution was required to prove that, “the defendants had reasonable grounds to believe that the property represented the proceeds of an indictable offence.” Of that, the judge went on to say :
14.Of the evidence of Mr John Lees, called as the expert forensic accountant by the prosecution, the judge said that he accepted :
The 1st applicant 15.Of the provenance of monies flowing through the accounts of the 1st applicant, having noted that there was some evidence that he was a mahjong player and shareholder in a mahjong club, a member of a chit fund and operator of an antique shop, the judge observed that substantial sums of money had passed through each of his bank accounts and posed the rhetorical question: “Where did the money come from?” Then, he said the question could not be answered on the available evidence. The judge said that the explanation of the provenance of some of the monies provided by the witnesses called in the 2nd applicant’s case, in the context of the overall substantial sums of money, constituted, “a drop in the bucket” and he rejected those activities as the provenance of the monies passing through the 1st applicant’s six accounts. 16.Citing the judgments of the Court of Final Appeal in Li Defan & Another v HKSAR[1] and of this court, differently constituted save for the Vice President, in HKSAR v Yam Ho Keung[2]the judge said :
17.In the result, the judge concluded :
The 2nd applicant 18.The judge found that the 2nd applicant’s evidence was “fragmented and (i) uncomprehensible”. Of that, he said, “For genuine reasons or otherwise, D2 has a weak memory”. Having noted her testimony that she had not asked the 1st applicant why he gave her so much money or why he did not use his own bank accounts, rather than use her bank accounts, the judge went on to observe that the 2nd applicant did not know the source of those monies. Of that, he summarised her position as being, “D1 did not tell her; she did not ask and did not want to know.” Citing the observations of this court in its judgment in HKSAR v Wan Yet Kwai[3] of the impermissibility of a person being able to ‘turn a blind eye’ to a reasonably held belief that certain property represents the proceeds of an indictable offence, the judge said :
19.In the result, the judge concluded :
Conclusion 20.In conclusion, the judge convicted the 1st applicant of Charges 1 to 6 and the 2nd applicant of Charges 7 to 10. GROUNDS OF APPEAL AGAINST CONVICTION The 1st applicant The failure to stay the proceedings 21.Firstly, Mr Keith Yeung SC, for the 1st applicant, submitted that Judge Albert Wong erred in refusing to grant a permanent stay of the proceedings against the 1st applicant. He accepted that the appropriate test to be applied in considering the application was that articulated in the judgment of Ribeiro PJ in the Court of Final Appeal in HKSAR v Lee Ming Tee[4], namely that “the court only grants the stay because, notwithstanding the range of remedial measures available at trial, a fair trial for the accused is found to be impossible….” 22.Mr Yeung submitted that on the undisputed evidence, specifically accepted by the judge, namely that, having suffered trauma to his head in 2004, the 1st applicant was suffering from brain atrophy, so that he suffered from a range of disabilities (ruling: paragraph 42), namely
the judge erred in determining that the 1st applicant could have a fair trial. 23.Mr Yeung contended that, given the risk of confabulation were the 1st applicant to testify, no remedial measures could ameliorate let alone remove the difficulty for the judge in determining his reliability and credibility. How was the judge to determine if the evidence given by the 1st applicant was confabulated? On the other hand, if the 1st applicant did not avail himself of the right to give evidence he faced the risk of strengthening the available adverse inference(s), in the sense articulated in Li Defan. 24.Secondly, given the undisputed findings of the judge as to the 1st applicant’s medical condition, it was submitted that Judge Gary Lam erred in finding that the 1st applicant’s failure to testify, and give any explanation in respect of his dealings in the impugned monies, permitted the judge to determine that inferences adverse to the 1st applicant were strengthened. In particular, the judge failed to have regard either to the 1st applicant’s mental and neurological condition or to whether that could have been a reason that he did not testify. The 2nd applicant Stay 25.On behalf of the 2nd applicant, Mr Andrew Bruce SC submitted that Judge Albert Wong erred in law in not staying the proceedings against both the 1st and 2nd applicants. It was contended that he ought to have done so, given the 1st applicant’s mental condition. If, as he ought to have done, the judge had stayed proceedings in respect of the 1st applicant, it was submitted that he ought to have done likewise for the 2nd applicant, given that in all the circumstances she was deprived of the benefit of his evidence as to the provenance of the monies he deposited or caused to be deposited in her accounts. Further, having refused to grant a stay of proceedings, the judge failed to take into account the fact that the 2nd applicant had been deprived of the benefit of his testimony in that regard. 26.Next, Mr Bruce submitted that the judge conflated or confused the two bases upon which culpability for the offence may be established, namely on knowledge that the monies were the proceeds of an indictable offence or, alternatively, on the basis that the person knew of facts which a right-thinking person would consider sustained reasonable grounds to believe that the monies were the proceeds of an indictable offence. In particular, in the context of the 2nd applicant’s evidence that she did not know of the source of monies given to her by the 1st applicant, she not having asked him or been told by him, reliance was placed on the judge’s finding :
It was suggested that the judge’s statement that there was only one inference to be drawn, was contradicted by the two possibilities he then identified. 27.Then, it was submitted that, if the judge was to be taken as having determined that the 2nd applicant had reasonable grounds to believe that the monies were the proceeds of an indictable offence, the judge had erred in his analysis of the law applicable to the facts. Firstly, he had not determined first what facts were known to the 2nd applicant, before considering whether or not a right-thinking member of the community would have considered that those facts sustained reasonable grounds to believe that the monies were proceeds of an indictable offence. Also, it was contended that proof of that element required proof that all reasonable men, not merely some reasonable men, would reach that determination and that the judge had failed to have regard to that requirement in reaching his determination. Further, the judge had failed to state that it was required that the grounds must be sufficient to induce belief, rather than something short of belief, and to make such a finding on the facts. Finally, it was suggested that the judge failed to consider and make the appropriate finding that the grounds sustained the belief that the monies were the proceeds of an indictable offence, rather than mere improper conduct. 28.In the alternative, it was submitted that if the judge had correctly identified the ingredients of the offence, then the offence violated the principle of legal certainty, mandated by article 39 of the Basic Law and article 11(1) of the Hong Kong Bill of Rights. In particular, it was contended that the offence making provision was not accessible or foreseeable to citizens falling within its ambit. It was suggested that the judgment to the contrary of this court, in HKSAR v Lung Ming Chu[5] was per incuriam. 29.Finally, it was submitted that the judge erred in accepting the expert evidence of Mr John Lees that the 10 bank accounts, including some of the bank accounts of the 2nd applicant, evidenced patterns of movements of monies that were characteristic of money laundering. To do so was to fail to have regard to the relevant issue, which was whether or not a right-thinking member of the community, not an expert witness, would determine that there were reasonable grounds to believe that the monies were the proceeds of an indictable offence. A CONSIDERATION OF THE SUBMISSIONS Stay 30.There is no dispute that the entirety of the material made available to Judge Albert Wong, at the stage of the application for a stay of the proceedings, comprised only :
