HKSAR v. WONG KENNEDY YING HO AND OTHERS

DCCC 190/2017

[2019] HKDC 57

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 190 OF 2017

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RULINGS ON COSTS

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1.  The three defendants in this case were originally committed for trial in the Court of First Instance (“CFI”) by way of committal proceedings initiated by the Secretary for Justice in the Magistrates Court, in accordance with the relevant provisions in Part 3 of the Magistrates Ordinance, Cap.227.

2.  There were two counts on the original indictment preferred in the CFI.

3.  Count 1 was against all three defendants for conspiring to offer advantage to an agent, contrary to s.9(2)(a) of the Prevention of Bribery Ordinance, Cap.201 (“POBO”) and ss.159A and 159C of the Crimes Ordinance, Cap.200.

4.  Count 2 has D1 as the only defendant, accusing him of offering an advantage to an agent, contrary to section 9(2)(a) of POBO.

5.  When the defendants were first brought before the magistrate, it was the intention of the prosecution to commit them to trial in the District Court.  However, upon a joint plea by the defendants, the Secretary for Justice “noted the wish of the Accused on the venue of trial[1]” and applied for the defendants to be committed to the CFI for trial instead.

6.  On the first day of trial, 20 February 2017, Mr Justice Andrew Chan indicated that, given the case appeared to involve complex issues of company law[2], perhaps it was more appropriate that the trial be transferred to the District Court.

7.  Section 65F of the Criminal Procedure Ordinance, Cap.221(“CPO”) contains the provisions for such a transfer.  According to section 65F(1) and (2), it is for the Secretary for Justice to apply for the transfer by way of motion.  It is then for the judge to decide whether to allow or refuse the application having regard to the interests of justice.

8.  D1 wrote on the same day to the Director of Public Prosecutions (“DPP”) urging him not to make the application.  This time, the defendant’s plea for a jury trial was not heeded by the DPP.

9.  According to the affirmation in support of the application to transfer, “The DPP, having considered all the circumstances and the interests of justice, including the representations for the 1^st Accused dated 20 February 2017, decided that an application should be made on behalf of the Secretary for Justice to transfer the proceedings to the District Court.[3]”

10.  The reason given by the DPP in support of the application to transfer is found at the final paragraph of the affirmation:-

“33. It appears that as the case progresses, it is now unfit to be tried by a jury, and it is just and appropriate, having regard to the interests of justice, for these proceedings to be transferred to the District Court.”

11.  And so it was that the application was made by the Secretary for Justice and allowed by the learned judge, and the Order of Transfer was made on 27 February 2017, and proceedings were transferred to the District Court.

12.  It must be pointed out that prior to the making of the Order of Transfer, none of the parties had invited Mr Justice Andrew Chan to exercise his discretion in relation to costs in the transfer proceedings.  This discretion is specifically provided for in s.65F(4).

13.  At the District Court Pre-trial Review (“PTR”) that was held in chambers on 11 September 2017, the court was informed that the Secretary for Justice will withdraw charge 1 against D1, D2 and D3, but will proceed with the trial of D1 on charge 2.  The PTR was adjourned and we reconvened in open court shortly thereafter to deal with the withdrawals.

14.  At 12:03 pm, the prosecution formally applied to withdraw charge 1 against all 3 defendants.  Counsel for the defendants had no objection to the application, which was duly allowed by the court.

15.  At this juncture, counsel for D1 told the court that he had “no instructions to make any applications”. Counsel for D2 gave the same indication.

16.  The late Mr Egan, who represented D3, informed the court that the defendant does apply for costs pursuant to section 4 of the Costs in Criminal Cases Ordinance, Cap.492 (“CCCO”).  By consent, this costs application was adjourned to a date to be fixed subject to the conclusion of the trial of D1.

17.  The trial of the sole remaining charge was adjourned to 16 October 2017, when D1 made two applications (an application under s.16 of the CPO and a stay application under common law), which, if successful, would have meant that there would be no trial of D1 on the remaining charge.  The hearing for the two applications concluded on 18 October.

18.  Rulings against D1 on the two applications were given on 24 October. The trial proper of D1 was then ordered to commence on 31 October 2017.

19.  On 31 October, the prosecution applied to re-amend the remaining charge and its particulars.  The application was not opposed.

