HKSAR v. Hui Rafael Junior , also known as Hui Si-yan Rafael and Others
Read the full judgment text of HCCC 98/2013 on BabelCite. This High Court CFI judgment.
1. I have before me two separate applications. The first is an application by the prosecution, pursuant to section 23(1) of the Criminal Procedure Ordinance, Cap 221 (the Ordinance), to amend the indictment currently before the court and upon which the five defendants have already been committed for trial to the High Court, so as to add the third defendant (D3) to Count 5, and the second defendant (D2) and D3 to Count 7, with consequent necessary amendments to the particulars of Counts 5, 7 and
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Subject to reporting restrictions as per paragraph 73 of the judgment HCCC 98 /2013 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CRIMINAL CASE NO. 98 OF 2013 ________________________ BETWEEN
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________________________ JUDGMENT / RULING ________________________ 1.I have before me two separate applications. The first is an application by the prosecution, pursuant to section 23(1) of the Criminal Procedure Ordinance, Cap 221 (the Ordinance), to amend the indictment currently before the court and upon which the five defendants have already been committed for trial to the High Court, so as to add the third defendant (D3) to Count 5, and the second defendant (D2) and D3 to Count 7, with consequent necessary amendments to the particulars of Counts 5, 7 and 8. 2.The second is an application that D3 be discharged on Counts 3 and 4, pursuant to section 16 of the Ordinance, on the basis that the evidence disclosed in the trial papers or sought to be admitted at the trial is insufficient to establish a prima facie case against him on those counts. 3.The first application is opposed by leading counsel, Ms Montgomery QC on behalf of D2, by Mr Kelsey-Fry QC on behalf of D3 and by Mr Winter QC on behalf of the fourth defendant (D4). The second application is opposed by Mr Perry QC on behalf of the prosecution. 4.Although Mr Choy on behalf of the first defendant (D1) initially signalled his neutrality on the second application, he subsequently allied himself with Mr Kelsey-Fry’s arguments on behalf of D3. Mr Chan on behalf of the fifth defendant (D5) has remained neutral on the first application. 5.Whilst both applications are technically separate and distinct, it was agreed between the parties that they could conveniently be dealt with at the same hearing. Not only is there a measure of overlap in the evidence traversed by each application but the test applicable to any amendment of the indictment so as to allege an additional offence on the evidence disclosed and the test applicable to an application for discharge is essentially the same; in so far as the prosecution must show in the first application that there is a prima facie case on the evidence to justify the amendment sought, while the defence must show in the second application that the evidence is insufficient to establish a prima facie case against D3. Both applications are ultimately concerned, therefore, with whether or not there is prima facie evidence of the offence concerned sufficient to be left to the jury. 6.Thus the tests applicable to the prosecution in seeking the proposed amendments, and to D3 in seeking a discharge, ultimately involve an assessment of the evidence and the inferences which flow from that evidence on paper. A submission of no case to answer at the close of the prosecution case, albeit concerned with the same test, will of course have the advantage of being based upon the actual evidence, which might either weaken or strengthen the inferences which may appear to derive from it on paper. The applicable law 7.There has been some discussion as to how one should determine a prima facie case for the purposes of an application to amend an indictment, an application for discharge or a submission of no case to answer, arising from a line of recent authorities from the English Court of Appeal, culminating in R v G, R v F [2012] EWCA Crim 1756; [2013] Crim LR 678. Whilst I have expressed my own reservations during that discussion as to certain aspects of the reasoning in R v G, R v F, which so far as I am aware has not been considered in the appellate courts of Hong Kong, my concerns are more with the way the Court has expressed itself than with its ultimate conclusion. I am certainly prepared to accept that if one has decided that there is no case to answer under the time-hallowed test in R v Galbraith [1981] 1 WLR 1039 at 1042, one will necessarily have also concluded that a reasonable jury properly directed could not exclude all reasonable possibilities consistent with innocence. If one finds that there is a case to answer, one will necessarily have found that a reasonable jury properly directed could exclude all reasonable possibilities consistent with innocence. 