The nature of the case 31.From the Charges and the ‘Summary of Facts’ the judge was informed that some of the impugned conduct of both applicants began as early as 1 July 2001 and ended as late as 18 July 2007. The monetary total of the proceeds alleged to have been dealt with in each charge was stipulated, so that the judge was informed that it was alleged that a total of over $68 million was dealt with in the accounts of the 1st applicant and over $43 million in the accounts of the 2nd applicant. The Summary of Facts alleged that patterns of money laundering were revealed in the activities in the various accounts, it being asserted that most funds were received in cash, albeit that some came by way of cheques, and that monies were soon withdrawn or transferred out of the accounts. No further particulars were provided as to the number or the monetary amount of the individual transactions. Finally, the judge was informed that the 1st applicant had made no tax returns in the “the last six years”, whereas the tax returns made by the 2nd applicant for the three financial years in the overall period of 2003 to 2006 asserted her income to be $180,000 for each of the first two years and $120,000 for the third and last year. The evidence of the 1st applicant’s medical condition 32.As the judge noted in his ruling, he was provided with the following medical reports :
33.Unusually, no oral evidence was led from any of the various doctors whose reports the judge received. The judge noted that Professor Tatia Lee had been engaged by the prosecution and that he had been informed, by counsel for the Prosecution, that :
34.No other evidence, oral or otherwise, was put before the court by the parties. It follows that there was no evidence from the defence of any actual difficulty encountered by those representing the 1st applicant in obtaining instructions in respect of the prosecution case, in particular as to the provenance of the monies in which the 1st applicant dealt in the impugned accounts or as to the nature and purpose of the transactions and the identity of the beneficiaries of payments made out of the accounts. 2004 35.Dr Joseph Lam had first treated the 1st applicant when he was admitted in a semi-conscious state to the Prince of Wales Hospital on 9 September 2004. As a result of an assault, he had suffered a compound depressed skull fracture on the left side of the skull vault and suffered from severe right-sided weakness and impaired memory function. Although he was discharged from the hospital on 16 September 2004, he was diagnosed as having sustained a moderate head injury and post-concussion syndrome. As a result, he was referred to an occupational therapist and clinical psychologists for assessment and treatment. He was diagnosed as having short-term memory impairment and problems with temper management. However, not recognising his own disability, he defaulted on follow-up treatment. 2010 36.Dr Joseph Lam saw the 1st applicant next in February 2010, at which time the 1st applicant complained of worsening poor short-term memory. An MRI scan performed in February 2010 revealed extensive brain substance loss from physical damage, consistent with his earlier head trauma. 37.In his report of 26 July 2010, Dr Joseph Lam adverted to and quoted from the reports prepared by Ms Cindy Chan, dated 26 February 2010, and the joint report of Professor Agnes Chan and Dr Sophia Sze dated 10 May 2010. 38.As the judge noted, Dr Joseph Lam described the most significant disabilities suffered by the 1st applicant as being his lack of insight into his disability, his impaired memory and his tendency to confabulate without his own recognition. Of that, Dr Joseph Lam expressed the opinion that :
39.Apparently at the recommendation of Ms Cindy Chan, Professor Agnes Chan and Dr Sophia Sze conducted a neuropsychological assessment of the 1st applicant in April 2010. As the judge noted, it was their observation that the 1st applicant had difficulty in expressing what he knew. Further, that although he was able to be attentive to tasks for up to 10 minutes, he experienced difficulties in remaining attentive for longer periods. It was their opinion that the 1st applicant suffered from a, “moderate to severe level of confabulation and perseveration”. Of persons with such a cognitive profile, they noted that they were likely to :
40.Professor Tatia Lee was asked by the Prosecution to consider specifically whether or not there were impediments to the 1st applicant being “able to properly defend himself at trial”. She considered the reports of Dr Lam and that of Professor Agnes Chan and Dr Sophia Sze, and conducted her own neuropsychological assessment of the 1st applicant, having interviewed him and the 2nd applicant. Of her findings from the assessment of the 1st applicant, Professor Lee said that he suffered from, “impairment in attention, memory, and frontal executive functions, in addition to cognitive processing speed.” She said that “sustained attention was the worst affected.” 41.As the judge noted, Professor Lee said of the 1st applicant :
The Judge’s Findings 42.Not surprisingly, in the face of that undisputed evidence, the judge found that the 1st applicant was suffering from brain atrophy and that his condition was deteriorating. In particular, as noted earlier, he accepted that the 1st applicant was suffering from disabilities, including “defective memory, risk of confabulation and perseveration, impaired reasoning and impairment of attention”. 43.No issue was taken with the short description that the judge gave of ‘confabulation’ :
44.Surprisingly, none of the various experts adverted in any of the reports to having been informed of the nature of the prosecution case, in particular that its core lay in banking documentation, which was available to the 1st applicant and would be available at trial and which evidenced the receipt of monies and their subsequent withdrawal in the bank accounts of both applicants. Needless to say, it follows that none of them suggested in any way that they were asked to consider the material which the 1st applicant would have to address, either in assisting his instructing solicitors to take his instructions or in considering whether or not to give evidence in due course at the trial. Similarly, there was no evidence before the court of any difficulty that had been encountered in fact. 45.Of those circumstances, the judge said (paragraph 50) :
The judge went on to add:
46.In the event, the judge found that he was not able to draw the inference that the 1st applicant’s health impacted on his preparation or presentation of his case to such an extent that no fair trial would be possible. 47.Finally, the judge found (paragraph 55) :
48.In the result, the judge said that (paragraph 56) :
49.We are satisfied that the judge was entitled to evince an obvious concern, perhaps even a measure of frustration, that no attempt had been made by those representing the 1st applicant to adduce any evidence whatsoever of any actual difficulties encountered in preparing for and conducting the prospective trial of the 1st applicant. Given that the judge had been informed that deposits in the impugned accounts had been made, inter alia, in the form of cheques, clearly the defence could have contacted the drawers of those cheques to obtain information as to those dealings with the 1st applicant. Also, even deposits in cash are often accompanied by documentation containing the details of the person depositing the money, as proved to be the fact in this case. Contacting such third parties and obtaining their accounts of the circumstances of the movements of monies to and from their accounts of the 1st applicant was the very obvious means by which the memory of the 1st applicant, if deficient, might have been jogged, or even corrected. Alternatively, the defence might have relied only upon the accounts of third parties as establishing the propriety of the dealings. Both were avenues of establishing the circumstances in which the 1st applicant dealt with the money and, if necessary, the means by which evidence to that effect could be led at trial. 50.Furthermore, it is to be noted that neither Professor Agnes Chan nor Professor Tatia Lee had said that the 1st applicant was incapable of giving reliable evidence, in particular in respect of his dealings with the monies in the impugned accounts. For her part, Professor Tatia Lee had said that in light of the 1st applicant’s disability, in particular in respect of false positive errors, “it will be quite a challenge for Mr Tam to present himself reliably in court.” Needless to say, in positing that view, namely that it would be ‘quite a challenge’, she was not saying that the 1st applicant could not present himself reliably in court. 51.By way of a rider to his determination, the judge said (paragraph 57) :
