HKSAR v. Kwok Ping Kwong Thomas

CACC 444/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 444 OF 2014

(ON APPEAL FROM HCCC NO. 98 OF 2013)

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BETWEEN

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Before: Hon Yeung VP in Chambers (open to the public)

Date of Hearing: 16 March 2015

Date of Decision: 16 March 2015

Date of Handing Down Reasons for Decision : 23 March 2015

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REASONS FOR DECISION

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Introduction

1.Rafael Hui, after serving the Civil Service for over 30 years and retiring from the post of Financial Secretary, became Managing Director of the Mandatory Provident Fund Schemes Authority (between 2000 and 2003) and then Chief Secretary of HKSAR (between June 2005 and June 2007).  As Chief Secretary, Rafael Hui was also a member of the Executive Council (the ExCo).  After his two-year term as Chief Secretary ended in June 2007, Rafael Hui remained a non-official member of the ExCo until January 2009.

2.The applicant (Kwok Ping-kwong, Thomas) and his younger brother Raymond Kwok were Co-Chairmen and Managing Directors of Sun Hung Kai Properties Ltd (SHKP), a leading property developer in Hong Kong, and Thomas Chan was one of its executive directors.  Francis Kwan was said to be a close friend of Rafael Hui.

3.The prosecution alleged that Rafael Hui had abused his official position by accepting large sums of money as general “sweetener payments” from the applicant for him to be favourably disposed towards SHKP when he was Chief Secretary.  The payments included $5 million paid in early April 2005, $8.5 million paid in late June 2005 and $11.182 million paid in 2007.  The prosecution further alleged that Rafael Hui had also received other “advantages”, namely other payments, free use of two residential flats in Leighton Hill (the Leighton Hill flats), unsecured loans and their extensions.

4.The prosecution case was that the applicant and/or Raymond Kwok and/or Thomas Chan and/or Francis Kwan were involved in the payment of those sums and the provision of the other “advantages” to Rafael Hui.

5.The applicant, Rafael Hui, Raymond Kwok, Thomas Chan and Francis Kwan appeared before Macrae JA (the judge), sitting as an additional judge of the Court of First Instance, and a nine-member jury on an indictment consisting of eight charges.

6.Three of the eight charges (the 2^nd, the 5^th and the 7^th charges) involved the applicant.  The 2^nd charge (against the applicant and Rafael Hui) of conspiracy to commit misconduct in public office related to the payment of $5 million in April 2005.  The 5^th charge (against the applicant, Rafael Hui, Raymond Kwok, Thomas Chan and Francis Kwan) of conspiracy to commit misconduct in public office related to the payment of $8.5 million in June 2005, and the 7^th charge (against the applicant, Rafael Hui, Raymond Kwok, Thomas Chan and Francis Kwan) of conspiracy to offer advantage to a public servant related to the payment of $11.182 million in 2007.

7.On 19 December 2014 after a trial lasting just over 130 days, the jury found the applicant not guilty on charges 2 and 7, but guilty on charge 5.  The jury acquitted Rafael Hui of charge 2, but convicted him of charges 5 and 7.The jury acquitted Raymond Kwok of charges 5 and 7, but convicted Thomas Chan and Francis Kwan of both charges.  The applicant was sentenced to 5 years’ imprisonment on charge 5.  There were also convictions on other charges unrelated to the applicant.

8.The applicant had applied for leave to appeal against conviction and represented by Ms Clare Montgomery QC, Mr Selwyn Yu SC and Mr Benson Tsoi, he seeks bail pending appeal on the basis that his appeal is likely to be successful.  Ms Maggie Wong, Ms Winnie Ho and Ms Annie Li for the respondent, resist the application.

9.At the end of the hearing, I dismissed the application and indicated that I would hand down my reasons in due course and this I now do.

The Prosecution Case and Evidence

10.Rafael Hui was tipped to be the new Chief Secretary of HKSAR soon after the former Chief Executive of HKSAR (Mr Tung) resigned in March 2005 when there was a rumour that he would be replaced by Mr Donald Tsang.  Beijing made the official announcement appointing Rafael Hui as Chief Secretary of HKSAR on 30 June 2005 and he took his oath for that post at about 2 pm on that day.  On 30 June 2007, Rafael Hui completed two years as Chief Secretary, and on 1 July 2007, was appointed a non-official member of the ExCo until 20 January 2009.

11.The applicant paid Rafael Hui $5 million (the subject matter of charge 2) by way of a cash cheque drawn on his Employee Services account with SHKP on 6 April 2005.  Between 27 and 30 June 2005, Francis Kwan paid Rafael Hui $8.5 million (the subject matter of charge 5) by eight payments, including one for $4.8 million. 

12.The applicant accepted that he had instructed Thomas Chan to pay $10.8 million to Rafael Hui and for that purpose he gave Thomas Chan two cheques, one for $4 million and one for $4.8 million on 20 and 28 June 2005 respectively.

13.A cashier’s order for $10.8 million, drawn on the account of Villalta, operated by Thomas Chan and his family, was paid into Francis Kwan’s account and it was from that $10.8 million that the eight payments totaling $8.5 million were made to Rafael Hui by Francis Kwan.

14.It appeared that Thomas Chan, having received only $8.8 million from the applicant, contributed $2 million from his personal funds to make up the sum of $10.8 million he paid Francis Kwan and Francis Kwan retained $2.3 million of the money he received from Thomas Chan before he passed on $8.5 million to Rafael Hui.

15.The prosecution alleged that the payment was secret and unexplained and that the applicant went to elaborate length to ensure that it was concealed, and its purpose was not recorded in any document. The prosecution emphasized that Thomas Chan contributed his own personal funds to the bribe and Francis Kwan was rewarded, and that the payment of $4.8 million coincided with the signing of a new tenancy agreement between Rafael Hui and SHKP on the Leighton Hill flats arranged by Thomas Chan.

