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Press Summary (English)
Press Summary (Chinese)
CACC 223/2022, [2026] HKCA 317
On appeal from [2022] HKDC 456 & [2022] HKDC 1462
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
CRIMINAL APPEAL NO 223 OF 2022
(ON APPEAL FROM DCCC NO 349 OF 2021)
________________________
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BETWEEN
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HKSAR |
Respondent |
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and |
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LAI CHEE YING (黎智英) (D1) |
1st Applicant |
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WONG WAI KEUNG (黃偉強) (D3) |
2nd Applicant |
________________________
| Before: |
Hon Poon CJHC, Pang JA and Anthea Pang JA in Court |
| Dates of Hearing: |
14 and 15 January 2025 |
| Date of Judgment: |
26 February 2026 |
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JUDGMENT
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The Court:
Table of Contents
A. Introduction
1. The proceedings below arose out of the lease of a piece of land registered as the Remaining Portion of Section J of the Tseung Kwan O Industrial Estate (“the said Land” and “the Estate”[1] respectively) and the factory buildings erected thereon known as No. 8 Chun Ying Street, Tseung Kwan O Industrial Estate, Tseung Kwan O (“the said Premises”[2]). The landlord was Hong Kong Industrial Estates Corporation (“HKIEC”) and its successor, Hong Kong Science and Technology Parks Corporation (“HKSTPC”).[3] The tenant was Apple Daily Printing Limited (“Apple Daily Printing”[4]). Lying at the centre of the prosecution case are three instruments pertaining to the lease.
2. By a proposal form dated 24 October 1995 (“the Proposal Form”[5]), Apple Daily Printing described the business proposal in support of its application to HKIEC for a lease of a site in the Estate. §1 of the Proposal Form specified the purpose for the use of the site to be leased as “the publishing and printing of newspapers and magazines using processes as described in the supporting schedules annexed [thereto]” (“the Specified Purpose”).
3. By an agreement for lease also dated 24 October 1995 (“the Agreement for Lease”[6]), HKIEC as grantor granted possession of the said Land to Apple Daily Printing as grantee for the construction of the said Premises for the Specified Purpose stated in the Proposal Form, which was annexed thereto, or such other purposes as HKIEC may approve: Clause A. The Agreement for Lease contained non-alienation provisions in Clause 8. Under sub-Clause (a), subject to sub-Clauses (b) and (c), Apple Daily Printing may not part with possession of the said Land or the said Premises. Pursuant to Clause 8(c),[7] Apple Daily Printing may permit a subsidiary or associate company to occupy or share the use of part of the said Premises by way of licence granted by HKIEC.
4. After the construction of the said Premises was completed, and pursuant to Clause D of the Agreement for Lease, HKIEC and Apple Daily Printing entered into a lease dated 25 May 1999 (“the Lease”[8]), covering both the said Land and the said Premises. The Second Schedule of the Lease stipulated the use of the said Land and the said Premises as the Specified Purpose in the Proposal Form. Correspondingly, Clause B(14) prohibited Apple Daily Printing from using the said Land or the said Premises other than for the Specified Purpose or any other purpose as HKIEC may approve in writing, unless the exceptions in sub-Clause (a) to (d) apply. Further, Clause B(11)(a) and (f) contained non-alienation provisions mirroring Clause 8(a) and (c) of the Agreement for Lease.
5. Unbeknown to the Corporation, Dico Consultants Limited (“Dico”), a private company wholly owned by the 1st applicant, had between 1 April 1998 and 19 May 2020 carried on business at part of the said Premises without licence by the Corporation, which allegedly had nothing to do with the Specified Purpose. HKSTPC discovered the state of affairs after an online media raised enquiry in March 2020. Criminal proceedings later ensued in which the two Charges of fraud were laid against the applicants under section 16A of the Theft Ordinance (Cap 210).[9]
6. Charge 1 averred that the 1st applicant, between 1 April 1998 and 31 December 2015, together with other persons, by deceit, namely by:
“(i) concealing from [HKIEC], later and now known as [HKSTPC], that [the said Premises] or part of the said Premises were or had been used otherwise than for the purpose specified in [the Proposal Form], [the Agreement for Lease], and the Second Schedule of [the Lease]; and/or
(ii) falsely representing to HKIEC (later and now known as HKSTPC) that the said Premises were or had been used for the purpose specified in the Proposal Form, the Agreement for Lease and the Second Schedule of the Lease,
and with intent to defraud, induce HKIEC (later and now known as HKSTPC) to make an omission or a series of omissions, namely not taking action to enforce its rights under the Agreement for Lease and/or the Lease, which resulted in benefit to Apple Daily Printing and/or [Dico], or prejudice or a substantial risk of prejudice to HKIEC (later and now known as HKSTPC).”
7. Couched in similar terms, Charge 2 averred that the 1st and 2nd applicants, between 1 January 2016 and 19 May 2020, together with PW6 and other persons, by deceit, namely by:
“(i) concealing from [HKSTPC] that [the said Premises] or part of the said Premises were or had been used otherwise than for the purpose specified in the Second Schedule of [the Lease]; and/or
(ii) falsely representing to HKSTPC that the said Premises or part of the said Premises were or had been used for the purpose specified in the Second Schedule of the Lease,
and with intent to defraud, induced HKSTPC to make an omission or a series of omissions, namely not taking action to enforce its rights under the Lease, which resulted in benefit to [Apple Daily Printing] and/or [Dico], or prejudice or a substantial risk of prejudice to HKSTPC.”
8. After trial, HH Judge Stanley Chan (“the Judge”) on 25 October 2022 convicted the 1st applicant of Charge 1 and the 1st and 2nd applicants of Charge 2.[10] In brief, the Judge accepted the prosecution’s case on all the components of the two Charges. He found that Dico’s principal business was in the nature of management consultancy and investment, which did not relate to the Specified Purpose. It had therefore occupied and used the said Premises in breach of the non-alienation provisions and user restrictions in the leasing instruments. The leasing instruments created a special lease and a special relationship between the parties, imposing on Apple Daily Printing a duty to disclose the above breaches occasioned by Dico’s occupation and use of the said Premises to the Corporation. The failure to make the disclosure amounted to a fraudulent concealment on the part of Apple Daily Printing for which the applicants were personally liable. Separately, the 2nd applicant made a false representation to HKSTPC in response to its enquiry in April 2020 that the said Premises had been used for the Specified Purpose. The deceit practised on the Corporation resulted in them not taking any steps to enforce its rights under the leasing instruments, thereby putting them to prejudice or substantial risk of prejudice. It also resulted in Apple Daily Printing and Dico gaining benefits in terms of rental paid to the former and the latter’s occupation at the said Premises at competitive rents, which had continued over the entire period covered by the two Charges.
9. On 10 December 2022, the Judge sentenced the 1st applicant to a total of 5 years and 9 months’ imprisonment, made a disqualification order against him for 8 years under section 168E of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) and fined him for HK$2 million. He also sentenced the 2nd applicant to 21 months’ imprisonment.[11]
10. Before this Court are the 1st applicant’s applications for leave to appeal against both conviction and sentence, and the 2nd applicant’s application for leave to appeal against conviction only.[12]
B. Facts
11. In mounting their applications for leave to appeal against conviction, the applicants criticise the Judge on all the adverse findings made against them in respect of each of the components of the two Charges, which the respondent seeks to support. A critical consideration of the parties’ submissions thus necessitates a closer look at the facts, most of which are not in dispute, as outlined below.[13]
B1. Parties involved
12. HKIEC was established on 1 March 1977 under the Hong Kong Industrial Estates Corporation Ordinance (Cap 209[14]) as part of the Government’s overall strategy to promote industrial developments in Hong Kong. It was succeeded by HKSTPC established under the Hong Kong Science and Technology Parks Corporation Ordinance (Cap 565) on 7 May 2001.[15]
13. Apple Daily Printing was one of the companies in the now defunct Next Media Group established by the 1st applicant. Since 12 January 1998, it had used the said Premises as its registered address.
14. Incorporated in 1988, Dico had been used by the 1st applicant as a vehicle for, among other things, handling his personal assets and affairs. Dico held 49% of Apple Daily Printing’s shares between 30 September 1997 and 10 September 2001. It was the company secretary to some other companies owned by the 1st applicant and various companies in the Next Media Group. It also dealt with the operation and personnel matters of Next Media Animation Limited (“Next Media Animation”), a company of the Next Media Group, which was involved in the online news business of the Group.
15. The 1st applicant was the major shareholder of Next Digital Limited (“Next Digital”[16]), the lead entity of the Next Media Group, between 2001 and 2020. He held various positions in Next Digital at various times, such as chairman of the board from 1999 to 12 December 2014, and 25 May 2020 to 29 December 2020; non-executive director and chairman between 1 February 2018 and 24 May 2020; chief executive officer between 1 January 2008 and 2 October 2008; and executive director between 20 October 1999 and 12 December 2014, and 25 May 2020 to 29 December 2020. He was also a director of Apple Daily Printing since its incorporation in 1995 until 12 December 2014 and Dico from its incorporation in 1988 until 5 May 2020.
16. The 2nd applicant was an employee of Next Media Management Services Limited (“Next Media Management Services”), a subsidiary of Next Digital, between 1995 and 2020. He was its director of administration since 1 April 2013. He also acted in the capacity of Apple Daily Printing’s director of administration in handling applications for licence under the Lease for various companies in the Next Media Group to occupy the said Premises between 2016 and 2018.
17. PW6 joined Next Digital in 1993. He was its chief financial officer between January 2016 and August 2020; company secretary between June 2016 and July 2021; and executive director between January 2016 and July 2021. He was a director and shareholder of Apple Daily Printing when it applied for admission to the Estate in 1995. He was also a shareholder of Dico at that time, holding the shares on trust for the 1st applicant, and a director between July 1996 and December 1997 and January 2016 and 22 May 2020. He gave evidence on, among other things, the 2nd applicant’s role in the matter, Dico and its operations at the said Premises.
