Read the full judgment text of FACC 8/2013 on BabelCite. This Court of Final Appeal judgment was delivered on 10 November 2014 before Chief Justice Ma, Mr Justice Ribeiro PJ, Mr Justice Tang PJ, Mr Justice Fok PJ, Mr Justice Spigelman NPJ.
Criminal law – money laundering – Organized and Serious Crimes Ordinance (Cap 455) s.25(1) – dealing with property having reasonable grounds to believe it represents proceeds of an indictable offence – construction of 'reasonable grounds to believe' – relationship between objective and subjective elements – whether accused's perception and evaluation of facts may be taken into account as 'grounds' – whether 'would believe' or 'could believe' is the correct standard – whether 'halfway house' defence of honest and reasonable non-suspicion is available – long friendship and trust between accused and principal of fraud as relevant grounds – appeal against conviction – whether to order retrial. The appellant, a long-standing friend of Kwok Wing (chairman of Tack Fat Group International Limited), allowed approximately HK$14 million, remitted by two Mainland individuals into his company's Hong Kong bank account, to be transferred on to a Cambodian company linked to Kwok. The funds derived from Kwok's fraud on Tack Fat through share-option manipulation. The appellant was charged with dealing with property contrary to sections 25(1) and (3) of OSCO; the prosecution proceeded on the 'reasonable grounds to believe' limb. Held, allowing the appeal and quashing the conviction without ordering a retrial: the statutory phrase 'reasonable grounds to believe' in s.25(1) OSCO is readily understandable and should be applied directly, free from the elaborate objective/subjective categorisation developed in HKSAR v Shing Siu Ming [1999] 2 HKC 818. The test is whether the accused 'had' reasonable grounds for belief, the focus being on the accused rather than on an abstract reasonable person. The accused's perceptions, evaluations, beliefs and prejudices are themselves 'grounds' that may be taken into account, although reasonableness remains an external objective standard applied to them. The correct standard is 'would believe' rather than 'could believe'; importing the 'sufficiency' language from George v Rockett (1990) 170 CLR 104, a case on the exercise of executive power, was inappropriate for the mental element of a serious criminal offence carrying the same maximum penalty as actual knowledge. The approach in Seng Yuet Fong v HKSAR [1999] 2 HKC 833 (Litton PJ) and the reasoning in HKSAR v Yan Suiling (2012) 15 HKCFAR 146 are to be preferred. The 'halfway house' defence considered in Hin Lin Yee v HKSAR (2010) 13 HKCFAR 142 does not arise on the proper construction. The trial judge's application of the Shing Siu Ming two-step sequence resulted in too narrow a set of grounds being assessed, divorced from the broader context of the 30-year friendship and trust between the appellant and Kwok. Having regard to the lapse of over six years since the events, the appellant's age, the 4.5 months already served, the stress and expense of proceedings, and the relative weakness of the prosecution case at the lower end of the scale, the interests of justice did not require a retrial. Conviction quashed; order nisi for costs of both appellate courts with liberty to apply within 14 days.
Legal issues: Whether accused's perception and evaluation of facts can be taken into account in determining reasonable grounds to believe under s.25(1) OSCO · Appropriate standard ('would' vs 'could' believe) for evaluating reasonable grounds to believe under s.25(1) OSCO
Outcome: Appeal allowed; conviction quashed; no order for retrial.
Cited by 27 cases · Cites 7 cases