16.The prosecution pointed to the fact that since February 2003, the applicant had allowed Rafael Hui to live in the Leighton Hill flats owned by SHKP free of charge and in June 2005, in anticipation of Rafael Hui’s appointment as Chief Secretary, a new tenancy agreement for 30 months at the monthly rent of $160,000 was put in place.  The total rent payable under the tenancy agreement was $4.8 million which matched the sum of $4.8 million paid by Thomas Chan to Rafael Hui.  The suggestion was that the payment of $4.8 million was to ensure that Rafael Hui, whilst as Chief Secretary and was entitled to an official residence which he, surprisingly, did not use, would continue to live at the Leighton Hill flats free of charge.  There was also, even on the applicant’s case, an over-payment of $800,000.

17.The $11.182 million (the subject matter of charge 7) was paid to Rafael Hui between 21 November and 12 December 2007 also in a circuitous and devious route with the use of accounts in the names of Thomas Chan and Francis Kwan, and accounts of companies under their control.

18.Francis Kwan paid $10.182 million to Rafael Hui and $1 million to his company-Top Faith between 21 November and 12 December 2007.  Thomas Chan, in the name of his company-Villalta, remitted $12 million (US$ 1,542,961.45) to an account of Francis Kwan’s company Wedingley in Singapore on 9 November 2007.  On 20 November 2007, US$1,543,000 was remitted from Wedingley to Francis Kwan’s time deposit account in Hong Kong.

19.There was no dispute that the $11.182 million paid to Rafael Hui initially came from Thomas Chan. The prosecution suggested that Thomas Chan was subsequently reimbursed by the applicant with two payments, one for $5 million on 22 April 2008 and one for $7 million on 30 April 2008 and therefore the $11.182 million payment to Rafael Hui in fact came from the applicant.

20.On 30 April 2008, Thomas Chan transferred $13 million into the account of Villalta and on 7 November 2008, Thomas Kwok paid Thomas Chan a further sum of $6 million.

21.The prosecution also alleged that the applicant had gone to elaborate length to ensure that the payment was concealed, and its purpose was not recorded in any document.  The prosecution did not suggest that Rafael Hui was paid the various sums for any particular identified act/omission to be performed by Rafael Hui as Chief Secretary of HKSAR, but its case was that the money was paid as a “sweetener” to secure Rafael Hui’s favourable disposition or goodwill towards SHKP and its subsidiaries or associated companies as Chief Secretary of HKSAR.  The prosecution case was and to quote from prosecution counsel’s (Mr Perry QC) opening to the jury:

“As Chief Secretary, the 1^st defendant (Rafael Hui) had an important and influential role to play in the development and implementation of government policy. He would also have access to highly confidential information in relation to matters in which SHKP had a profound and deep commercial interest.

There were matters going on within government in which SHKP, the 2^nd defendant’s (the applicant) company, was effectively the adversary of the government, was on the other side of the negotiating table. And by making the payments to the 1^st defendant, the 2^nd defendant sought to gain his favourable disposition or goodwill. Imagine the benefit to a property development company in Hong Kong if you have a representative at the government table. Imagine if you have someone who is your man within government. Imagine if you have someone who can tell you what’s going on, when they are supposed to be negotiating against you. You have, in fact, a man on the inside.

So in short, the prosecution case is during his time as Chief Secretary, and during his time as a member of ExCo, the 1^st defendant was in the pay of SHKP.”

22.Mr Perry reiterated the prosecution position in his final address to the jury:

“…The law does not require that any specific favour in return is identified. Of course, you may come across particular acts of favour which may evidence a favourable disposition, because a favourable disposition could embrace the prospect of future acts of favour.

But let me explain why the law takes this position, because it may assist just to understand.

The law is about practical affairs of people. It’s not some mysterious art or science; it’s about how we conduct our lives. The law is designed to make it easier for us to live in societies.

The reason why the law does not say it’s necessary to identify specific acts of favour is obvious, you may think, and it reflects the good sense of the law.

First, it is because the acceptance of money by a public official in return for him, in a general way, being favourably disposed to the person giving him the money, is itself capable of amounting to misconduct or a breach of the obligations that the public official owes to the public as a trustee of the public interest, by virtue of his office.

The evil of these kind of payments is that once you have a bribe, no-one will have confidence anymore in the acts of the public official who has been kept sweet. Remember in the opening – I know it’s a long time ago now,…I used the example of a judge. Suppose a judge accepts a bribe, but he decides the case on the basis of the evidence. No-one could point to an act of specific favour. But would people have confidence in a judge who had accepted a bribe? That is why the law says it is sufficient if there is a payment made to a public official in order to keep the public official sweet. The law does not require the identification of a specific act of favour. And the reason for that is that the confidence which the public are entitled to have in the impartial performance of the public official’s duties is simply eroded….

But there’s another reason why it’s not necessary for the payments to be related to the performance of some specific acts by Rafael Hui. The law is realistic in this regard, and based on good, sound, practical sense. In the very nature of misconduct and corruption of the sort alleged in this case, it is frequently impossible to link a bribe or a payment to the specific performance of any act. A bribe may be given for a purpose that may not be explicit. A bribe may be given for a purpose that cannot be discerned, on the face of it, but which is readily apparent from the circumstances. Why else would you pay the man who was about to be Chief Secretary millions of dollars? Businessmen don’t do that. They’re not running a charity.

So although the purpose may not be explicit, the law says it’s sufficient if the prosecution establish a ‘general sweet’ situation, a friend in office… To have the warm glow of knowing, at SHKP, that you have a friend at the top of government. It is sufficient for the prosecution to prove that the money identified in each count was paid and accepted as a general sign of good relations…

… …

It’s for you to decide, for example, whether the payments made to Rafael Hui in 2005 and 2007 were bribes, as the prosecution say, paid in return for his favourable disposition towards the other defendants and SHKP.”

23.Mr Perry also gave the jury many examples to persuade them that Rafael Hui might have shown specific acts of favour towards SHKP and such would be supportive of a general sweetener.

The Defence Case

24.The applicant did not dispute that he had paid Rafael Hui and/or was instrumental in the payment of the various sums to him in 2005.  He accepted that the $5 million came from his personal account with SHKP and that the $8.5 million, being part of the $10.8 million drawn on the account of Villalta, also came from him.