B2. Steps for taking out a lease in the Estate
18. According to section 4 of Cap 209, the purposes of HKIEC were to establish, construct, manage and control industrial estates and to manage and control the land comprised therein. HKIEC provided developed land in the industrial estates at competitive rates to manufacturers with skill-intensive processes and service industries with new or improved technology and those industries which could not operate efficiently in multi-storey factory or commercial buildings, thus facilitating the overall development of Hong Kong’s economy by broadening its industrial base and upgrading technology levels.[17]
19. One of the three industrial estates held by HKIEC was the Estate.[18] As observed by the Judge, leases for the land in the Estate are granted up to 2047, thereby providing a stable operation environment to attract eligible applicants to develop their business there on a long-term basis.[19]
20. An applicant who desires to apply for admission to the industrial estates held by the Corporation has to satisfy the following criteria:[20]
(1) the industrial project must be of a nature which effectively prohibits it from being carried out in an ordinary multi-storey industrial or commercial building available on the open market in Hong Kong;
(2) the project must not be classified as an offensive trade under Government regulations;
(3) the primary activity must not be storage or warehousing.
21. As prescribed by the Corporation, an application for admission to an industrial estate takes the following steps:[21]
(1) The applicant uses the standard application form supported by information to address the admission criteria. The application form contains particulars of the applicant; details of the proposal for the intended project including manufacturing processes, products to be manufactured and estimated minimum production, details of floor and land area required (in square metres), capital expenditure and estimated time for completion of the building and the installation of machinery, etc; environmental evaluation, water consumption, vehicle volume and other relevant information.[22] The applicant must also pay a deposit equivalent to 5% of the total land premium, which would be forfeited if it does not accept the Corporation’s offer; refunded in full if the application is rejected.
(2) The application would be assessed by the Corporation against the admission criteria based on individual merits.
(3) Upon accepting the application, the Corporation would issue a formal offer of a site to the applicant. The offer requires the applicant to, among other things, accept the terms and conditions or the agreement for lease; accept the proposal form which set out those aspects of the project which the applicant would be legally obliged to carry out under the agreement for lease; accept the site, pay a further deposit of 5% of the total land premium; to supply further company documents as stipulated.
(4) The offer must be accepted within 4 weeks or such extension as granted by the Corporation by the applicant signing the offer letter, the proposal form and the site plan and by paying the further deposit.
(5) The agreement for lease and the proposal form must be executed under common seal of the applicant within the next 4 weeks or such extension as granted by the Corporation. The Corporation’s solicitors require a copy of the applicant’s board resolution granting approval for the project, the leasing of the site, the signatories and the fixing of the company’s common seal to the agreement for lease and the proposal form.
(6) Upon the execution of the agreement for lease and the proposal form, the applicant must pay the remaining 90% of the land premium.
(7) As soon as possible (usually within 8 days) after the Corporation executes the agreement for lease and the proposal, it would grant possession of the site to the applicant.
22. In the Brief notes of some main terms and conditions of the Agreement for Lease,[23] §3.7 highlighted the condition that the premises must only be used for the purpose specified in the second schedule of the lease or such other purpose as the Corporation may approve in writing to the lessee and for no other purpose whatsoever.
B3. Apple Daily Printing’s application and the Offer Letter
23. On or about 15 August 1995, Apple Daily Printing, following the procedure described above, applied to HKIEC for admission to the Estate by submitting an application form, signed by the 1st applicant in his capacity as chairman with Boris Chow Sui Kwok as the contact person (“the Application Form”[24]). The Application Form stated that:
(1) The proposed project aimed at consolidating all Apple Daily Printing’s printing business of newspapers and magazines under one roof and providing adequate space for future business expansion.
(2) Apple Daily Printing prepared to invest HK$528 million to the project, which included expenditure on building (174 million); machinery, plant and equipment (300 million), land costs (54 million).
(3) The estimated time for completion of the building and installation of machinery was 20-24 months and 18-24 months from the date of site possession respectively.
24. On 4 September 1995, HKIEC issued an offer letter to Apple Daily Printing (attention to the 1st applicant as chairman), attaching a copy of the Proposal Form, the Agreement for Lease and the Lease, all of which were to be executed (“the Offer Letter”[25]). It offered to Apple Daily Printing the said Land at a land premium of $2,400 per square metre for it to publish and print newspapers and magazines subject to its satisfactory completion of the conditions stipulated and execution of the Agreement for Lease and the Proposal Form.
25. Specifically, paragraph (a) of the Offer Letter made reference to the user restrictions set out in the Second Schedule to the Lease contained in the Agreement for Lease, which were the same as those set out in §1 of the Proposal Form, as well as Clause B(14) and B(15) of the Lease. It was a fundamental condition of the grant of the site and Apple Daily Printing was required to always comply with it. Apple Daily Printing was further asked to note Clause B(8) of the Agreement for Lease and Clause B(11) of the Lease. It was required to be the manufacturer in the said Premises and no entity or its employees shall occupy part of the said Premises without prior approval of the Corporation and HKIEC would take steps to verify Apple Daily Printing’s compliance. However, as Apple Daily Printing intended to have group companies, a sheet summarising the standard licensing conditions was enclosed and Apple Daily Printing was advised to obtain HKIEC’s prior approval as early as possible.
B4. Leasing instruments
26. Apple Daily Printing accepted the offer on or about 29 September 1995. One of the documents that Apple Daily Printing returned to HKIEC in accepting the offer was a board resolution dated 29 September 1995 signed by the 1st applicant as chairman with Mr Morris Ho Kwok Fai and Mr Yeung Wai Hong as directors, which authorized the company seal be affixed to the Agreement for Lease and the Proposal Form (“the Board Resolution”[26]). On 24 October 1995, HKIEC and Mr Morris Ho on behalf of Apple Daily Printing formally signed the Agreement for Lease and the Proposal Form. HKIEC on the same date granted possession of the said Land to Apple Daily Printing whereupon construction works were carried out and after completion, machinery was installed at the said Premises.
27. Pursuant to Clauses A(1)(b) and D of the Agreement for Lease, Apple Daily Printing shall hold the said Land and the said Premises (to be completed and upon completion) subject to the same conditions and covenants contained in the Lease as if it had been executed. So even before the Lease was executed, Apple Daily Printing could only use the said Land and the said Premises for the Specified Purpose or such other purposes as the Corporation may approve.
28. On 25 May 1999, HKIEC and Apple Daily Printing formally executed the Lease.
B5. Licences
29. The licence scheme under the Agreement for Lease and the Lease is augmented by the Guidelines for Licence to Subsidiary, Associate Company, Fellow Subsidiary, Related Company or Parent Company issued by the Corporation.[27]
30. The Guidelines defines subsidiary and associate company thus:
(1) a company shall be deemed to be the grantee/lessee’s subsidiary if it holds more than 50% of the issued and paid up share capital with voting rights of that company; and
(2) a company shall be deemed to be the grantee/lessee’s associate company if it holds more than 20% but not exceeding 50% of the issued and paid up share capital with voting rights of that company.
31. In support of an application, the Guidelines further requires separate undertakings to be executed by the grantee/lessee and the prospective licensee in the prescribed form as prescribed by the Corporation; and separate statutory declarations by the grantee/lessee to be supplied annually.
32. The prosecution called four HKSTPC staff members, PW2 to PW5,[28] to elaborate on how it operated the licence scheme, which was just the same for HKIEC. According to their evidence:
(1) A lessee may apply for licences to meet the needs of its related companies. If a licence is granted, the lessee’s subsidiary, associate or parent company may occupy or share the whole or part of the premises, which should not be more than 25% of the gross floor area in the case of an associate company.
(2) While emphasizing on its objectives, HKSTPC will also consider the development and upgrading of a lessee’s business. In determining an application by a lessee for licences to enable its associate company to occupy its leased premises, HKSTPC’s primary consideration is that there must exist certain connection between the prospective licensee and the lessee’s business. Ancillary services provided by the former must be in support of the latter’s main business. If the business of the prospective licensee is mainly private in nature, HKSTPC will probably not approve the application.
(3) There are instances where certain companies operated at the lessee’s premises without prior approval or licence. Usually the lessee would submit the application on a later date and HKSTPC would backdate the licence.
(4) If the prospective licensee occupies the premises of the lessee without a licence, it is a breach and the lessee has to take remedial action. HKSTPC’s stance is that it wants to put resources to good use and will not take enforcement action immediately as they are not the police. They therefore adopt a 3-step approach: oral enquiry, requests for clarification in writing and notice of breach. That is, if HKSTPC is aware of a breach, it will ask the lessee for clarification and if it admits to the breach, ask it to rectify it. If the lessee fails to do so, HKSTPC will take enforcement action. The primary concern is whether the company in question has breached the law. If yes, HKSTPC may, depending on the circumstances, decide to re-enter the premises. Overall, HKSTPC to a certain extent adopts a “harmony-prioritized” approach in dealing with the breach.
B6. Inspections
33. To ensure compliance of the user restrictions and other provisions of the leases, the staff of HKSTPC carry out inspections of the leased premises in the Estate and submit inspection reports regularly every 5 to 6 months in accordance with the IE Procedural Manual.
34. As revealed in the evidence of PW2 to PW5, HKSTPC’s staff in reality rely on the staff of the lessees when carrying out the inspections, which are quite cursory occasionally. Further, the inspection reports do not always give a full or accurate account of the inspections. As such, the Judge described the inspections as “token inspections”.[29]
35. In the present case, inspections of the said Premises were provided for in Clause C(1)(a) of the Agreement for Lease and Clause B(16) of the Lease. Since 2010, HKSTPC’s staff carried out regular inspections of the said Premises on a mostly half-yearly basis. PW5, who joined HKSTPC in 2018, said he mainly liaised with the 2nd applicant for the routine inspections at the said Premises.[30]
36. PW3 dealt with one particular inspection of the factory at the said Premises on 30 November 2011.[31] On that occasion, PW3 and his colleague were received by the facility manager of Apple Daily Printing, Cheung Kin Sing (“Cheung”). They first went to the fifth floor and then the first floor via the stairs. They did not enter the floors in between for inspection without Cheung’s consent and could only conduct visual checks at the entrances. Cheung further did not allow them to take photographs because, PW3 believed, those were sensitive floors and he respected Cheung’s wish. PW3 admitted the report for that inspection was inaccurate as he did not record the fact that inspections were denied in certain areas.