8.Thus put, the Court’s statement in R v G, R v F, at para 36, that “[w]here a key issue in the submission of no case is whether there is sufficient evidence on which a reasonable jury could be entitled to draw an adverse inference against the defendant from a combination of factual circumstances based upon evidence adduced by the prosecution, the exercise of deciding that there is a case to answer does involve the rejection of all realistic possibilities consistent with innocence”, is somewhat difficult to understand. With respect, “the exercise of deciding that there is a case to answer” by a judge at the close of the prosecution case involves at that stage not a “rejection of all realistic possibilities consistent with innocence” but an acknowledgment that a jury may ultimately reject all realistic possibilities consistent with innocence. The Court’s attempt to refine the approach where the prosecution case rests upon circumstantial evidence and the inferences a jury would (or would not) be entitled to draw therefrom within the “classic” or “traditional” test in Galbraith, coupled with the fine distinction it draws between a reasonable jury and all reasonable juries, runs the risk, with respect, of sowing semantic confusion by introducing nice distinctions into a well-understood and time-honoured test. To use a Cantonese expression, it is rather like drilling into the tip of a bull’s horn. 9.In terms of clarity of expression, I prefer the way the matter has been put by the English Court in R v Morgan (Unrep) Court of Appeal, 29 March 1993; R v Morgan [1993] Crim LR 870, which authority was not referred to in R v G, R v F:
10.However, it seems to me that the argument, such as it is, does not ultimately much matter; not least because both Ms Montgomery and Mr Kelsey-Fry have pitched their submissions primarily under the first limb of Galbraith. The test which I apply as to whether there is a prima facie case is that set out in Galbraith, while the test applicable to the application for discharge is that set out in Attorney General v Li Fook-shiu [1990] 1 HKC 1, as applied in Attorney General v Phung Van Toan and Others [1992] 1 HKCLR 56, at 62:
11.I shall deal, as did counsel before me, with the application for discharge first. D3’s application for discharge on Counts 3 and 4 12.D3 is charged under Count 3 with conspiracy to commit misconduct in public office with D1. The allegation centres on a payment of HK$4.125 million, authorised by D3 and made by D3’s company Sun Hung Kai Properties Ltd (SHKP) to D1’s company Top Faith Enterprises Ltd (Top Faith) at the end of April 2005, which was about two months before D1 was formally appointed Chief Secretary of the Hong Kong Special Administrative Region. The prosecution allege that this payment was dressed up as a ‘bonus’ when it was in fact a bribe; more accurately characterised as a general sweetener made to someone about to be appointed to high office within the Government of the Hong Kong Special Administrative Region. 13.On the invoice, dated 25 April 2005, submitted by D1 to Sun Hung Kai Real Estate Agency Ltd (SHKREAL) for the sum of HK$4.125 million, representing 11 months of the remaining period of the consultancy agreement entered into between SHKREAL and Top Faith on 1 March 2004, D3 has endorsed these words: “OK. In view of his (Mr Hui’s) excellent performance during his consultancy work with us for the past 13 months” (original underlining). The endorsement has been signed by D3 and addressed to his subordinate, Mr Tang Chak Hin. The resulting payment was thereafter openly accounted for by both parties. 14.On the face of it, therefore, what was to have been a ‘consultancy fee’ for the remainder of the term of the agreement became a ‘bonus’ for past service. The prosecution case is that the change in description was a sham designed to obscure a substantial, gratuitous payment which D1 was not entitled to receive and which D3 was not obliged to pay under the agreement. They say that the context of the payment is all important and will determine its true complexion. 15.By the end of February and into early March 2005, comment had appeared in the media that the then Chief Executive, Mr Tung Chee Wah, was about to resign. In fact, the announcement of his resignation was made on 10 March 2005. Considerable speculation attended these events, particularly concerning the candidatures for both the new Chief Executive and the Chief Secretary. The prosecution say that it is an obvious inference to draw that D3 must have known that D1 was in the running to be appointed Chief Secretary, hence the early termination of the consultancy agreement. In this regard, they point to certain entries in D3’s diary which indicate a keen interest in these events. On 9 March 2005, for example, D3 noted in his diary: “Call Rafael Hui re CE, CS”. 16.The decision to terminate the consultancy agreement underlines the fact, say the prosecution, that both D1 and D3 must have readily appreciated that the provision of consultancy services to a private developer in return for a substantial fee would clearly be incompatible with the holding of the office of Chief Secretary. Since D3 must have known of D1’s imminent appointment as Chief Secretary, the payment of consultancy fees during the period of D1’s tenure of office would have been unconscionable; particularly when SHKREAL were under no obligation to pay such fees upon termination of the agreement. 