HKSAR v. CHAN SHU HUNG AND ANOTHER

[English Translation – 英譯本]
CACC 512A/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 512 OF 2001

(ON APPEAL FROM DCCC NO. 87 OF 2001)

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BETWEEN

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JUDGMENT
(APPLICATION FOR COSTS)

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Hon Yeung JA (giving the judgment of the Court):

1. On 28 November 2002, we allowed the appeal of the two Applicants and quashed their convictions.

2. Pursuant to Section 9 of the Costs in Criminal Cases Ordinance (Cap. 492), the Applicants now apply for an order that the prosecution do bear the Applicants’ costs at trial and on appeal.

3. In HKSAR v Chiu Fung Kuen and Yim Chee Sing (CACC 475/2001), this Court considered the question of the liability of prosecution in criminal cases to pay costs of successful appellants and held as follows:

In Tong Cun Lin v HKSAR [2000] 1 HKLRD 113, the Hong Kong Court of Final Appeal held that the question of whether an acquitted defendant in a criminal case should be awarded costs can be dealt with in accordance with the Practice Directions issued by the UK courts on 5 June 1973 and 24 May 1989 ([1973] 1 WLR 718, [1989] 2 All ER 604).

The above Practice Directions state that orders for costs should normally be made in favour of acquitted defendants unless there are positive reasons for not doing so.  Such reasons include: the defendant’s own conduct has brought suspicion on himself; the defendant has misled the prosecution into thinking that the case against him is stronger than it really is; there is ample evidence to support a verdict of guilty but the defendant is entitled to an acquittal on account of some procedural irregularity.

Subject to the above basic principle, the court should also bear in mind that Section 9 of the Costs in Criminal Cases Ordinance confers upon the court an unfettered discretion.  In determining whether an acquitted defendant is to be awarded costs, the court can take into account the general position in Hong Kong as well as the circumstances of each particular case.  (See The Queen v Kwok Moon-Yan and another [1989] 2 HKLR 396 at 400.)

4. The facts of the present case reveal a conspiracy between the two Applicants and a number of “registered tenants”.  Taking advantage of the “loophole” in the policies of the Urban Services Department, these people deliberately acted in breach of the relevant tenancy agreements in order to obtain personal gains, thereby causing loss to the public revenue.  Such conduct was immoral and condemnable.

5. At the same time, however, we pointed out that “the criminal law is not to be used for breach of contract/tort or moral issues arising from such matters, and the court cannot impose criminal sanctions on an accused on the ground that he has acted in breach of contract or has done a tortious or other immoral act”.

6. We allowed the two Applicants’ appeal and quashed their convictions on the ground that their conduct could neither be proved to be dishonest nor established as fraudulent.

7. The two Applicants elected not to give evidence at trial.  Furthermore, for sundry reasons, the trial judge refused to accept the records of the Applicants’ interviews by ICAC officers as evidence.

8. The two Applicants’ appeal was allowed not because of some procedural irregularity, but because the prosecution failed to prove an element of the offence, namely that the Applicants’ conduct was “dishonest”.  There is nothing to show that the Applicants had in any way misled the prosecution into thinking that the case against them was stronger than it really was.

9. Although the court has an unfettered discretion in dealing with applications for costs, the court must adopt a robust and fair approach in exercising the discretion.

10. In the present case, we fail to see any positive reason for not awarding costs in favour of the two Applicants.

11. We allow the two Applicant’s application and order that their costs both at trial and on appeal are to be paid by the prosecution.

12. In assessing the amount of costs payable, we have taken into account the following factors:

(1)     The defence counsel at trial appeared for the Applicants free of charge.  In such circumstances, we have some reservations about whether the fees charged by the solicitors were appropriate and whether the back-up service was necessary in terms of nature and manpower required;

(2)     The hearing of the Applicants’ application for costs was initially fixed for 30 January 2003, but it was adjourned because the Applicants had not adequately prepared for the hearing. They must be responsible for costs occasioned by the adjournment;

(3)     The Applicants had incurred a huge amount of legal expenses prior to the commencement of trial.  In our view, the prosecution should not have to bear those legal expenses in full.

13. We have also considered the Applicants’ request for a fixed costs order as well as the receipts produced by the Applicants in respect of solicitors’ and counsel’s fees.

14. To avoid spending time and incurring expenses on having the costs taxed by the Master, we accede to the Applicants’ request and make a fixed costs order.

15. We consider $300,000 to be a reasonable amount of costs.

16. Pursuant to the power conferred upon us by Sections 9 and 15(d) of the Costs in Criminal Cases Ordinance, we order that the prosecution do pay the Applicants’ costs fixed at $300,000.