HKSAR v. KWOK CHAU WAH

CACC 210/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 210 OF 2008

(ON APPEAL FROM DCCC NO. 1202 of  2007)

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JUDGMENT

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Hon Wright, J. (giving the judgment of the Court):

1.  The applicant seeks leave to appeal his conviction by Deputy Judge R Chan in the District Court, after trial, on four charges of dealing with property known or believed to represent proceeds of an indictable offence contrary to section 25(1) and (3) of the Organised and Serious Crimes Ordinance, Cap. 455.

2.     The basis of the prosecution case was that during the periods set forth in the four charges moneys amounting to over $18 million passed through four bank accounts operated by the applicant.

3.     The prosecution relied on a number of other factors: when the accounts were opened the applicant described himself, variously, as unemployed or a car dealer; the applicant only rendered three returns to Inland Revenue during the period 1 January 2003 to 1 April 2007 in which he asserted his income amounted to $79,660; at the time of the offences the applicant was resident in a public housing unit; in the bank account forming the subject matter of the first charge there were 266 deposits and withdrawals of amounts exceeding $10,000, the largest single transaction being $130,000; in that forming the subject matter of the second charge, 50 such deposits, the largest single transaction being $500,000; in that forming the subject matter of the third charge, 29 such deposits, the largest single transaction being $400,000; in that forming the subject matter of the fourth charge, 83 such deposits, the largest single transaction being $700,000.

4.     The applicant elected not to testify at trial.

5.     The prosecution also called evidence on two other aspects about which complaint is made, unjustifiably in our view, in the grounds of appeal.  The first was that when exhibits seized from the applicant 's premises were examined by a witness professing expertise in the field of gambling, he concluded that a number of those exhibits constituted records of betting on football matches via the Internet.  The second was that the police had endeavoured to locate a number of the persons to whom payments had been made from the accounts operated by the applicant: in some instances those persons could not be located whilst in other instances the person located either declined to comment or provided the police with information.

6.     The objection to the evidence concerning soccer betting records was that it "... cannot be evidence at all to show any elements of the 4 charges" whilst that concerning the police enquiries is challenged on the basis that "The evidence of PW1 about enquiries he made is unreliable and hearsay in nature". Those criticisms ignore just what it was the judge said about these aspects of the evidence.

7.     In regard to the gambling expert evidence the judge said:

"33.      PW2 is the gambling expert.  His evidence, if accepted in its entirety, will establish a case of bookmaking.  The defence submission and main argument is that his evidence is incapable establishing that...

...

37.       ... in my judgement, PW2's evidence falls short of the case of bookmaking.  I agree that some of the features of the bookmaking activity simply do not exist here.  While Exhibits 4, 12 to 51 strongly suggest that there was business of illegal soccer betting going on, I cannot say that the charge of bookmaking has actually been made out..."

8.     Nothing could be more clear, therefore, than the fact that the judge was not satisfied that the evidence before him established that the applicant had been involved in bookmaking.  The judge went on to say that the fact that there were what he described as "suspected betting records" found in the applicant's computer which "coupled with" the other evidence concerning financial transactions, the applicant’s returns to Inland Revenue and the like, constituted reasonable grounds for a commonsense, right-minded person to believe that the moneys in the bank accounts were wholly or in part the proceeds of an indictable offence.  That was a perfectly permissible and sensible approach for the judge to have adopted.

9.     He went further, even though it was unnecessary for him to do so.  We agree with the approach he adopted when he said:

"55.      I may even go further by saying that even if the evidence of the soccer betting is totally excluded from the evidence, the evidence of the money flowing in and out of his accounts can lead to an irresistible inference that any reasonable, right minded, commonsense people of this community would have reasonable grounds to believe that the money, either in whole or in part, represents proceeds of an indictable offence.

…

57.       In my judgement, with or without the evidence of the soccer betting, the evidence is so overwhelming that there could be no other inference to be drawn from the evidence."