37. PW4 took part in various inspections of the said Premises in May and November 2015, June and December 2016, July 2017 and August 2019. Cheung, who led HKSTPC’s staff from the fifth floor to the first floor for all the six inspections, mentioned that the second to fourth floors which were designated areas for reporters and editors would usually not be open for inspections. They were for visual checks from outside only.[32]
B7. Licences taken out by Apple Daily Printing
38. In February 1997, Apple Daily Printing applied for licences for 10 related companies to occupy part of the said Premises. As requested by HKIEC, the applications were supported by a statutory declaration made by the 1st applicant dated 25 September 1997 confirming his ultimate beneficial ownership of Apple Daily Printing and the corporate structure of the 10 related companies[33] and the undertakings by the 1st applicant, Apple Daily Printing and the prospective licensees (“the Undertakings”[34]). All the applications were approved by HKIEC.
39. In April 1999, Apple Daily Printing again applied for licences or renewal of licences for 12 related companies. The applications were handled by a firm of solicitors acting for Apple Daily Printing. They were similarly supported by a statutory declaration executed by the 1st applicant, the Undertakings signed by him and Apple Daily Printing and the licensees dated 3 May 1999 and the minutes of the board of directors of Apple Daily Printing and the licensees.[35]
40. In the Undertakings signed by the 1st applicant, he confirmed and undertook that:
“(2) I shall procure that the Licensee shall use the said premises solely for publishing and printing of newspapers and magazines and ancillary services;
…
I realise that should there be any default or breach of the terms and conditions of this Undertaking and the Agreement for Lease whether due to or attributable to the default or breach of the Licensor and/or the Licensee or otherwise, you will be at liberty to exercise all rights and powers under the Agreement for Lease including the power of re-entry thereunder on the whole of the captioned site and the buildings thereon.”
41. Apple Daily Printing gave the same undertakings in the Undertakings that it signed. Correspondingly, each of the licensees undertook that it would “use the said premises solely for publishing and printing of newspapers and magazines and ancillary services”.
42. After the execution of the Lease in May 1999, Apple Daily Printing successfully applied for or renewed licences for its related companies in 2003 (6 companies); in 2006 (11 companies); in 2010 (2 companies); in 2012 (11 companies); in 2016 (7 companies); in 2018 (2 companies); and in 2019 (5 companies). Each of those applications was supported by statutory declarations by the corporate beneficial owner of Apple Daily Printing, the Undertakings signed by the owner, Apple Daily Printing, and the licensees, which contained the same undertakings referred to above, and the board minutes of Apple Daily Printing and the licensees. The 1st applicant did not sign any of those statutory declarations or Undertakings.
43. As Apple Daily Printing’s director of administration, the 2nd applicant was involved in the licence applications. For example, in 2006, 2016 and 2018, the 2nd applicant wrote to HKSTPC on 10 March 2006, 26 April 2016 and 19 January 2018 respectively to initiate the application process.[36] According to PW6 who elaborated on the 2nd applicant’s role on licence applications:[37]
(1) If the Next Media Group needed to rent space for its companies, it would communicate with HKSTPC. If HKSTPC agreed, the group would apply for the requisite licence and sign the agreement.
(2) The administrative department, of which the 2nd applicant was in charge, was responsible for the related matters including arrangement or relocation, licence applications and preparation of the documents, and liaison between the group and HKSTPC for the licence applications.
(3) After submitting an application for licence, the 2nd applicant would report the matter to the board of directors in the form of a resolution for approval by the board.
44. PW6 further said that the directors of Next Digital would archive the board resolutions that specified which subsidiaries or wholly-owned companies were licensed to use the said Premises. One of such board resolutions was dated 12 March 2012, which was signed by seven directors including the 1st applicant.[38] PW6 added that those resolutions had been circulated and each director had signed them and that the 1st applicant should have known which companies needed to apply for licences.[39]
B8. The 2nd applicant’s role generally
45. PW6 also described the 2nd applicant’s role in the matter generally thus:[40]
(1) After his appointment as the chief financial officer of Next Digital in January 2016, he had to help the work of the administrative department. The 2nd applicant was accountable to him although he was not his immediate superior. The 2nd applicant reported to him on major matters but could act independently on certain matters without seeking instructions from him.
(2) The 2nd applicant managed several departments including the administrative department, building operation department and security and procurement department. He did not participate in the group’s operational decisions, which were made by the board of directors collectively. Nor did he formulate financial policies. In sum, he was not part of the senior management.
(3) The 2nd applicant was not responsible for the operations of individual companies and it did not fall within the scope of his duty to decide whether to apply for licences.
(4) The 2nd applicant received tertiary education but did not have any professional qualifications. When legal issues arose, he would either consult PW6 or the group’s legal department, and would not act on his own or answer external inquiries by himself.
(5) The 2nd applicant attended to the 1st applicant’s personal needs and affairs in Dico.
B9. Dico and its operations at the said Premises
46. As the 1st applicant’s private company, Dico was neither a subsidiary nor associate company of Apple Daily Printing for the purposes of the Agreement for Lease and the Lease. On 1 April 1998, Dico changed its registered office to the said Premises.[41] Since then, it had been operating at the 1/F and later at Rooms 429 and 430 on 4/F since about January 2010.[42] The floor area that Dico had used was 646 square feet, that is, 0.16% of that of the said Premises.
47. According to PW6:[43]
(1) Dico was primarily involved in managing properties, cars and boats for the 1st applicant and his family. Dico reported in its tax return for the year 2015/2016 that its primary business was the provision of management services and assets and investment holding.[44] All along, Dico’s business had nothing to do with newspaper printing.
(2) As owner, the 1st applicant was the top decision maker of Dico, including its mode of operation, expenses and business location;[45] and controlled all the flows of its fund.
(3) Dico’s general manager was Mark Simon, who had “decision-making power” and directed the work of its accounting department. He was the 1st applicant’s assistant and often referred to as his “right-hand man”, and managed the 1st applicant’s personal affairs. He reported directly to the 1st applicant and often communicated the former’s instructions to PW6, who primarily provided back office support. He also gave directives to the 2nd applicant (whose office was on the third floor) in the name of the 1st applicant. Dico provided secretarial services to various companies upon Mark Simon’s instructions, which should have been approved by the 1st applicant.
(4) Apple Daily Printing charged Dico rent for occupying the said Premises, which Dico paid.
(5) For reasons unknown to PW6, Dico’s name did not appear on the directory at the said Premises.[46]
(6) PW6 did not know why Apple Daily Printing did not apply for a licence for Dico. He believed it was a matter for the 1st applicant or other directors.[47]
B10. Steps taken after media inquiry in March 2020
48. On 13 March 2020, an online media made an email enquiry with HKSTPC about the lease and usage of the said Premises.[48] Upon enquiry by HKSTPC, Mark Simon discussed the matter with PW6 and consulted Next Digital’s internal legal department. The legal advice was contained in an email dated 23 March 2020 from the legal advisor, Ms Rosa Ho (“Ho”), to Mark Simon,[49] which he forwarded to PW6 on the same day. Ho opined that Dico’s occupation of the said Premises was likely a breach of Clause B(11)(a) of the Lease; and that in light of the enforcement action HKSTPC might take including re-entry and re-possession, extreme care should be taken to avoid disclosing to HKSTPC Dico’s operation at the said Premises. She finally advised that Dico’s registered address be changed as soon as possible, with which, according to PW6, Mark Simon said the 1st applicant agreed.[50] PW6 further believed that Mark Simon was carrying out the 1st applicant’s instruction and he had no objection to the change of Dico’s registered address.[51] The 2nd applicant, PW6 and Mark Simon then took steps to change Dico’s registered address to an office address in Wanchai on 23 March 2020 and later to another address in Kwun Tong on 11 May 2020.[52] Eventually, Dico moved out of the said Premises to the Kwun Tong address sometime in May 2020.[53]
49. By a letter dated 30 March 2020, emailed and addressed to the 2nd applicant of the administration department,[54] HKSTPC sought clarification in writing from Apple Daily Printing before 10 April 2020. According to PW6,[55] the 2nd applicant then forwarded it to PW6 and Mark Simon, copied to Ho, requesting from her a draft reply. Under cross-examination, PW6 said:[56]
(1) A meeting was held with a lawyer from an external law firm on 6 April 2020. PW6, Mark Simon and the 2nd applicant and some other colleagues attended.
(2) After the meeting, Ho on 8 April 2020 emailed HKSTPC’s email and the draft letter prepared by the external lawyer to Mark Simon, PW6 and the 2nd applicant for their comment.[57] By an email on the following day, PW6 replied to Ho, copied to Mark Simon and PW6, that he had no comment on the draft reply.[58]
50. On 9 April 2020, the 2nd applicant replied to HKSTPC as director of administration on behalf of Apple Daily Printing (“the 9/4/20 Letter”[59]) thus:
“We fully understand your sensitivity concerning possible breaches of alienation restrictions in your leases. In response to your enquiries, [Dico] is a private company owned by our Chairman [the 1st applicant]. He had used [the said Land] as an address for Dico.
Dico does not occupy and is not operating on any part of [the said Land].
Having been made aware of your concerns, [the 1st applicant] has already established another address both for the statutory registrations of Dico and for receipt of its mail.
We also confirm that we, [Apple Daily Printing], are in full compliance with all the terms and conditions of our lease of [the said Land] …”
51. Under cross-examination,[60] PW6 said that although he was not sure if the 9/4/20 Letter was the same reply drafted by the external lawyer, he genuinely believed that the contents of 9/4/20 Letter was true and accurate at the time. The 2nd applicant would not have issued it on his own. It was issued with PW6’s consent and upon legal advice. He further agreed that the engagement of the external lawyer was to focus on how to respond to HKSTPC’s enquiry in a proper, reasonable and legal manner; and that it was to safeguard the interests of the company.
52. What followed were two inspections of the said Premises on 28 April and 4 May 2020 arranged by the 2nd applicant. According to PW2 to PW5, the 2nd applicant was Apple Daily Printing’s contact person for the inspections. He however did not tell them that Dico had occupied the said Premises for its operations.
