HKSAR v. Ng Chun To Raymond and Another
Read the full judgment text of CACC 178/2010 on BabelCite. This Court of Appeal judgment was delivered on 31 July 2013.
1. The applicants are husband and wife. On 27 April 2010 they were convicted after a lengthy trial before Judge Douglas Yau in the District Court. The husband was convicted of four offences (charges 1-4) of conspiracy to defraud and one offence (charge 6) of doing an act tending and with intent to pervert the course of public justice. The wife was convicted of 17 offences of dealing with property known or believed to represent the proceeds of an indictable offence (charges 7-23).
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CAC C 178/2010 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CRIMINAL APPEAL NO. 178 OF 2010 (ON APPEAL FROM DCCC NO. 405 AND 895 OF 2009) ________________________ BETWEEN
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________________________ J U D G M E N T ________________________ Hon Stock VP (giving the judgment of the Court): Introduction 1.The applicants are husband and wife. On 27 April 2010 they were convicted after a lengthy trial before Judge Douglas Yau in the District Court. The husband was convicted of four offences (charges 1-4) of conspiracy to defraud and one offence (charge 6) of doing an act tending and with intent to pervert the course of public justice. The wife was convicted of 17 offences of dealing with property known or believed to represent the proceeds of an indictable offence (charges 7-23). 2.They were, respectively, the first and fourth of four defendants; so we will refer to them as D1 and D4. 3.D2, Leo Lam, pleaded guilty at an early stage of the trial to three of the four charges of conspiracy to defraud and D3, Polly Sun, was convicted of the 5th charge (another conspiracy to defraud) in respect of which charge the prosecution at an early stage offered no evidence against D1. 4.The two applicants with whom we are concerned were sentenced to total terms of four years and three years’ imprisonment respectively. 5.There are before us two categories of application:
6.Naturally, we deal first with the application in relation to convictions. The prosecution case 7.The case involved the trading of derivative warrants. What was alleged were conspiracies spanning almost three years whereby D1 and others took part in a scheme of false trading in derivative warrants issued by different financial institutions in Hong Kong. 8.Derivative warrants are listed and traded by the investing public through brokers on the Stock Exchange of Hong Kong. The case concerned warrants issued at various times through the conspiracy period by four issuers of derivative warrants, namely, Calyon Financial Products (Guernsey) Ltd; Standard Bank plc; Citigroup Global Markets Holdings Incorporations; and Dresdner Bank AG. Each issuer of warrants is required to appoint a liquidity provider for each derivative warrant issued. The liquidity provider provides liquidity by being able continuously to quote bid and ask prices to the investing public to ensure a source of warrants which the investor can buy or sell. The liquidity providers in this case were CLSA Ltd (in respect of warrants issued by Calyon); Standard Securities (Asia) Ltd (for warrants issued by Standard Bank plc); Citigroup Global Markets (Asia) Ltd (for warrants issued by Citigroup Global Markets Holdings Incorporations); and Tai Fook Securities Co Ltd (for warrants issued by Dresdner Bank). 9.The allegation against D1 was that in 2005 and thereafter he orchestrated what was called a warrant pushing scheme for which the main engine of operation was an office on the Mainland. Various trading accounts, called “dummy accounts” at trial, were established in Hong Kong and those in the warrant pushing group used the accounts to carry out the trading. The Mainland operators of the dummy accounts, all working in the same office, under the immediate and daily direction of one Cheung Ching Ho (CCH), traded warrants amongst themselves, using the dummy accounts. At trial these operators were called the “hands”. Their activities were intended to and did increase the trading volume of the selected warrants and created a false impression of active trading, thereby luring innocent investors; all of which was likely to enhance the price of the warrant. The operators of the dummy accounts then sold the warrants at a profit. In this case the warrants were usually sold back to the warrant issuers or to the liquidity providers and to ensure that they were able to do so and to do so profitably, the co-operation of insiders employed by the warrant issuing companies was secured. 10.The allegation was that whilst CCH was in charge at the Mainland operating office (which, for avoidance of detection, was moved from time to time), the person who was in control of the entire operation and from whom directions to CCH and some of the hands emanated on a daily basis, was D1 who at all material times remained in Hong Kong. 11.For several years from the late 1990s until October 2005 D1 had worked for CLSA (in the last year for Calyon, of which CLSA had become a subsidiary). Whilst he worked for Calyon, three of the alleged insiders worked with him: Eric Tsang (Eric), Chui Man Kit, and Dickson Cheung (Dickson). They were all traders whose function it was to quote the bid and ask prices of derivative warrants issued by the company to the investing public, via the appointed liquidity provider. Traders were vested with discretion to adjust the bid and ask prices thus quoted. In July 2007 Eric joined Standard Bank and one of his responsibilities there was the marketing and trading of equity warrants in Asia. Dickson moved to Citigroup Global Markets Asia Limited in April 2007. The choice by the warrant pushing group to trade in Calyon warrants; then later in Standard Bank warrants; and then in Citigroup warrants was said to be hardly a coincidence, for each had an insider who was a long-standing acquaintance of D1. The insider with Dresdner Bank AG was said to be one Khalid Chaneb. 12.The case was that warrant pushing by the group in warrants issued by CLSA (Calyon) commenced in September 2005; in warrants issued by Standard Bank from mid-2007; in warrants issued by Citigroup from early 2008; and in warrants issued by Dresdner Bank also from early 2008. 13.The warrant pushing activities generated enormous profits. The “hands” received salaries. According to the prosecution case, the profits went to D1 in cash, the delivery of which was the responsibility of CCH. As for the insiders, the inference which the trial court was asked to draw is that they must have been rewarded from the profits for their roles. 14.D1 and D4, as well as CCH and a number of the hands, were arrested on 28 May 2008. Upon investigation, over $5 million in cash was found in two safes inside D1’s office; and it emerged that between January 2006 and late May 2008, almost HK$39 million was deposited in cash into bank accounts in D1’s name or operable by him[1]. HK$34.6 million in cash was found in a safe deposit box in D4’s name which she had accessed on numerous occasions between May 2005 and May 2008; and during the term of the conspiracies about HK$69 million had been deposited in cash into various accounts in her name or over which she had control; generally in bulks of $50,000 or $100,000. D4 was a solicitor and D1 supposedly a trader, neither of whom earned salaries which could possibly account for such vast sums. 15.The prosecution suggestion was that D4 knew full well that the cash which she possessed and the sums in her accounts were the proceeds of the warrant pushing; failing proof of which they relied on the alternative limb of the offence creating provision, that there were reasonable grounds to believe that the monies were the proceeds of an indictable offence and that she was aware of those grounds. The charges 16.Against this background D1 and D2 were charged with four charges of conspiracy to defraud:
17.We need not concern ourselves with the fifth charge since, as against D1, and in circumstances which we will later describe, no evidence was offered. 18.Charge 6 was a charge against D1 only. It alleged that between 29 May 2008 and 31 July 2008 with intent to pervert the course of public justice he approached Lee Wai-ming, one of the hands (PW2 at trial), asked him not to cooperate with the ICAC and urged him to provide the ICAC with false or misleading information. 19.Charges 7 to 23 were levelled against D4 alone. Charge 7 alleged that she had dealt in the cash found in her safe deposit box knowing or having reasonable grounds to believe that it represented the proceeds of an indictable offence, an offence contrary to section 25(1) and (3) of the Organised and Serious Crimes Ordinance, Cap 445. The remaining charges against her alleged the same offence of dealing with property known or believed to represent the proceeds of her indictable offence, but each in relation to amounts deposited in her bank accounts or in the bank accounts of companies in respect of which accounts she had control. The prosecution case in relation to all the money laundering charges was that she well knew that the source of the funds was the illicit warrant pushing controlled and directed by her husband; but that even if that knowledge were not proved, there were reasonable grounds to believe that the cash found in her safe deposit box and the various cash deposits into the bank accounts were proceeds of an indictable offence and that she knew of those grounds. The central issues below 20.We have thus far recounted the fact that the prosecution allegation was that D1 was the person who directed the warrant pushing activity. It was not in issue at trial that there was warrant pushing as alleged in each of the first four charges; that it was conducted from offices in the Mainland by “hands” who were called as witnesses for the prosecution in the trial (though the beneficiaries of immunity from prosecution offered to them); and that the activities were rendered successful by the aid of insiders. 21.What was in issue – it was the central issue – was whether the prosecution was able to prove to the requisite standard that the person alleged by the witnesses to be the controlling hand in Hong Kong was the first applicant, D1. 22.What they all said in evidence was that upon recruitment and whilst they were engaged upon the business of warrant pushing, they were told by CCH that a man called Raymond was the boss; that Raymond was responsible for their salaries; that Raymond was the man who was to (and did) make direct contact with the insiders on a day-to-day basis to ensure the success of the operation; and that Raymond was the person to whom the profits were regularly delivered. Raymond was also the person who gave directions to CCH on a daily basis and to whom some of them spoke directly, either to report or to receive directions. However, what no witness was able to say was that he ever saw Raymond. Although it was the prosecution case that D1 was Raymond, none of those who testified was in a position to identify D1 as that person. So, absent the testimony of CCH, proof that Raymond was D1 had to be circumstantial and depended as well on the prosecution establishing, through the rule of evidence applicable to declarations made by co-conspirators in the course or in furtherance of the conspiracy, that what these witnesses – the hands – told the court that CCH had told them was admissible evidence. 