52.The judge did not condescend to identify any matters that he had in mind in making that statement. Since the parties did not provide the court with a transcript of the application for stay before District Court Judge Wong, it is not known if that statement resonated with any exchange between the Bench and Bar. However, since Professor Agnes Chan had noted that the 1st applicant had a limited attention span, it may be that one matter that the judge had in mind was taking frequent short breaks during the evidence, either of prosecution witnesses or in the defence case, to assist the 1st applicant. Conclusion 53.In the result, we are satisfied that the judge was entitled to determine, as he did, that the 1st applicant had failed to satisfy the court on the balance of probabilities that a fair trial of the 1st applicant was impossible. Stay : 2nd applicant 54.In rejecting the application made on behalf of the 2nd applicant, that her case ought to be stayed in consequence of the prejudice to a fair trial for her, given that the mental condition and disabilities suffered by the 1st applicant precluded him from giving cogent and reliable evidence, the judge said (paragraph 60) :
55.As Mr Wesley Wong submitted for the respondent, at the stage of the applications for stay of the proceedings, the 1st applicant was not a compellable witness at the behest of the 2nd applicant. On the other hand, as long-term cohabitees, perhaps it was to be anticipated that, if he was able to do so, he would assist her case with testimony as to the provenance of the monies. However, the nub of the case advanced on behalf of the 1st applicant was that, given his mental condition, he was unable to testify, in particular as to the provenance of the monies in all the accounts. It was not known what account otherwise he might have been able to give. In those circumstances, from the perspective of the 2nd applicant, the 1st applicant fell to be regarded at most as occupying a position similar to that of an absent prospective witness, whose account of events was unknown. Conclusion 56.In all circumstances, we have no hesitation in finding that the judge was correct in refusing to grant a stay of proceedings to the 2nd applicant. There was no possible proper basis to grant the application. Li Defan 57.There is no dispute that no medical evidence in respect of the 1st applicant was adduced at his trial before Judge Gary Lam. Rather, in the context of the application made by Mr Oderberg on behalf of the 1st applicant that the judge sever the trial of the 1st applicant from that of the 2nd applicant, the judge was invited to look at the ruling of Judge Albert Wong only. 58.Notwithstanding the absence of the detailed medical reports, the findings and opinions expressed in those reports were summarised at some length in the ruling of Judge Albert Wong. As noted earlier, the judge himself noted the findings and opinions of both Professor Agnes Chan and Professor Tatia Lee in respect of the risk of the 1st applicant confabulating in testimony. In particular, Professor Tatia Lee expressed the opinion that it would be ‘quite a challenge’ for the 1st applicant to present himself reliably in court. 59.It is in that context that consideration must be given to the judge’s stated reliance on what he said were the legal principles to be discerned in the judgments of the Court of Final Appeal in Li Defan, namely :
60.Having identified the legal principle, the judge went on to state (paragraph 30) :
61.In his judgment in Li Defan, with which the other judges agreed, Lord Hoffmann NPJ addressed the issue, quoting with approval from the joint judgment of Mason CJ and Deane and Dawson JJ in the High Court of Australia in Weissensteiner v. The Queen[6] :
62.Needless to say, there was before the judge ample material to provide a reason for the 1st applicant not to testify in his trial other than that the evidence would not assist his case, namely the risk of confabulation, identified in particular by Professor Agnes Chan and Professor Tatia Lee. As Mason CJ, Deane and Dawson JJ noted in their joint judgment, the possibility that the defendant may have other reasons for not testifying is a matter that must be borne in mind by a jury (decider of facts) in determining whether the prosecution case is strengthened by the failure of the accused to give evidence. Further, they noted that ordinarily that is a matter of which the jury would be directed by the judge. 63.Whilst a judge need not state that he has directed himself on a particular matter (see paragraphs 30 and 31 of the judgment of Lord Hoffmann), in the same way that it is necessary for a judge to direct a jury specifically, the readily available alternative explanation for the 1st applicant’s failure to give evidence is a matter that the judge was required to have considered. He did not address the issue at all in his Reasons for Verdict. 64.In our judgment, in the circumstances of this case, given the obvious other reason for the 1st applicant not to testify, the judge erred in law in having regard to the failure of the 1st applicant to testify as strengthening the inference to be drawn from the evidence led in the prosecution case. Clearly, that error constituted a material irregularity. PROVISO 65.Notwithstanding that finding, it is necessary to consider in the context of all the evidence led at trial whether or not a miscarriage of justice actually occurred. 66.As noted earlier, the judge was in error to state that Mr John Lees had come to the “firm conclusion that the transaction size and nature of activities in the 10 accounts displayed characteristics of money laundry”. He did not do so. In fact, Mr Lees concluded that to be the case in respect of only three of the accounts in the name of the 1st applicant, namely those that were the subject of charges 1, 2 and 6. Similarly, he formed that opinion in respect of three only of the four accounts of the 2nd applicant, namely the subject of charges 7, 8 and 9 but not charge 10. 67.In his reasons for verdict (paragraph 21-3), in his consideration of the explanations advanced in the case of the 2nd applicant for the deposit and withdrawal of some of the monies in her accounts, the judge adverted specifically to appendices to the report of Mr John Lees. Those appendices supported the account advanced in her case. Subsequently, having noted, “the basis of Mr Lees’ findings is sound and his methodology is reliable” the judge determined that he accepted his opinion “without reservation”. 68.It may be, as Mr Keith Yeung suggested, that in making his statement as to the ambit of the findings of Mr John Lees the judge misinterpreted a statement made by him in the Executive Summary, to the effect that in his opinion the characteristics of money laundering were to be discerned in the pattern of transactions :
The expression “bank accounts” did not encompass all six accounts reflected in the six charges. That was made clear on the previous page by Mr John Lees, who had described the six accounts of the 1st applicant as comprising “three bank accounts (the “D1 Bank Accounts”), two securities accounts (the “D1 Securities Accounts”) and one pledged time deposit account.” As was made apparent in the subsequent text, the designation D1-AC6 was assigned to the Hang Tung Securities account. Similarly, and on the same page, Mr John Lees had described the 2nd applicant as having three bank accounts and one Hong Kong Jockey Club Betting Account. Again, he specifically said that his findings as to discerning the characteristics of money laundering were restricted to three of the accounts (paragraph 1.2.12 of the report). The Bank of China account, the subject of charge 10, was not included in that finding. Clearly, however the judge’s mistake came about, it is most regrettable. 69.Having noted that the 1st applicant had not declared an income in the six financial years beginning in 2001/2002, it being an Admitted Fact that he had not filed any tax returns with the Inland Revenue Department in that period, the judge acknowledged that there was “some evidence” of activities that might generate an income, namely that “he might be a mahjong player, member of a chit fund, investor of a mahjong club and operator of an antique shop.” However, having noted the substantial amounts of money passing through the six accounts, the judge rejected those activities as being capable of generating the monies in those six accounts. Charge 1 : Hang Seng Bank 70.For his part, having examined and analysed the movements of monies in the bank account in the name of the 1st applicant with the Hang Seng Bank (Charge 1) into which over $54 million was deposited in the savings account during the period the subject of the charge, of the total of over $68 million deposited in all the accounts the subject of the charges 1-6, Mr John Lees expressed the opinion that the deposits into the account the subject of Charge 1 were “not likely generated by employment or in normal course of a business.” 