C. A preliminary point on duplicity
53. Before proceeding further, we digress to dispose of one preliminary point, which may have an impact on the validity of Charge 1. That point is quite apparent but had not been canvassed until we raised it with the parties shortly before and at the hearing, which is this.
54. By repeatedly averring that “[HKIEC], later and now known as the [HKSTPC]”, the particulars of Charge 1 suggest that the two corporations are one same legal entity. HKIEC was the only victim of the fraud albeit it had operated under a different name later. That suggestion, if truly intended, is not legally supportable. It is because HKIEC ceased to exist since its dissolution on 7 May 2001 and could not have subsisted as HKSTPC or indeed any other entity. As its successor by operation of law, HKSTPC takes over all benefits and liabilities under all agreements and contracts previously made by HKIEC, having been vested with such rights and liabilities;[61] or deemed to be a party to such agreements, etc.[62] However, that does not detract from the fact that HKIEC and HKSTPC are not one same legal entity. They had never been.
55. It is trite that no one count of the indictment should charge the defendant with having committed two or more separate offences. However, the undisputable fact that HKIEC and HKSTPC are two separate legal entities raises legitimate concern if Charge 1 in fact covers two separate charges of fraud committed by the 1st applicant with others. The first is against HKIEC between 1 April 1998 and its dissolution; the second, against HKSTPC thereafter until 31 December 2015. It is thus arguably duplicitous: see rule 2(2) of the Indictment Rules; and see generally Archbold Hong Kong 2025 on Criminal Law, Pleadings, Evidence & Practice Vol.1, at §1-123, pp.35 – 36. Although it was not taken at trial, as a point of law, it may still be raised on appeal as it goes to the court’s jurisdiction and may result in quashing of the conviction: see generally Archbold Hong Kong, supra, at §§1-188 – 1-191; and 7-96(5).
56. Ms Maggie Yang, Director of Public Prosecutions,[63] submits that it has all along been the prosecution case that HKIEC and HKSTPC are two legal entities. The averments of Charge 1 merely intend to express the fact that HKSTPC is a successor of HKIEC, rather than suggesting that they are one same legal entity. With respect, such an intention is not borne out by the actual language used. There are self-evidently far much better ways of correctly stating the legal relationship between the two statutory corporations.
57. Ms Yang next submits that the fraud which the 1st applicant had allegedly committed was a continuing one. It ran throughout 1 April 1998 (when Dico began its operation at the said Premises) until 31 December 2015 and on the following day, the 2nd applicant and PW6 participated in the joint enterprise under Charge 2. Although the offence was technically against two legal entities, it should be regarded as forming part of a single transaction or criminal enterprise. Charge 1 is therefore not bad for duplicity: see Archbold Hong Kong, supra, at §1-125 at p.36. Even if it is duplicitous, Ms Yang goes on to submit, the 1st applicant had not suffered any prejudice that would automatically lead to quashing of the conviction.
58. Mr Derek Chan, SC for the 1st applicant,[64] accepts that Charge 1 could arguably be regarded as forming part of a single transaction despite the change in the identity of the alleged victim. He also accepts that in any event the 1st applicant has not been prejudiced as he relied on the same defence in respect of the alleged criminal acts or omissions committed against HKIEC and HKSTPC. For those reasons, although he was aware of the duplicity point, he did not take it at trial. Nor will he on appeal.
59. In light of Mr Chan’s position, we will not dwell on the duplicity point any further, save to mention this. The undesirable manner in which the particulars of Charge 1 are drafted should best be avoided in the future when similar situation arises. It would only spawn unnecessary confusions and arguments, which might inadvertently affect the validity of the charge. With that note, we return to the leave applications against conviction proper.
D. The main issues
60. Section 16A of the Theft Ordinance provides:
“(1) If any person by any deceit (whether or not the deceit is the sole or main inducement) and with intent to defraud induces another person to commit an act or make an omission, which results either—
(a) in benefit to any person other than the second-mentioned person; or
(b) in prejudice or a substantial risk of prejudice to any person other than the first-mentioned person,
the first-mentioned person commits the offence of fraud and is liable on conviction upon indictment to imprisonment for 14 years.
(2) For the purposes of subsection (1), a person shall be treated as having an intent to defraud if, at the time when he practises the deceit, he intends that he will by the deceit (whether or not the deceit is the sole or main inducement) induce another person to commit an act or make an omission, which will result in either or both of the consequences referred to in paragraphs (a) and (b) of that subsection.
(3) For the purposes of this section—
act (作為) and omission (不作為) include respectively a series of acts and a series of omissions;
benefit (利益) means any financial or proprietary gain, whether temporary or permanent;
deceit (欺騙) means any deceit (whether deliberate or reckless) by words or conduct (whether by any act or omission) as to fact or as to law, including a deceit relating to the past, the present or the future and a deceit as to the intentions of the person practising the deceit or of any other person;
gain (獲益) includes a gain by keeping what one has, as well as a gain by getting what one has not;
loss (損失) includes a loss by not getting what one might get, as well as a loss by parting with what one has;
prejudice (不利) means any financial or proprietary loss, whether temporary or permanent.
(4) This section shall not affect or modify the offence at common law of conspiracy to defraud.”
61. Section 16A(1) requires proof that the accused’s deceit induced the victim, to act or omit to act with either of the results specified in paragraphs (a) and (b). That is the actus reus of the offence. See HKSAR v Chan Kam Ching (2022) 25 HKCFAR 48, at [134]. Although deceit under the statutory definition in section 16A(3) includes omission, a concealment by the accused per se, as a form of omission, does not necessarily attract criminal liability. It does so only if it was made in breach of a duty of disclosure: see Archbold Hong Kong, supra, §22-128 at p 450; HKSAR v Chan Shu Hung [2001-2003] HKCLRT 316; HKSAR v Cheung Chi Fai [2011] 3 HKLRD 186; HKSAR v Law Joseph Nimcho, CACC 19/2013, unreported, 8 October 2013.
62. According to the particulars of the Charges presently formulated, the deceit allegedly practiced by the applicants on the Corporation involves two limbs:
(1) concealment of the fact that the said Premises had been used otherwise than for the Specified Purpose as set out in the leasing instruments, which is a form of omission; and
(2) false representation that the said Premises had been used for the Specified Purpose, which is a positive act.
The subject matter of both limbs is the allegation that the said Premises had been used otherwise than for the Specified Purpose.
63. In relation to the first limb, as seen, the applicants’ mere non-disclosure of the fact that the said Premises had been used otherwise than for the Specified Purpose is, as a matter of law, not sufficient. The prosecution must first prove that there is a duty of disclosure on their part to do so. However, they were not a party to any of the leasing instruments. Only Apple Daily Printing was. So subjecting the prosecution case to a more structured analysis than what was presented at trial, the applicants are criminally liable for the concealment practiced on the Corporation only if the prosecution proves that:
(1) Apple Daily Printing was under a duty to disclose to the Corporation the fact that the said Premises had been used otherwise than for the Specified Purpose; and
(2) Apple Daily Printing’s duty was attributable to each of the applicants; or
(3) each of the applicants was in any event under an independent personal duty to disclose such a fact to the Corporation.
64. In relation to the second limb, the prosecution has to prove that each of the applicants had made a false representation to the Corporation that the said Premises had been used in accordance with the Specified Purpose.
65. For both limbs, the prosecution has to prove that the applicants’ deceit induced the Corporation not to take action to enforce its rights under the leasing instruments, which resulted in benefit to Apple Daily Printing and/or Dico, or prejudice or a substantial risk of prejudice to the Corporation.
66. The following main issues on actus reus thus arise:
(1) Had the said Premises been used otherwise than for the Specified Purpose? (Issue 1)
(2) Applying the three-stage analysis at [63], was each of the applicants liable for the concealment of the fact that the said Premises had been used otherwise than for the Specified Purpose? (Issue 2)
(3) Did each of the applicants make the false representation that the said Premises had been used for the Specified Purpose? (Issue 3)
(4) Did each of the applicants’ deceit induce the Corporation not to enforce its rights under the leasing instruments with either of the results pleaded? (Issue 4)
67. Section 16A also requires proof that the accused must have a corresponding mens rea, defining “with intent to defraud” as intending to induce the victim to act, etc, with either or both of the stated consequences: HKSAR v Chan Kam Ching, ibid. The main issue on mens rea is whether the prosecution has proved that each of the applicants had the requisite intent to defraud. (Issue 5)
E. The prosecution case on “the said Premises had been used otherwise for the Specified Purpose”
68. As seen, the allegation that “the said Premises had been used otherwise than for the Specified Purpose” critically forms the basis of the Charges. It is therefore crucial to understand what exactly the prosecution case is in that regard before addressing the Issues. At first glance, the prosecution case appears to be limited to the breach of the user restrictions. The pleadings refers to Apple Daily Printing’s breach of the user restrictions in the leasing instruments. And evidence has been adduced to prove that Apple Daily Printing committed that breach by allowing Dico to occupy and use the said Premises for purposes unrelated to the Specified Purpose.
69. Mr Chan and Ms Maggie Wong SC, for the 2nd applicant,[65] argue, as they did below, that the breach of the user restrictions is the only basis of the prosecution case as pleaded. The particulars of the Charges make no reference to the non-alienation clauses at all. Bound by the particulars, the prosecution cannot rely on and adduce evidence in connection with the non-alienation clauses and any alleged breach thereof; and the duty to disclose such a breach and any breach thereof. Significantly, the Judge was wrong to have convicted the applicants on that additional basis.
70. In our view, whether the prosecution could proceed and the Judge could convict on that additional basis depends on the fairness of the trial, including in particular any disadvantage or prejudice which might have been caused to the applicants: cf Hau Tung Ying v HKSAR (2011) 14 HKCFAR 453, at [37] – [53]. In terms of fairness, there are two primary considerations: (a) pleadings and (b) actual conduct of the trial.