23.The only direct evidence that D1 was Raymond was to come from CCH, who had been given immunity from prosecution but when, at an early stage of the trial, he was called for the prosecution to testify, he refused to do so; and he never testified for the prosecution at that trial. It is in these circumstances that proof of the case against D1 depended upon a mix of circumstantial evidence and evidence said to be admissible under the co-conspirators rule. 24.The case against D4, on the other hand, was self-contained in so far as, under the alternative limb of the relevant statutory provision, it depended on the banking evidence and the finding of a large amount of cash in her safe deposit box; and not on the testimony of CCH. The central issues now (1) Abuse 25.CCH’s refusal to testify was a breach of the central condition of the immunity which had been granted to him. So the immunity fell away. He was immediately thereafter arrested and charged with the same conspiracies to defraud as alleged in the first four charges against D1. In circumstances which we will shortly describe, it emerged after the trial of these applicants that certain ICAC officers had sought to pervert the course of justice in the present case in a series of meetings with CCH before the trial of the present applicants. In April 2012, two of those three officers were, in respect of their conduct with CCH, convicted of conspiracy to pervert the course of public justice and all three of misconduct in a public office; and sentenced to various terms of imprisonment. 26.This gross misconduct by those officers gave rise upon this appeal to a contention on behalf of both applicants that the trial of the applicants amounted to an abuse of process in that but for the impropriety of the officers, the prosecution might not have been brought against the applicants and that had the court below been aware of the true facts, the proceedings against the applicants would have been stayed as an abuse of the process of the court; that the applicants, deprived of the relevant information, were denied an opportunity to apply for a stay and of the opportunity to prepare and conduct their case armed with information which might be shown to have tainted the reliability of other prosecution witnesses. For these reasons, it is said that the convictions should be quashed and, further, that this Court should hold that the circumstances as a whole are such that it would be an affront to the conscience of the Court that these applicants should now be retried for these offences. 27.Entwined with these contentions is an argument as to disclosure. The suggestion is that the prosecuting authorities did not conduct timely investigations following CCH’s withdrawal as a witness and that such disclosure as has been made subsequent to their discovery of the misconduct has been inadequate. (2) Severance 28.The second issue arises from a failed application made by both applicants at the end of the prosecution case to sever the indictment so as to enable each to testify if he or she so wished without fear of spousal incriminatory testimony admissible against the other. The applications failed and it is argued that the premise upon which the judge proceeded was wrong in law and that, in any event, his discretion was exercised upon a flawed basis. (3) The co-conspirator’s rule 29.This ground is advanced on behalf of D1 only. Since the testimony of the “hands” was largely evidence of what CCH told them, it was incumbent on the prosecution to show that that evidence, in so far as it sought to establish that the man “calling the shots” was Raymond and that he knew the insiders and that the profits were delivered to him, was admissible as to its truth. Since on its face it was hearsay evidence, it was admissible only if it fell within the co-conspirators rule; which is to say, only if, first, there was sufficient evidence that D1 was party to the conspiracy or conspiracies to which CCH was party and, second, that the acts and declarations of CCH which were relied upon were acts and declarations in furtherance of that conspiracy or those conspiracies. The applicants contend that the judge failed to recognise the need to satisfy the first test; that there was no sufficient independent evidence that D1 was party to the conspiracies; and that the acts and declarations relied upon were not in furtherance of any of the conspiracies. (4) Charge 6 30.It was not contended that there was no attempt to persuade PW2 not to co-operate with the ICAC. The issue was the identity of the caller; and the contention is that the prosecution failed to establish that it was D1. 31.There was another ground in the grounds of appeal on behalf of D1 to the effect that the judge wrongly admitted and relied upon evidence of previous dealings and possible misconduct as background circumstantial evidence but, although not formally abandoned before us, no oral argument was advanced in its support. Key procedural dates (1) The arrest and trial of these applicants 32.The applicants were arrested on 28 May 2008. On that same day, CCH was arrested, as was Lee Wai-ming (PW2) and other “hands” who were later granted immunity from prosecution and became prosecution witnesses and also D3. 33.On 28 May 2008, CCH was the subject of a video-interview in which he made a series of admissions as to his role in the warrant pushing scheme. In that interview, he said that Raymond employed him; that he, CCH, recruited others; that Raymond had contact with the insiders; that earnings were passed to Raymond; and that daily turnover was in the millions of dollars.[2] 34.On 29 May 2008, consent was sought from and given by the Department of Justice for the taking from CCH of a non-prejudicial statement. The terms of the request for that consent is a matter we later address. On that day and thereafter, four such statements were taken. PW2 made such a statement on 14 August 2008. 35.On 25 February 2009, D1 together with the second and third defendants were charged with offences connected with the warrant pushing and, in the case of D1, with attempting to pervert the course of justice. In July 2009 D4 was charged with money laundering. 36.In October 2009, the case against the first three defendants was consolidated with that against D4; this in the face of opposition by D1 and D4. The order for consolidation is not the subject of an appeal, but the refusal by the trial judge to sever is. 37.The trial against these applicants commenced before Judge Yau on 30 November 2009. There was then a voir dire, which does not concern us. 38.On 7 December 2009, CCH appeared in court, the day upon which he was scheduled to testify for the prosecution as its first witness on the general issue. He had earlier that day been granted immunity from prosecution on condition that he testified truthfully. On 7 December, before he was sworn or affirmed, but from the witness box, he said to the judge:
39.This obviously took leading counsel for the prosecution by complete surprise and he was granted time to consider the prosecution’s position. When he suggested a need for CCH to be interviewed, counsel acting for the various defendants objected in the strongest terms, insisting that there should be no approach to CCH by any ICAC officers or any member of the prosecution team; the objection was, for that day at least, upheld by the judge. 40.When the hearing resumed the following day, 8 December 2009, counsel for the prosecution said that he had certain information about what might have caused CCH to withdraw but the fact was that the prosecution would no longer be calling CCH as a witness. The prosecution required further time to assess its case in the light of that fact and the suggestion was then made (by the prosecution) that, in the meantime, the case against D4 could proceed since the facts in her case were largely agreed and the evidence would only take a couple of days. That is what happened; and as for the case against the other defendants, it was thereafter presented on the basis of a series of admitted facts plus the testimony, in the main, of the “hands” who had been granted immunity from prosecution. 41.CCH was discharged from further attendance. 42.As for future contact between ICAC officers and witnesses, against which vigorous representations were made by those acting on behalf of the defendants, the judge said:
43.CCH was arrested the same day and charged with the same four conspiracies to defraud with which this case is concerned. 44.On 3 February 2010, the judge rejected submissions by D1, D3 and D4 (D2 had pleaded guilty) of no case to answer. D1 then elected not to testify; and D4 applied for severance, an application which was refused by a ruling delivered on 10 February 2010. There was at the same time an issue about the proper interpretation of s 65A of the Evidence Ordinance, Cap 8, concerning the privilege against spousal incrimination, which we will later address. There was also an application for a stay of proceedings; this also failed. 45.Neither applicant testified on his or her own behalf. 46.On 26 and 27 April 2010, the Reasons for Verdict were read out, with the full phalanx of counsel – including three leading counsel – in attendance, an extraordinary waste of costs, which was no fault of the judge because the practice is apparently occasioned by a statutory provision which is said to require this reading-out exercise in every District Court criminal case. Sentence was passed on 28 April 2010. 47.It is pertinent to note that until this stage, no suggestion had emanated from CCH or anyone on his behalf that there had been an attempt by ICAC officers in the course of their contact with him to pervert the course of justice. (2) The arrest and trial of CCH 48.The first pre-trial review in CCH’s case took place on 18 May 2010. On the standard form judge’s questionnaire submitted a few days before, CCH, through his counsel, gave notice that he intended to seek a stay of proceedings on the basis of “coaching witnesses to such extent as to place in jeopardy a fair trial and conduct on the part of the ICAC which shocks the conscience of the court.” On 3 June 2010 the stay application commenced and, at that hearing, the fact of notes made by CCH, and of two audio recordings, of meetings between himself and the three officers were disclosed and on the following day two digital pens which contained the two audio recordings were handed by CCH’s solicitor to the ICAC. The recordings were of meetings held on 23 November and 3 December 2009. The stay application was adjourned. 49.In June 2010, the Director of Public Prosecutions directed that the matter be referred to the police for investigation, which it was. 50.In November 2010, the three ICAC officers were arrested. 51.In March 2011, CCH’s stay application was heard in the District Court, in the course of which six of the alleged co-conspirators[5] who had received immunities for the purpose of the trial of the present applicants, testified on behalf of the prosecution; each denied that he had been coached by the ICAC prior to testifying in this, the first case. 52.On 5 May 2011, CCH’s stay application was rejected by Judge Tallentire. The judge accepted the testimony of CCH in so far as it related to the conduct of the three officers but said, having heard the testimony of the six co-conspirators, that he was not able to find that they too had been subjected to the same improper coaching as in the case of CCH; that none of the three officers were to play any part in CCH’s trial; and that taking into account all the circumstances, including the gravity of the offence with which CCH was charged and the fact that the ICAC officers were to be prosecuted for their misconduct, a stay was not warranted. 