71.As Mr Yeung acknowledged in his helpful table summarising the activity in the six accounts the subject of the charges, the savings account in the Hang Seng Bank (Charge 1) received 279 deposits to a total of $54,156,413.08. That was the monetary amount stipulated in the Particulars of Offence. As Mr Lees noted, over 25% of the value of those deposits were in cash. Those cash deposits accounted for over 30% of the number of deposits. By contrast, deposits of six cheques drawn on casinos to a total of $9.3 million accounted for over 17% of the non-cash deposits. Five cheques to a total value of over $3.7 million were received from Tung Koon Ming, whilst four cheques to a total of over $1.5 million were received from Cheung Ki. 72.Conversely, there were a total of 518 withdrawals from the account to a total of $53.7 million. 311 of the withdrawals, comprising 60% of the withdrawals, were in cash. 73.Of the subsequent movement of monies, following the deposit of cheques drawn on casinos, Mr Lees noted that “they were usually followed by substantial withdrawals in cash or transfers to the current account” in the same account in the name of the 1st applicant, from which he noted that “some of the transferred funds were subsequently withdrawn in the form of cheque payments to... Tong Koon Ming and Cheung Ki.” 74.As Mr Lees noted, in October 2003 (7, 8 and 20 October) three cheques to a total of $5.1 million drawn on the account of Sociedade de Jorgos de Macau (“SJM”), a well-known Macau casino, were deposited into the savings account in the name of the 1st applicant with the Hang Seng Bank. A very substantial portion of those monies were withdrawn in cash in less than 10 transactions by the 1st applicant in the period 9 October to 3 November 2003. One of those withdrawals was for no less than $1 million, another for $900,000. The current account 75.The current account in the name of the applicant with the Hang Seng Bank was opened on 22 December 2003. Mr John Lees noted that of the total deposits into the current account in the relevant period of over $17.4 million, over $9.7 million was transferred from his savings account with the Hang Seng Bank and over $4.1 million came from his security account with Hang Tung Securities (Charge 6). In turn, over $3.75 million was transferred from his current account to the savings account. 76.No doubt, because of their intimate interrelationship, Mr John Lees considered the two accounts together in forming his opinions. He said that he observed that, “there is a pattern evident of multiple deposits in one day followed by a substantial withdrawal of similar amount(s) in cash over a very short period. In particular, he noted that on 27 February 2006 by 15 separate deposits a total of $2.7 million was deposited into the savings account. Seven of those deposits were in cash and the balance by transfer. On 7 March 2006 $2.3 million was withdrawn in cash from that same savings account. In his opinion, this suggested, “the use of this account as a vehicle for temporary receipt of funds.” 77.As noted earlier, in the result it was Mr Lees’s opinion in respect of this account in the name of the 1st applicant with the Hang Seng Bank that “the patterns of transactions…display the characteristics of money laundering.” Charge 2 : ICBC 78.Dealings by the 1st applicant in an account in his name with the Industrial Commercial Bank of China (Asia) Limited, (‘ICBC’) were the subject of Charge 2. Although the time period of the impugned dealing stipulated in the Particulars of Offence of Charge 2 encompasses the period commencing with the opening of that account on 8 January 2004 and ends on 18 July 2007, the activity in the account on which Mr Lees focused was in a narrow period in January 2004. On 8 January 2004, two deposits, one in cash of $80,000 and the other a cheque of $600,000 drawn on the 1st applicant’s account with the Hang Seng Bank, were made into the account. On 12 January 2004, $1.9 million in cash was deposited into the account. On the same day, the 1st applicant caused a remittance to be made in that sum of money to the credit of an account with the Shenzhen branch of ICBC. On 15 and 21 January 2004, $400,000 and $187,100 respectively were withdrawn by two cash cheques, the former in favour of the 1st applicant and the latter in favour of Ho Siu Lan. Thereafter, the account in effect remained dormant with a balance of over $90,000, until a payment of $80,000 was made to the 2nd applicant by cheque on 15 June 2007. 79.Mr Lees said that it was his opinion that the pattern of transactions in the account suggested that the account was opened for the purposes of receiving and dispersing the few cash transactions. Of that, he said, “it is a common practice used by money launderers to use different accounts in different periods to facilitate the placement of large sums of cash into the banking system without attracting undue attention”. He noted that the deposit of $1.9 million into the account on 12 January 2004 represented 74% of the total deposits into that account. Those monies were remitted to an account in Shenzhen on the same day that they were received. Those transactions were consistent with the commonly used money-laundering practice of ‘placement’. In consequence, it was his opinion that, “this account was used as a vehicle for temporary receipt of funds subsequently withdrawn cash transfer to a different account”. In the result, he concluded that the deposit and withdrawal transactions, “display the characteristics of money laundering”. Charge 6 : Hang Tung Securities Limited 80.Dealings by the 1st applicant in an account in his name with Hang Tung Securities Limited, in the period 13 February to 18 July to 2007, were the subject of Charge 6. The account was an investment account used for the purchase and sale of securities. Mr John Lees noted that four of the deposits into the account, to a value of $2.4 million, came from the current account in the name of the 1st applicant with the Hang Seng Bank, whilst the remaining deposit, to a value of $1.2 million came from an account in his name with the Fubon Bank (Hong Kong) Limited (Charge 5). The remaining deposits in the account came from the sale of securities in the account. Seven withdrawals, to a total value of over $4.1 million, were made from the account and transferred to the current account in the name of the 1st applicant with the Hang Seng Bank. 81.During the relevant period eight purchases of six different securities had been made to the value of over $4.6 million and over $5.2 million had been realised on their subsequent sale. The first purchase of securities was made on 15 February 2007. The sale of purchased shares occurred typically within a few weeks of their purchase. No securities were on hand by early July 2007. 82.Noting that four of the deposits into the securities account came from the current account in the name of the 1st applicant with the Hang Seng Bank, Mr John Lees said that it was his opinion that the transactions conducted in that account “display the characteristics of money-laundering”. Furthermore, he said that the purchase of securities by payment from other bank accounts, after which these securities were disposed of in a short period of time is consistent with the commonly known money-laundering mechanism of ‘integration’, by which “laundered proceeds are placed back into the economy, thereby appearing to be normal business proceeds, in order to conceal the origin of the funds.” Charge 3 : ICIC 83.The impugned conduct alleged by Charge 3 concerned a time deposit of $1.5 million held in an account with the Industrial and Commercial International Capital Limited (‘ICIC’) created on 13 May 2006. The provenance of the money were two cashier’s order for $300,000 each provided by the 1st and 2nd applicants’ respectively and a cheque for $900,000 drawn on the account of Sun Wan Kam. Not surprisingly, in the absence of any other relevant material Mr John Lees said that not only had he been unable to establish the purpose of the payment of $900,000 but also he had been unable to identify any characteristics of money-laundering in the account in the relevant period. 84.In those circumstances, and having regard to all the evidence, clearly there was no factual basis upon which a right thinking reasonable person would conclude that there were reasonable grounds to believe that those monies were the proceeds of an indictable offence. Charges 4 and 5 : FBL 85.The impugned conduct alleged by Charge 4 concerned a securities account opened in the name of the 1st applicant on 6 October 2006 with Fubon Bank Limited (‘FBL’), whereas Charge 5 is concerned with the 1st applicant’s current account with the same bank. Mr John Lees said that on the limited information available to him he was unable to identify any evidence or pattern of money-laundering. 