71. In relation to pleadings, Ms Yang submits that the particulars of the Charges do not merely refer to the Specified Purpose but also allege the applicants of concealing that the said Premises or part thereof were or had been used otherwise than for the Specified Purpose, or of making false representations thereon. The court is entitled to consider all the relevant terms of the leasing instruments and is not confined to the basis of whether the said Premises had been used for the Specified Purpose. She goes as far as submitting that the particulars include the reference to the non-alienation clauses.
72. However, the plain and natural meaning of the particulars does not support Ms Yang’s contention that they somehow also include that additional basis. With respect, she has conflated user with licence. More importantly, it is trite that the function of the particulars is to inform the defendant the prosecution case that he has to meet. This would then define the scope of the evidence which the prosecution can properly lead: R v Chan Kang To [1997] HKLRD 412 at p. 417I-J; Chan Tak Ming v HKSAR (2010) 13 HKCFAR 745 at [23]. This rule is not a technical requirement but is essential to the accused’s right to a fair trial. So, had the prosecution wished to rely on the non-alienation clauses, they should have set them out in the particulars.
73. Ms Yang refers to HKSAR v Chen Keen (2019) 22 HKCFAR 248, per Fok PJ at [49] – [51], for the general proposition that particulars should not be confused with the essential constituent elements of the offence. However, that distinction, which is well-established, does not detract from the prosecution’s duty to properly formulate its case in the particulars for the defendant to meet to ensure fairness of the trial.
74. In relation to the conduct of the trial, Ms Yang submits that as is apparent from the prosecution’s opening submissions, the evidence adduced and its closing submissions, the prosecution throughout the trial did not confine its basis to the user restrictions but included the non-alienation clauses too. The applicants conducted their defence with that additional basis in mind and had no difficulty in so doing. They also complained to the Judge repeatedly, including in their closing submissions, that it was a new basis other than the breach of the user restrictions in the Charges. The Judge, who was alive to this objection, nevertheless convicted the applicants on that basis as well.
75. We agree that in light of how the trial was conducted, the applicants must have known and understood that the prosecution relied on both the user restrictions and non-alienation clauses, a wider basis than the pleaded case contained in the particulars. They had the opportunity to and did address the prosecution case in full, both by way of cross-examination and submissions. Viewed objectively, they had not been disadvantaged or prejudiced in any material way. The overall fairness and integrity of the trial was not affected and the applicants’ right to a fair trial had not been compromised. Mr Chan and Ms Wong’s complaints in this regard therefore fail.
76. We now come to Issue 1.
F. Issue 1 – whether Dico’s occupation and use constituted a breach of the user restrictions or the non-alienation clauses
77. Whether Dico’s occupation and use of the said Premises constituted a breach of the user restrictions or the non-alienation clauses depends on firstly, the proper construction of the provisions; and secondly, the application of the provisions, properly construed, to the facts as found by the Judge. To construction we first turn.
F1. Construing the provisions
78. The general principles for construction of contracts are well established. They were recently reiterated by the Court of Final Appeal in Eminent Investments (Asia Pacific) Ltd v DIO Corp (2020) 23 HKCFAR 487, [43] – [46]. As summarised by the Court of Appeal in Law Ting Pong Secondary School v Chen Wai Wah [2021] 3 HKLRD 185, at [47] – [48]:
“47. … [That] interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract. In Jumbo King Ltd v Faithful Properties Ltd (1999) 2 HKCFAR 279, at p.296D-I, Lord Hoffmann pointed out that ‘the overriding objective in construction is to give effect to what a reasonable person rather than a pedantic lawyer would have understood the parties to mean’, and this ‘involves having regard, not merely to the individual words they have used, but to the agreement as a whole, the factual and legal background against which it was concluded and the practical objects which it was intended to achieve.’
48. The process of interpretation is thus a unitary exercise and the Court does not consider the words in a vacuum but always in context of the background, even if the words are unambiguous and sensible. The focus is on the meaning which the [words] would reasonably have conveyed to the parties in the situation in which they were at the time of the making of the contract.”
79. For the construction exercise at hand, a consideration of the following provisions in the Lease will suffice, as they were also applicable before it was executed.
80. Clause B(14) of the Lease provides that the lessee covenants with the Corporation:
“Not to use or permit or suffer the said premises or any part thereof to be used otherwise than for the purpose specified in the Second Schedule hereto or such other purpose as the Corporation may approve of in writing to the Lessee and for no other purpose whatsoever PROVIDED nevertheless that where such part of parts of the said premises was or were, in accordance with the provisions of the said Agreement for Lease or this Lease, built or constructed as
(a) ancillary offices required to support the principal industrial undertakings referred to in the said Proposal Form … and the Lessee shall use the same as the Lessee’s ancillary offices … of or incidental to the Lessee’s operation or business at the said premises only …” (Emphasis supplied)
81. The Specified Purpose set out in the Second Schedule reads:
“The publishing and printing of newspapers and magazines using processes as described in the Lessee’s application and supporting schedules, numbered 398-1 to 398-10 annexed to the Proposal Form referred in the said Agreement for Lease”.
82. Under Clause B(11), the lessee covenants with the Corporation:
“(a) Except as provided in paragraphs … (f), not to assign mortgage charge demise underlet or part with the possession of the said premises or any part thereof or otherwise dispose of the said premises or any part thereof or any interest therein or enter into any agreement so to do nor to permit any other party by way of a licence or otherwise to occupy the said premises or any part thereof.
…
(f) The Lessee may, subject to the prior written approval of the Corporation, permit a subsidiary or associate company of the Lessee to occupy or share with the Lessee the use of part of (but not the whole of) the said premises by way of licence on such terms for such duration and in such form as may be approved by and in conformity with any condition as may be imposed by the Corporation in its discretion.”
83. The contextual consideration that is most relevant to construction is the leasing policy adopted by the Corporation. Land in the Estate is designated by the Government to be held by the Corporation for the purpose of facilitating its mission to stimulate the growth of local industrial and technological businesses with a view to furthering and broadening Hong Kong’s economic base and upgrading its technology levels. To attract suitable entities, the Corporation provides financial incentives to them in terms of preferential rates for leasing the land lower than the market rates. On the other hand, the Corporation only leases land to the suitable entities for them to carry out specified operations which align with the above fundamental aim, after the careful assessment incorporated in the steps for taking out a lease in the Estate. How the lessee uses the land must be subject to the Corporation’s approval and control. In short, under the Corporation’s leasing policy, while land in the Estate is leased to suitable entities at preferential rates, it must be used (1) for the purpose as specified in the lease only; and (2) by the lessee alone or such licensees as permitted by the Corporation. These policy considerations are well-known to any applicant who wishes to apply for a lease in the Estate, including Apple Daily Printing in the present case.
84. Another contextual consideration relevant to usage of the said Premises is this.
85. The standard application form for admission to the Estate asks in Section D(1) an applicant to provide details of floor area required in the proposed building to fit the purpose stated: (a) manufacturing; (b) covered storage; (c) administration; and (d) others (please specify). This acknowledges the commercial reality that the lessee may have to use part of the land for administration and other purposes to support the undertakings in the specified purpose.
86. In the present case, Apple Daily Printing in the Application Form indicated in Section D(1) the floor area proposed for the said Premises. For (c) administration, the floor area was 3,507 square metres on the upper floors. For (d) others, the purposes stated were “treatment rooms/loading/unloading/services rooms”, occupying 4,477 square metres on the ground floor. In Section G, the numbers of employees proposed to be deployed at the said Premises were given in accordance with different categories at the initial stage and final stage respectively. For managerial and supervisory staff, the number was 20 and 30. For logistic supports, it was 20 and 40. For sales/marketing, it was 10 and 20. For editorial staff, it was 400 at the final stage. These particulars indicated that Apple Daily Printing intended to carry out the undertakings in the Specified Purpose with the support of other departments.
87. Further, in Section B of the Application Form on the manufacturing process, Apple Daily Printing outlined the four steps involved: editorial preparation; pre-press production; printing the publications; and binding and distribution. Editorial preparation and pre-press production are the two crucial steps leading to the actual printing of the newspapers and magazines; whereas distribution is the necessary step for publication of the finished products. These steps may be regarded as ancillary but are necessary and have been included as the manufacturing process referred to in the Specified Purpose. Using part of the said Premises for these steps fall within the scope of the Specified Purpose.
88. Catering for the commercial reality and Apple Daily Printing’s intention described above, the Agreement for Lease expressly provided for the construction of ancillary offices, which are in the opinion of the Corporation required to support the principal industrial undertakings referred to in the Proposal Form: Clause B(6)(a). The final say as to which areas in the said Premises could be used as ancillary offices rested with the Corporation, giving it overall control over the matter. Moreover, the ancillary offices, together with canteen and welfare facilities for the employees shall not exceed 30% of the total usable floor area of the said Premises except with the prior approval of the Corporation and the Director of Lands: Clause B(6)(e).
89. Construed against the above contextual considerations, the meaning and effect of Clause B(14) of the Lease is clear.
90. First, to give effect to the Corporation’s policy that land in the Estate can only be used for the specified purpose in the lease, Clause B(14) emphasises that the land must not be used for any other purpose whatsoever. The lessee must use the land for the specified purpose only and no other purpose is permissible unless with the Corporation’s written approval. It follows that Apple Daily Printing must use the said Premises for the Specified Purpose only or for any purpose with the Corporation’s approval in writing.
91. This construction does not have the effect of inhibiting the development of the lessee’s business, as contended by Mr Chan and Ms Wong. For the user restrictions allow the lessee to apply for approval from the Corporation to use the land for some other purpose as the occasions arise. This gives the lessee room to develop its business after the grant of the lease. While providing flexibility, it does not give the lessee a free rein to do whatever it likes, lest the original intention of leasing the land for fostering its development of industries or businesses, as stipulated by the specified purpose, may be defeated. Obtaining approval from the Corporation guarantees that any use other than the specified purpose is always subject to its control. This strikes a careful balance between development and control. Apple Daily Printing could have applied for such approval for further development if it so wished.