20.  Due to the shift in focus of the charge as re-amended, time was granted for D1’s counsel to decide how best to proceed with the defence case.  The prosecution supported the application to adjourn for a few days, since the time will be well spent on finalizing the admitted facts.

21.  Trial proper continued on 6 November and parties finished their closing submissions on 28 November.  Verdict was delivered on 8 January 2018 and D1 was acquitted of the charge.

22.  Upon his acquittal, D1 applied for costs in relation to the acquitted charge, as well as costs in relation to the withdrawn charge.

23.  Both the costs applications by D1 and D3 include the costs for the committal proceedings and the proceedings in the Court of First Instance up to the Order of Transfer to the District Court being made.

24.  D1, understandably, does not seek the costs in relation to their failed s.16 application, nor their failed stay application.

25.  The costs applications were heard on 19 June and 5 October 2018.  Both D1 and D3 ask for costs of these costs proceedings.

The prosecution’s position in relation to D1

26.  The prosecution conceded that D1 is entitled to costs of the District Court proceedings in relation to the acquitted charge, but that is the extent of their concession.  The rest of D1’s costs applications were opposed to on the following grounds.

(1)  Functus officio in relation to the withdrawn charge

It is the prosecution’s position that since D1 had through his senior counsel indicated that there was no instruction to make any applications when charge 1 was withdrawn, it is not open to D1 to now seek to apply for costs in relation to the withdrawn charge.  The court is functus officio in relation to the withdrawn charge when it was ordered that there be no order as to costs.

(2)  No jurisdiction for District Judge to deal with CFI and magistracy costs

It is the prosecution’s position that the District Judge has no jurisdiction to deal with the matter of costs for proceedings in the CFI and the magistracy.

(3)  No costs pre-Chan Chi Wan Stephen

It is the prosecution’s position that in any event, costs incurred prior to the Court of Final Appeal decision in Secretary for Justice v Chan Chi Wan Stephen (2017) 20 HKCFAR 98 should not be awarded.

(4)  S.17 costs against D1 for unsuccessful applications

The prosecution also seek costs against D1 in relation to the unsuccessful application for discharge under s.16 of the CPO and the stay application.  They base their claim on s.17 of the CCCO, arguing that the applications should never have been made, and that they were completely unnecessary.

The prosecution’s position in relation to D3

27.  The prosecution conceded that D3 is entitled to costs of the District Court proceedings in relation to the withdrawn charge, but opposed the rest of D3’s costs application on the following grounds.

(1)  No jurisdiction for District Judge to deal with CFI and magistracy costs

For the same lack of jurisdiction as in the case with D1, they say D3 is only entitled to costs incurred subsequent to the Order of Transfer was made, and up to the formal withdrawal of charge 1 on 11 September 2017.

(2)  No costs pre-Chan Chi Wan Stephen

Same position as with D1.

The prosecution’s position on costs in relation to these costs proceedings

28.  The prosecution’s position is that there should not be any order as to costs for the present costs proceedings.

Rulings

Functus officio in relation to the withdrawn charge

29.  The prosecution referred to a number of cases where the issue of when a judge becomes functus officio was considered.

30.  In particular, the prosecution rely on a passage in the judgment of Keith J in Secretary for Justice v Yuen Lit Ping to say that, in the District Court, once a sentence is pronounced and recorded through the court recording system the judge is functus officio[4].

31.  First of all, having had the opportunity to listen to the audio recording of the proceedings on the day, it is not disputed by the parties that there is no audible record of the court pronouncing the order of “there be no order as to costs” in relation to the withdrawn charge against D1.

32.  As a result of the fact that no such pronouncement had been made, it must be the case that I am not functus in relation to the costs of the withdrawn charge, even if assuming the finding of Keith J in Yuen Lit Ping is correct and binding on this court.

33.  Furthermore, the cases referred to by the prosecution in support of their proposition of the court being functus are all concerned with a defendant who had been sentenced. As such, they are not helpful in determining when the judge becomes functus in case of an acquittal or where a charge had been withdrawn.

34.  The point of when a judge may cease to have power to vary his decision is governed by what  is referred to as the “perfection rule[5]”. In gist, if the order pronounced had not been perfected, there is still power to vary.

35.  The cut-off point of when an order is perfected is dependent on the court level, the type of order involved, statutory provisions and administrative practices.

