SENG YUET FONG v. HKSAR

FAMC No. 26 of 1998

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 26 OF 1998 (CRIMINAL)

(ON APPLICATION FOR LEAVE TO APPEAL

FROM CACC No. 415 OF 1997)

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D E T E R M I N A T I O N

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Mr Justice Litton PJ:

1. This is the determination of the Appeal Committee.

2. The applicant was convicted in July 1997 on one count of assisting another to retain the benefit of drug trafficking contrary to s.25(1)(a) of the Drug Trafficking (Recovery of Proceeds) Ordinance, Cap. 405, and sentenced to 7 years' imprisonment. On 23 October 1998 the Court of Appeal dismissed her application for leave to appeal against conviction. Despite this, the Court of Appeal acceded to an application made under s.32(2) of the Hong Kong Court of Final Appeal Ordinance, Cap. 484, to certify questions of law for consideration by the Court of Final Appeal and pursuant thereto certified the following questions:

"1. Under s.25(1) of the Drug Trafficking (Recovery of Proceeds) Ordinance, Cap. 405, was it right for the Court to hold that the objective element in the phrase 'having reasonable grounds for belief' relates to a common sense, right-thinking member of the community and that the prosecution had to prove that these grounds were known to the defendant?

2. Was the approach adopted by the English Court of Appeal in Ghosh [1982] 3 WLR 110 at pp.118H-119C to be applied as the appropriate test or method by which a tribunal of fact should determine whether a defendant has 'reasonable grounds to believe' that the person being assisted was a drug trafficker or had benefited therefrom?"

3. The particulars of the offence of which the applicant was convicted are as follows:

"Count 3

SENG Yuet-fong, between about the 9th day of May, 1995 and the 31st day of August, 1995 in Hong Kong, was concerned in an arrangement whereby the retention or control by or on behalf of SHING Siu-ming of the said SHING Siu-ming's proceeds of drug trafficking was facilitated, in respect of Australian currency $1,527,000.00, knowing or having reasonable grounds to believe that the said SHING Siu-ming carried on or had carried on drug trafficking or had benefited from drug trafficking."

4. The applicant was the 3rd defendant at the trial. The 1st defendant Shing Siu-ming (D1) is her brother and the 2nd defendant (D2) is D1's common law wife. D2 faced a similar charge as the applicant.

5. The undoubted facts leading to the applicant's conviction are these.

6. D1 was heavily involved in a conspiracy to smuggle heroin into Australia. In May 1995 the applicant opened a foreign currency savings account with the Hang Seng Bank on D1's instructions and, between 6 June to 27 July 1995, she received 43 Australian dollar remittances into this account totalling A$1,527,000 (the equivalent of HK$8,601,651). She was then an accountant earning HK$20,000 a month. D1's main occupation was said to be that of a "salesman", but he also bred pit bull terriers for dog fights from which he derived, he said, a considerable income. On 9 June 1995 (three days after the first remittance) the applicant transferred the equivalent of HK$1,350,000 into her Hong Kong dollars savings account. On the same day she went with D1 to the Bank to withdraw the money in cash, but was told that the branch did not have that amount in cash immediately available. Eventually, after D1 had made a telephone call, the applicant asked for two cashier orders totalling HK$1,350,000 and gave them to D1. Between 10 June and 1 August 1995 the Hong Kong dollar equivalent of $6,750,000 was further withdrawn in cash from the foreign currency savings account. This was on D1's instructions. The cash was handed over to D1. She also opened a safe-deposit box on D1's instructions. $500,000 in cash was found in that box at the time of her arrest. She was throughout involved as an accountant in D1's financial affairs and knew that in his tax returns he had reported his income as a salesman at $6,000 a month. No explanation was given as to why such large sums of money belonging to D1 passed through her hands in such a short time.

7. At the trial D1 was convicted of conspiring with others to traffick in dangerous drugs. No satisfactory explanation was put forward regarding the remittances into the applicant's foreign currency account and the withdrawals from that account. There can be no doubt that the applicant was in fact concerned in an arrangement whereby the retention or control by or on behalf of D1 of proceeds of drug trafficking was facilitated, as averred in the indictment. What more was needed to convict the applicant of the offence under s.25(1)(a)? Section 25(1)(a) has, since the date of the charge, been amended. We are concerned with the old section.