92. Second, in acknowledging the commercial reality and Apple Daily Printing’s intention as described above, Clause B(14) allows the ancillary offices built under the Agreement for Lease to be used as such to support the principal undertakings referred to in the Proposal Form. Apple Daily Printing shall use the same as such offices of or incidental to its operations and businesses at the said Premises only. On a proper interpretation, “ancillary offices” must mean offices which are in the Corporation’s opinion supportive of Apple Daily Printing’s operations pursuant to the Specified Purpose or any other approved purpose exclusively; and Apple Daily Printing may use the ancillary offices incidental to its operations exclusively. This exclusivity is crucial to ensuring that the ancillary offices will not be used in breach of the user restrictions; and that Apple Daily Printing will not permit any such use of the offices contrary to Clause B(14).
93. Third, following from the above, the Corporation and Apple Daily Printing, as contracting parties, clearly envisaged and intended that the said Premises could be used for purposes that are ancillary and incidental to the Specified Purpose. No other purpose is permissible except with the Corporation’s written approval. This construction is consistent with the general proposition that a primary user in a lease may be interpreted to include users that are reasonably regarded as incidental to it but not others: see Mexx Consolidation (Far East) Ltd v Attorney General [1987] HKLR 1210, at pp.1213I-1214A; Raider Ltd v Secretary for Justice (2000) 3 HKCFAR 309, at pp.319E-321C.
94. Turning to the non-alienation clauses, its meaning and effect is also clear when construed against the relevant contextual considerations set out above. Clause B(11)(a) and (f) of the Lease serve three purposes:
(1) The lease is granted to the lessee personally.
(2) The licensee must be a subsidiary or associate company of the lessee. No other party, irrespective of its relationship with the lessee, is eligible.
(3) The licensee can only use the land subject to the terms imposed by the Corporation in the licence.
Together, they ensure that the land is continuously used for the specified purpose or any other approved purpose despite the grant of licence. These three conditions prevent the lessee from using the land for rental gain by sub-letting at large: see SUNeVision Holdings Ltd v Hong Kong Science and Technology Parks Corporation [2022] 3 HKLRD 21, at [11].
F2. Dico’s occupation and use in breach of the user restrictions
95. In the present case, as found by the Judge, Dico, as the 1st applicant’s private company, mainly engaged in the business of management consultancy and investment, and dealt with the 1st applicant’s and his family’s personal properties and affairs. It had nothing to do with the Specified Purpose. Apple Daily Printing had not obtained any approval from the Corporation for Dico either. Mr Chan submits that the documentary evidence adduced by the prosecution only related to Dico’s operation after 2006, leaving a lacuna between 1999 and 2006. With respect, this is a blinkered approach, which ignores the totality of the evidence adduced by the prosecution, including those admitted facts and other documentary evidence pertaining to Dico and its operations, and, importantly, PW6’s oral testimony on Dico’s businesses and activities. The remaining question is whether Dico’s operation was ancillary or incidental to Apple Daily Printing’s operation and business under the Specified Purpose, as Mr Chan and Ms Wong contend.
96. The main argument raised by counsel is that Dico was involved in other activities supportive of and incidental to Apple Daily Printing’s operations. Such activities included holding shares in Apple Daily Printing between 1997 and 2010; supporting the development of Apple Daily Printing’s online media from 2006 (which, they contended, fell within the scope of the Specified Purpose); assisting in the privatization of Next Media Animation in 2011; assisting in the accounting matters of the Next Media Group; and engaging in financing and supporting the business of the Group. By virtue of these activities, Dico’s operations were ancillary and incidental to Apple Daily Printing’s operations within the meaning of the Specified Purpose and the offices it occupied fell within the definition of “ancillary offices” under Clause B(11)(f). We disagree because:
(1) Applying the construction at [92], whatever businesses or activities Dico might have conducted to support Apple Daily Printing’s business and operation, including online media (assuming that it fell within the scope of the Specified Purpose), the undisputed fact remains that it was at the same time the 1st applicant’s private company mainly engaging in activities which had nothing to do with the Specified Purpose whatsoever and without the Corporation’s approval. It did not provide support to Apple Daily Printing for its operations under the Specified Purpose exclusively. Absent the requisite exclusivity, its operations did not amount to a purpose ancillary or incidental to the Specified Purpose.
(2) That being the nature of its operations, and applying the construction at [91] above, the offices that Dico occupied could not be regarded as “ancillary offices” for the purpose of Clause B(14)(a).
97. Mr Chan and Ms Wong next submit that there was no breach of the user restrictions as long as there was substantial compliance with the requirement for the Specified Purpose. It was not possible for every inch of the said Premises to be used for the Specified Purpose, to the exclusion of some other insignificant uses, such as the private affairs of the owner or employees. Further, Dico only occupied 0.16% of the total floor area of the said Premises. It was of a de minimus proportion and did not alter the character of the primary use of the said Premises, which remained the Specified Purpose. We again disagree.
98. As demonstrated, the contractual intention of the user restrictions is to ensure that there will always be full and strict compliance with the Specified Purpose or any other approved purpose. Dico’s operations at the said Premises must be viewed in its entirety. It is quite wrong to look at the actual floor areas it occupied only. Its actual operations and the extent and nature of its activities, and the duration (22 years), are all relevant. When so considered, it was clearly a breach of the user restrictions.
99. For completeness, we need to deal with two minor points taken by counsel. They first argue that under the Lease, the said Premises could be used for permitted purpose other than the Specified Purpose. The concealment as pleaded in the Charges, namely, concealing that the said Premises were used otherwise than for the Specified Purpose, could not arise because it was expected that parts of the said Premises could be so used. However, as seen, Dico’s use of the said Premises did not fall within the scope of those permitted purposes. They next submit that, as to false representation, since the Charges did not specify which part of the said Premises it was concerned with, any representation that parts thereof were used for the Specified Purpose would not be false, as it was not in dispute that at least some parts were so used. With respect, this pleading point is most technical and devoid of merits. We have no hesitation in rejecting it.
F3. Dico’s occupation and use in breach of the non-alienation clauses
100. It is undisputed that Apple Daily Printing had not applied for any licence for Dico to occupy and use the said Premises.
101. Mr Chan and Ms Wong argue that no licence was required under Clause B(11) of the Lease because Dico did not have exclusive possession of the parts that it used. They rely on SUNeVision Holdings Ltd v Hong Kong Science and Technology Parks Corporation, at [108] – [110] in support. There, the Court of Appeal reiterated the general proposition that the meaning of the word “occupation” in a lease terms depends on context and purpose. While the word connotes a degree of presence over the relevant space and the occupier’s power to exclude other persons from that space, the degree of presence and exclusion that would amount to occupation depends on the facts and matters such as “the nature of the premises, the use to which they are being put and the rights enjoyed or exercised by the persons in question”. Applying that proposition, and having regard to the nature of the Lease; the contractual intent that the said Premises had to be used by Apple Daily Printing personally for the Specified Purpose only; and the purpose of the licensing provisions; it seems to us that “occupation” in relation to Dico’s case did not require wholly exclusive possession as contended by counsel before the licensing provisions were to be triggered.
102. We need not come to a definitive view on occupation because what is really dispositive is another aspect of the non-alienation clauses, which is equally important. As seen, on a proper interpretation of Clause B(11)(a) and (f), Apple Daily Printing could only share the use of part of the said Premises with a subsidiary or associate company under a licence granted by the Corporation. It could not share the use of part of the said Premises with anyone else who was neither a subsidiary nor associate company, such as Dico. Since it did, it had committed a breach of the non-alienation clauses.
F4. Conclusion
103. For the above reasons, Apple Daily Printing did commit a breach of both the user restrictions and the non-alienation clauses by allowing Dico, the 1st applicant’s private company dealing mainly with his and his family’s affairs, to occupy and use part of the said Premises for some 22 years. The Judge was accordingly correct in making the same findings, although he did not articulate his reasons as fully or orderly as we did.
G. Issue 2 – Did each of the applicants owe a duty of disclosure?
104. As already seen, Issue 2 entails three sub-issues:
(1) Was Apple Daily Printing under a duty of disclosure?
(2) If yes, how was that duty attributable to each of the applicants?
(3) In any event, did each of the applicants owe an independent personal duty of disclosure to the Corporation?
We will discuss them in turn.
G1. Sub-issue 1: Did Apple Daily Printing owe a duty of disclosure?
105. The prosecution case at trial was that Apple Daily Printing was under a duty to disclose that the said Premises had been used otherwise than for the Specified Purpose, which as seen, referred to the breaches of the user restrictions and the non-alienation clauses occasioned by Dico’s occupation and use.[66] This relates to the performance of the Agreement for Lease and the Lease on the part of Apple Daily Printing. However, at common law, there is no such general duty of disclosure in the performance of an already concluded contract: Treitel on the Law of Contract, 16th Edition, at §9-177 at p.482. Most significantly, a lease does not generally fall within any established category of contracts where such a duty of disclosure is imposed. The prosecution so far has not cited any authority to support its contention that a lease imposes a duty on the lessee to disclose its own breach of the lease to the lessor.
106. In contending that the duty did arise in the present case, Ms Yang prays in aid the following exceptions to the general rule:
(1) express term of the leasing instruments;
(2) implied term of the leasing instruments; and
(3) special nature of the leasing instruments giving rise to a special relationship between the contracting parties.
See generally, HKSAR v Law Joseph Nimcho, supra, at [37], quoting from Arlidge & Parry on Fraud, 2nd Edition (1996), §4-014 at p.127.[67]
107. Ms Yang stresses that it is not the prosecution case that Apple Daily Printing was under a duty to disclose the breaches of the user restrictions and the non-alienation clauses. Rather, the duty is in respect of the occupation or sharing of occupation or use by other company of part of the said Premises that required prior approval by the Corporation, which was entitled to enforce its rights under the Lease, including re-entry, if so wished. That duty arose under the non-alienation clauses which provide that if Apple Daily Printing intended to make available for occupation by other company or to share with other company part of the premises, it was required to apply for a licence from the Corporation in accordance with the prescribed procedures. Such a requirement to apply for a licence, Ms Yang reasons, in effect imposed on Apple Daily Printing a duty to disclose such occupation or use of the said Premises, by way of express term or alternatively implied term, or because of the special nature of the leasing instruments.