25.The applicant’s case was that the $5 million and the $8.5 million were payments to Rafael Hui as the balance of consultant’s fees under an oral agreement concluded in the latter half of 2003.  The suggestion was that despite a written consultancy agreement to the effect that Rafael Hui, as SHKP’s consultant, was only entitled to $4.5 million a year, there was an oral agreement that he would be paid $30 million for two years and after deducting two sums of $3 million paid by cash cheques drawn on the applicant’s personal account with SHKP and the $9 million paid under the written consultancy agreement, the balance was $15 million.

26.The applicant said he did not reveal the extra payments to his mother and his elder brother (Walter Kwok), the Managing Director of SHKP because Walter Kwok did not approve such consultancy agreement. In the circumstance, he had to use cash cheques drawn on his personal account to pay Rafael Hui the two earlier sums of $3 million each and then the $5 million in April 2005.  There was a fund transaction sheet signed and kept by Agnes Leung, the applicant’s personal secretary in connection with the payment of $5 million in April 2005.

27.The applicant said Rafael Hui told him in or about May 2005 that he was involved in the election campaign of Donald Tsang to become Chief Executive of HKSAR and that he had to resign the consultancy. Rafael Hui further impressed upon him that $10.8 million was still owing to him under the oral consultancy agreement and that it had to be settled urgently before the end of June 2005.

28.The applicant spoke to Thomas Chan on or about 18 June 2005 and explained to him the private consultancy agreement he had with Rafael Hui.  He told Thomas Chan that he did not want the balance to be paid in a direct way and that the matter could not be disclosed to his mother or Walter Kwok.

29.The applicant said he then asked Thomas Chan to settle the matter directly with Rafael Hui and that he would reimburse him by two or three payments as he did not want the accounts staff of SHKP to see a large payment to Thomas Chan.

30.The applicant said he expected Thomas Chan to just issue a cheque to Rafael Hui for the full amount of $10.8 million and he did not know why the payment was made by the devious routes involving the use of Villalta and Francis Kwan.  The applicant said he later gave instructions for the issue of two cheques, one for $4 million and one for $4.8 million to repay Thomas Chan.

31.As for the remaining $2 million, the applicant said Thomas Chan was not meant to contribute to the payment to Rafael Hui and the appearance that he had done so was the result of an error.  He said he had forgotten to pay Thomas Chan the additional $2 million, which was simply a mistake and he did not understand why Thomas Chan did not chase him for it.

32.Rafael Hui’s case was that Francis Kwan retained $2.3 million so that he could make various payments on his behalf as and when required.  He also said the indirect and complicated route of payment was initiated by the applicant, which the applicant denied.

33.The total payment of $21.8 million plus the $9 million paid under the written agreement exceeded the amount of $30 million payable under the alleged oral agreement and the extra $800,000 was said to be an additional sum payable to Rafael Hui.

34.The applicant suggested that his payment of $12 million to Thomas Chan in April 2008 had nothing to do with the payment of $11.182 million by Francis Kwan to Rafael Hui in November and December 2007, or the corresponding payment of $12 million by Thomas Chan to Francis Kwan.

35.It was the applicant’s case that he had paid a total of $18 million to Thomas Chan in 2008, namely $5 million in April 2008 as his bonus for 2008, $7 million on 30 April 2008 as a special payment to show his family’s appreciation of Thomas Chan’s courage and loyalty demonstrated during the family’s difficult times and $6 million in November 2008 as his advanced bonus for 2008-2009.

36.The applicant said none of those payments was a bribe paid to Rafael Hui.  The applicant said he was unaware of the private investment or dealing between Thomas Chan and Francis Kwan in 2007 or 2008.

37.Thomas Chan supported the applicant’s evidence on the nature of the $18 million paid to him by the applicant in 2008.  Thomas Chan also said it was Rafael Hui’s idea that Francis Kwan should receive the sum of $10.8 million for him by way of a cashier order in June 2005.

38.Of the $12 million paid to Francis Kwan via Villalta and Wedingley on 9 November 2007, it was Thomas Chan’s case that the money was his investment in Francis Kwan’s product, AlcolOut which was being marketed as a hangover cure and he produced a contract (the Longally agreement) to support his case.  He said he had no idea why the money ended up with Rafael Hui.  He suggested that Francis Kwan and Rafael Hui had misappropriated his $12 million.

39.Thomas Chan agreed with the suggestion from Francis Kwan’s counsel that the idea of moving the money to Singapore was a prudent course to avoid risk and that it was not an attempt to hide any money.

40.Francis Kwan did not give evidence and it was suggested by Rafael Hui’s counsel to him that there was no reason for him to be paid $11.182 million when he had lost his power and influence, having ceased to be the Chief Secretary in June 2007.  Rafael Hui said he was told by Francis Kwan that someone wanted to give him the money without telling him who or why. He said he believed the $11.182 million in fact came from a Beijing official who was aware that he was in financial difficulties.

The Judge’s Directions to the jury on the offence of Misconduct in Public Office

41.To a submission of no case to answer on charges 5 and 7, the judge said:

“I do not accept that the particulars disclose no offence known to law, and nor do I accept that all these counts are bad in law…The words ‘sweetener’ or ‘sweeten’ or the phrase ‘to keep him sweet’ were then used by Mr Perry to explain how it was, according to the prosecution, that (Rafael Hui’s) favourable disposition was to be obtained and/or maintained… The prosecution have therefore always put their case on this basis. Nobody can conceivably be taken by any surprise or realistically claim to be misled or wrongfooted…(The Prosecution’s) position, as it was explained to the jury…is that it is not necessary for the prosecution to prove that (Rafael Hui) was in fact favourable to SHKP Ltd. Their case is that (Rafael Hui) was paid sweeteners so that he would be or remain favourably disposed to SHKP Ltd. He thereby became their man in government, regardless of whether he did in fact use his eyes and ears, or do anything favourable to SHKP Ltd… It is a legitimate way of putting the prosecution case in law, and I find a case to answer on the evidence in relation to these counts.”