17.Accordingly, the prosecution case is that the invoice was endorsed by D3 so as to give apparent justification for a payment he was not required to make and, in the light of D1’s imminent change of circumstances, should not have been made. They point to other internal documentation which on its face appears to be inconsistent with the reason endorsed by D3 for the payment. 18.The cheque by which payment was advanced to D1 was dated 29 April 2005. The prosecution say that earlier in that same month, D2 and D3 had already arranged to make a lump sum settlement of HK$1.375 million in respect of D1’s rental of Flat 20B at Tower 6 of The Leighton Hill, Happy Valley for the period 1 April 2003 to 30 April 2005. In effect, the arrangement was that the payment would be borne equally by the two brothers. As for the tenancy of Flat 20A, the adjacent premises which D1 had also occupied with his wife, no payment was ever made for rental due on this property, which appears to have been written off. In effect and as a result of these arrangements, the prosecution allege that D1 was able to occupy two SHKREAL properties rent free, notwithstanding that such a benefit was not included in the consultancy agreement signed on 1 March 2004. 19.As a matter of chronology, the payment voucher for the HK$1.375 million was dated 6 April 2005, the cheque was dated 11 April 2005 and the payment made on 30 April 2005. 20.The prosecution further point out that the rental payments for the months of May and June 2005 were also paid in part by D3. It was not in fact until July 2005 that D1 paid any rent, or was ever asked to pay any rent, for the two adjacent properties he occupied at Leighton Hill. As to the apparent payments of rent by D1 from July 2005 onwards, I shall come back to them when I consider Count 5. 21.The point the prosecution make about the payment or forgoing of rent on two properties occupied by D1 when it was never a benefit under the consultancy agreement is that the true purpose of the so-called ‘bonus’ of HK$4.125 million will have to be assessed by the jury against a background of already considerable generosity extended to D1 by D3 at around the same time. 22.The prosecution further rely, in making the same point, on the three unsecured loans extended to D1 on the approval of D3. Whilst they accept that the first two were fully repaid (albeit the second one not until January 2006, when D1 was already Chief Secretary), the last one for HK$3 million advanced on 31 May 2004 was not repaid. 23.Accordingly, the prosecution say that, when viewed in context with events going on at the same time and either side of the HK$4.125 million payment, as well as against the already fulsome generosity of D3 towards D1, such payment was not a bonus at all but part of a financial arrangement by which D3 (and D2) were intending to keep D1 sweet during what was anticipated to be his powerful and influential tenure as Chief Secretary of the Government of the Hong Kong Special Administrative Region. 24.The defence for their part contrast the payments of HK$5 million in Count 2, HK$8.5 million in Count 5 and HK$11.182 million in Count 7 with the payment in Count 3. Unlike the other payments which are as yet unexplained, there was no secret as to what the payment for HK$4.125 million represented. Its purpose was spelt out on the face of the invoice as a ‘bonus’ which D3 was perfectly entitled to authorise: moreover, there were sound reasons why D1 would have merited such a bonus. None of the hallmarks of secrecy were present in this payment which was openly documented in the business records of both parties. 25.Mr Kelsey-Fry further points to the evidence of Mr Tang Chak Hin, a prosecution witness, who had encountered similar discretionary bonuses being paid in the past to other consultants, even though there was no such provision stipulated in the relevant consultancy agreements. Accordingly, it is submitted that the fact that the payment was gratuitous and not due under the terms of the consultancy agreement does not help the prosecution: that is, after all, the nature of a discretionary bonus. 26.As for the payments of rent on the two properties in Leighton Hill, I note that, whilst no provision for rental payment of the two residential premises was made in the consultancy agreement, it had obviously been the subject of discussion at some stage, since it was referred to in an earlier unsigned draft of the agreement. 27.It was submitted that the fact that the payment was openly described as a ‘bonus’ with reference to D1’s past efforts for the company, which D1 was entitled to render as a consultant, and openly accounted for, cannot advance the prosecution case on Count 3. No reasonable jury could properly reject as incredible the explanation contemporaneously recorded on the document and conclude that the only reasonable explanation was that the payment represented a sweetener by D3 to D1 for the role he was about to assume. 