10. Insofar as the complaint regarding evidence of the results of PW1’s enquiries is concerned the judge said, rightly:

"31. …While PW1 was allowed to testify on the investigation he had carried out in regard to those transactions, the contents of PW1’s investigations will not be relied upon as the truth of the matter.  I therefore will not attach weight to whatever seen or heard during the course of PW1’s investigation."

11. There were three "Perfected Grounds of Appeal" and what were described as three "Further Perfected Grounds of Appeal".  Other than the discrete complaints with which we have already dealt, which were particulars of the second of the three Perfected Grounds of Appeal, all six grounds may be reduced to a single contention, namely that the judge erred in finding that the applicant had reasonable grounds to believe that the moneys involved, either in whole or in part represented the proceeds of an indictable offence.

12. Counsel for the applicant submitted in his written submissions that "... the wordings "having reasonable grounds to believe" is an important element of the offence concerned and is purely a subjective element of [the applicant].  In deciding whether the prosecution has successfully proved this element, it is wrong to evaluate the prosecution's evidence by the "objective and subjective element tests" as the learned judge had adopted." and that "..section 25(1) simply requires the prosecution to prove that [the applicant] actually had reasonable grounds to believe the money in his account were the proceeds of crime."

13. This contention although not advanced in oral argument is based on a fundamental misunderstanding of what it is necessary for the prosecution to prove. This has been explained on a number of occasions by the Court of Final Appeal as well as by this court, differently constituted.  (See, e.g., HKSAR v SHING Siu-ming & Others [1999] 2 HKC 818; SENG Yuet-fong v HKSAR [1999] 2 HKC 833; Oei Hengky Wiryo vs HKSAR (No. 2) [2007] 1 HKLRD 568; HKSAR v YAM Ho-keung CACC555/2001 especially at §22; HKSAR v MA Zhujiang and Anor [2007] 4 HKLRD 285 and the cases cited therein).

14. Moreover, the contention flies in the face of the decision in HKSAR v SHING Siu-ming & Others where this issue was specifically decided.  Mayo JA, giving the judgment of the court in connection with an offence under an identical provision contained in s.25(1) of the Drug Trafficking (Recovery Proceeds) Ordinance, Cap 405 said, at 828I:

“…The prosecution is not called upon to prove actual belief.  It would be sufficient to prove reasonable grounds for such a belief and that the defendant knew of those grounds

and, at 829G:

"…  He has placed the former, i.e. that there must be belief by the defendant, too high.  It is necessary only to prove that the defendant knew of the grounds... He has similarly placed too high a burden on the prosecution as regards the objective element, i.e. the belief of the reasonable man.  The jury did not have to be satisfied that a reasonable person would have held such a belief but only that such a person would be satisfied that there were grounds sufficient to sustain such a belief.

As to both the subjective and the objective element, the judge placed too high a burden on the prosecution by telling the jury that they had to be satisfied that the applicants had formed that belief ‘in their heads and in their minds'..." [emphasis supplied]

15. The judge did not labour under any misapprehension as to the tests which he was to apply.  He set out the correct approach quite clearly in his Reasons for Verdict.

16. Having correctly stated the law and then evaluated the evidence the judge went on to find, as has already been seen, that the facts which existed were such as, objectively, to provide reasonable grounds for belief.  He then went on to make a specific finding that those facts were also known to the applicant.  On the evidence, those findings cannot be criticised.

17. This application is fundamentally flawed.  It is one which should never have been brought. The evidence was overwhelming, leave is refused and the application is dismissed. Unsurprisingly, there is no application for leave to appeal sentence. We are bound to say that the sentence of 3 years imprisonment on four counts of dealing with property believe to be the proceeds of an indictable offence in the sum of more than $18 million in 15 months is extraordinarily low.

18. Having given counsel the opportunity to address us as to loss of time, we are satisfied that this is an appropriate case in which to make such an order pursuant to the provisions of s. 83W of the Criminal procedure Ordinance, Cap. 221. We shall order that 3 months of the time spent in custody pending this hearing shall not be counted towards the sentence being served.

Stuart-Moore, VP:

19. The applicant is to pay the costs of the appeal, such costs to be taxed if not agreed.