8. If the applicant knew that D1 had carried on drug trafficking or had benefited from drug trafficking, then of course the crime was complete. What if the evidence did not go as far as to establish positively that she knew (such as, for example, by proof of her involvement in his drug trafficking, or by admission that she knew), but it was established that she had reasonable grounds for believing that D1 was so involved? The answer quite simply is that, in terms of s.25(1)(a), she was equally guilty, unless she was able to show, on a balance of probabilities, that she did not know or suspect that the remittances to her account related to proceeds of drug trafficking: s.25(4)(a), or that she did not know or suspect that, by such arrangement, the retention or control of such proceeds by D1 was facilitated: s.25(4)(b). To convict, the jury had to find that the accused had grounds for believing; and there was the additional requirement that the grounds must be reasonable: That is, that anyone looking at those grounds objectively would so believe. As the Privy Council said in Attorney-General of Hong Kong v. Lee Kwong-kut [1993] AC 951 at 964 D-E:

"The language of section 25 makes the purpose of the section clear. It is designed to make it more difficult for those engaged in the drug trade to dispose of the proceeds of their illicit traffic without the transactions coming to the knowledge of the authorities. Once a person has knowledge or has reasonable grounds to believe that a relevant person carries on or has carried on drug trafficking or has benefited from drug trafficking, then it will be an offence to become involved with 'the relevant person' in any of the wide-ranging activities referred to in the section, unless the activity is reported in accordance with subsection (3) or the person who engages in the activity is in a position to establish the defence provided for in section 25(4). The section therefore creates an offence, which involves an absolute prohibition on engaging in the activities referred to in the section with someone whom you know or have reasonable grounds to believe is a person who carries on or has carried on or has benefited from drug trafficking, subject to an exception contained in section 25(3) and a special defence contained in subsection (4)."

In this regard the trial judge Saied J directed the jury as follows:

" Knowledge is when you know something yourself. For instance, it is to your knowledge that I am sitting here, talking to you, but if somebody else tells you something, and you think it is right, may be right, then you cannot say that it is to your knowledge. You can say that I believe this may be so. Belief is something less than knowledge. So this belief, in the minds of these two ladies, in counts two and three, they must have had reasonable grounds to believe that D1 was involved in and carrying on in drug business and drug trafficking or had carried on drug trafficking, or had benefited from drug trafficking. That is number one.

And number two is that their belief must be based upon reasonable grounds. So these are the two things there in believing."

9. Regarding the expression in s.25(1)(a) "having reasonable grounds to believe" the Court of Appeal, at p.9 of its judgment, said:

"This phrase, we are satisfied, contains subjective and objective elements. In our view it requires proof that there were grounds that a common sense, right thinking member of the community would consider were sufficient to lead a person to believe that the person being assisted was a drug trafficker or had benefited therefrom. This is the objective element. It must also be proved that those grounds were known to be defendant. That is the subjective element."

10. The Court of Appeal thought that the trial judge had gone too far when he also told the jury that the prosecution had to prove that D3 had "formed the belief in her head and in her mind" that D1 had carried on drug trafficking, or had benefited from drug trafficking: The requirement of "having grounds for belief" did not necessarily involve having the belief. This is a fine distinction. But assuming it be valid, this was an error favouring the applicant. The Court of Appeal so acknowledged.

11. The Court of Appeal in its judgment did not refer to the passage in Lee Kwong-kut, analysing the effect of s.25, as set out above. The Court of Appeal said that it was sufficient for the prosecution to prove that the defendant knew of reasonable grounds to believe that there was trafficking, or had benefited from trafficking. This would seem to be another way of saying having reasonable grounds, in terms of s.25. Once the prosecution has shown by credible evidence that the defendant has such grounds, then he (or she) is at risk of committing the offence and the defendant can only safely deal with that person if he (or she) is in a position to satisfy s.25(3) or (4): See Lee Kwong-kut at 973E-F. Section 25(1) is wide in its scope: Intentionally so.

12. Whilst the Court of Appeal did not formulate the effect of s.25(1) in the precise terms as set out in Lee Kwong-kut, we see no real variance therefrom. In these circumstances we cannot see how it can be said that any point of law of great and general importance is involved in the Court of Appeal's decision, in terms of s.32(2) of the Hong Kong Court of Final Appeal Ordinance. It is not the function of the Court of Final Appeal to engage in academic exercises.

13. In the application before us the applicant also says that substantial and grave injustice has been done in that, in affirming the sentence of imprisonment of seven years' imposed by the trial judge, the Court of Appeal had fundamentally erred in (i) equating the applicant's position with that of D2 and in (ii) saying that the applicant was in a position to have been aware of the implications of her involvement. As to (ii), having regard to the applicant's relationship with D1 and her involvement as an accountant in his financial affairs, we cannot see how the Court of Appeal can be faulted in its reasoning. As to (i), the degree of culpability as between D2 and the applicant was a matter for the trial judge to assess. In fact the trial judge did not use a common starting point for D1 and D3. He sentenced D1 to 10 years for his part in dealing with the money, an offence for which he was charged separately in Count 4. So far as D3 was concerned he used a starting point of 10 years and reduced it to 7. The Court of Appeal was entitled to uphold the judge's sentence.

14. The application for leave to appeal is in fact out of time. Had the Court of Appeal not certified the points of law for the Court of Final Appeal's consideration, we might have been minded to dismiss the application summarily by not extending time. As it is we have considered the matter fully under both limbs of s.32(2) of the Hong Kong Court of Final Appeal Ordinance; and in concluding that there are no merits in any of the points advanced, we dismiss the application.