108. Ms Yang’s submissions are premised on the licensing requirement rather than a breach of either the user restrictions or the non-alienation clauses. As such, it is a significant departure from the prosecution case conducted at trial. It is a new case raised for the first time on appeal. In our view, it would be most unfair if the prosecution were allowed to shift its case in such a fundamental manner now. The prosecution case must be confined to the original basis advanced at trial.
109. Taking the first matter which Ms Yang relies on at [106] above, we note that the leasing instruments contained no express term that imposed a duty on Apple Daily Printing to disclose its breach of the user restrictions or non-alienation clauses as the prosecution contended.
110. The main thrust of the prosecution’s contention raised and accepted by the Judge, now repeated by Ms Yang before us, is that in line with the Government’s policy to promote Hong Kong’s industrial developments, the Corporation grants leases in the Estate at competitive and concessionary premiums well below market rates. Further, the term of the leases is up to 2047, which provides a stable operation environment to attract applicants to develop their business on a long-term basis. As such, the lease is not a purely commercial transaction. It is a special lease different from an ordinary lease on the market. It places the Corporation as landlord and the lessee in a special relationship. The lessee has to apply for a licence from the Corporation to enable the licensee to carry on a business same as the specified purpose. During the currency of the lease, if there is any non-conformity, the tenant is under a duty to disclose the relevant facts to the Corporation, including the fact that land has not been used in accordance with the specified purpose and the company concerned occupying the land does not have the requisite licence to do so. Failure to disclose the facts constitutes false representation. Based on this premise, Apple Daily Printing was under a duty to disclose to the Corporation that the said Premises had not been used in accordance with the Specified Purpose because of Dico and that Dico had occupied the said Premises without a licence.
111. In our view, the leasing instruments have to be viewed as a whole to determine if they gave rise to the special relationship as contended by the prosecution:
(1) Despite its mission and leasing policy, the Corporation must act in accordance with prudent commercial principles: section 7 of Cap 565. That must dictate how it deals with the lessees in the Estate. It follows that from its perspective, the relationship with its lessees must be commercial in nature. This must be equally true from the lessees’ perspective, too.
(2) The preferential rates and tenure are undoubtedly important attractions to the lessees. However, they have to satisfy the Corporation with the merits of their proposed projects in order to gain its approval for admission to the Estate.[68] One of the considerations that the Corporation will take into account is the size of investment proposed by the lessees. In the present case, Apple Daily Printing invested some HK$528 million into the construction of the said Premises and fitting of machinery, etc. Balancing the costs incurred and the benefits involved, including the preferential rates and tenure, to determine if the project was viable clearly entailed a careful commercial decision on Apple Daily Printing’s part.
(3) The Corporation’s decision to grant the lease to Apple Daily Printing was likewise a careful commercial decision, after carrying out the requisite assessment to ensure that the grant of preferential rates and tenure would be justified.[69]
(4) In stressing that the preferential rates and tenure were benefits to Apple Daily Printing, Ms Yang seems to have implied that Apple Daily Printing alone stood to benefit from the leasing instruments. That is, however, not the case. It seems that the Corporation would also benefit from the improvement in the land value from Apple Daily Printing’s construction of the said Premises. Further, the Corporation must have been satisfied that the undertakings under the Specified Purpose would facilitate the overall development of Hong Kong’s economy by broadening its industrial base and upgrading technology levels. Those are substantial benefits that the Corporation, which is tasked by the Government to promote Hong Kong’s industry and technology, would stand to gain.
112. Thus analyzed, while the leasing instruments had their special characteristics, they were essentially commercial in nature. What existed between the Corporation and Apple Daily Printing remained essentially a commercial landlord-tenant relationship. It was not a special relationship between the Corporation and Apple Daily Printing as the prosecution contends. As such, it did not constitute an exception to the general common law rule that no duty of disclosure arises in the performance of an already concluded contract.
113. Turning to implied term, it is a matter of construction of the contract. Insofar as Ms Yang seeks to rely on the special relationship between the parties, it could not have advanced the prosecution in light of our conclusion above. Moreover, it is trite that the term sought to be implied must not contradict any express term of the contract: Kensland Realty Ltd v Whale View Investment Ltd (2001) 4 HKCFAR 381, at [23]. Clause C(1)(a) of the Agreement for Lease and Clause B(16) of the Lease provide that the Corporation may carry out inspections for the said Premises, the purpose of which was to ensure Apple Daily Printing’s compliance of the user restrictions and other terms of the leasing instruments. The contractual intent behind those provisions is clear. Recognizing that their interests do not necessarily align with each other, the Corporation does not expect Apple Daily Printing to disclose voluntarily any breach of the user restrictions or other terms. Rather, the Corporation has to protect its own interests by carrying out inspections of the said Premises. This strongly militate against the notion of implying a term to impose the duty of disclosure on Apple Daily Printing.
114. Both the prosecution and the Judge relied on the fact that actual inspections carried out at the said Premises were superficial and ineffective.[70] However, the actual inspections and their effects are evidence of conduct subsequent to the making of the leasing instruments. As such, they are not admissible for the purpose of construction: Chitty on Contracts, 25th Edition, Vol.1, §16-061.
115. The Judge accepted the prosecution’s argument, which Ms Yang repeats, that without the implied term to disclose the breaches, the user restrictions and the non-alienation clauses would be rendered nugatory and the effectiveness of the licensing mechanism would be undermined. That seems to be the case from the Corporation’s perspective with the benefit of hindsight. However, as seen, at the time of the contract, the parties’ intent was to empower the Corporation’s staff to carry out inspections and upon discovery of breaches, for the Corporation to take enforcement measures in accordance with the provisions of the leasing instruments and prescribed procedure. As submitted by Mr Chan and Ms Wong, the court will not rewrite or insert terms that affect or better the parties’ understandings and expectations of their contractual obligation, especially in detailed commercial contracts such as the leasing instruments in the present case: Sinoearn International Ltd v Hyundai-CCECC Joint Venture (2013) 16 HKCFAR 632, at [78]; Marks & Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd & Another [2016] AC 742, at [21].
116. For completeness, it would appear from the evidence that the leasing instruments are standard contracting documents applicable to all tenants in the Estate. While there are individualised terms to cater for the specific circumstances of each tenant, the user restrictions and non-alienation clauses appear to be common terms. So if the prosecution were right on the duty of disclosure, it might potentially apply across the board to all tenants irrespective of the nature of their businesses and operations. That is in fact Ms Yang’s submission. We have reservations if such a sweeping proposition affecting every single tenant in the entire Estate truly represents the Corporation’s leasing policy or contractual intent.
117. In conclusion, we hold that Apple Daily Printing did not owe a duty to the Corporation to disclose its breach of the user restrictions or the non-alienation clauses occasioned by Dico’s occupation and use of the said Premises. With respect, the Judge erred.
G2. Sub-issue 2: How was Apple Daily Printing’s duty attributable to each of the applicants?
118. In case we were wrong on sub-issue 1, we proceed to deal with the second sub-issue on attribution.
119. On the available evidence, the obvious route to attribute Apple Daily Printing’s breach of duty of disclosure to the applicants is section 101E of the Criminal Procedure Ordinance (Cap 221), which provides:
“Where a person by whom an offence under any Ordinance has been committed is a company and it is proved that the offence was committed with the consent or connivance of a director or other officer concerned in the management of the company, or any person purporting to act as such director or officer, the director or other officer shall be guilty of the like offence.”
However, the prosecution had not invoked it at trial. When we at the hearing query why the prosecution did not do so, Ms Yang does not offer any explanation. Instead, she expressly states that she will not rely on the section either. In light of her position, any further consideration as to whether and how the section might have augmented the prosecution case is academic.
120. Ms Yang seeks to rely on the established principle that corporate bodies are deemed to act and acquire knowledge through those individuals who can be identified as its directing minds: Smith, Hogan & Ormerod’s Criminal Law, 17th Edition, §§8.1.2, 23.2; R v A Ltd & Others [2017] 1 Cr App R 1, at §§26-27; R v Alstom Network UK Ltd [2019] 2 Cr App R 34, at §30. Under this principle, the company is fixed with criminal liability through the acts or omissions of its directing mind. As the learned editors of Blackstone’s Criminal Practice (2025) summarized at §A6.23:
“Because a company is a separate person from its officers, the officers will not necessarily be guilty of a crime just because the company is. Conversely, since a company may be fixed with criminal liability through the acts or omissions of its ‘directing mind’, the way for criminal liability to be proved may, depending on the relevant rule of attribution, be by identifying the criminal acts of one of its officers; in those circumstances both the individual officer and the company may be guilty. In appropriate circumstances, both the company and its officers may be charged with a criminal offence and/or with aiding and abetting an employee to commit a crime …”
121. This rule is the criminal law’s solution to the lack of a corporate body to perform the actus reus and a corporate mind capable of forming mens rea by treating the minds and bodies of the officers concerned as supplying its mental and physical faculties: Smith, Hogan & Ormerod’s Criminal Law, §8.1.2.5. It only attributes criminal liability to a company through the act of its officer who is the directing mind. It does not have the opposite effect of attributing the company’s criminal liability to its officers. Ms Yang’s reliance on this rule is entirely misplaced. If her submission were accepted, it would turn the rule on its head.
G3. Sub-issue 3: Did the applicants have an independent personal duty?
122. Ms Yang makes no submission that the applicants owed the Corporation an independent personal duty to disclose Apple Daily Printing’s breach of the user restrictions or the non-alienation clauses. That is a recognition on her part that no such duty arose either as a matter of law or on the facts.
G4. Other points
123. In her oral submissions, Ms Yang raises two fresh points for the first time on appeal:
(1) Both Apple Daily Printing and the applicants might be held liable under the Charges as participants to a joint enterprise. However, that is not what the Charges alleged. Further, Apple Daily Printing has not been named as a co-defendant, contrary to the rudimentary requirement that the prosecution must expressly name a co-defendant in a joint charge if his identity is known.
(2) The 1st applicant had used Apple Daily Printing as a vehicle to perpetrate the fraud against the Corporation. That was never the prosecution case below and the Judge did not make any finding to that effect either.
These points are not open to the prosecution on appeal.