42.On the issue of misconduct in public office, the judge mentioned the five elements constituting such an offence; namely (1) a public official; (2) in the course of or in relation to his public officer; (3) willfully misconducts himself by act or omission; (4) without reasonable excuse or justification; and (5) where such misconduct is serious, not trivial, having regard to the responsibilities of the office and the officeholder, the importance of the public objects which they serve and the nature and extent of the departure from those responsibilities.

43.The judge further told the jury that the act of willful misconduct alleged by the prosecution is that Rafael Hui, as the Chief Secretary, would be or remain favourably disposed to SHKP’s interests in return for the payments.  On the meaning of “being or remaining favourably disposed to”, the judge directed the jury in the following terms and I quote from the transcript (Day 122 - 8 December 2014 pages 78):

“The words ‘being or remaining favourably disposed to’ reflect the prosecution allegation that the payments made to (Rafael Hui) were general goodwill payments. In other words, they were sweeteners, payments made to sweeten a public official. The counts do not allege that the payments were made in return for any specific identifiable favour which (Rafael Hui) was to perform or had performed. And the law does not require that any particular favour be specifically identified. Indeed, in the context of paying any public official a sweetener, which you might think would necessarily involve subtlety and secrecy, it may be very difficult to show that any favour was in fact performed. A public official may have acted in exactly the same way, or objectively made the correct decision, or done the right thing, whether he was sweetened or not.

The reason the law does not require a particular favour to be identified is, you may think, obvious. The acceptance of money by a public official in return for him in a general way, rather than in a specific way, being favourably disposed to the person or persons giving him the money, is itself capable of amounting to misconduct by virtue of the breach of the duties and obligations he owes to the public as a public official.

The evil or the vice of these kinds of payments is that no-one could have confidence in the acts of a public official who, through the offer and acceptance of money, has been kept sweet by private interests. And the confidence which the public are entitled to have in the fair and impartial performance of a public official’s duties and obligations is thereby eroded or destroyed.

…

So, the question for you is whether you are sure the offer of the advantage, in other words the payment, was made in one of those ways so as to achieve the objective of (Rafael Hui) being or remaining favourably disposed to the entities named…

…

Now, in the realm or in the area of bribery and corruption, it might sometimes be very difficult to show that a public servant has done anything favourable or indeed that he has refrained from doing anything unfavourable in return for a payment. He may have performed his normal duty, or indeed made a correct decision, or done the right thing. Yet, he has received a substantial payment. What you must therefore be sure about, where no specific act of favouritism can be shown, is that being or remaining favourably disposed to SHKP’s interests as a result of the payment was something which he, (Rafael Hui), was able to do because it fell within the range or scope of the public duties of that particular public servant, rather than something he was not able to do because he fell outside the range or scope of the public duties of that particular public servant, or fell within his private capacity.

…the (prosecution) case is not about securing favourable disposition to anyone personally, but to SHKP’s company interests or the interests of SHKP’s subsidiaries or associated companies.”

Proposed Grounds of Appeal

44.On charge 5, the jury must have rejected the applicant’s case that the $8.5 million paid to Rafael Hui was the balance of any consultant’s fee and must have accepted the prosecution case that it was paid to Rafael Hui in relation to his office as Chief Secretary of HKSAR.  On the evidence, the jury was entitled to come to such a decision and it would be difficult to argue otherwise.

45.For the purpose of this application, Ms Montgomery raises two grounds of appeal, the first relates to the judge’s direction to the jury on what constitutes the offence of “misconduct in public office” and the second relates to consistency of the jury’s verdicts.

46.Ms Montgomery suggests, as she did before the judge, that the offence of “misconduct in public office” requires a specific act committed by the public official that constitutes a serious abuse of power, duty or responsibility exercisable by him in the public interest and that “being or remaining favourably disposed” alone is insufficient to constitute the specific act of abuse of power required for the offence.  Her suggestion is that if the pleaded course of conduct agreed upon had been carried out, it would not have involved the commission of the offence of misconduct in public office, and accordingly, the pleaded agreement did not amount to a statutory conspiracy under section 159A of the Crimes Ordinance. 

47.Ms Montgomery argues that a person’s disposition only concerns his state of mind, and it cannot itself constitute a conduct element of a crime nor give rise to any misconduct unless it is combined with a discernible act of abuse of power by an official.

48.Ms Montgomery emphasizes that the prosecution case on charge 5, namely that the applicant and others agreed to pay $8.5 million to Rafael Hui, not for any specific favour, but simply for his favourable disposition or goodwill towards SHKP, did not constitute an offence of conspiracy to commit misconduct in public office because the prosecution had not alleged or identified a specific act favourable to SHKP to be performed by Rafael Hui as Chief Secretary of HKSAR in return for the payment.

49.Ms Montgomery suggests that it is not proper for the prosecution to charge a conspiracy to commit a common law offence when there are specific statutory corruption offences under the Prevention of Bribery Ordinance and the judge should have dismissed charge 5 at the end of the prosecution case.  She argues that in any event, the judge should not have allowed a charge of common law offence of conspiracy to commit misconduct in public office based on an allegation of bribery to be prosecuted in circumstances where no substantive or inchoate corruption offence had been committed.  She relies on R v Rimmington [2006] 1 AC 459 to support her contention.

50.Ms Montgomery emphasizes, albeit only in her written submissions, that the factual issues on charges 2 and 5 between the prosecution and the defence were the same and in particular, the applicant’s case was that the payments, the subject matters of charges 2 and 5, were paid to Rafael Hui under a verbal consultancy agreement.  Ms Montgomery suggests that when the jury acquitted the applicant of charge 2, they must have concluded that there was or might have been such an agreement.  On that basis, so Ms Montgomery argues, the jury could not have convicted the applicant on charge 5 as they could not be sure of the prosecution case that such an agreement did not exist.