28.It is not for me to come to any decided conclusion as to the veracity or integrity of evidence (which I have not yet, of course, had the advantage of hearing), or to decide what inferences I myself would draw from the evidence where there are competing inferences to be drawn; unless the one contended for by the prosecution is fanciful or one which no reasonable jury could properly draw. It is not what I think about the evidence and the inferences which flow from it but what a reasonable jury properly directed could, may, or might conclude on the basis of that evidence. 29.In my judgment, there is on the papers sufficient evidence to justify a prima facie case on Count 3; and, it would follow, Count 4. The points which Mr Kelsey-Fry has argued are certainly matters which the jury would be entitled to consider in deciding whether at the end of the day the prosecution have proved beyond reasonable doubt that the HK$4.125 million payment was not a ‘bonus’ at all but a sweetener paid to D1 to ensure his loyalty to D3 and his companies during his time as Chief Secretary. It would be open to the jury to conclude that D3 must have intended the payment for that purpose and to exclude the possibility that the payment was made for the purpose stated by D3 on the invoice. 30.If I ask myself at this stage whether a reasonable jury properly directed could, may or might conclude, in the context of the events and evidence on which the prosecution rely, some of which I have earlier detailed, that the linking of the payment to the consultancy agreement was a device designed to clothe it with legitimacy when in reality it was a corrupt payment, then my answer is that the jury could. Whether the jury ultimately does so conclude is another matter. 31.I accordingly refuse D3’s application for discharge under section 16 of the Ordinance. 32.I turn next to the prosecution’s application to amend Counts 5 and 7 (with consequent amendments to Count 8) on the indictment under section 23(1) of the Ordinance. I shall deal first with Count 5 and the application to join D3 to this alleged conspiracy. The prosecution application to amend Count 5 33.I have already rehearsed some of the context and background in which the prosecution contend that the payment of HK$4.125 million was corruptly made to D1. I shall not repeat that evidence. Leaving to one side for the moment the disputed complexion of that payment, the one thing which is reasonably clear is that D3 was personally involved with discussions concerning the termination of the consultancy agreement with D1’s company. That much may be inferred from the statement of Mr Tang Chak Hin (dated 24 November 2009, para 11), D3’s written representation dated 9 July 2012, para’s 90-91, and the diary entry of D3 for 13 April 2005, viz “CH Tang re Rafael Hui” followed on the next line by “Call Rafael Hui”. 34.Shortly after the authorisation of the HK$4.125 million payment, an entry appears in D3’s diary for 5 May 2005, which the prosecution contend is of particular significance. The entry reads: “TK (D2) re Rafael Hui’s package.” Given its timing in the run-up to D1’s appointment as Chief Secretary, the prosecution invite the inference that the reference to “package” was a reference to the financial package being put together for D1. 35.The prosecution also rely on other diary entries to show, for example, that during June 2005, D3 was speaking to D2 about D1 (21 June 2005) and meeting with D1 himself (22 June 2005), having earlier seen D4 about D1 and thereafter called D1 (14 June 2005); whilst in July 2005, he was meeting with D2 about D1 (12 and 14 July 2005). 36.The prosecution allege that the first payment made to D1 under Count 5 began its journey on 20 June 2005 with a cheque for HK$4 million leaving D2’s HSBC account and entering the account of a company called Villalta Inc, said to be controlled by D4, for onward transmission through D5 ultimately to D1. 37.On 24 June 2005, tenancy agreements were executed in relation to the two premises at Leighton Hill which D1 and his wife were still occupying and had been occupying since 2003. D4 signed one of the agreements on behalf of the landlord. They were revised so as to ensure that as from 1 July 2005, the day following D1’s swearing in as Chief Secretary, the monthly rental for the two premises would be fixed at the going market rate of HK$80,000 per unit for a period of 30 months. As has already been described, D3 was (with D2) personally involved with the payment of D1’s rent in respect of one of the units up until then, and with payment of rent (again with D2) for the months of May and June 2005. Accordingly, the prosecution say that D3 was clearly privy to, and concerned with, the arrangements for payment of D1’s rent up until he became Chief Secretary. 