86.In those circumstances, and having regard to all the evidence, clearly here was no factual basis upon which a right thinking reasonable person would conclude that there were reasonable grounds to believe that those monies were the proceeds of an indictable offence. Discussion Charge 1 87.Clearly, the transactions that occurred in the 1st applicant’s account with the Hang Seng Bank constituted a very strong factual basis on which a right-thinking reasonable member of the community would determine were reasonable grounds to believe that the monies with which the 1st applicant dealt were the proceeds of an indictable offence and the judge was entitled to so conclude. The sums of money involved were huge and the number of transactions that were conducted in cash for large sums of money very significant. Those transactions were to be considered in the light of the absence of any declared income by the 1st applicant and the absence of any evidence in the banking documentation consistent with income from employment or normal business activity. The activity in the current account was clearly intimately bound up with the pattern of transactions in that account overall and with activity in the 1st applicant’s other accounts. Charge 2 88.Clearly, the activities in the ICBC account gave rise to the compelling inference that the account was used for the specific, special purpose identified by Mr John Lees. The deposit of a large sum of cash into the account immediately followed by a remittance to the Mainland of a matching amount, after which the account in effect became dormant, is entirely consistent with his opinion. That was a strong factual basis on which a right-thinking reasonable member of the community would determine were reasonable grounds to believe that the monies with which the 1st applicant dealt were the proceeds of an indictable offence and the judge was entitled to so conclude. Charge 6 89.Of relevance to the 1st applicant’s dealings in the Hang Tung Securities account (charge 6), is the fact that the majority of the deposits of outside funds came from 1st applicant’s account with Hang Seng Bank. Also, it has been noted that the proceeds of sale of securities in that account were remitted to the 1st applicant’s Hang Seng Bank account. Clearly, the Hang Tung Securities account was intimately connected with the 1st applicant’s account with the Hang Seng Bank, in which account we are satisfied he dealt with monies having reasonable grounds to believe that they were the proceeds of an indictable offence. Also, of some importance is the nature of the trading, namely the purchase of shares which will hold a short time before sale at which the proceeds were remitted to another account, which is obviously consistent with the characteristics of money laundering. The judge was entitled to conclude that a right-thinking reasonable member of the community would determine those were reasonable grounds to believe that the monies with which the 1st applicant dealt were the proceeds of an indictable offence. Conclusion 90.In respect of charges 1, 2 and 6 we are satisfied that, absent his wholly erroneous reliance of the so-called failure of the 1st applicant to give evidence as strengthening the inferences to be drawn from the evidence, inevitably the judge would have been led by the strength of the evidence to have convicted the 1st applicant on those charges. The 2nd applicant The judge’s acceptance and reliance on expert evidence 91.The complaint made on behalf of the 2nd applicant that the judge erred in accepting the expert evidence of Mr John Lees is surprising and was not a submission that was made at trial. That fact is not surprising, since there was no objection to the report being adduced into evidence. Indeed, as noted earlier, it was placed before the court pursuant to section 65B of the Criminal Procedure Ordinance, Cap. 221. Although Mr John Lees did give oral evidence and was cross-examined in short compass on behalf of the 2nd applicant we were not provided with a transcript nor was it suggested that we call for one. 92.As is apparent from the report itself, a considerable body of the work related to collating information as to the transactions in the various accounts from the primary material contained in the bankers’ affirmations. Mr John Lees stated as much at the outset of his report. Then, the collated information was presented in schedules annexed to the report, which described the nature and frequency of both deposits and withdrawals to the accounts. On occasions the report focused on particular transactions and noted other transactions occurring at or about the same time. As is obvious, that enabled the court to have before it, in convenient form, a distillation of information as to activity in the various accounts. Clearly, there was nothing objectionable about that. 93.As noted earlier, from time to time in the report Mr John Lees expressed his opinion as to whether or not the activities or transactions that occurred in the various accounts had the characteristics of money-laundering. Again, he stated in his report that was the second element of his engagement by the Department of Justice. Without any disrespect to Mr John Lees we doubt very much whether the expression of those opinions, in contrast to the collation of information from the Bankers Affirmations, was of any assistance to the judge. The fact that on numerous occasions monies were deposited and withdrawn as cash and that transfers were made to and from particular accounts to other accounts spoke obviously and by itself to the resulting difficulties in tracing an audit trail and establishing the ownership of funds. What else is the nature of money-laundering? 94.The receipt of monies, particularly as cash deposits, without any obvious pattern suggestive of business or employment raised questions by itself. Similarly, a pattern of withdrawal of large sums of money in cash raised its own obvious questions. 95.Furthermore, we have no doubt that it is common knowledge that gaming chips in casinos can be acquired by payment in cash and that cheques drawn on casinos, on their face suggesting payments by the casino to a successful gambler, prevent any further fruitful enquiry as to the provenance of funds used initially in the gaming. Of course, cheques drawn on casinos in very large sums of money obviously provided a very limited explanation only as to provenance of those monies, beyond which it was impossible to go. Again, Mr John Lees’s opinion stated no more than the obvious. 96.We are satisfied that the judge was entitled to have regard to the opinions expressed by Mr John Lees as to the presence or absence of the characteristics of money-laundering in the transactions he discerned in the various accounts. Indeed, he stated that he accepted those opinions. But, as observed earlier, those opinions did no more than state the obvious as to the use made of a particular account. Needless to say, acceptance of those opinions was in no way determinative of the real issue in the trial in respect of the 2nd applicant, namely whether on the facts and circumstances known to her there were reasonable grounds to believe that the monies in which she dealt in the various accounts the subject of the charges were the proceeds of an indictment offence. We are satisfied that it was to that issue that the judge had regard in convicting the 2nd applicant. The nature of the activities in the accounts of the 2nd applicant 97.The 2nd applicant was the sole authorised signatory of all four of the accounts the subject of charges 7 to 10. As noted earlier, Mr John Lees did not express the opinion that the transactions in all four accounts in the name of the 2nd applicant, the subject of charges 7 to 10, displayed the characteristics of money-laundering. In his opinion there was no such activity in the account in her name with the Bank of China. Charge 10 : Bank of China 98.Mr John Lees noted that the 2nd applicant’s Bank of China account, the subject of charge 10, had been opened in 1995, many years before the impugned transactions. In the period from 7 July 2001 until July 2007 over $1,700,000 had been deposited in the account and a slightly lesser amount withdrawn. He noted that 82 deposits, to a total value of $715,000, of the 139 deposits were cheques drawn on a restaurant, ‘Stylish Thai’. He concluded that the account “has mainly been used for receipt of payroll income and payment of credit card expenses”. In the result, he said of the activity in that account, “I have not identified any characteristics of, or patterns that give an inference to, the process of money-laundering”. As the judge noted, there was evidence that in the period 2005/6 the 2nd applicant had been employed by the restaurant at a monthly salary of $15,000. 