53.CCH then pleaded guilty to four charges of conspiracy to defraud in respect of which he was sentenced to 25 months’ imprisonment. (3) The present appeal process 54.The applicants in this case filed their notices of application for leave to appeal in May 2010. There have since been a number of directions hearings in relation to their appeal, the result of which was that the hearing of the present applications was periodically postponed in order to await, first, the outcome of CCH’s stay application and, thereafter, the outcome of the case against the three ICAC officers. (4) The trial of the ICAC officers 55.The trial of the officers Cho, Chan and Au commenced on 30 January 2012 before Judge Douglas Yau in the District Court. CCH testified for the prosecution. 56.On 13 April 2012, Cho and Chan were convicted of conspiracy to pervert the course of public justice and all three officers were convicted of misconduct in public office. 57.On 30 April 2012, Cho and Chan were each sentenced to a total of 30 months’ imprisonment; and Au was sentenced to 18 months’ imprisonment. 58.It is understood that the officers seek leave to appeal their convictions. However, without prejudice to those applications, which have not been heard, the present applications proceed on the assumption that the convictions of the officers were warranted; and with no material challenge to the findings of fact by Judge Yau in the trial of the officers. ABUSE (A) The misconduct 59.That the ICAC officers behaved unlawfully, and outrageously so, is accepted by the respondent. Since one of the main questions which this Court is called upon to address in this case is whether in all the circumstances, including in particular this gross misbehaviour, a fresh trial of these applicants would offend this Court’s sense of justice and propriety and since such an issue whenever it arises is fact-specific, it is necessary to recount the facts in some detail. 60.Officers Cho, Chan and Au, the three ICAC officers against whom allegations of misconduct were subsequently proved, were involved in the investigation of this case from the outset. Cho was of senior rank: an acting Chief Investigator. 61.CCH’s evidence, which was accepted by the trial judge in the prosecution of the ICAC officers (which has for the sake of convenience been labeled Trial 3[6]), was that on the day upon which he was arrested, he was offered a deal by two other ICAC officers, called Li and Lai, that so long as CCH successfully implicated D1 as well as some of the warrant issuer employees in the alleged conspiracy to defraud, the ICAC would not prosecute CCH or his aunt, that the “brothers” (the hands) would be “rescued”[7] – in other words, escape prosecution – and that CCH’s substantial assets would not be confiscated. This was to be a secret agreement. At no stage in the three proceedings to which we have alluded has either Li or Lai testified and Mr Caplan QC for the respondent does not accept CCH’s allegation against them. 62.Between early June 2008 and 9 December 2009 CCH had, according to the information disclosed in and since mid-2010 to those acting for the applicants, no fewer than 54 meetings with ICAC officers. Most were with the officer Chan and others were with Au and/or Cho present. The schedule of those meetings (a schedule drawn by the ICAC) which has been disclosed describes the purpose of each meeting under the column “Event/s” most broadly: many are referred to merely as “Debriefing”; the rest as “Taking NPS[8]”; “Re bail procedure”; “Briefing on the development”; “Serving summons”; “Refreshing memory”; “Visit at District Court”; “Informing the processing of immunity application”; and “Counseling”. They are said, in the schedule, to have taken place at a host of different locations, few of which were at the ICAC offices; mostly at cafés. In attendance at the last three, according to these records, in the first four days of December 2009 – very shortly before CCH’s dramatic attendance at court on 7 December 2009 – was Cho. 63.The litany of misconduct is here taken from the judge’s summary of the evidence which he accepted in the trial of the three officers and about which, for the purposes of this appeal, there is no dispute:
(B) A suggested wider malaise 64.We are asked to say that there are indicia of a systemic disregard by the ICAC for the rule of law; a factor, it is argued, to be brought into the scales for the purpose of the abuse argument. It is contended, in other words, that this is more than a case of three errant officers who were a law unto themselves. If it were “just” such a case, the fact that the particular officers have been prosecuted and imprisoned would carry greater weight in the balancing exercise which has to be conducted, than if this law enforcement authority at large embraced or permitted a culture of disregard for the rule of law. Evidence of the malaise is said to present itself in several ways. (1) Other cases 65.Mr Blanchflower SC, for D4, took us to three previous cases in which the courts have expressed disapproval of ICAC practices in relation to memory refreshing exercises. In one such case[9] the Court of Appeal and then the Appeal Committee of the Court of Final Appeal said that the practice of summarising witness statements for a witness in the course of a memory refreshing exercise with, say, a summary of each paragraph, was inappropriate and should stop. But that was a case in which it was accepted that the ICAC officer had not acted in bad faith. The Court of Appeal accepted the permissibility of allowing witnesses to refresh their memories from their statements prior to trial but warned against exercises which were not in truth memory refreshing exercises but constituted, rather, training or coaching. 66.Despite those judgments, the practice did not then stop; probably because the internal circular drawn by the ICAC to give effect to the Courts’ warnings was not issued until over a year later. In a case decided at first instance in April 2008, a case in which Cho was one of the investigating officers, there were extensive memory refreshing episodes : 14 sessions lasting over 23 hours in respect of the main prosecution witness. One of the officers is said to have read out every paragraph of two non-prejudicial statements and the other officer then summarised them and discussed the summaries with the witness. A similar practice was carried out with other witnesses. The judge noted that in respect of two of the witnesses these exercises took place after the Court of Appeal issued its judgment in Lee Wing Kan in March 2007.[10] The District Court judge disapproved what had happened. In the appeal from that case, the Court spoke of the danger in discussing with a witness his evidence prior to trial lest the witness’s recollection of events was consciously or subconsciously altered from his true recollection. Investigators were entitled to review a witness’s statement and any exhibits referred to in it, with the witness, for the purpose of allowing him to refresh his own recollection of events: to that end, they were entitled to clarify contents of the statement; to explore inconsistencies in it – but what they were not to do was to go further and put words into his mouth or otherwise subvert his true recollection.[11] 67.The argument on behalf of the applicants is that what happened in the present case evidenced a deliberate disregard for earlier warnings and, that aside, reveals systemic eagerness improperly to bolster the credibility of prosecution evidence. 68.In May 2010, this Court, differently constituted in part, addressed an abuse argument against the background of the tape-recording by ICAC officers of a conversation between an immunised witness, an accused person and two solicitors and then listened to the tape recording when they knew or ought to have known that it was covered by legal professional privilege[12]. Against that background, the Court allowed the appeal against conviction and ordered a permanent stay of proceedings. That Court’s analysis of the law of abuse is an issue which we address below; but the point for immediate purposes is that the case presented an example of either a “cavalier approach to privileged communications or a failure to appreciate the nature and importance of the principle”[13]; of which approach, albeit not in relation to privilege, the conduct of the ICAC officers in this case is said to be an echo. (2) The NPS consent 69.On 29 May 2008, consent was given by counsel in the Department of Justice for the ICAC to take from CCH a non-prejudicial statement; meaning a statement that is not be used against its maker in the event of the maker’s prosecution for the offence or offences which it discloses but the purpose of which is for the witness to disclose what he knows of the offence or offences for which others have been arrested and, depending on the utility of the evidence thus disclosed, in respect of which the witness may become a prosecution witness, in exchange for an immunity from prosecution. 70.There was no written representation made by the ICAC to counsel, but we have (though counsel at the trial of these applicants did not have) a note or aide memoire dated 29 May 2008, signed by an investigating officer of the ICAC (not one of the convicted officers) which purports to recall a conversation between the officer and counsel “with a view to seeking urgent legal advice as to whether an NPS could be taken from [CCH] an associate of [D1]who was suspected to have offered advantages to staff members of four warrant issuers for the latter quoting favourable prices to [D1] in trading the warrants of the respective issuers.” He goes on to say:
71.We were not provided with the records of interview with CCH which, prior to that Note, had taken place but the suggestion that CCH played a passive and minor role in scam is, on its face and in the light of what we now know, false; as is the suggestion that CCH had no direct dealing with the corrupt agents. This is suggested to be another example of those in the ICAC playing fast and loose with the truth and to be evidence of a design to target D1 by sleight of hand. (3) Flouting the trial judge’s directions 72.At the hearing on 8 December 2009, the judge was urged by those acting on behalf of the applicants that such contact after that date as might take place between prosecution witnesses and ICAC officers should be video-recorded. The judge made the observation to which we have earlier referred[14]:
73.Yet, there were meetings thereafter with some of the prosecution witnesses in respect of which notes were not made or, if made, have not been disclosed. (C) Non- disclosure 74.Embodied in the arguments in support of the assertion that there has been an abuse of process is an argument that there has been a failure on the part of the prosecution to comply with its duty of proper disclosure to the defence of such material as may assist the defence in the conduct of its case. 75.It is obvious from the detailed history which we have recited that there was nothing either before or during the trial of these applicants which was in the hands of prosecuting counsel or of those instructing him to alert them to the misconduct which was later revealed. However, the grounds of appeal and the arguments assert that the duty to reveal defence-relevant information known to the prosecuting legal adviser and to the relevant law enforcement authority is not the long and the short of the duty owed to a defendant; for where there are reasonable grounds for the prosecutor or the law enforcement body to believe that “a person may have information which might undermine the case for the prosecution or assist the case for the suspect or defendant”, the prosecution or the investigator “cannot decline to make enquiries of that person in order to avoid the need to disclose what that person might say.”[15] 76.The argument is that, first, CCH should have been interviewed after his refusal to testify and that, in any event, there was no timely investigation of what the other immunised witnesses had to say about the nature of their contact with the ICAC, once the prosecuting authorities knew, from the early summer of 2010, the framework of CCH’s allegations. 77.Beyond that, it is asserted that there were specific requests for information before the trial commenced which were not truthfully answered, the blame for which is not directed at the Department of Justice (which had to rely on the information provided to it by the ICAC), but at the ICAC which had, or had the wherewithal to be possessed of, the full information. 78.By letter dated 27 November 2009, those acting for D4 asked for full information and particulars of “any memory refreshing exercise which has taken place (or is contemplated) with any of the PWs, with full information, detail and particulars of the location, participants/parties and duration of the said memory refreshing exercises. In addition, please provide us with all memoranda and materials in relation to the said memory refreshing exercises.” Yet, in respect of CCH, all that was supplied was a schedule, or table, containing two entries with “Refreshing Memory” under the “Purposes” column; one relating to 23 November 2009; the other to 3 December 2009. There was no reference to the 51 other meetings which by that date the ICAC officers had held with CCH; and there was not full disclosure of all contacts with the immunised witnesses. In answer to this complaint, the respondent asserts that the request was expressly directed at memory refreshing exercises and that there was no reason at that stage to believe that anything more was sought or that there was anything in other meetings or contact that might assist the defence. 79.A much fuller schedule was provided in July 2010 in response to a request for “all correspondence and information/details of any contacts/communication/meetings between the ICAC and prosecution witnesses.” That fuller schedule was the one that revealed over 50 meetings with CCH and, supposedly, all the meetings with the (other) witnesses to whom immunities had been granted. (D) The applicants’ suggested disadvantages 80.The consequence of all this is that both prior to and during their trial the applicants and their legal advisers had no knowledge of the fact that key ICAC officers had so conducted themselves as to manipulate the evidence which CCH was to give; a manipulation designed to enhance the chances of a conviction of D1, whom they believed to be guilty. Also, the applicants and those advising them did not then know how often ICAC officers had in fact held meetings with CCH and with the other immunised witnesses; and they did not know that the judge’s request of 8 December 2009 as to record-taking had been ignored. 81.Had they known, so the argument runs, they would have prepared their cases differently and either at the preparation stage or in the course of cross-examination sought to ascertain what hitherto undisclosed promises, if any, had been made to those witnesses in consideration of their agreeing to testify for the prosecution; what meetings had been held; whether the broad descriptions of the meetings in the schedules were truthful; and to what extent the reliability of the testimony of the witnesses had been coloured, if at all, by coaching or other improper devices. 82.Furthermore and before cross-examination was launched, an application to Judge Yau to stay the proceedings would undoubtedly, it is said, have been mounted; on the basis, first, that the applicants were precluded from having a fair trial and, second, that it would be an affront to the conscience of the court and to public confidence in the administration of justice for the trial to proceed. 83.On those bases, this Court is now urged to quash the convictions and stay further proceedings; alternatively, if not a stay order, to quash the convictions on the basis that the disadvantages thus identified deprived the applicants of a fair trial before Judge Yau. (E) The law 84.The circumstances in which, in the exercise of a court’s discretion, a stay of proceedings will be justified are exceptional. Those circumstances are explained by Ribeiro PJ in HKSAR v Lee Ming Tee & anor[16]. “In general,” he said, “if a prosecution is brought, the court’s duty is to try the case”[17]; since “generally speaking a prosecutor has as much right as a defendant to demand a verdict … on an outstanding indictment, and where either demands a verdict a judge has no jurisdiction to stand in the way of it.”[18] But in exercise of its inherent power to prevent an abuse of its own process, the court has jurisdiction to stay criminal proceedings in two circumstances:
85.The cases in the second category will be rare since :
86.Highly relevant for the purpose of the present case is the injunction not to utilise the discretion to stay for the purpose of disciplining the individual or body guilty of the abuse of power which has been demonstrated:
87.The key question in the second category of case is, therefore, not whether, without more, the court is offended or even outraged by the prosecutorial misconduct disclosed; and it is not whether the public, possessed of the facts, would be offended or outraged by the misconduct. It is, rather, whether “the court’s sense of justice and propriety” or, one should add, public confidence in the proper administration of justice, is or would be offended “if [the court] is asked to try the accused in the particular circumstances of the case.”[27] (emphasis added). 88.That is what distinguishes the punitive or disciplinary function, which is not the court’s remit, from that which is the court’s remit, namely to administer justice in individual cases by a process the integrity of which remains intact. The fact of prosecutorial misconduct in connection with a criminal case does not necessarily undermine the integrity of and respect for the process; for where the weaponry available to a court in the course of a trial is such as to ensure a fair trial, the integrity of the process is maintained, as it is where, assuming the prospect of a fair trial, the circumstances as a whole are such that, notwithstanding the investigative or prosecutorial misconduct in the case, proceeding with the trial of the accused does not offend the court’s sense of justice and propriety or bring the criminal justice system into disrepute. 89.It has been said that “[i]t may not always be easy to distinguish between (impermissibly) granting a stay ‘ in order to express the court’s disapproval of official conduct pour encourager les autres’ and (permissibly) granting a stay because it offends the court’s sense of justice and propriety”[28]; but we suggest that it is easier to make the distinction if one remembers that Lord Lowry in Bennett added to the phrase “ it offends the court’s sense of justice and propriety” the words “ to be asked to try the accused in the circumstances.”[29] Since that is the relevant question in application of the second limb of the abuse test, it is all the circumstances that require to be considered; not just the misconduct, but all factors in the particular case that touch upon that question including, but not limited to, the gravity of the offence with which the accused is charged, the availability of a sanction against the miscreant, and whether the misconduct was perpetrated in bad faith or in circumstances of urgency. An example of a relevant circumstance emerges from the Reasons for Verdict in the trial of the three officers, that CCH was “deliberately leading the [officers] on during the meetings”, encouraging them to coach him[30]; as it happens, that does not appear from the ruling upon CCH’s application for a stay in his own trial to have featured in the balancing exercise undertaken by Judge Tallentire but it is an example which serves the purpose of illustrating how varied the relevant circumstances can be. 90.The distinction between the two approaches, the one permissible, the other impermissible, requires emphasis because the author of the judgment in HKSAR v Wong Hung Ki[31] is satisfied, despite the urging of counsel for the applicants, that the reasons for judgment in that case obscured the distinction at the risk of taking the impermissible route; a view shared by the other members of the presently constituted Court. Since a number of passages in that judgment, if followed, risk leading advisers astray, we must deal with them. 91.The facts of Wong Hung Ki have been referred to earlier in this judgment[32]. It was a case in which ICAC officers took a tape recording of a conversation between an accused person and legal advisers and listened to the tape recording when they knew or ought to have known that the conversation was one covered by legal professional privilege. In the course of summarising key principles Stock VP said :
92.The Court then expressed its view that:
93.The citation in that passage was from R v Grant[35], a decision of the Court of Appeal of England and Wales which has since in material part been disapproved by the Privy Council in Warren v Attorney General for Jersey[36], to which latter case we shall shortly turn. 94.In the closing stages of its judgment, the Court in Wong Hung Ki said, further, that:
95.The problem with these passages is twofold:
96.These errors in approach become apparent by revisiting Lee Ming Tee and by a study of the judgments in Warren. 97.The basis of the application for a stay in Warren was that the only evidence against the defendants, charged with conspiracy to import a large quantity of cannabis into Jersey from the Netherlands, had been obtained by police monitoring of incriminating conversations between one of the defendants and a co-conspirator upon collection of the consignment of drugs in Amsterdam. Authority for fitting a tracking and audio device in that defendant’s vehicle in Jersey had been obtained from the Jersey authorities but the permission of the authorities of certain of the Continental countries through which that defendant travelled, to fit audio devices and through them eavesdrop on conversations, had not been secured. A senior prosecutor in Jersey advised that evidence procured by means of an audio device for the use for which no consent had been obtained from the authorities of the Continental countries was, notwithstanding the lack of consent, unlikely to be excluded in the Jersey proceedings. The Jersey officers fitted the defendant’s car with a tracking and an audio device. Unexpectedly, the defendant changed his plans, travelled to France aboard a ferry and then hired another car in France with which he drove to Amsterdam. The officers, notified of the sudden change of plan, requested assistance from the French police in deploying a tracking device in the hire vehicle but deliberately did not raise the issue of the audio device. In the result, the officers acted unlawfully in a foreign jurisdiction and engaged in deliberate deceit of their French counterparts. The Commissioner in Jersey held that the balance of factors fell in favour of refusing a stay; the Jersey Court of Appeal refused the defendants leave to appeal; and in due course, the defendants were convicted. The judgments to which we now turn are those in the subsequent unsuccessful appeal to the Privy Council. 98.Lord Dyson traversed key passages from past authorities and one from an academic text, including:
99.We lift these cited passages from Lord Dyson’s judgment because they ring with the recurrent theme that the test for the second category of case in which a stay may be warranted is not blinkered by a singular focus upon the nature and magnitude of the misconduct but is one which, instead, addresses the question whether, in the face of all the circumstances, the prospect of trying the defendant for the offence or offences with which he is charged offends the court’s sense of justice and propriety or is likely to undermine public confidence in the criminal justice system and bring it into disrepute. Since that is the correct approach, its application necessarily involves a balancing exercise. 100.The judgment in Grant[43] is one which influenced the decision in Wong Hung Ki[44]. Grant was a case of deliberate infringement of legal professional privilege and the Court of Appeal (England and Wales) said, in a passage which finds an echo in Wong Hung Ki, that:
101.Their Lordships in Warren were satisfied that the decision in Grant was wrong in that whilst a deliberate invasion of a suspect’s right to legal professional privilege was indeed “a serious affront to the integrity of the justice system which may often lead to the conclusion the proceedings should be stayed”, nonetheless:
102.The Board concluded that it was “difficult to avoid the conclusion that in Grant the proceedings were stayed in order to express the court’s disapproval of police misconduct and to discipline the police”[47]; a flaw in approach which might also be thought to taint the decision in Wong Hung Ki. 103.Counsel for the respondent in Warren contended that it was possible to identify categories of cases where the court will always grant a stay; for example, he suggested, unlawful abduction; entrapment; and prosecutions in breach of a prior assurance that there would be no prosecution[48]. These are situations which reflect a suggested “but for” test; in other words where, but for the abuse of power, there would not have been a trial. The Board rejected the idea that such a test “will always or even in most cases necessarily determine whether a stay should be granted on grounds of abuse of process”[49]. It was, however, clearly a relevant factor.[50] 104.The result of all this is to remind the courts faced with a stay application based upon the second limb of the abuse test, that it is not appropriate to order a stay merely because of a sense of outrage at such particular misuse of executive power as may be demonstrated in the circumstances of the particular case; that the ultimate question under this limb of abuse is always whether all the circumstances specific to the particular case, including but not limited to the misconduct, lead to the conclusion that proceeding with a trial of the accused for the offence charged offends the court’s sense of justice and propriety or that public confidence in the criminal justice system would be undermined by proceeding with it or whether, conversely, it is in the interests of justice that, notwithstanding the misconduct, the accused be tried for the offence with which he is charged. 105.The balancing exercise by the Board in Warren illustrates an application of that test. First, their Lordships noted that the police were guilty of grave prosecutorial misconduct of such a kind that the case for a stay was of considerable weight: the authorities of three foreign states had been misled as had the Attorney General and the Chief Officer of Police of Jersey. Yet, as against that, there were factors which, taken cumulatively, entitled the tribunal at first instance to view as weighing heavily against a stay: the charge was very serious; the ringleader was a professional drug dealer with serious previous convictions for like offences and for manslaughter; the officers had been given unwise legal advice by reason of which they felt encouraged to act as they did; there was no attempt to mislead the Jersey court in that “it was understood by the police that the circumstances in which the evidence had been obtained would be revealed to the appellants”[51] and to the court; and the misconduct occurred in a fast moving situation where the police were dealing with sophisticated criminals. The Board said that “some judges might have granted a stay; others, like the Commissioner, would have refused one”; but their Lordships found it impossible, in the light of these factors, “to characterise the decision to refuse a stay in this case as perverse or one which no reasonable judge could have reached.”[52] (F) The balance in this case 106.In favour of a stay in this case is the fact that the misconduct was particularly grave: the officers acted deliberately rather than in ignorance; they acted in bad faith; they knowingly flouted, and encouraged CCH to flout, procedures designed to protect the methods by which the reliability of testimony is tested; they encouraged the witness to lie, in several respects, to the trial court; and their misconduct was designed to secure a conviction of D1 by improperly coaching, and seeking to bolster the reliability of the evidence of, the main prosecution witness. They provided one word or one line descriptions of their contacts with CCH, which were either directly untrue or grossly misleading. Their improper conduct was not committed in circumstances of urgency or, as in the case of Warren, encouraged by some lackadaisical legal advice. The misconduct was repeated on several occasions. The officer in charge of the group was a senior officer, and was in charge of the case. It hardly needed previous court decisions or an internal circular to alert the officers concerned to the fact that what they were doing was wrong: they knew full well what they were doing and that it was unlawful, and seriously so. They conducted themselves in cynical disregard of fundamental principle. 107.If the test were one which depended solely on the gravity of the misconduct of the ICAC officers, we would allow the appeal and order a permanent stay of proceedings. Given the nature and gravity of the misconduct in this case, the outrage-driven temptation to stay the proceedings is considerable, not least when the facts of this case as well as the facts revealed by a number of previous cases lead to a concern whether the attitude of these officers, that the end justifies the means is, in this particular agency, limited to this handful of officers or is more widespread. It is a concern we will mention later.[53] But to stay the proceedings on such a footing would be to stay proceedings without regard to all the circumstances of the particular case and at the expense of the correct test, the essence of which we have identified. It would be an order born largely of a desire to drive home a lesson which, absent other avenues of effective supervision, appears to be in need of firm delivery. But that is not the remit of this Court. 108.In the counter-balance sit the following factors:
109.In so far as it is suggested that the proceedings should henceforth be stayed, we are not persuaded to that end. We are satisfied that in all the circumstances and given the countervailing factors we have identified, the interests of justice require a trial notwithstanding the misconduct which has been revealed; or, put the other way round, the prospect of a trial of these applicants, notwithstanding that misconduct, does not offend the conscience of the Court. We are, on the same basis, not persuaded that had Judge Yau been possessed of all the relevant information at trial, a stay would have been ordered. 110.That is our conclusion as to the second limb stay test in relation to both applicants but as regards the second applicant (D4), the argument against a stay may be said to be the more potent in so far as the case against her does not necessarily stand or fall upon the evidence of the prosecution witnesses described as “the hands” whose evidence was vital as against D1. Though we note that the prosecution case was that the funds with which she dealt were the proceeds of the warrant washing activity and that she knew so[54], and that the judge made specific findings to the same effect[55], it would be open to the prosecution to proceed on the alternative basis that she had reasonable grounds to believe the funds to be the property of an indictable offence, relying for their case upon the massive amounts in her accounts, the very large sum of cash in her deposit box, the frequency of the deposits in her accounts and the large amounts deposited on each occasion, all of which was to be compared with her relatively modest income as a solicitor. That was the alternative basis of the case upon which the judge also relied. 111.There are two further strings to the bow of the abuse submissions which we must mention which, in our judgment, added little strength to the argument:
112.We think that the non-disclosure argument has been overplayed. The fact that the misconduct of the officers was not disclosed prior to 7 December 2009 is a by-product of the misconduct which we have already taken into account. That there was disclosure of only two meetings with CCH in pursuance of a request to reveal all memory-refreshing exercises is a result of the nature of the specific request. There can be no suggestion that those enjoined with carriage of the prosecution itself were aware that the true facts were such that disclosure of all contacts, although not sought, was necessary. The contention that after 7 December 2009 investigations should have commenced to ascertain what had happened to cause CCH to refuse to give evidence and that such investigations would or may well, whilst the trial was still proceeding, have revealed the misconduct in question ignores the vehement protests made by counsel for the applicants at any suggestion of further ICAC contact with CCH. In any event, if it be suggested that there should have been an interview of him by another law enforcement authority, that presupposes that there was at the material time reason, on the part of prosecuting counsel or of those instructing him, to suspect foul play by the officers. There was then no such reason and, indeed, we see that on 8 December 2009 leading counsel for the prosecution said: “I have certain information about what might have happened but I am not at liberty to disclose it.”[56] One can safely assume that the information he had was not information of assistance to the defence and it would not be difficult to proffer one possibility, which may reflect the thinking at that stage, given that CCH had been in a witness protection programme and shortly after his refusal to give evidence no longer enjoyed that protection. We mention that possibility – it may have no substance – merely to illustrate the type of circumstance which would be a far cry from the circumstance which the applicants now say ought to have been suspected. There is no basis upon which to conclude that before May 2010, there was any indication known to parties other than officers within the ICAC, that CCH had been improperly tutored. Whether the lack of relevant information at the time of the trial of the applicants deprived them of a fair trial is another matter which we shall address; but the failure between December 2009 and the summer of 2010 to investigate possible misconduct by ICAC officers was not, in our judgment, a culpable omission such as to add weight to the abuse argument. 