38.The point of the reference to the tenancy agreements signed on 24 June 2005, is that four days later on 28 June 2005, a second payment of HK$4.8 million also left D2’s account en route for D4’s company Villalta Inc account (albeit via D4 and his wife’s Hang Seng joint bank account first, from which account HK$4.9 million was almost immediately transferred to the Villalta Inc account). The money, together with the earlier HK$4 million and other funds, subsequently entered D5’s Hang Seng bank account, from which it was ultimately transferred or routed via several payments into D1’s Standard Chartered bank account; the final tranche of HK$4.7 million reaching D1’s account a matter of hours before D1 was sworn in as Chief Secretary. 39.Against that background of D3’s (and D2’s) involvement in taking care of D1’s entire rental of the two units at Leighton Hill up until 30 June 2005 and the execution of the new tenancy agreements on 24 June 2005, the prosecution point out that 30 months’ rent as from 1 July 2005 at HK$80,000 per month per unit totals HK$4.8 million, the exact same amount which left D2’s account en route for D1’s account on 28 June 2005. 40.For the defence, it is submitted that nowhere in the transmission of the HK$8.8 million from D2 through D4 and D5 (and others) to the arrival of HK$8.5 million in D1’s account is D3 implicated or even mentioned. In that respect, the allegation is said to be no different from Count 2, where again the money particularised can be shown to come from D2, and yet D3 is not charged together with D2. Simply because D3 has close blood and business connections with D2 does not mean that he must be connected with the payments in Count 5. 41.So far as D3’s diary entries are concerned, the defence contend that it would be inappropriate for a jury to draw an inference from the reference to “package” in D3’s diary entry for 5 May 2005 that it must have related to the June transactions, when D3 is not connected in any way with or to those payments. Besides, “package” is a word more apt in common parlance to describe the benefits and emoluments relating to a service contract (and its termination); as it seems to have been in a diary entry made exactly three years later in relation to another named individual. 42.Mr Kelsey-Fry has argued that when one looks at the diary entries as a whole, rather than picking and choosing particular entries to suit a prosecution theory, there is nothing sinister or nefarious about meetings which D3 has recorded having either with D2 about D1, or with D1 himself. He has identified various entries during this period where D3 was speaking with D1 on what would appear to be perfectly legitimate or innocuous matters. 43.I have to decide whether there is prima facie evidence sufficient to justify D3’s joinder to Count 5. 44.Given, in particular, D3’s personal involvement with the termination of the consultancy agreement, his settlement (together with D2) of D1’s rental payments for the Leighton Hill premises up until the end of June when D1 became Chief Secretary, the apparent link between the second payment of HK$4.8 million by D2 on 28 June 2005 and the total rental which would be payable for the duration of the new tenancy agreements executed on 24 June 2005 (one of which was signed by D4 on behalf of the landlord), his discussion on 5 May 2005 with D2 about D1’s “package”, his ongoing meetings and/or discussions (as documented in his diary) with D2 and D4 about D1 and with D1 himself, and the fact that the business relationship between D1 and SHKP had been managed by D1 on the one side and D2 and D3 on the other, it is an inference that a reasonable jury properly directed could draw that D3 was part of the conspiracy to pay D1 HK$8.5 million, so that D1 would remain favourably disposed towards SHKP in his capacity as a senior Government official. 45.I have for the purpose of this analysis endeavoured to put the payment of the HK$4.125 million by D3 to D1 under Count 3 to one side. I wished to isolate that payment from the rest of the evidence which I have just canvassed in order to better test whether there is a prima facie case of D3’s complicity on Count 5 without the “building block”, as Mr Kelsey-Fry termed it, of the allegedly corrupt payment in Count 3. That may be a somewhat artificial way of looking at the evidence since, although Counts 3 and 5 will require to be considered separately by the jury, the facts and circumstances relevant to Count 3 may also be relevant to the jury’s consideration of Count 5. Both counts are concerned with relatively proximate payments made during the unravelling of the consultancy agreement and in the run-up to D1’s appointment as Chief Secretary, in both of which contextual events D3 can be shown to have displayed a lively interest. 46.Nevertheless, even approaching the evidence in this way, I am quite satisfied that a reasonable jury properly directed could find on the available evidence that D3 was party to the conspiracy alleged in Count 5. Accordingly, I allow the amendment of Count 5 in the terms sought by the prosecution. 