99.In those circumstances, and having regard to all the evidence, there were no facts and circumstances known to the 2nd applicant upon which a right thinking reasonable person would conclude that there were reasonable grounds to believe that those monies were the proceeds of an indictable offence. Charge 7 : Hang Seng Bank- integrated account 100.By contrast, in respect of the integrated bank account in the name of the 2nd applicant with the Hang Seng Bank, Charge 7, Mr John Lees expressed the opinion that the patterns of transactions displayed the “characteristics of money-laundering”. In particular, he noted the large quantity of cash transactions, the large number of deposits and withdrawals and the fact of significant funds received from a casino. Of transactions in both the savings and current account, more than $15 million of the more than $32 million deposited into the account in the relevant period, was deposited in cash. Unidentified depositors made 158 of the 166 deposits. Two cheques deposited into the savings account to a total value of $3.2 million were drawn on SJM, a Macau casino. By 334 withdrawals, more than $10 million was withdrawn in cash, of the total of more than $32 million withdrawn from the account. Charges 8 and 9 : HK Jockey Club Betting account and HSB savings account 101.As Mr John Lees noted, this Hang Seng Bank savings account in the name of the 2nd applicant was the designated settlement account for the Hong Kong Jockey Club Betting account in her name. Of the total of over $5.5 million deposited into this Hang Seng Bank savings account, over $1.3 million was deposited in cash. Over $2.3 million of the total deposits in that account was transferred from the integrated account in the name of the 2nd applicant with the Hang Seng Bank, which account was the subject of Charge 7. Similarly, of the over $5.5 million withdrawn from the account, over $2.6 million was transferred to the 2nd applicant’s integrated bank account. 102.Noting the fact of the cash transactions, together with the transfer of funds to and from the 2nd applicant’s integrated bank account with the Hang Seng Bank, Mr John Lees was of the opinion that the patterns of activity displayed in this account were “characteristic of money-laundering”. 103.In light of that opinion, Mr John Lees also noted that over $2.5 million of the approximately $3.2 million deposited into the 2nd applicant’s Hong Kong Jockey Club Betting account came from the 2nd applicant’s Hang Seng Bank savings account by way of 441 transfers. Further, that having been mixed with the proceeds of successful betting over $1 million was returned to the Hang Seng Bank savings account. Overall, it was his opinion that the manner of transferring funds to/from the integrated bank account with the Hang Seng Bank (Charge 7) to/from the Hang Seng Bank savings account (charge 9) and to/from the Hong Kong Jockey Club Betting account (charge 8) was consistent with the money-laundering. As a result, it was his opinion that the pattern of transactions in the betting account displayed the “characteristics of money-laundering”. The live issue in the case of the 2nd applicant 104.In the Reasons for Verdict, the judge had identified the crux of the 2nd applicant’s testimony in respect of the conduct of transactions in the four accounts that were the subject of the charges, noting :
105.Clearly, it was in light of that evidence that the judge addressed the issue of whether or not on the facts known to the 2nd applicant there were reasonable grounds to believe that the monies were the proceeds of an indictable offence. Earlier, the judge had identified what it was that the prosecution needed to prove :
106.That the judge did not there identify ‘knowledge’ that the monies were the proceeds of an indictable offence as being a relevant issue is hardly surprising, since the prosecution never put its case on that basis. No doubt, it was in that context that the judge addressed the issue of a person turning a ‘blind eye’ to inferences to be drawn from the facts known to her. Of that, he said :
107.On its face, it is surprising that, having stated that on the facts known to the 2nd applicant, there was only one inference to be drawn, the judge then went on to say :
Nevertheless, in context, it is clear that the true import of his statement was that there was but one inference as to culpability, which was that the requisite guilty mind was proved; as to which limb of guilty mind she either knew the source or turned a blind eye to the obvious truth. Clearly, the judge was satisfied that the applicant’s knowledge of the facts and circumstances afforded reasonable grounds to believe that the monies were the proceeds of an indictable offence. ‘Having reasonable grounds to believe’ : the two-stage test 108.As noted earlier, in his Reasons for Verdict the judge adverted to the two-stage test that arises in addressing the issue of ‘reasonable grounds to believe’. In doing so he quoted from the judgment of this Court in Wan Yet Kwai[7]delivered by Hartmann JA. His statement that the test was “well settled”, was clearly a reference to the earlier judgment of this Court delivered by Mayo JA in HKSAR v Shing Siu Ming & Ors[8], in which it was said of that phrase, in the context of section 25(1) of the Drug Trafficking (Recovery of Proceeds) Ordinance, Cap. 405 :
109.The nub of Mr Bruce’s complaint is that, insofar as that passage in the judgment in Shing Shui Ming has been taken as establishing the sequence in which the two-stage test is to be applied, it is in error. He submitted that the sequence in which the questions must be posed is to be reversed : first, it is to be established what facts were known to the defendant and secondly, whether or not objectively on those facts there were reasonable grounds to believe that the property is the proceeds of an indictable offence. 110.The same argument was advanced in HKSAR v Pang Hung Fai[9], in which Mr Bruce also appeared as counsel. In his judgment, McWalters J acknowledged that a risk might arise from the application of the sequence of the two-stage approach articulated in Shing Shui Ming, namely that the court might be deflected into considering what facts and circumstances had been proved by the prosecution, rather than what facts and circumstances had been proved to be known to the defendant, when it came to considering the objective test. He went on to note that if the sequence in which the questions were posed was reversed that risk would be eliminated. Of that, he said (paragraph 107) :
In that case, the court concluded that the risk there identified had not eventuated. 111.In the case of the 2nd applicant, it is clear that the judge concentrated on the facts and circumstances known to the 2nd applicant. He noted that she testified that she knew that “much of the money she received in her 4 accounts was given to her by D1.” That admission by the 2nd applicant confirmed her knowledge of what was established by the primary material adduced into evidence through the bankers’ affirmations and collated in Mr John Lees’s report. Similarly, the judge acknowledged that she knew that the 1st applicant had his own accounts. Of that, the judge noted that the 2nd applicant had not asked the 1st applicant why it was that he deposited so much money into her accounts and, more particularly, why it was that he did not use his own accounts. Furthermore, the judge noted that it was the 2nd applicant’s evidence that she did not know “the source of D1’s earnings”. Of that, he observed that the 2nd applicant said that she had not asked the 1st applicant about that matter and he had not told her. 112.Clearly, the judge’s analysis was confined to facts and circumstances known to the 2nd applicant. He did not trespass outside those boundaries. Accordingly, there was no question of the risk adverted to by McWalters J, namely of taking into account facts and circumstances proved by the prosecution but not known to the 2nd applicant. There is no merit in this ground of appeal. The standard for belief 113.The arguments advanced by Mr Bruce as to the standard for belief resonate with the arguments, to which he was a party, advanced in Pang Hung Fai. As noted in the judgment of McWalters J (paragraph 132), the judgment of the High Court of Australia in George v Rocket[10] succinctly identifies and contrasts that which is required for reasonable grounds for suspicion compared to reasonable grounds for belief (pages 115-116) :
Proof of reasonable grounds to believe requires more than is required for mere suspicion but less than that which is required for proof of knowledge, even on the balance of probabilities. 114.In HKSAR v Yam Ho Keung[11] this court approved the analysis of District Court Judge Line, as he was then, in his Reasons for Verdict, in which he determined that the fact that particular factual circumstances afford reasonable grounds to believe in several different scenarios does not excuse a defendant, if one of those scenarios is that the property is the proceeds of indictable offence.