36.  For example, in the case of HKSAR v Abdallah Tatu Said, CACC 218/205, it was held that in the CFI, a forfeiture order is perfected when the yellow paper copy of a “Confiscation Order” form is filed by the Clerk of Court.

37.  In our present case, I find that I am not functus in relation to the costs of the withdrawn charge on the basis that the order as to costs had not been perfected.  The perfection rule applies and it is open for me to revisit the issue of whether D1 should be entitled to the costs for the withdrawn charge.

38.  Unlike in the case where a defendant has pleaded guilty or has been convicted after trial and sentenced, there was, and never will be, a Certificate of Sentence issued in the District Court similar to those governed by s.86(1)[6] of the Criminal Procedure Ordinance.

39.  I find that the cut-off point of the costs order of the withdrawn charge cannot reasonably be placed at any time before the conclusion of the trial of the remaining charge that the defendant was still facing.  The position of the defendant concerning the trial continued to be fluid and the matter of costs may require consideration of matters between the withdrawal of the charge and the acquittal.

40.  Additionally, the order that there be no order as to costs concerning the withdrawn charge, if it had been made, was made without hearing parties on the merits.  It would not be just and reasonable to disallow D1 to re-open the issue despite the order not having been perfected.

41.  I find, therefore, that I am not functus in relation to the costs of the withdrawn charge, and that I should, and do, entertain D1’s application to re-open the matter.

42.  Since the prosecution’s opposition to D1’s application for costs of the withdrawn charge is based solely on the court being functus officio, now that I have found that I am not, there is no reason to deny D1 of the costs of the withdrawn charge in relation to the District Court proceedings.

No jurisdiction for the District Court to deal with CFI and magistracy costs

43.  The next matter to deal with is whether the District Court has the jurisdiction to award costs to D1 and D3 in relation to the magistracy committal proceedings and the CFI proceedings.

44.  For reasons given below, I have singled out and separated the costs of the CFI proceedings specific to the application to transfer, and find that I do not have jurisdiction to deal with this part of the costs in the CFI proceedings.

45.  s.65F(4) of the Criminal Procedure Ordinance provides specifically for the CFI judge to deal with costs in relation to an application to transfer:-

“(4) On an application being made under subsection (1), the judge may, if he considers it fit having regard to the interests of justice, make an order allowing the application (in this section and section 65G referred to as an “order of transfer”), or refuse the application and may in either case make such order as to costs as he considers appropriate.”

46.  The fact that this discretion to make such order as to costs is inserted at the end of this particular subsection and placed behind the phrase “may in either case” is indicative of the legislative intent, which is that this particular discretion should be exercised by the judge dealing with the application to transfer and upon him or her making a decision on the application.  The discretion in this subsection applies only to the transfer application.

47.  If the judge refuses the application, he or she can make such order as to costs as appropriate in relation to the refusal and the trial will continue in the CFI.

48.  If the judge allows the application, he or she can make such order as to costs as appropriate in relation to the successful application.

49.  Once the order of transfer was made, the CFI proceedings are terminated pursuant to s.65F(11):-

“(11) Unless the judge otherwise orders in respect of any matter, an order of transfer shall operate to terminate the proceedings before the court.”

50.  Mr Justice Andrew Chan did not make any such order in respect of any matter, and so the CFI proceedings were terminated upon the making of the Order of Transfer on 27 February 2017.

51.  Upon a transfer pursuant to s.65F, it is D1 and D3’s submissions that s.75(1A) of the District Court Ordinance, Cap.336 (“DCO”) empowers the District Judge to deal with the matter of costs for all proceedings in the CFI, including those in relation to the transfer application.

52.  s.75(1A) reads as follows:-

“(1A) Where any proceedings on indictment are transferred to the Court under section 65F of the Criminal Procedure Ordinance (Cap.221), the Court shall have jurisdiction and powers over all proceedings in relation to the offence alleged in the indictment similar to the jurisdiction and powers the Court of First Instance would have had if the proceedings had not been so transferred save that nothing in this section shall be deemed to give jurisdiction to hear and determine such indictment.”

53.  I find for the following reasons that this empowering section does not allow the District Court to deal with the matter of costs in relation to the transfer application.