47.I turn now to the application to amend Charge 7 by joining D2 and D3 to the Count, with the consequent amendments to the particulars of Count 7 and Count 8. The prosecution application to amend Counts 7 and 8 48.On 30 June 2007, D1 relinquished the office of Chief Secretary and on the following day became a Non-Official Member of the Executive Council (Exco). Between 9 November and 12 December 2007, a series of banking transactions took place which resulted in D1 receiving HK$11,182,000 from D5. I have not found it necessary at this stage to examine the intricate transactions which resulted in money entering D5’s account from D4’s company Villalta Inc, via Wedingley Ltd, a company controlled by one Tommy Kow. Suffice it to say, the prosecution are able to show that on 9 November 2007, the equivalent of about HK$12 million entered the Wedingley Ltd account from the Villalta Inc account and on 20 November 2007, a similar (but slightly higher) amount left the Wedingley Ltd account for one of D5’s DBS accounts. 49.For present purposes, the prosecution point to the fact that some time later, on 21 April 2008, D2 signed a cheque for HK$5 million drawn on the account of Sanfield (Management) Ltd, a SHKP subsidiary, and made out to D4. On 22 April 2008, that cheque was deposited into D4’s Hang Seng joint bank account with his wife. On 30 April 2008, HK$6 million was transferred from D4’s Hang Seng joint bank account into the Villalta Inc account. 50.Meanwhile, on 28 April 2008, a cheque for HK$7 million made out to D2 was issued on the account of Honour Finance Co Ltd, also a subsidiary of SHKP, with the money being debited from D2’s SHKP (Employee Services) Ltd account. On the same day, that cheque was deposited in D2’s HSBC account. On 30 April 2008, a personal cheque for HK$7 million drawn on D2’s HSBC account was deposited in D4’s UBS account; and, on the same day, HK$7 million was transferred to D4’s Villalta Inc account. 51.On 7 November 2008, a further cheque for HK$6 million drawn on the Sanfield (Management) Ltd account was deposited into D4’s Hang Seng joint bank account with his wife. In a memorandum dated 17 October 2008, D2 had asked Mr Tang Chak Hin to pay D4 a bonus of HK$6 million “for his contribution to SHKP”. The bonus was properly accounted for. This memorandum was copied to D3. I shall return to the significance (if any) of this payment and the associated memorandum later. 52.The effect of the two earlier transactions (the HK$5 million and HK$7 million) is that, between 22 and 30 April 2008, HK$12 million was transferred by D2 to D4, all of which found its way on 30 April 2008 into D4’s Villalta Inc account. 53.Thus far, the flow of money going from D2 to D4’s Villalta Inc account and from the Villalta Inc account to D5 is, according to the prosecution, similar to the pattern encountered in Count 5. There are, however, a number of differences, the most obvious being that the payments began their journey from D2 several months after D5 had in fact been placed in funds so as to be able to pay HK$11,182,000 over to D1. The prosecution contend that this was an elaborate attempt, consonant with the intricate routing of the money, to distance D2 even further from the ultimate payments, by reimbursing D5 for funds he had already given to D1. 54.I shall deal with the position of each defendant in turn in this application, and with D2 first. The application to amend in relation to D2 55.Ms Montgomery submits that if the prosecution are seeking to draw parallels with the flow of funds in Count 5, their argument falls down in terms of the timing, amount, purpose and pattern of the payments. As to timing, unlike Count 5, the prosecution claim the funds were reimbursed several months after money had been paid over to D1. As to amount, what D1 received does not match what D2 allegedly paid out, making it more difficult properly to infer that the money is the same. As to purpose, it is said the prosecution have effectively appropriated D4’s annual bonus to fit in with their theory of a corrupt payment. As to pattern, there is nothing in the point that because bonuses were normally paid in certain months during a three year period, a payment to D4 in another month could not also be a bonus. 56.Finally, it is argued that if the similarities between the payment scheme under Count 7 and Count 5 are so significant, then so are their dissimilarities. 57.Many of the points which Ms Montgomery has submitted are no doubt matters the jury will want to consider. However, the jury will also want to consider why D4 and D5 would be involved in the payment of HK$11,182,000 to D1 unless at someone else’s behest and for someone else’s benefit. In examining that question, the jury would obviously be entitled to examine the source of funds which were used in the alleged reimbursement. 58.At this stage, the fact remains that, even allowing for a possible explanation in relation to the HK$5 million transfer from D2 to D4, which the jury will obviously in due course have to consider, there is as yet no explanation of the HK$7 million transfer eight days later. Furthermore, to the extent that the two payments said to provide for the corrupt monies in Count 5 and Count 7 were each transferred by D2 to D4 eight days apart, there is similarity and proximity of payment method, as there is in the alleged use of Villalta Inc as a vehicle for the payments through D4 to D5. 