115.That analysis was approved by this court in Wan Yet Kwai. In the judgment of the court, Hartmann JA said (paragraph 32) :
Legal certainty 116.The arguments advanced by Mr Bruce that section 25(1) of the Ordinance offends the requirement for legal certainty were advanced and rejected by this court in Pang Hung Fai. As noted in the judgment of McWalters J, (paragraph 160) the Court of Final Appeal addressed the requirement of legal certainty in a criminal offence, in the context of conspiracy to defraud, in Mo Yuk Ping v HKSAR[12]. In his judgment, with which the other judges agreed, Sir Anthony Mason NPJ said (page 410, paragraph 61) :
117.As McWalters J observed in Pang Hung Fai the requirements of legal certainty does not mandate that the citizen reach a determination without the assistance of appropriate advice. In the circumstances of the 2nd applicant, namely on the one hand a long-term cohabitee of the 1st applicant but on the other hand not only unaware of the provenance of his monies but also not provided with any information as to why he did not use his own accounts, the provision of appropriate legal advice would be a matter of no difficulty. 118.We are satisfied that, on the facts and circumstances that the judge accepted were proved to be known to the 2nd applicant, the judge was entitled to find, in respect of the 2nd applicant’s dealings in the accounts the subject of charges 7, 8 and 9, that a right thinking member of the community would be satisfied that there were reasonable grounds to believe that the property was the proceeds of an indictable offence. As noted earlier that was not the case in respect of the 2nd applicant’s dealings in the account in her name with the Bank of China, the subject of charge 10. Conclusion 119.In the result, we allow the applications of the 1st and 2nd applicants for leave to appeal against conviction and, treating the hearing of the applications as the hearing of the appeals, we allow the 1st applicant’s appeal in respect of charges 3, 4 and 5, but dismiss it in respect of charges 1, 2 and 6. We allow the 2nd applicant’s appeal in respect of charge 10, but dismiss it in respect of charges 7, 8 and 9. REASONS FOR SENTENCE 120.For purposes of sentencing the judge called for and received background reports on both applicants and two psychiatric reports on the 1st applicant. In addition, he received a report dated April 2012 from Dr Joseph Lam in respect of the 1st applicant and a psychiatric report from Dr Lai, together with a physician’s report from Dr Ng in respect of the 2nd applicant. 121.The judge noted that Dr Joseph Lam said that the 1st applicant’s disabilities (lack of insight into those disabilities, impairment of memory and a tendency to confabulate) were likely to increase with time. Further, the 1st applicant required the constant support and supervision of his family members and friends. Both Professor Agnes Chan and Dr Choi diagnosed the 1st applicant as continuing to suffer from impairment of his front lobe functions, resulting in impairment of abstract thinking and perseveration. However, both of them confirmed that no in patient psychiatric treatment was required for the 1st applicant. 122.The judge noted that the 2nd applicant was diagnosed as suffering from chronic depression and from chronic ear infection which affects her hearing causing her to be withdrawn. 123.In determining the appropriate starting point to be taken for sentence, the judge stated that he had regard to the judgments of this court in HKSAR v Hsu Yu Yi[13]; HKSAR v Boma Amaso[14]; HKSAR v Wan Kwok Keung[15] and SJ v Jerome Y. A. Herzberg[16]. The judge said :
124.Of the amount of money involved and the duration of the offences the judge found :
The 1st applicant 125.The judge stipulated the following periods of imprisonment as the starting points for sentence for the 1st applicant : Charge 1 : 5½ years; Charge 2 : 2½ years; Charges 3 and 4 : 2 years on each charge; Charge 5 : 3 years; and Charge 6 : 3½ years. 126.Having regard to the 1st applicant’s health and, “as an act of mercy”, the judge stated that he reduced the sentences identified above by six months’ imprisonment. Having ordered that those sentences be served concurrently, the total sentence of imprisonment imposed on the 1st applicant was five years. 2nd applicant 127.The judge stipulated the following terms of imprisonment as the starting point for sentence for the second applicant : Charge 7 : 4 years; Charge 8 : 3 years; Charge 9 : 3½ years; and Charge 10 : 2 years. 128.Having regard to what he determined to be the 2nd applicant’s, “passive role and her dependency on D1” the judge reduced each of the sentences identified as starting point for the 2nd applicant by 6 months’ imprisonment. 129.Having ordered that all of the sentences be served concurrently, the total sentence of imprisonment imposed on the 2nd applicant was 3½ years. GROUNDS OF APPEAL AGAINST SENTENCE 1st applicant 130.It was submitted on behalf of the 1st applicant that in determining the appropriate sentence to be imposed upon him, the judge failed to take into account his findings, in respect of the conduct of the 1st and 2nd applicants, articulated in his reasons for verdict that they dealt with the property merely by “receiving, withdrawing and transferring money into or from their respective accounts”. Having regard to the judgment of the Court of Appeal delivered by Stock VP in HKSAR v Boma Amaso[17] that conduct was to be regarded as at the low end of the “sophistication of the offences”. 131.Secondly, it was contended that the judge had failed to have regard to the fact that the 1st applicant had admitted the factual basis of the prosecution case and agreed to the receipt into evidence of the expert report of Mr John Lees, pursuant to section 65B of the Criminal Procedure Ordinance, Cap. 221. In consequence, the time of the court had been saved. Reliance was placed by Mr Yeung on the judgment of this court in HKSAR v Hau Yu Yi[18] as illustrating the fact that such cooperation by the defence at trial can be reflected in a small reduction in sentence after trial. There, this court reduced by one month a starting point taken for sentence of 3½ years to reflect a defendant’s “admission of the facts”. 132.Next, Mr Yeung submitted that the judge had failed to take into account adequately the circumstances arising from the mental and neurological condition of the 1st applicant or that the matter had been hanging over the applicant since 20 July 2007, when he was first charged with the offence of money-laundering. 2nd applicant 133.The basis of the 2nd applicant’s application for leave to appeal against sentence was her bare request for leave to do so in Form XI. No perfected grounds of appeal had been settled by counsel. A CONSIDERATION OF THE SUBMISSIONS Delay 134.There is no doubt that there was a delay of 4 years between the arrest, followed by the first appearance in court of the applicants in 2007 and the commencement of their trial in July 2011. The 1st applicant first appeared in the Magistracy on 21 July 2007 and the 2nd applicant’s first appearance in the Magistracy was on 21 September 2007. Equally clearly, there is no doubt that the investigation was complex and involved obtaining voluminous material from banks and other institutions over many years. The activities and transactions in no fewer than 10 accounts were involved. Enquiries were made into some of the accounts over the period beginning 1 July 2001 to 18 July 2007. Mr John Lees’s forensic accountants report was signed off in October 2009. Although it sought to collate and analyse the mass of documentation, nevertheless it was itself a lengthy document. 135.On 16 October 2009, the trial dates fixed for November 2009 were vacated at the application of the defence. On 1 March 2010, the trial, which was listed to commence then, was vacated on the application made on behalf the 1st applicant to obtain medical reports in respect of his mental and neurological condition. After further adjournments for that purpose and subsequently for the respondent to obtain its own report on the 1st applicant, in December 2010 the trial was fixed to commence in April 2011. However, shortly before the dates fixed for trial the trial dates were vacated on the 1st applicant giving notice that an application to stay of proceedings was to be made. Ultimately, the applications for a stay of the proceedings were made on behalf of the applicants before Judge Albert Wong in July 2011. 