113.The second additional string, that the misconduct is all the worse because of previous warnings or strictures by the courts, takes the matter, as far as a balancing exercise goes, little further; precisely because the misconduct without this additional factor was itself particularly grave and it hardly needed previous curial warnings for the officers in question to know that what they were doing was unlawful. Furthermore, an order to stay on the basis of previous expressed concerns would smack heavily of a disciplinary act. (G) The first limb – a fair trial 114.At this particular stage, we look solely prospectively: whether it is now possible for the applicants to have a fair trial were we to find that the convictions or any of them were unsatisfactory. 115.On the evidence presently before us, we see no reason why not. The applicants are now in possession of all or almost all material information; or in a position to pursue such further enquiries of which they may be advised; and will be in a position to test the prosecution case armed with such information. (H) Abuse : Conclusion 116.It follows that we are not persuaded that a stay application at first instance would have succeeded and we are satisfied that the grounds deployed do not now justify a stay of further proceedings for the offences of which these applicants were convicted. Whether they had a fair trial 117.This question addresses, not the issue whether the trial judge, had he possessed all the information now to hand, was likely to have ordered a stay or whether this Court, in light of the information now before it ought (if it allows the appeal) to order a stay; but whether the applicants or either of them were deprived of a fair trial; for, if so, it necessarily follows that the convictions must be quashed. The question of a retrial would then fall to be considered. 118.That we have taken the view that the prospect now of a trial of these applicants will not undermine confidence in the administration of justice does not dictate the answer to the question whether the applicants were, through ignorance of the misconduct on the part of the law enforcement authority responsible for their prosecution, deprived of the wherewithal properly to prepare their case and to test the credibility of the key prosecution witnesses. It matters not for this purpose that the Department of Justice acted at all times with complete propriety, itself ignorant of the misconduct. What matters for the present issue is that it was the design of the three officers that the defence and the court below be kept ignorant of the arrangement with CCH as to benefits other than that contained in the immunity and of the nature of their discussions with him, instructing CCH not reveal what had transpired. The question is whether ignorance of that which had transpired between the officers and CCH gave rise to a real risk of prejudice to the defence, despite the fact that CCH did not in the event testify. 119.We draw the phrase “a real risk of prejudice to the defence” from the judgment of Lord Brown in McInnes v Her Majesty’s Advocate[57]. That was a non-disclosure case in the more usual sense in which non-disclosure arises, namely, of allegedly material statements made to the police by a prosecution witness. It was said by Lord Hope that:
121.Albeit not in the context of non-disclosure, this Court is familiar with emphasis placed by appellate counsel upon the suggested significance of inconsistent statements and it is within our experience that pleaded inconsistencies are often of no true significance. It is necessary to take a realistic approach to the question whether timely revelation to the defence of a previous inconsistent statement might have led a jury reasonably to arrive at a different conclusion on the material issue; in most instances the answer may be gauged with little difficulty. 122.In the present case, it is not realistically possible at this stage to say whether the full picture, had it been disclosed to the trial judge, might or might not reasonably have led to a different conclusion. That is because the full picture has not been explored. The applicants have not had the benefit of asking the ‘hands’ in cross-examination what occurred between them, on the one hand, and the now convicted officers, on the other, during those few meetings immediately preceding the testimony of the witnesses at which meetings with lawyers acting for the interviewees were not present. 123.Two facts stand out from the records we now possess:
124.The fact that in the trial of CCH, these witnesses denied that they had been coached does not, in our opinion, assist the respondent’s stance on the present issue; a stance which says that the new material provides no realistic prospect of an acquittal of either applicant. Judge Tallentire said in this regard that:
125.The denials of the witnesses in that trial that they were coached and the finding of the judge in that regard does not assist the respondent because their answers were provided in a different proceeding with none of the applicants there represented, let alone armed with the material now available and, further, because CCH’s testimony, accepted at the two trials at which he testified, was that he was urged to keep secret such agreement or agreements which had been made between him and the ICAC as inducements to provide evidence against D1; so the mere fact of a denial by them of a coaching by the officers now remains open to exploration. 126.It is to be recollected in this connection that Judge Yau, in the trial of the officers, found as a fact that CCH was persuaded by one or more of the officers to contact the warrant pushing ‘brothers’ and secure their co-operation and that the officers made it clear that they did not want others to know that CCH had contacted them.[65] CCH had, according to his testimony at that trial, been promised that “as long as [CCH] gave evidence against [D1] and the employees of the 4 main warrant issuers, the ICAC would not prosecute [CCH], would not confiscate his assets and would not harass his family members the officers also promised that there was a chance that they could also rescue [CCH’s] ‘brothers’ in the fraudulent trading of warrants. [CCH] accepted their offer.”[66] That CCH in fact contacted at least some of the key prosecution witnesses seems sufficiently clear[67]. 127.None of this was known to those acting for the applicants at the time of the trial and, subject only to consideration of the contrary argument advanced for the respondent, it seems to us that the absence of this knowledge constituted real prejudice to the defence. There was cross-examination about contact between the witnesses and ICAC officers but some of it – for example cross-examination of Lee Wai-ming – was particularly sparse. He was a witness who, at the trial of CCH, admitted to have retained something in the order of HK$5 million to HK$6 million of assets which were the proceeds of his participation in the conspiracies with which we are concerned, the potential relevance of which lends itself to greater exploration given the deal concluded with CCH as to his assets. Whether, absent a successful prosecution of CCH and the others, there was a route by which confiscation of those assets might lawfully be achieved – a question which was the subject of some argument before us – is not to the point; the point is what, if anything, was said in this regard to the remaining prosecution witnesses and what they may have believed to be the case. 128.We were invited by Mr Caplan QC for the respondent to say that the uncontested facts of the case as well as a common sense appraisal of the evidence of the ‘brothers’ as far as it went, renders artificial the notion that the new information provides a real possibility of an acquittal. There is force in some of the points he makes in support of that proposition. 129.Mr Caplan emphasised that there was no suggestion that warrant pushing did not take place or that Raymond was a figment of the imagination of any of the witnesses; that none of the remaining witnesses sought by his statements or in his testimony at trial directly to implicate D1 as the man named Raymond, whereas each could readily have done so had veracity been of little concern to the witness or had he been the subject of improper pressure by the ICAC officers to implicate D1 or, for that matter, D4. Furthermore, he argues, it is always the question with witnesses who have received promises of immunity – as have these witnesses – whether that inducement undermines their credibility. 130.There was strong circumstantial evidence that the man called Raymond, to whom the witnesses referred in their evidence, some of whom had spoken directly with him in the course and for the purpose of warrant pushing, was D1. That circumstantial evidence is summarised in the Reasons for Verdict[68]; and there is a clear prima facie case to support the charges against D4, which does not depend on the testimony of those witnesses. 131.But as to Raymond’s role, much depended on the testimony of those witnesses, as we see from the conclusion of the judge in his Reasons for Verdict:
132.We accept the point made by Mr Caplan that the testimony of the ‘brothers’ carries a ring of credibility in the sense that a design falsely to implicate D1 might be expected to manifest itself in evidence somewhat more directly incriminating of him; which is to say that their testimony may well be true. Yet it is to be remembered that part of the misconduct of the officers in relation to CCH was constituted by discussions designed to render his forthcoming testimony credible and defence-proof. 133.It is, we have concluded, impossible at this stage to say what may emerge from further exploration by the defence of the meetings, some of them lengthy, between the convicted officers and the key prosecution witnesses in the periods immediately preceding their testimony and of the question whether there was contact between these officers and these witnesses on the days on which they were testifying. Against the background of the extraordinary misconduct which has been revealed only since that trial, a conclusion by this Court at this stage that, after that exploration, the credibility of these witnesses will remain intact in respect of their core evidence would, we believe, go beyond the robust. 134.The question whether D4’s trial was, in the light of what has since been revealed, unfair requires separate consideration since it has discrete features; but we are satisfied that D1 has been exposed to a real risk of prejudice in the sense we have particularised and that, accordingly, his convictions upon Charges 1 to 4 should be quashed. We consider separately the conviction in relation to Charge 6; and whether D1 should face a retrial on Charges 1-4. The position of D4 135.Once CCH dropped out of the trial, and leading counsel for the prosecution was thinking aloud, as it were, in addressing the trial judge as to the possible courses open to the prosecution, the possibility was canvassed that “[t]he prosecution may have to abandon its primary position that the fourth defendant had knowledge.”