54.  If the proceedings had not been so transferred, the CFI judge would not have had the need to deal with costs under s.65F(4), in other words, the discretion to award costs in relation to the transfer proceedings would not have been there to be exercised.

55.  Furthermore, once the order of transfer was made, proceedings in the CFI are terminated and as such even the CFI would not be able to re-open the proceedings and re-visit the issue of costs under s.65F(4).  S.75(1A) cannot give to the District Court jurisdiction and powers that the CFI did not have in the first place.

56.  As such, I find that s.75(1A) does not give the District Court the powers and jurisdiction to deal with the costs in relation to the transfer application governed by s.65F(4).

Costs in relation to CFI proceedings other than those in relation to the transfer application

57.  Having said that, I find that had the proceedings not been transferred, the CFI would have had the jurisdiction and powers to deal with the matter of costs in general, and costs in relation to the committal proceedings in particular pursuant to the provisions in the CCCO.

58.  That being the case, I find that as a result of the operation of s.75(1A), the District Court does have the jurisdiction and powers to also deal with the costs in relation to these parts of the CFI proceedings.

59.  In considering whether to award the costs for these parts, I first of all make the following observations.

60.  Under s.65F of the CPO, the Secretary for Justice is the only person that can apply for a transfer.  The provision is in line with the fundamental principle that the venue of trial is the sole prerogative of the Secretary for Justice: “Choice of the venue for a prosecution is clearly a matter covered by Article 63 of the Basic Law which gives control of prosecutions to the Secretary for Justice without any external interference.”[7].

61.  Therefore, although it was the learned judge who brought up the issue of the proper venue for trial in the present case, had the Secretary of Justice not made the decision to apply to transfer under section 65F(1), proceedings would have remained in the CFI.

62.  However vociferous D1 might have been in his insistence on trial by jury, the venue of trial was ultimately a decision for the Secretary for Justice, as was the decision to apply for the case to be transferred to the District Court.

63.  With that in mind, I do not see why the defendants should not be compensated for the costs incurred in the committal proceedings and the CFI, being proceedings preliminary or incidental to the withdrawn (and acquitted charge, in the case of D1) charge.

No costs pre-Chan Chi Wan Stephen

64.  It is the prosecution’s submissions that the defendants should not be entitled to costs incurred before 14 March 2017, being the day when the case of Secretary for Justice v Chan Chi Wan Stephen (2017) 20 HKCFAR 98 was handed down, on the ground that “the declaratory theory of judicial decisions has no application to the issue of costs”[8].

65.  The prosecution invites the court to so limit the costs “on account of the change in the law in reality, albeit under the declaratory theory the law had not changed”[9].

66.  The prosecution has not provided the court with any direct authorities in support of their proposition that an acquitted defendant should not be entitled to costs as a result of a different interpretation of existing law.

67.  In dealing with this issue, I quote from the submissions of Mr  Bruce for D3[10]:-

“37. It is also worth noting that, as made clear in the judgment of Ribeiro PJ at paragraphs 41, 50, 53 of Chan Chi Wan Stephen, the Court of Final Appeal was setting out the proper construction of the s.9 POBO offences, with regard to the leading authority of Ch’ng Poh, and with regards to the mischief and purpose of s.9 POBO. These determinations came in the context of correcting a misapplication of the law by the Court of Appeal in the Chan Chi Wan Stephen case. There is no suggestion that the CFA case represents a change in the law. Nor is there any suggestion that the law was previously unclear.”

68.  I adopt Mr Bruce’s above quoted submissions.

69.  That being the case, and bearing in mind the principles to be adopted when exercising the discretion on costs, as provided in s.15 of the CCCO, I find that it would not be just and reasonable if the defendants are denied their costs incurred prior to the handing down of the judgment in Chan Chi Wan Stephen, and I find that they are so entitled.

S.17 CCCO costs against D1 for unsuccessful applications

70.  D1 applied under s.16 of the Criminal Procedure Ordinance for his discharge on the ground that there is insufficient evidence to establish a prima facie case against him for the remaining charge.

71.  He also applied for a stay of proceedings under common law on the ground that a fair trial is impossible, and/or to continue with the trial would be an abuse of process.

72.  I ruled against him on both applications on 24 October 2017.  Neither the prosecution nor the defence made any submissions in relation to costs after the delivery of the ruling.