59.In my judgment, there is sufficient evidence to ground a prima facie case so as to permit the prosecution to amend Count 7 on the indictment so far as D2 is concerned, with consequent amendments to Count 8. The application to amend in relation to D3 60.The prosecution place much reliance on D3’s diary entries in the relevant period. In the course of July, August and September 2007, D3 recorded in his diaries meetings or conversations with D1 (14 August and 24 August 2007), with D1 and D2 (16 July and 22 September 2007) or with D2 about D1 (3 September 2007). They attach particular significance to a further diary entry on 1 September 2007 which reads: “See T Chan (D4) re R Hui (D1).” (There was, as I have already noted, a similar meeting between D3 and D4 concerning D1 recorded on 14 June 2005, which the prosecution rely on in respect of Count 5: see para 35 supra.) 61.So far as D4 is concerned, the prosecution argue that in being the conduit for money passing from D2 to D5, he cannot have been acting on his own behalf. D4 was a senior and trusted officer of SHKP, who worked closely with D2 and D3, although Mr Perry has accepted that he worked more closely with D2 than D3. In 2005, he had been involved in a similarly structured scheme using his company Villalta Inc as a vehicle for payments to D1 on behalf, according to the prosecution, of D2 and D3. They invite the inference that in 2007, D4 was again acting as one of the executive directors of SHKP and, in particular, on behalf of the two individuals who controlled SHKP’s dealings with D1, namely D2 and D3. In that regard, the particular diary entry of 1 September 2007, after D1 had ceased to be Chief Secretary and become a Non-Executive Member of Exco, raises an obvious question of why he would be talking to D4 about D1 at all, if not in relation to a perpetuation of the scheme. 62.I am conscious of Mr Kelsey-Fry’s concern about taking single entries out of context and using them to support a prosecution theory that D3 must have been involved because of his contacts and links with D1, D2 and D4. Indeed, he has been able to point to a number of occasions which seem on the face of it to be perfectly legitimate, social contacts between D1 and D3 and others. 63.It is also right to say that, as with Count 5, nowhere is D3 referred to in, or linked with, the flow of funds and payments to D1, and subsequently to D4. I should perhaps at this stage deal with a matter that I said I would return to, namely the 17 October 2008 memorandum authorising a HK$6 million ‘bonus’ payment to D4 sent by D2 to Mr Tang Chak Hin, which memorandum was copied to D3. If this amount formed part of the reimbursement to D4 under the scheme, then the fact that the memorandum describing it as a ‘bonus’ was copied to D3 could be evidence of D3’s knowledge of the reimbursement. However, I am not entirely clear whether, and if so how, this payment is relevant to the prosecution allegation in Count 7; although I understand the tenor of the prosecution point that D4 received no less than HK$18 million over the course of eight months in 2008. Mr Perry seemed to accept, if I understood him correctly, that the HK$6 million may have been the actual bonus paid to D4 in 2008; which, as Mr Kelsey-Fry pointed out, was properly accounted for in the 2008/2009 Annual Report for SHKP. If that be right, there would presumably be nothing unusual in D3 being informed about it. Conscious, therefore, of Mr Kelsey-Fry’s concern about the prosecution using the memorandum to “reach for D3”, the safest course is for me to ignore it for present purposes in my analysis of the evidence in relation to Count 7. 64.It is true to say that the time frame of the payments to D1 and the subsequent payments of HK$5 million and HK$7 million from D2 to D4 are significantly down the road from the alleged payments in 2005, at a time when D1’s position had materially changed; although I note that the prosecution allege that the preparations for the payment to D5 (in US dollars) began in May 2007, while D1 was still Chief Secretary. 65.However, it would be fanciful to suggest that D4 (still less D5) would be paying over HK$11 million of his own money for his own private purposes to D1 in what appears to be such an elaborate way. D4 was obviously an important and trusted executive of SHKP, answerable to both D2 and D3. The prosecution case is that this was a continuation of an intricate scheme of corrupt payments to D1 begun in 2005, by which the money was provided by D2 and routed through D4’s Villalta Inc account. They will invite the jury to infer that, as with the scheme of payments allegedly made by D2 and D3 to D1 under Count 5, D4 was again the trusted conduit of the payments made for the same purpose under Count 7. And, as also with Count 5 (save for the HK$650,000 which came from D5’s sister-in-law’s Hang Seng bank account), D5 was the one from whom D1 actually received the money. In this latter regard, the Part A / Part B documents found in D5’s possession tend to support the prosecution allegation of a continuation (or, perhaps, the completion) of a scheme of corrupt payments, albeit that the payments under each Part were described as ‘loans’. 