[69] But in the event the prosecution did not abandon its primary position. Indeed in his closing submission, counsel for the prosecution contended that “…we … have proved that the properties D4 dealt with in the charges were proceeds of an indictable offence, and that D4 knew that to be so. That represents the principal limb under which the charges are being presented against D4.”[70] And the judge found that not only were the monies of which she was possessed the actual proceedings of the warrant pushing profits, but also that “D4 knew that they[71] came from warrant pushing activities.”[72] 136.Thus far it would seem in the light of those findings that the result of her application for leave must necessarily follow that of D1, since if warrant pushing as against him is a finding made in the absence of material evidence which has subsequently come to light, she is entitled to the benefit of such further exploration now permitted him. 137.However, a question arises whether the result of D4’s application necessarily follows that of her husband. That is because of the alternative basis upon which the prosecution presented its case against her; which was also the alternative basis upon which she was convicted. The alternative basis is that, whether or not she knew that the property in her accounts and in the safe deposit box, was the proceeds of the warrant pushing exercise, there were overwhelming grounds which a commonsense right-thinking member of the community would recognise as grounds for believing the property to be the proceeds of an indictable offence: the amounts themselves, in cash, over an extensive period of time, in the hands of a person whose occupation could not conceivably account for such sums.[73] The evidential basis for such a finding did not depend upon the reliability of the testimony of the ‘hands’ or the circumstantial evidence against D1. 138.This Court could only properly confirm the convictions of D4 in respect of Charges 7-23 in so far as they were entered under the alternative (reasonable grounds to believe) limb of section 25(1) of the Organised and Serious Crimes Ordinance if we were satisfied that the convictions thus based are safe notwithstanding our finding that her husband’s right to a fair trial was compromised. Such a conclusion would presuppose that the manner in which her defence was conducted was unaffected by the case against her husband or by the manner in which his defence was conducted. In the light of matters as they developed at trial, that is a difficult supposition to make. 139.In circumstances we shall describe, D4 decided not to testify at her trial. That decision, in turn, followed her husband’s decision not to testify and her failure to secure an order of severance by which the trial against her would be severed from that against her husband. The contention made on her behalf was that although section 25 imposes no persuasive onus on a defendant to explain the source of the property said to have been the proceeds of an indictable offence or, if not to explain the source, then to provide evidence of facts which lend a different gloss to the circumstances said by the prosecution to be redolent of money laundering, there was nevertheless on the facts of this case a tactical onus upon her. She wished to discharge that onus but was constrained from testifying because to do so might have incriminated her husband. 140.Whether her contentions as to severance and as to the width of the protection against spousal incrimination are correct is a matter upon which we shall shortly touch but, for present purposes, the merits of those submissions are not to the point. What is to the point is that we cannot say with a sufficient degree of certainty how the case against her husband might have stood had he enjoyed a fair trial. We cannot say, had he been possessed of all pertinent information, how matters might have stood by the time he decided whether to testify and, it follows, how such decisions might have enured to her benefit or affected her tactical approach. 141.The judge correctly emphasised that the two cases shared a common background[74] and there was, for example, evidence of a substantial deposit made into one of D4’s accounts by a secretary of D1’s company who was also a personal assistant of D4 and who had been seen to receive cash from CCH, cash collected from dummy accounts[75]. The case against the husband materially affects that against, and of, D4 and the alternative limb case is not realistically divorced from it. 142.It follows:
143.For these reasons, we propose to allow the application of D4 to appeal her convictions, to treat the hearing of the application as the appeal, to allow the appeal and to quash those convictions. We consider separately the question of a retrial. The severance issue 144.We wish however to touch upon the severance issue, not because it determines the outcome of her application but, first, because it is likely to raise its head again, in this case if not in others and, second, it gives some colour to the tactical issue confronting D4 to which we have alluded. 145.The severance application was belated indeed. It was made by D1 and D4 only after the prosecution had closed its case. The fact that it was made so late in the day played no material part in the judge’s determination to refuse the application nor has it played a part in the argument before us; although we are bound to say that we see insufficient justification for making the application at such a late stage[76], for the potential difficulties said by her to present themselves ought to have been clear to those advising her from the outset. 146.Although D4 was arrested in 2008, as was D1, they were charged at separate times. The first three defendants, including D1, were charged in February 2009 and their case transferred to the District Court in April 2009. D4 was rearrested thereafter, charged on 29 July 2009 and her case transferred to the District Court in August that year. 147.In October 2009, the two cases came before Judge Patrick Li (as he then was) and he ordered them to be consolidated, in the face of opposition to that application. There is no appeal against that decision. The only complaint before us is against the decision of Judge Yau not to order severance. It is D4’s application with which the appeal has been primarily concerned, rather than D1’s application. 148.The essence of her case in this regard was that, given the tactical burden upon her to testify, she wished to do so yet if she did, it was likely that she would be required to answer questions which might incriminate D1 in respect of the charges which he faced. She contended that s 65A of the Evidence Ordinance, Cap 8, enabled her to refuse to answer any questions which might have that effect; so she sought a ruling from the judge about its effect. 149.The judge ruled that there was in the circumstances no “blanket protection” against spousal incrimination and that a proper application of section 65A meant that whether on a joint or a separate trial, D4 would be:
150.The argument which we propose briefly to address is that the judge erred in his interpretation of the scope and effect of section 65A. The argument is that the privilege against spousal incrimination is absolute in the sense that a defendant who testifies may successfully claim privilege from answering any question which might incriminate his or her spouse in any offence whatsoever, including the offence with which the defendant is charged. 151.The provision which was at the heart of the argument before the judge is section 65A of the Evidence Ordinance which reads:
152.The contention was and is that the privilege against spousal incrimination is a fundamental right and that such a right can only be overridden by express words or necessary implication, both of which, it is said, are absent from this provision. An example of an express provision is section 65 of the same Ordinance which deals with the privilege against incrimination of self or spouse in proceedings other than criminal proceedings:
153.The submissions to us were wide ranging and included reference to the competence and compellability of spouses but we feel able to address the point in issue without referring to competence and compellability, since a defendant who seeks to claim privilege will be doing so only where he or she is a competent and willing witness. 154.There is one further statutory provision which it is necessary to mention: it is section 54 of the Criminal Procedure Ordinance, Cap 221. The relevant parts are these :
155.Section 65(3) of the Evidence Ordinance is a construction provision and the absence of a similar express provision in section 65A does not prevent the court from construing section 65A according to its peculiar context. Section 65 contemplates a host of disparate situations in which persons are required to answers questions; but the one situation which it does not address is that of a defendant to a criminal charge who chooses to give evidence and save to the extent protected by section 54 of the Criminal Procedure Ordinance, by that act voluntarily surrenders such right as otherwise he enjoyed to refuse to answer questions. The defendant who chooses to testify in his own defence chooses to open his or her account to examination, for otherwise his choice is meaningless. That, we suggest, is the rationale for section 54(1)(e) of Cap 221. Questions about other offences are excluded unless relevant to the trial issue, precisely because they are irrelevant and unfairly prejudicial and because but for that protection, defendants would be discouraged from offering defences to the charges they face. 156.Section 65A refers to “the like right”; not simply to a “right” and the use of the word “like” is to be presumed to be deliberate. It necessarily implies that in so far as a defendant gives up his right in relation to incriminating himself in the offence with which he is charged, he also does so in relation to questions the answers to which may incriminate his spouse in that offence. To this extent, we are satisfied that the judge’s interpretation of the section was correct. 157.We say “to this extent” for the question remains to be argued and considered whether the judge’s construction was too limited. On the face of it there seems to be imported an artificiality, in a case such as the present, in concluding that the wife was bound to answer questions even though they might incriminate her husband in the money laundering charges but not if they might incriminate him in the predicate offence of which it was said she was well aware. This is a matter that lends itself to research and argument in another case, or in this case upon retrial. It is relevant to the wife’s contention that because of this artificiality she was placed in the difficult position of deciding what questions lent themselves to a proper claim, question by question, to privilege. 158.It is unnecessary for us to decide the question of severance – in other words, whether the judge erred in refusing to sever. The question of severance is likely to raise its head again upon retrial; and much will depend upon the manner in which the prosecution chooses to put its case and, possibly, the answer to the question posed in the preceding paragraph. Charge 6 159.Charge 6 alleged that D1 between 29 May 2008 and 31 July 2008 with intent to pervert the course of public justice did a series of acts which had a tendency to pervert the course of public justice by approaching Lee Wai-ming, a person whom he knew was being investigated by the ICAC for a suspected offence alleged to have been committed by D1 and others and asking Lee not cooperate with the ICAC and to give false and/or misleading information to the ICAC that D1 and Lee were involved in speculation concerning derivative warrants; and promising to pay Lee money if he agreed not to cooperate with the ICAC in circumstances where criminal proceedings were possible as a result of the investigation. 160.Lee’s evidence was that after he was arrested he was contacted through his pager by a person who identified himself as Mr Chu. The message asked him to switch on his mobile telephone. He did so and received a call from a man. The evidence-in-chief was:
161.His testimony then continued to relate how the caller asked him not to cooperate with the ICAC and that he, the caller, would “support” Lee. The caller sounded as if he knew Lee. The witness said that he had previously heard of Mr Chu. CCH had mentioned him and had said that Mr Chu was Raymond; he had heard CCH address him as such; but he, Lee, had never addressed Raymond as Mr Chu[78]. 162.Then, said Lee, there was another conversation, again with the same person. The evidence as to identity on this occasion was as follows:
163.There were further conversations redolent of attempting to pervert the course of justice but as to identifying the voice, the evidence was no more definitive. 164.Not surprisingly, the contention at trial was that this did not suffice to prove beyond reasonable doubt that D1 was the caller. 165.The judge accepted that Lee was unable to say “with definite certainty that it was Raymond who was on the other end of the phone call. Having had the opportunity to see [Lee] in the witness box and bearing in mind that this person had been taking part in a criminal conspiracy over a lengthy period of time, it appears that there was some reluctance for him to accuse D1 as the culprit.”[80] 166.The judge noted the evidence of Lee that he had on a number of occasions spoken with the person Raymond over the telephone; indeed he had made the daily morning reports and frequent afternoon reports to him. 167.The judge then found as follows:
168.The judge said that the voice recognition evidence was supported by other circumstantial evidence; in particular that Lee had heard CCH address Raymond as Mr Chu. 169.There was no doubt, accordingly, in the judge’s mind that it was Raymond who communicated with Lee on three occasions in question. For reasons which we need not here traverse, the judge had found that Raymond was D1. 170.We do not think this evidence sufficed to convict D1 on Charge 6. Lee did not, as the judge suggested, say that the person with whom he was speaking was “the same Raymond with whom he had been having communication within the period of 2003 to 2005.” Indeed, given the frequent contact between Lee and Raymond over that period and the length of the three conversations which were the subject of Charge 6, one might have expected Lee to be quite firm in his identification of the caller had he recognised the voice. The fact that Lee was somewhat reluctant to accuse D1 is as may be, but it is the fact that he did not do so and our judgment is that the evidence did not suffice. 171.For these reasons, the application in relation to Charge 6 succeeds. Conclusion 172.Accordingly, we intend to grant both applicants leave to appeal their convictions, treat the hearing of the applications as the appeals, allow the appeals and quash the convictions. We are minded to order a retrial save on Charge 6; but those acting for the applicants have asked that in the event of success upon these applications, they be heard on that question. That opportunity will be afforded. Against the background of that possibility, Mr Caplan for the respondent expressed concern that by reason of the provisions of sections 83(3) and 83E of the Criminal Procedure Ordinance an order for retrial, if it is to be made, must, in order to be effective, be made co-terminously with the quashing of a conviction. To cater for that concern, as to which we have heard no submissions concerning the construction of the provisions, we do no more at present than express our intention to quash the convictions and will defer making an order quashing them until determination of the retrial issue. We shall give directions for the making of retrial submissions. Sentence 173.The applications for review of sentence fall away. We wish to note however that the argument in relation to review of sentence raised the question whether as a general approach the courts have accorded proper recognition to the principle of double jeopardy. The suggestion was that it is factor which should be accorded more than a token recognition. In this regard our attention was drawn to the following passage from the judgment of Lord Phillips in A-G’s Reference (Nos 14 and 15 of 2006):
174.The approach in this regard will no doubt be case sensitive and it may be that there will be cases where a discount is not warranted. But we mention the submission since there may be some merit in the suggestion that the double jeopardy factor, in the sense described by Lord Phillips, has hitherto not received sufficient consideration. No doubt the opportunity will present itself for a considered analysis of past cases in this jurisdiction and of the point of principle raised. Addendum 175.We have earlier in this judgment said that:
176.The function of the court is to render judgment in particular cases. It is generally not part of our remit to ask and determine whether the type of conduct revealed by this and a few other cases to which we have referred is part of a wider unhealthy attitude to the rule of law within the particular agency with which this case has been concerned. Yet anyone reading the facts of this case and the facts of one or two of the earlier cases to which we have referred is bound to ask that question to which there may well, justifiably, be a comforting answer. The organisation is a powerful one, armed, for good policy reason, with Draconian powers. It is therefore most particularly important for those powers to be exercised with an understanding of and true respect for the rule of law. The rule of law is not a sound bite. Understanding what the rule of law actually means in its many manifestations and why respect for it is the cornerstone protection for all members of our society – protection for those who wield power as much as for those who are affected by the exercise of power – is vital. Individual officers in this or any other organisation to whom this message is not effectively imparted may insufficiently appreciate that disdain for the rule of law in a particular case in order to achieve what they perceive to be the “right” result is to contribute slowly but surely to the destruction of the checks and balances which have been designed over time to provide the public and individuals with a respected system of justice. It may well be that this is a message which is already sufficiently imparted but if it requires further specific attention, the expression of our concern may encourage that attention to be provided.
Mr Jonathan Caplan, QC (On fiat) and Ms Kasmine Hui, PP of the Department of Justice, for the Respondent Ms Clare Montgomery, QC, Mr Clive Grossman, SC and Mr Jonathan Ah-weng, instructed by JCC Cheung & Co., for the 1st Applicant (D1) Mr Michael Blanchflower, SC, Mr Graham Harris, SC and Mr Benson Tsoi, instructed by T.H. Wong & Co., for the 2nd Applicant (D4) [1] Reasons for Verdict para 438 [2] Reasons for Sentence, trial of CCH, 31 May 2011. [3] Appeal bundle transcript p 852. [4] ibid p 874 [5] PWs 2; 4; 5; 6; 7 and 8. [6] Trial 2 was the trial of CCH. [7] CCH conceded in cross-examination that it was he who asked the officers for immunity for his “brothers”, rather than an idea emanating from the officers. [8] Non-prejudicial statement. [9] HKSAR v Lee Wing Kan [2007] 3 HKC 368 (Court of Appeal); and FAMC No. 28 of 2007, 18 September 2007, unreported ( Appeal Committee of the Court of Final Appeal). [10] HKSAR v Tse Sui Luen and others DCCC 350 of 2006, April 2008. Lee Wing Kan is the case referred to at footnote 9 above. [11] HKSAR v Tse Tat Fung & Ors [2010] 5 HKC 455. [12] HKSAR v Wong Hung Ki & Anor [2010] 4 HKC 118. [13] ibid para 94 [14] para 42 above. [15] R v Joof and others [2012] EWCA Crim 1475 at para 17. [16] (2001) 4 HKCFAR 133. [17] ibid at 148F [18] per Lord Morris in Connelly v DPP [1964] AC 1254 at p. 1304, cited by Ribeiro PJ at p 148, Lee Ming Tee. [19] Lee Ming Tee at 148J. [20] per Mason CJ in Jago v District Court of New South Wales (1989) 168 CLR 23 at p. 30; cited in Lee Ming Tee at p 149 A . [21] A-G’s Reference (No. 1 of 1990) [1992] QB 630 at p 644. [22] ibid p 641 and Lee Ming Tee at p 149 I [23] Lee Ming Tee p 150B. [24] See for example R v Horseferry Road Magistrates Court, ex p Bennett [1994] 1 AC 42, referred to in Lee Ming Tee at pp 182 -183. [25] Lee Ming Tee at p 151 G. [26] ex p Bennett at p 74. [27] Warren v Attorney General for Jersey [2012] 1 AC 22 at para 35, per Lord Dyson JSC. [28] ibid para 37. The reference to disapproval of official conduct ‘ pour encourager les autres’ is a reference to Lord Lowry’s comment in Bennett at p 75 [29] Bennett p 74 [30] DCCC 360 of 2011, Reasons for Verdict para 145. [31] [2010] 4 HKC 118. [32] para 68 above. [33] Wong Hung Ki [2010] 4 HKC 118 at para 84 (e). [34] ibid at para 84 (h) [35] [2005] 3 WLR 437 at para 54. [36] [2012] 1 AC 22. [37] [2011] 1 WLR 1837 at para 13. [38] referred to in Warren at para 22. [39] in Warren at para 26. [40] [1996] 1 WLR 104 at 112 and 113. [41] Abuse of Process and Judicial Stays of Criminal Proceedings, 2nd ed ( 2008), p 132. [42] Warren at para 25. [43] [2005] 3 WLR 437. [44] See para 84(h) of Wong. [45] Grant at para 54. [46] Warren at para 36. [47] ibid para 37. [48] ibid para 25 [49] ibid para 30 [50] ibid paras 28 and 83 (p 46 H) [51] ibid para 49 [52] ibid para 50 [53] para 174 below. [54] Closing submissions para 133. [55] See for example Reasons for Verdict para 645. [56] appeal bundle transcript p 872. [57] [2010] UKSC 7 at para 35. [58] ibid para 20 [59] ibid para 30. [60]European Convention on Human Rights. [61] para 63(5) above. [62] para 63(3) above. [63] ‘limb one’ asks the question whether the abuse has denied the defendant the possibility of a fair trial. [64] Stay ruling para 55. [65] Reasons for Verdict in the trial of the officers, paras 204-205. [66] ibid para 42. [67] Stay ruling of Judge Tallentire, para 18. [68] Reasons for Verdict paras 435 to 440. [69] 8 December 2009. [70] Closing Submissions para 133. [71] In this particular passage he was referring to the monies in the safe deposit box. But there are similar findings in relation to funds in her accounts. [72] Reasons for Verdict para 645. [73] See Prosecution Closing Submissions paras 157-158; and Reasons for Verdict paras 647-648. [74] Reasons for Verdict, para 581. [75] ibid para 658. [76] It was said by defence counsel to the judge below that “… whilst we could not say before this trial had started with any degree of certainty whether or not D1 would testify in his own case, we now know that he has elected not to call evidence and so the situation has changed. That impacts directly, and we say potentially unfairly on the interests of D4”: transcript p 1441 K- N. [77] Transcript p 1182. [78] ibid p 1184. [79] ibid p 1187. [80] Reasons for Verdict para 453. [81] [2007] 1 All ER 718 at 732. [82] para 107 above. |
Cases cited in this judgment
Further hearings and rulings under CACC 178/2010