51.Similarly, Ms Montgomery suggests that as the prosecution case on charges 5 and 7 was that there was one single agreement under which Rafael Hui was paid the two instalments forming the subject matters of charges 5 and 7, the applicant’s acquittal of charge 7 must have impact on charge 5.  Ms Montgomery suggests that the jury, in acquitting the applicant of charge 7, must have concluded that there was no such overall agreement as alleged by the prosecution.

52.Ms Montgomery is in effect suggesting that charges 2, 5 and 7 should stand or fall together and therefore the jury’s verdicts of acquitting the applicant of charges 2 and 7, but convicting him of charge 5 were inconsistent and she suggests that such inconsistent verdicts were brought about by the confusing way in which the judge directed the jury on the relevant issues.

53.In the reply submission, detailed events, said to be supportive of the applicant’s case of an oral agreement which explained the payment of the sums of money to Rafael Hui in 2005, were listed and the suggestion is that the jury should have accepted the applicant’s case.

Discussion

54.Many corruption offences had been codified in the Prevention of Bribery Ordinance to provide further and better provisions so that corruption in Hong Kong can be more effectively rooted out.  However, the common law offence of misconduct in public office still applies in cases where a public officer acts corruptly in the course of his public office and there had been many examples of misconduct in public office cases in Hong Kong, particularly since 1997.  The prosecution is certainly entitled to, in appropriate circumstances, continue to prosecute the common law offence of misconduct in public office.

55.I agreed with Ms Wong’s observation that R v Rimmington (supra) has no relevance as it was concerned with a situation where the conduct of the accused fell within the definition of a tailor-made statutory offence, yet the prosecution chose to charge him with a common law offence.

56.The payments under charge 5 were made within days and hours of Rafael Hui taking up office as Chief Secretary and technically he could not be charged under the Prevention of Bribery Ordinance as he was not yet a public servant at the time of the payment.  The prosecution’s decision to rely the common law offence of misconduct in public office is perfectly reasonable and understandable.

57.The Court of Final Appeal decided in HKSAR v Shum Kwok Sher (2002) 5 HKCFAR 381 that the offence of misconduct in public office comprised of the following elements: (a) a public official; (b) who in the course of or in relation to his public office; (c) willfully and intentionally; (d) culpably misconducted himself.  Those elements are difficult to describe with precision and the difficulty stems, as Sir Anthony Mason NPJ pointed out at para 69 of the judgment:

“… not so much from the various ways in which they have been expressed as from the range of misconduct by officials which may fall within the reach of the offence. This is because, to quote the words of PD Finn, ‘Public Officers: Some Personal Liabilities’ (1977) 51 ALJ 313 at p.315:

‘The kernel of the offence is that an officer, having been entrusted with powers and duties for the public benefit, has in some way abused them, or has abused his official position.’ ”

58.Sir Anthony Mason NPJ further commented: “It follows that what constitutes misconduct in a particular case will depend upon the nature of the relevant power or duty of the officer or of the office which is held and the nature of the conduct said to constitute the commission of the offence.”

59.The Court of Final Appeal, in HKSAR v Sin Kam Wah & Another(2005) 8 HKCFAR 192 re-formulated the elements of the offence of misconduct in public office to include:

(a) a public official;

(b) in the course of or in relation to his public office;

(c) willfully misconducted himself; by act or omission, for example, by willfully neglecting or failing to perform his duty;

(d) without reasonable excuse of justification; and

(e) where such misconduct was serious, not trivial, having regard to the responsibilities of the office and the officeholder, the importance of the public objects which they served and the nature and extent of the departure from those responsibilities.

60.I do not accept the suggestion that on a charge of conspiracy to commit misconduct in public office, the prosecution must prove that the applicant had agreed and intended that Rafael Hui, acting as a public officer, would willfully abuse his powers and favour SHKP by a specific act in breach of his official duty imposed for the benefit of the public.  In my view, the offence was committed when Rafael Hui agreed to be and remain favourably disposed towards SHKP in return for the payment of a large sum of money and that such money would not have been paid if Rafael Hui was not going to be Chief Secretary of HKSAR.

61.As Sir Anthony Mason NPJ commented in Sin Kam Wah (supra)at p 211 D-G:

“To constitute the offence of misconduct in public office, willful misconduct which has a relevant relationship with the defendant’s public office is enough. Thus, misconduct otherwise than in the performance of the defendant’s public duties may nevertheless have such a relationship with his public office as to bring that office into disrepute, in circumstances where the misconduct is both culpable and serious and not trivial. In the present case, if the charges as particularized are made out, there can be no doubt that the misconduct had the necessary relationship with the first appellant’s public office and that it was culpable and serious because it involved his participation in the acceptance of free sexual services with the knowledge that they were provided by prostitutes over whom the second appellant exercised control, direction or influence, that being a serious criminal offence.”

62.In considering if it was improper or wrong for Rafael Hui to accept large sums of money from businessmen and in return he would be favourably disposed towards them whilst he was a public official, it would be necessary to bear in mind Rafael Hui’s position in HKSAR, his duties, responsibilities, discretions and powers as well as public trust and confidence invested in him.

63.As Chief Secretary, the number two man in the hierarchy of the HKSAR Government, Rafael Hui held an office of trust and confidence concerning the public.  He had taken oaths, both as a principal officer and as a member of the ExCo to serve HKSAR “conscientiously, dutifully, in full accordance with the law, honestly and with integrity”.  As Chief Secretary and an ExCo member, Rafael Hui would have unlimited information on government policy and could have widespread influence on every major government decisions affecting every business as well as every individual.

64.It must be remembered that, at all material times, HKSAR and SHKP had competing interests, particularly in relation to land development of which SHKP is one of the few major players in Hong Kong.  At the time of the payments to Rafael Hui, SHKP and HKSAR were engaged in commercial dealings on large scale and important projects in which SHKP had a very significant financial interest.  Any information on government policy is extremely valuable to property developers in Hong Kong and they would probably be prepared to pay very large sums of money if a senior public official, such as Rafeal Hui, was prepared to be favourbly disposed towards it.