136.We are satisfied that the delay in the commencement of proceedings caused by the investigations from the arrest of the applicants in July 2007 until the service of Mr John Lees reported in 2009 was entirely justified. Thereafter, the further delay is to be explained, perhaps initially, by the need to consider the report and then subsequently by steps taken to obtain medical reports on the mental and neurological condition of the 1st applicant relevant to the stay applications that were made ultimately in July 2011. 137.Although the overall delay of four years from the arrest of the applicants to the commencement of their trial is regrettable, no unjustified responsibility lies at the door of the prosecution. There is no reason why the delay should enure to the benefit of the 1st applicant in determining the appropriate sentence to be imposed upon him. The 1st applicant’s health 138.There is no doubt that the judge was aware of the impact that incarceration will have upon the 1st applicant given his state of health. As noted earlier, he observed that Dr Joseph Lam said that the 1st applicant required the constant support and supervision of his family members and friends. No doubt, it was with that in mind the judge stated specifically that, “due to D1’s health conditions”, he reduced the terms of imprisonment imposed on the 1st applicant for each of the charges by 6 months’ imprisonment. We are satisfied that reduction in sentence was entirely appropriate to reflect that circumstance. 139.Of course, the sentences imposed by the judge in respect of charges 3, 4 and 5 will be quashed in consequence of the appeal against conviction being allowed in respect of those charges. It follows that the judge’s statement in his overview of the case, that the 1st applicant had been involved in dealing in $68.2 million is no longer correct. That global figure is to be reduced by about $7 million. However, the judge took care to impose appropriate tailored sentences of imprisonment in respect of each separate charge. Also, he ordered that all of the sentences of imprisonment imposed on the 1st applicant be served concurrently. 140.Whilst we are satisfied that the scheme by which the 1st applicant dealt with the property was not particularly devious or clever it was nevertheless simple and effective. For example, as noted earlier, the transactions in the Hang Seng Bank account, the subject of charge 1, involved the deposit and withdrawal in aggregate of large sums of money in cash, the receipt of casino cheques and the transfer to and from other accounts. Moreover, that activity was carried on for a period of no less than six years. Further, the overall scheme made use of a number of accounts held in the names of both the 1st and 2nd applicants. 141.We are satisfied that the judge correctly identified the primary factors relevant to the determination of the appropriate sentences to be imposed, in particular the amount of money involved, the duration over which the offences were committed and the role of the applicant concerned. Similarly, he was entitled to have regard, as he stated he did, in favour of the applicants that there was no evidence of the underlying criminal activity and that there was no international element involved. However, we are satisfied that the resulting total sentence of 5 years’ imprisonment was markedly low for the 1st applicant’s overall culpability. Admissions/agreements in respect of the prosecution case 142.Although the judge was aware of the ambit of the admissions/agreements made by the applicants in respect of the prosecution case (see paragraph 16 of the reasons for verdict) he did not advert to that fact in his reasons for sentence. There is no doubt that those admissions/agreements saved the time of the trial court. We are satisfied that the applicants were entitled to a small discount in sentence to reflect that laudable approach to the trial. 143.Nevertheless, we are satisfied that such small discount in sentence that ought to have been afforded the 1st applicant for the manner in which the defence was conducted is to be regarded as subsumed by the over generous low totality of sentence imposed on him, so that it is not appropriate for this court to interfere with the individual sentences imposed upon the applicant. 2nd applicant 144.As noted earlier, the judge accepted that the 2nd applicant played a lesser part than the 1st applicant, finding her to have been passive and dependent on the 1st applicant. On that basis, he discounted each of the sentences he imposed upon her by 6 months’ imprisonment. Given that the sentence imposed by the judge in respect of charge 10 will be quashed in consequence of the appeal against conviction being allowed in respect of that charge, it follows that the judge’s statement in his overview of the case that the 2nd applicant had been involved in receiving deposits of $43.8 million is no longer correct. Since the total amount of monies received in the bank account the subject of charge 10 was $1,739,800, it follows that the aggregate amount of money which the 2nd applicant received in the accounts the subject of charges 7, 8 and 9 was just over $42 million. 145.The property with which the 2nd applicant dealt in by way of monies received into the account the subject of Charge 7 came to a total of over $33 million, over 46% of which was by way of cash in no less than 150 transactions. Further, the period of her dealing in that property was over 6 years. In all the circumstances, we are satisfied that the sentence of 3½ years’ imprisonment in respect of charge 7 was overly generous to the 2nd applicant. 146.Counsel for the 2nd applicant has not sought to persuade the court that the judge erred in not affording the 2nd applicant a discount in the starting point taken for sentence to reflect her admissions of facts at the trial, in particular the admission into evidence of the report of Mr John Lees. Perhaps, no such submission was made having regard to the submissions made in the application for leave to appeal against conviction in respect of the use made of the report by the judge at trial. In any event, we are satisfied that such discount from the starting point taken for sentence as ought to have been afforded the 2nd applicant for her cooperative approach at trial is to be regarded as subsumed by the overly generous sentence imposed on the 2nd applicant in respect of charge 7. Conclusion 147.In the result, we dismiss the applications for leave to appeal against sentence of the 1st applicant in respect of charges 1, 2 and 6 and of the 2nd applicant in respect of charges 7, 8 and 9. Accordingly, the total sentence imposed on the 1st applicant remains as 5 years’ imprisonment and that imposed on the 2nd applicant remains as 3½ years’ imprisonment.
Mr Wesley Wong, DDPP, of the Department of Justice, for the respondent Mr Keith Yeung, S.C. leading Mr Keith Oderberg and Mr Simon Ng, instructed by Lau, Chan & Ko, for the 1st applicant Mr Andrew Bruce, S.C., instructed by Lau, Chan & Ko, for the 2nd applicant [1] Li Defan & Another v HKSAR[2002] 1 HKLRD 527 [2] HKSAR v Yam Ho Keung (CACC 555/2001; unreported, 24 October 2002) [3] HKSAR v Wan Yet Kwai (CACC 372/2008; unreported, 5 May 2009) [4] HKSAR v Lee Ming Tee (2001) 4 HKCFAR 133 at 148 F [5] HKSAR v Lung Ming Chu [2009] 3 HKC 137 [6] Weissensteiner v. The Queen (1993) 178 CLR 217 at 227 [7] HKSAR v Wan Yet Kwai (CACC 372/2008; unreported, 3 June 2009) [8] HKSAR v Shing Siu Ming & Ors [1999] 2 HKC 818 at 825H-I [9] HKSAR v Pang Hung Fai (CACC 34/2012; unreported, 31 May 2013) [10] George v Rocket (1990) 170 CLR 104 [11] HKSAR v Yam Ho Keung (CACC 555/2001; unreported, 24 October 2002) [12] Mo Yuk Ping v HKSAR (2007) 10 HKCFAR 386 [13] HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545 [14] HKSAR v Boma Amaso [2012] 2 HKLRD 33 [15] HKSAR v Wan Kwok Keung [2012] 1HKLRD 201 [16] SJ v Jerome Y.A. Herzberg [2010] 1 HKLRD 502 [17] HKSAR v Boma Amaso [2012] 2 HKLRD 33 at p.44, paragraph 40 (4). [18] HKSAR v Hau Yu Yi [2010] 5 HKLRD 545 at 547, paragraph 16. |
Cases cited in this judgment
Further hearings and rulings under CACC 199/2012