66.I bear in mind the change in D1’s circumstances, the distance from the 2005 payments and their immediate context, and the general point, made in D3’s written representation dated 9 July 2012 at para 116, that D2 and D3 had their own substantial and independent means; by which they were obviously capable of acting unilaterally with considerable sums of money at their disposal. In due course, the jury will want to consider, assuming there was indeed a corrupt scheme in existence to route substantial payments to D1, whether D2 or D3 or both or neither was involved in that scheme. 67.I am prepared to accept that the evidence against D3 on Count 7 may be more limited than against D2 on the same count, to the extent that D3 cannot be linked to the source or flow of funds. However, in my judgment, a jury properly directed could find that D3 must have been party to the HK$11.125 million payment to D1, bearing in mind his involvement in the events which led to the earlier payments and his shared interest with D2, which he would have continued to have in and after 2007, in retaining D1’s favourable disposition towards SHKP and its associated companies. 68.The diary entry of 1 September 2007 concerning a meeting between D3 and D4 about D1 is clearly of some significance in this regard because it is suggestive of D3’s continued business (as distinct from social) interest in D1. Two days later, he was arranging to see or speak with D2 about D1. The jury could find that these two events are not only connected but concern arrangements for further illicit payments to D1. For there is, say the prosecution, an immediate context to these events. A few days earlier, on 27 August 2007 at 2:35 pm, D5 had emailed Tommy Kow to say that he had just had lunch with the “Trustee Manager” concerning the future transfer of funds, which was not expected to be made to Wedingley Ltd “before the third week of September”: on the same day at 1 pm, an entry in D1’s diary records that he was seeing D5 and his business partner. Thereafter, on 9 November 2007, US$1,542,961.45 left D4’s Villalta Inc account for Tommy Kow’s Wedingley Ltd account for onward transmission on 20 November 2007 to D5. 69.Unlike the position at a submission of no case to answer at the conclusion of the prosecution case, I must necessarily resolve these issues on the papers before me without the benefit of hearing live evidence which might either strengthen or weaken the available inferences. Nevertheless, there is in my judgment sufficient prima facie evidence on the papers against D3 on which a jury properly directed could convict to warrant his joinder to Count 7. 70.Accordingly, I allow the amendment of Count 7 on the indictment so far as D3 is concerned, with consequent amendments to Count 8. Conclusion 71.In the result, the application by D3 for discharge on Counts 3 and 4 is refused. The application by the prosecution to amend Counts 5, 7 and 8 is allowed. 72.I should add, for the sake of completeness and in deference to Mr Winter’s submission on behalf of D4, that whilst he also objected to the amendments sought by the prosecution, and allied himself with the arguments of Ms Montgomery and Mr Kelsey-Fry, his particular concern was with a possible reading of the amended particulars of Counts 5 and 7, which left room for the possibility of a conviction for conspiracy upon an alternative basis, namely, that the payments were made so that D1 might remain favourably disposed towards D4. It has been made clear by Mr Perry that it is no part of the prosecution case that payments were made to secure D1’s favourable disposition to the personal interests of D4 unconnected with his involvement with SHKP. I believe Mr Winter is content with that assurance. Post-script 73.This judgment and its contents are not to be reported until the conclusion of the trial. Furthermore, no mention should be made by the press of the nature of the proceedings which has led to the rulings in this judgment. However, in accordance with para 2(3) of the Court’s ‘Order in relation to restrictions on reporting’, the press may publish the offence or offences, or a summary of them, with which the defendants are charged, which will now include those on the amended indictment.
Mr David Perry QC, Mr Joseph Tse SC, Mr Louis Mably, Ms Maggie Wong, Counsel on fiat, Ms Winnie Ho Ag SADPP & Ms Betty Fu PP, for the Director of Public Prosecutions Mr Edwin Choy, instructed by Tang, Lai & Leung, for the 1st defendant Ms Clare Montgomery QC, Mr Lawrence Lok SC and Mr Benson Tsoi, instructed by Boase, Cohen & Collins, for the 2nd defendant Mr John Kelsey-Fry QC, Mr Gerard McCoy SC and Mr Steven Kwan, instructed by Sit, Fung, Kwong & Shum, for the 3rd defendant Mr Ian Winter QC, Mr Daniel Marash SC, Mr Bernard Chung and Mr Adrian Wong, instructed by Tsang, Chan & Wong, for the 4th defendant Mr Charles J Chan, instructed by Chan & Tsu, for the 5th defendant |
Cases cited in this judgment
Further hearings and rulings under HCCC 98/2013