65.With respect, this is not a case of favourably disposition per se.  This is a case of favourable disposition obtained by the payment of millions of dollars and the obvious implication was that the favourable disposition would manifest itself in the form of useful information/advices and/or favourable decisions when such information/advices and/or decisions were called for.

66.It is incorrect to suggest that the prosecution had completely disavowed the case that by favourable disposition it meant that by paying Rafael Hui millions of dollars, SHKP expected that he would act in favour of SHKP should that become necessary, a point emphasized by Ms Montgomery in her oral submissions.

67.It was the defence case throughout the trial that the prosecution had to allege and prove a specific act of an abuse of power on the part of Rafael Hui and the prosecution resisted that suggestion.  The judge summarized the prosecution case as follows:

“In his opening address to the jury, Mr Perry for the prosecution cited these very words in the indictment on a number of occasions when explaining the prosecution allegations. He also used the phrase ‘favourable disposition’ or ‘goodwill’ in relation to the payments allegedly made to (Rafael Hui).

The words ‘sweetener’ or ‘sweeten’ or the phrase ‘to keep him sweet’ were then used by Mr Perry to explain how it was, according to the prosecution, that (Rafael Hui’s) favourable disposition was to be obtained and/or maintained. For example Day…..

The prosecution have therefore always put their case on this basis. Nobody can conceivably be taken by any surprise or realistically claim to be misled or wrongfooted.

The prosecution contend, and it might be said to be a matter of common sense, that if one is in receipt of a substantial general sweetener in this context, it will be so that one will be favourably disposed to the giver. That is precisely what Mr Perry said in terms at Day…

‘As I said yesterday, these payments were in effect what’s sometimes called by lawyers ‘sweeteners’. If you’re a public official and you get a sweetener, it’s to show favourable disposition, goodwill. ‘You give me money; I’ll show you goodwill.’

On Day… Mr Perry put the matter in opening in these terms:

‘But, ladies and gentlemen, as you know, the prosecution case is that the payments made to (Rafael Hui) were sweeteners, bribes, and he was being paid to be the inside man, SHKP’s inside man, in government.’

Another way of saying that (Rafael Hui) was SHKP’s inside man in government is that he was to be their ‘eyes and ears’.

That is, in fact, how Mr Perry put the matter on Day…

‘But the prosecution case is that in simple terms, it was paid by (the applicant) to (Rafael Hui) for one reason and one reason only: because it was known that (Rafael Hui) was going to be appointed to the position of Chief Secretary, and he was to be SHKP’s representative in the government, the eyes and ears of SHKP. In other words, it was a bribe, to show favour to (the applicant) and his company.’

The final reference to SHKP having a man on the inside of government as their ‘eyes and ears’ was on Day…That was in the context of Mr Perry telling the jury that they were not concerned with the merits of any particular decision that (Rafael Hui) took.

I do not, with respect, see that there has been any shift in the prosecution’s position.  Their position, as it was explained to the jury, and as I have just referred, is that it is not necessary for the prosecution to prove that (Rafael Hui) was in fact favourable to SHKP Ltd.  Their case is that (Rafeal Hui) was paid sweeteners so that he would be or remain favourably disposed to SHKP Ltd.  He thereby became their man in government, regardless of whether he did in fact use his eyes and ears, or do anything favourable to SHKP Ltd.  That, as I understand it, has always been their position, and I see no shift in position that would warrant my intervention at this stage upon a submission of ‘no case to answer.”

68.Ms Montgomery relies heavily on the following exchange between the judge and Mr Winter, counsel for Thomas Chan, on how the jury should be directed:

“Mr Winter:….My learned friend said yesterday that the agreement was that (Rafael Hui) would show, or would be favourably disposed. I simply want to know is it both elements, or is it only the latter element… But the repeated use of the word ‘specific’ before ‘act’ makes it appear that there might be an element of agreement to act.

Now, your Lordship merely ruled at the end of the prosecution’s case that as a matter of law, it is an offence to agree merely to remain favourably disposed without also agreeing to act, should that become necessary. I want to know whether the prosecution allege that we entered into an agreement with (Rafael Hui) that he would act in our favour, should that become necessary, or not.

His Lordship:…Mr Perry, I think your answer is ‘no’?

Mr Perry: The answer is ‘no’, my Lord, and it’s catered for by the way we have addressed the point in paragraphs 4 and 5. It’s quite clear. The agreement is the agreement as alleged in the counts in the indictment, and the analysis of the legal ingredients is as set out in this note.

His Lordship: It is not part of your case that the agreement engaged or involved an understanding that (Rafael Hui) would do an act, should it become necessary, a specific act, should it become necessary?

Mr Perry: Yes. It’s the general sweetener situation.

His Lordship: Yes, all right. Thank you.

Mr Winter: I’m so sorry, my Lord. Do I understand it that your Lordship – if your Lordship removes the words ‘a specific act’ from your Lordship’s question, I take it that the answer is ‘yes’? In other words, that the agreement does not involve any agreement that he would act? I take the answer is ‘yes’; is that right?

Mr Perry: My Lord, if I may say so, this is not a fruitful exercise because my leaned friend is seeking to assert that there is something magical about ‘a specific act’. My Lord, as we’ve made clear in paragraphs 4 and 5, if there is an allegation of favourable disposition, the jury could conclude that as a result of that favourable disposition, (Rafael Hui) carried out one or more acts of specific favour.

All the prosecution have to allege, and we have alleged, and it’s what the law requires, is an allegation of favourable disposition.  And that is clear.”

69.Mr Perry clearly was suggesting that the jury could conclude that by accepting millions of dollars from the applicant, it was expected that Rafael Hui would render such assistance to SHKP as when it became necessary to do so, but he was, at the same time, reiterating the prosecution’s position that it was not necessary to allege or to prove any act of specific favour as contended by the defence.  That, in my view, was a correct stance to take.

70.By accepting millions of dollars from the applicant and in return agreeing to become SHKP’s “eyes and ears” in government, the only logical and reasonable inference was that Rafael Hui would act in favour of SHKP in a general way if it became necessary.  The court is entitled to take the view that a businessman will not pay large sums of money to a senior government official for nothing and it will be naïve to think that, having received large sums of money from a businessman, the official, in return, will not feel oblige to render such favour or assistance to the businessman as and when the need for such favour or assistance arises.  The obligation is readily and easily discernible and the term “favourable disposition” must be considered in such context.