73.  The first mention of the prosecution seeking costs for the failed applications was on 8 January 2018 after the verdict was delivered.  Mr Kwan for the prosecution informed the court that “there is also an issue as to the costs of the s.16 and stay application” to be dealt with.

74.  Although the prosecution had relied on the case of HKSAR v Au Yeung Lai Hung Doris[11] to complain about how D1’s costs application in relation to the withdrawn charge was made late and should not be entertained, D1 did not take issue with the prosecution’s own lateness in their application for costs. 

75.  The prosecution’s costs application is based on s.17 of the CCCO:-

“Where at any time in the course of criminal proceedings a court or a judge is satisfied that costs have been incurred in respect of the proceedings by a party to the proceedings as a result of an unnecessary or improper act or omission by or on behalf of the other party to the proceedings, the court or the judge may, after hearing all such parties, order that all or part of the costs so incurred shall be paid to the first-mentioned party to the proceedings by the other party to the proceedings.”

76.  It is the prosecution’s position that neither of the applications should have been made, and that they were “completely unnecessary”.

77.  I find that I cannot agree with the prosecution.

78.  Dealing with D1’s section 16 application required careful consideration of the interaction between the empowering section s.75(1A) of the DCO, section 16 of the CPO, and various sections in the Magistrates Ordinance and other sections in the DCO.  Although I did find against D1 eventually, having gone through the process, I find that the application cannot be said to be unnecessary or improper.

79.  As for the stay application, it was more or less a tagged on application.  The defendant argued, essentially, that as a result of undue delay and the death of two possible key witnesses, he was not able to have a fair trial.  The defendant also claimed that the evidence do not support the charge and to continue with it would amount to an abuse of process.  The grounds put forward in support are essentially the same as those in their s.16 application.  As a result, only relatively little time was spent dealing with the stay application.

80.  My finding is, therefore, that the prosecution’s application for costs on the stay application should stand and fall together with the s.16 application.

81.  Lawyers are duty bound to advance any argument or to make any application that, in their professional judgment, is or might be advantageous to the defence of a client.  This is exactly what the defence legal team had done in making the two applications.  Neither of the applications can be said to be unnecessary or improper.  It follows that the prosecution’s application for costs under s.17 of the CCCO must fail.

Orders

In relation to the Prosecution

82.  There be no order as to costs in relation to D1’s unsuccessful s.16 and stay applications.

In relation to D1

83.  Costs of the committal proceedings in relation to both the withdrawn charge and the remaining charge be to D1, to be taxed[12] if not agreed.

84.  Costs of proceedings in the CFI in relation to both the withdrawn charge and the remaining charge be to D1, to be taxed if not agreed.

85.  There be no order as to costs in relation to the s.65F transfer application.

86.  Costs of proceedings in the District Court subsequent to the making of the Order of Transfer in relation to both the withdrawn charge and the remaining charge be to D1, to be taxed if not agreed.

87.  For the sake of clarity, D1 is not entitled to the costs of his failed s.16 and stay applications.

88.  D1’s application for certificate for 3 counsel, whether it be in relation to the CFI proceedings or the District Court proceedings, is refused on the ground that the case is not of sufficient complexity to so warrant.  Certificate for two counsel is, however, granted.

In relation to D3

89.  Costs of the committal proceedings in relation to the withdrawn charge be to D3, to be taxed if not agreed.

90.  Costs of proceedings in the CFI in relation to the withdrawn charge be to D3, to be taxed if not agreed.

91.  There be no order as to costs in relation to the s.65F transfer application.

92.  Costs of proceedings in the District Court subsequent to the making of the Order of Transfer in relation to the withdrawn charge be to D3, to be taxed if not agreed.

93.  There be certificate for two counsel in relation to all proceedings.

Cost of this costs application

As between D1 and the prosecution

94.  Taking into consideration that the prosecution has failed in its costs application for the s.16 and stay application, while D1 had by reason of his indication that there was no application for costs for the withdrawn charge caused substantial time to be spent dealing with the issue of whether the judge is functus officio, I find that it is just and reasonable that there be no order as to costs as between the prosecution and D1 in relation to this costs application.

As between D3 and the prosecution

95.  Apart from the costs relating to the transfer proceedings, D3 is successful with the rest of his costs application.  I find that it is just and reasonable that D3 be awarded the costs of this costs application, to be taxed if not agreed.