SAEED KHAN v. HKSAR

HCAL 71/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 71 OF 2014

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J U D G M E N T

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1.  This is an application for an order of certiorari to quash the decision of His Honour Judge Casewell, refusing the applicant his costs incurred in successfully defending a criminal prosecution in the District Court and for an order of mandamus directing that the applicant be awarded those costs under section 5 of the Costs in Criminal Cases Ordinance, Cap 492.

2.  The applicant had been charged, along with a man named Anil Kumar, with an offence contrary to section 25 of the Organised and Serious Crimes Ordinance.  It was alleged that he dealt with the sum of US$67,597.49 held in a Standard Chartered Bank account held in the name of Anil Kumar between 24th and 26th days of October of 2011, knowing or having reasonable grounds to believe that the sum represented the proceeds of an indictable offence.

3.  The prosecution came about because two separate traders had been the victims of fraud.  They had been induced to make payments into the bank account in question to the relevant total, believing they were paying for goods which they had ordered.  Anil Kumar then withdrew the bulk of the funds in cash and handed it to the applicant.

4.  On the first day of the trial, the prosecution offered no evidence against Anil Kumar.  He had explained to the police in the course of their investigation that the applicant had asked him for the use of his bank account as he had problems with his own bank account and that since he had known him for four years or so he went along with it.  He asked for his costs and he was refused them.

5.  The applicant was arrested on 2 November of 2011 and made explanations to the police.  The thrust of his case was that he was a legitimate businessman, albeit in a relatively small way, dealing mainly in cash with African traders selling audio/visual equipment; that a customer of his called Okey had ordered goods from him which he had in fact supplied and the sums in questions were payment for those goods; and that the reason he asked his friend, Mr Kumar, for the use of his account was because Okey had required the payment be made to a corporate account and he did not have control of one, while Mr Kumar’s account was in fact in the name of a limited company.  In other words, the case for the applicant was that Okey was the rogue and Okey had paid him with the proceeds of his fraud; that he had no knowledge of the fraud himself; and there was nothing in the circumstances of his trading with Okey which would have indicated to him or to a reasonable man that the payment in his legitimate dealings would come from the proceeds of Okey’s fraud.

6.  The judge acquitted the applicant.  He found as a fact that there was no evidence:

“that would lead a reasonable person to have grounds to believe that this payment...was the proceeds of a crime directly or indirectly as opposed to a payment for the provision of goods...by this man Okey.”

He said that that there was:

“insufficient evidence...for the court to reach the conclusion that the Okey transaction was not genuine from the defendant’s point of view, and the transaction was of such an unusual nature as to give rise to such indicia as would persuade or for a reasonable person to reach the conclusion or belief that the payment represented the proceeds of an indictable offence.”

Those quotations are to be found at paragraph 44 of the reasons for verdict.

7.  The applicant applied for his costs and was refused.  The judge said, and again I quote him:

“I do not propose to go into any detail in the giving of reasons, but the reasons are effectively the same as with the 1st defendant, that the suspicion was aroused by the use of the ... the transfer of funds into another person’s account and that certainly created suspicion and the defendant brought suspicion on himself by that.”

8.  Of course, it is right to say that by using another’s bank account the applicant had done something prima facie suspicious and worthy of investigation.  What the ruling ignores in the case of the applicant is that within a matter of days the applicant explained what had happened to the police and it was on the basis of this explanations that he was acquitted.

9.  The costs of the criminal proceedings were occasioned by the prosecution testing that explanation.  The applicant survived the test and was successful: he won.  He won on the factual basis that he disclosed in full at the outset of the investigation.  He had neutralised his suspicious behaviour with that timely explanation.  His explanations included the reason why he used the account of another.  The judge’s findings robbed the applicant’s use of another’s account as being colourable.

10.  In argument today in front of me, Ms Go, in a spirited defence of the judge’s ruling, in effect repeated the submissions she had made at the close of the District Court criminal trial to me, highlighting matters which she said were suspicious and demonstrating things that she said could undermine the account given by the applicant to the police.  The fact is, the judge heard those submissions and rejected them, hence the acquittal, and it seems to me that those matters cannot now be used to go behind the neutralising effect of the applicant giving the full explanation that he did.

11.  The general rule, of course, is that a successful defendant should have his costs unless there is a good reason to order otherwise.  In the circumstances of this case I judge that no reasonable tribunal could order otherwise by concluding, as the judge did, that the applicant had occasioned or contributed to the costs of the criminal proceedings by bringing suspicion on himself.  Put another way, the judge fell into error in the exercise of his discretion by failing to take into account that the suspicious act of using another’s bank account was neutralised by the applicant’s explanations following his arrest.

12.  I therefore quash the decision of His Honour Judge Casewell made on 26 March of 2014 denying the applicant his costs and direct that the matter be remitted to the District Court for an order to be made in the applicant’s favour granting him his costs in the criminal proceedings DCCC 915/2013, pursuant to section 5 of the Costs in Criminal Cases Ordinance, Cap 492, to be taxed if not agreed.

(Discussion between court and counsel)

13.  The judge was wrong in my view and they have had to come here to put it right and you sought to argue against that.  It must follow that the applicant have his costs of these judicial review proceedings, so I shall order that, to be taxed if not agreed.