71.However, I agree with the proposition that for a charge of misconduct in public office, it is not necessary for the prosecution to prove that Rafael Hui had agreed to act in a particular way in favour of SHKP as long as it could be established that he would be and remain to be favorably disposed towards SHKP.

72.In my view, being favourably disposed towards private interests by a public officer because he had been paid a large sum of money constitutes a gross and obvious act of misconduct.  The acceptance of the payments corrupts the core characteristics of public service and taints each and every official act of the public officer who can no longer claim to be impartial or loyal to the public interest.

73.By accepting millions of dollars from the applicant in relation to his public office as Chief Secretary so that he would be favourably disposed towards SHKP, Rafael Hui, not only failed to keep his oath, but had completely destroyed any trust and confidence that the public had in him.  What he did had injured public interest and called for condemnation and punishment:

“It is corrupt to accept a gift for carrying out one’s public duty even if one intends to carry it out property; even if one has carried it out properly. The evil of so doing is that the other party, and any other person who may be aware of the transaction, will not know or will not believe in the purity of one’s intention to perform one’s duty properly whether gratified or not. By any such act the confidence which private citizens ought to be able to repose in the impartial performance of their duty by public officials is eroded.” (Per McMullin J in AG v Chung Fat-ming [1978] HKLR 480 at p 488)

74.In the same case, Leonard J, in considering what constituted an act in the capacity as a public servant under the Prevention of Bribery Ordinance said at p 497:

“I would regard being or remaining favourably disposed to the person solicited as sufficient to amount to an ‘act’ within the meaning of the section and it is for that reason that I say the act does not have to be particularized.”

75.When a public officer in the position of Rafael Hui accepted a very large sum of money from SHKP days and hours before he was formally appointed as goodwill payments or “sweeteners” so that he would be, while he was in office, favourably disposed towards SHKP, a property developer that had competing interests and was engaging in commercial dealings with HKSAR, it would be regarded as a misconduct in public office as if he accepted the payment and agreed in return to do SHKP a specific favour.  It is, in my view, correct for the prosecution to adopt such a stance and for the judge to direct the jury on the way he did.

76.Ms Montgomery emphasizes that the payments under charge 5 were made before Rafael Hui was formally appointed as Chief Secretary.  In my view, the important issue is not when, but why Rafael Hui was paid.  The suggestion that it is lawful and not wrong or improper for a senior public official to be favourably disposed in a general way towards private interests in return for money paid to him, albeit a few days or a few hours before his actual appointment, but nevertheless in relation to his public office, is not convincing.

77.In Sin Kam Wah (supra), by way of obita, the Court of Final Appeal in the judgment of Sir Anthony Mason NPJ expressly stated at p 213H-J of the judgment of the court:

“I should made it clear, however, that acceptance of a ‘general sweetener’ by a public officer can, in appropriate circumstances, amount to misconduct in public office.”

78.I wish also to repeat what Chan Acting CJ said in HKSAR v Ho Hung Kwan Michael (2013) 16 HKCFAR 525, also a case on misconduct in public office at p 533 of the judgment of the court:

“26. In considering this important question, one must not lose sight of the object of this offence. It is clear from a review of the authorities that this offence is aimed at punishing an abuse by a public officer of the power and duty entrusted to him for public benefit or of his official position…..

… …

29. In cases where corruption, dishonesty or other illegal practices are involved, it is not necessary to specifically consider the consequences of the misconduct in deciding whether it is serious enough as to constitute the offence of misconduct in public office. The misconduct speaks for itself: the seriousness of the consequences of such corrupt, dishonest or illegal practices will be obvious.

… …

39. The integrity of the system and the public confidence in such a system are clearly relevant matters for consideration in deciding whether the conduct of a public officer is so serious as to amount to the offence of misconduct in public office.  But these matters must be considered in context and together with other relevant factors.”

79.I agree with Ms Wong’s submission that a public officer being favourably disposed towards private interests having been paid to be so could constitute a gross and obvious act of wrong and improper conduct.  On the facts of the present case, what Rafael Hui did, bearing in mind his power and responsibilities as Chief Secretary of HKSAR, was a serious and culpable misconduct in public office.

80.Charges 2, 5 and 7 all alleged that Rafael Hui had accepted bribes from the applicant, but they are separate charges and the jury had to consider them separately.  The judge had expressly and repeatedly told the jury:

“You must consider each count separately, and the case against and for each defendant separately on each count.  The evidence concerning each count and each defendant is different, and therefore your verdicts need not be the same” and “The evidence against the other defendant may be different.  So you must reach separate verdicts on each count against each defendant concerned, having focused on each count and each defendant separately, and having formed a separate decision about each count and each defendant.”

81.The prosecution alleged three separate conspiracies against the applicant and it was never the applicant’s case at trial that the three charges against him should stand or fall together.

82.The judge had reminded the jury that it was for them to decide whether they believed the evidence of a particular defendant or his witnesses, or whether what was said might be true.  The jury was of course entitled to accept parts of a witness’s evidence and reject the other parts, and that it was entirely a matter for them to decide what inferences they could draw as judges of facts.  The jury was also entitled to accept the explanation given by a defendant and/or other witnesses in respect of one count, but reject their explanation in respect of another count.

83.Ms Montgomery’s suggestion, only in her written submissions, that the jury must have concluded that there was or might have been the oral consultancy agreement as suggested by the applicant and that the payments, the subject matter of charge 5, were paid under such agreement, is unrealistic.  The judge had repeatedly reminded the jury the applicant’s case that the payments to Rafael Hui were parts of the consultancy fees payable to him under an oral agreement.  The judge had also repeatedly reminded the jury that if the applicant’s account was or might be true, they must acquit the applicant of both charges 2 and 5.

84.Charges 2 and 5 were allegation of conspiracy to commit misconduct in public office and the defendants in those charges were different.  Charge 2 was directed at the applicant and Rafael Hui whereas charge 5 was directed at all the five defendants.

85.Payments under those charges were made at different times, namely respectively in April 2005 when the appointment of Rafael Hui as Chief Secretary of HKSAR was a rumour and in late June 2005 when Rafael Hui was about to take the oath as such and when the applicant was aware of his imminent appointment.  The applicant must have known before the official announcement that Rafael Hui would be appointed Chief Secretary and he would be involved on the Government side in sensitive matters which were of considerable importance to SHKP.

86.Charge 7 was a charge of conspiracy to offer an advantage to a public servant and the payments to Rafael Hui were made in late 2007 when Rafael Hui was no longer Chief Secretary of HKSAR.  There was a lapse of two and a half years between the payments forming the subject matters of charges 2 and 5, and charge 7.  The applicant admitted that the payments under charges 2 and 5 came from him, but denied that he was involved in the payments under charge 7.

87.The modes of payment were different when $5 million under charge 2 was paid by a cheque drawn on the applicant’s account and a record of the payment was made and kept by his secretary.

88.The applicant alleged that there were two other payments made to Rafael Hui when it was not known for certain that he was going to be appointed Chief Secretary of HKSAR.  The $8.5 million under charge 5 was paid within days and hours before Rafael Hui’s appointment as Chief Secretary was officially announced and in a devious manner with the use of Thomas Chan and Francis Kwan as well as company accounts under their control. 

89.As pointed out by Ms Wong in her written submissions, the payment under charge 5 also appeared to have a connection with Rafael Hui’s occupancy of the Leighton Hill flats when the applicant paid $4.8 million to Thomas Chan, a sum equal to the rent payable under the tenancy agreement.  The jury was entitled to reject the applicant’s explanation that the $4.8 million was linked to the alleged oral agreement, namely that an additional $800,000 was claimed by Rafael Hui as expenses when there was no documentation to support such additional expenses.

90.The applicant’s defence in respect of those charges was different in that he admitted to have paid Rafael Hui the payments referred to in charges 2 and 5, but denied any involvement in the payment of $11.182 million, the subject matter of charge 7.  Thomas Chan had explained in details the circumstances in which he made the payment of $12 million to Francis Kwan, saying it was his own money for his own personal investment.

91.It was for the jury to decide which parts of the evidence of Thomas Kwok and/or Thomas Chan that they accepted and which parts they rejected or which parts that they had accepted would give rise to a reasonable doubt as to the applicant’s guilt.

92.On charge 7, the jury could have concluded that Thomas Chan and Francis Kwan had conspired to bribe Rafael Hui, but were unsure how and when Thomas Chan got the money to do so.  The jury might have a doubt whether the $5 million and $7 million paid to Thomas Chan by the applicant in April 2008 in fact related to the payment of $11.182 million from Thomas Chan to Rafael Hui via Francis Kwan in November and December 2007.

93.I do not wish to speculate further as to why the jury acquitted the applicant of charges 2 and 7, but convicted him of charge 5. However it is important in our system of the administration of justice to accord respect to verdicts given by the jury.

94.Bail pending appeal is the exception rather than the rule and, to be successful, the burden on the applicant, an onerous one, is to satisfy the court that the appeal is likely to be successful.  To be able to rely on the ground of inconsistent verdict, it must be established that the verdicts are logically inconsistent, and that there is no rational explanation for the inconsistency.

95.I wish to refer to HKSAR v Li King Sing Ivan [2001] 2 HKC 539 when this was said at p 546:

“In our approach to the submissions of counsel on both sides in this application, we think it right to adopt the two-stage test, taken from R v Durante ([1972] 56 Cr App R 708), which was propounded by Hutchison LJ in R v Clarke & Fletcher CA, July 30 1997, Cases 96/5638/X2 and 96/5797/X2 (unreported), at p 5….where he said:

‘To succeed the appellant must show, first, that the verdicts are logically inconsistent and, secondly, that they are so inconsistent as to demand interference by an appellant court – i.e. that there is no way in which the logically inconsistent verdicts can be sensibly explained.’

In the same year as that decision, the English Court of Appeal held in R v Van Der Molen [1997] Crim LR 604 at 605 that:

‘…it did not follow that because the jury must have disbelieved a witness or rejectedhis or her evidence with the result that it acquitted on one count, it was necessarily acting irrationally to rely on the evidence of the same witness to convict on another count. The Court had to be very careful not to usurp the role of the jury who had heard the witnesses and considered the matter long and hard.’

In the following year, in R v G [1998] Crim LR 483, the English Court of Appeal held that:

‘A person’s credibility is not a seamless robe, any more than is their reliability.  The jury had to consider (as they were rightly directed) each count separately, and might take a different view of the reliability of the evidence on different counts.  It was too simplistic to draw a stark distinction between reliability and credibility (as had been put in the argument).  It was for the jury to decide on the basis of all the material before it whether it was sure of the particular allegation in each count.’”

96.I do not accept Ms Montgomery’s criticism of the way in which the judge directed the jury.  Bearing in mind the length of the trial that had spread over a 7-month period and the large number of witnesses and the many issues involved, the judge was entitled to sum up the case to the jury in the way he did.  The issues were clearly identified and the summing up was detailed and fair.  It should perhaps also be pointed out that at the end of the judge’s summing up, there was no suggestion that it was in anyway faulty.

97.On the available materials and the arguments presented by Ms Montgomery in support of the application at this stage, I am not persuaded that the grounds of appeal as advanced have any real chance of success, not to say a strong one.  The time factor is also not in favour of the application.  That being the case, there is no valid basis upon which I can exercise my discretion to grant the applicant bail pending appeal.  The application is therefore dismissed.

Ms Maggie Wong, Counsel on fiat, Ms Winnie Ho, SADPP and Ms Annie Li, PP of the Department of Justice, for the respondent

Ms Clare Montgomery QC, Mr Selwyn Yu, SC and Mr Benson Tsoi instructed by Davis Polk & Wardwell for the applicant