G5. Conclusion
124. For the above reasons, we hold that even if Apple Daily Printing owed the duty of disclosure to the Corporation and had breached that duty, the same could not as a matter of law be attributed to the applicants. The Judge did not analyze the matter in the detail as we did. In any event, his reasoning in concluding that the applicants were liable for the concealment as the prosecution contended is unsupportable. He erred in making those findings. Since the prosecution has failed to prove that the applicants owed the Corporation the requisite duty of disclosure, its case on the first limb of the Charges based on concealment must fail in limine.
H. Issue 3 – Did each of the applicants make the false representation?
125. This issue concerns the second limb of the Charges based on false representation.
H1. The 1st applicant under Charge 1
126. In relation to the 1st applicant under Charge 1, Ms Yang submits that the false representation by Apple Daily Printing that the said Premises had been used in accordance with the Specified Purpose was attributed to him. However, she has failed to explain why such false representation by Apple Daily Printing could be attributed to him, a non-contracting party to the leasing instruments.
127. Ms Yang next submits that the 1st applicant made a false representation by stating in the Application Form (dated 15 August 1995) that the said Premises would be used for the Specified Purpose, which induced HKIEC to grant the said Land to Apple Daily Printing and subsequently entered into the Proposal Form and the Agreement for Lease.[71] Thereafter and before the execution of the Lease, the 1st applicant, who was the directing mind of Apple Daily Printing, permitted Dico to occupy and use the said Premises without a licence for activities unrelated to the Specified Purpose since 1 April 1998. The 1st applicant was aware that HKIEC relied on the said representation, which was a continuous one, and believed that was the state of affairs. Its belief was reinforced by the Undertakings that the 1st applicant signed for applications for licences for 12 companies in early May 1999.[72] However, the 1st applicant chose not to disclose or inform HKIEC of the change in circumstances, that is, the material fact that Dico occupied and used part of the said Premises. HKIEC was thereby induced into executing the Lease on 25 May 1999 and was prejudiced from exercising its rights under the Agreement for Lease.
128. There are several difficulties in Ms Yang’s argument.
129. First, while the Application Form did state the proposed use of the said Premises, there is no evidence to prove that it was a false representation. For nothing in the evidence suggests that as early as 15 August 1995, it had been planned or decided that Dico would occupy and use the said Premises after the execution of the Agreement for Lease. In fact, as a matter of logic, by characterizing it as a continuous representation and submitting that it had become untrue by the change of circumstances occasioned by Dico’s subsequent occupation in April 1998, Ms Yang must have accepted that it was not a false representation when it was made in August 1995.
130. Second, the 1st applicant signed the Application Form in his capacity as the chairman of Apple Daily Printing. It raises the question of how the representation therein would become something for which he was personally liable.
131. Third, the material parts of the Undertakings have been set out at [40] above. To recap, the 1st applicant first confirmed and undertook that he shall procure the licensee to use the said Premises for the Specified Purpose. It is hardly a representation that the said Premises had been used for the Specified Purpose. The 1st applicant next stated that he realized that if there was any breach of the terms of the Agreement for Lease whether by Apple Daily Printing as licensor or the licensee, the Corporation would be at liberty to exercise all rights under the Agreement for Lease. Again, it was not the representation as Ms Yang contends.
132. Fourth, the main plank of Ms Yang’s argument is that the representation in the Application Form was a continuous one. In Chitty on Contracts, at §10-027, the relevant principle is summarized thus:
“Representations are treated for many purposes as continuing in their effect until the contract between the parties is actually concluded. This is one reason why a statement which is true when made, but which ceases to be true to the knowledge of the representor before the contract is concluded, is treated as misrepresentation unless the representor informs the representee of the change in circumstances.”
133. Applying the principle, the Application Form was one of the documents in the course of the negotiations leading to the execution of the Proposal Form and the Agreement for Lease. The representation contained therein was to induce HKIEC to grant the said Land to Apple Daily Printing to construct the said Premises to be used for the Specified Purpose: see Clause A of the Agreement for Lease for the purpose of granting the said Land.[73] That being its effect, it continued until the Agreement for Lease was actually executed and not beyond.
134. Fifth, according to its preamble, HKIEC granted the Lease to Apple Daily Printing because it had completed the erection of the said Premises and had commenced operations, and was entitled to the grant. In so doing, HKIEC must have been satisfied that Apple Daily Printing had used the said Premises for the Specified Purpose only. It is reasonably arguable that HKIEC was so satisfied because of the actual conduct of Apple Daily Printing since the execution of the Agreement for Lease, rather than the representation made in the Application Form, which the Lease did not even mention.
135. In conclusion, we hold that the prosecution has failed to prove beyond reasonable doubt that the 1st applicant had made the false representation under Charge 1 as alleged. The Judge erred.
H2. The applicants under Charge 2
136. As her primary submission, Ms Yang again argues that Apple Daily Printing’s false representation that the said Premises had been used for the Specified Purpose is attributable to both applicants under Charge 2. This submission must likewise fail because she has failed to explain why such attribution is possible.
137. Ms Yang then submits that the applicants together with PW6 and other persons, including Mark Simon and Ho, made a false representation to HKSTPC about Dico’s occupation in the 9/4/20 Letter. In responding to HKSTPC’s enquiry “whether Dico is, in any way, operating inside [the said Premises] and the reason for using the address of [the said Premises] as its registered office address”, the Letter replied: “Dico does not occupy and is not operating on any part of [the said Land]”. Since Dico only moved out of the said Premises physically in May 2020, the representation in the Letter was false.
138. Taking issue on the falsity of the representation, Mr Chan and Ms Wong argue that occupation is a difficult legal concept and the 9/4/20 Letter was issued upon legal advice. As such, there is doubt as to the falsity about the representation that Dico “does not occupy” the said Premises.
139. In our view, the 9/4/20 Letter did appear to be misleading as Dico only moved out of the said Premises physically in May 2020. However, that was just one piece of the relevant evidence, which might not be conclusive, especially when it was issued upon legal advice. Evidence in relation to Dico’s actual occupation and operation as at 9 April 2020 would seem necessary. Given the state of the evidence, there is doubt if the prosecution had discharged the burden of proving the falsity of the representation in the 4/9/20 Letter. Even if the prosecution had, there were further hurdles that it might not be able to overcome.
140. Ms Yang argues that while there is no direct evidence showing that the 1st applicant was personally involved in the preparation of the 9/4/20 Letter, the 2nd applicant had email correspondence with PW6, Mark Simon, Boris Chow and Ho discussing the reply to HKSTPC . They, except Boris Chow, also had meetings over the matter on 31 March and 6 April 2020. The 1st applicant, as the directing mind and controlling will of Apple Daily Printing and Dico, must have been notified of the representations to be made to HKSTPC before the issuance of the 9/4/20 Letter and must have consented to it.
141. However, in March and April 2020, the 1st applicant was no longer a director of Apple Daily Printing. He had in fact ceased to be so since December 2014. In his testimony, PW6 gave evidence to the effect that the major decisions relating to Apple Daily Printing would be made by the 1st applicant as the majority shareholder of the Next Media Group.[74] But it does not necessarily follow that he was at the material time the directing mind and will of Apple Daily Printing. In any event, as accepted by Ms Yang, there is no direct evidence that he was personally involved in the matter. Her suggestion that, inferentially, he must have been notified of and consented to it has no sufficient evidential basis. On the contrary, the fact that he was not included in the email chain in which the 2nd applicant and others discussed the response to HKSTPC reasonably suggests that he was not involved in the matter. It also militates against the inferences that Ms Yang attempts to draw. If, as contended, his consent was vital, why was he not included in the email chain in the first place, which would no doubt conveniently keep him abreast of the situation, others’ views and Ho’s advice for him to come up with an informed decision quickly?
142. PW6 gave evidence that Mark Simon would normally convey the 1st applicant’s message or that PW6 believed that Mark Simon was executing the 1st applicant’s instruction. Being hearsay aside, that piece of evidence is insufficient for one to draw the irresistible inference, as the Judge did, that Mark Simon must have changed the registered address of Dico and relocate Dico after discussion with and approval by the 1st applicant.
143. As to the 2nd applicant, as explained below, the prosecution had difficulty in proving that he had the requisite intent to defraud.
H3. Conclusion
144. For the above reasons, we hold that the prosecution has failed to prove that the applicants had made the false representation as alleged in Charge 2.
I. Issues 4 and 5
145. In light of our holdings above, Issues 4 and 5 do not arise for our determination. For completeness, we wish to make the following observations.
146. In relation to Issue 4, Ms Yang submits that the representation in the Application Form induced HKIEC to grant the Lease to Apple Daily Printing. However, the Charges complained that the Corporation had been induced not to take enforcement action under the Agreement for Lease and the Lease, not that it had been induced to grant the Lease. Ms Yang’s attempt to widen the prosecution case is impermissible.
147. As to Issue 5, the prosecution might have difficulty in proving mens rea if the case were to proceed to that stage.
148. First, in relation to both applicants, Clauses B(15), (16) and (20) of the Lease stipulated that Apple Daily Printing was obliged to remedy any breach of the Lease. Accordingly, a reasonable inference that could be drawn is that when Dico moved out of the said Premises in May 2020, it was done to ensure full compliance of the Lease.
149. Second, as to the 2nd applicant, Ms Yang submits that he clearly knew that the representation in the 9/4/20 Letter was false and that it would be relied upon by HKSTPC. Ms Wong submits that the 9/4/20 Letter was issued upon legal advice by an external lawyer. PW6 confirmed that the focus at that time was on how to respond to HKSTPC’s enquiry in “a proper, reasonable and legal manner”, and “to obtain genuine legal advice” for the purpose of safeguarding the interests of Apple Daily Printing. He agreed that the 2nd applicant was acting under the direction of the board in accordance with legal advice.[75]
150. Bearing in mind how the 9/4/20 Letter came about, one reasonable inference which can be drawn from PW6’s evidence is that the 2nd applicant did not have reason to doubt the veracity of what was stated in the 9/4/20 Letter. As such, it casts doubt on whether the 2nd applicant did know that the representation in the 9/4/20 Letter was false. Further, a reasonable inference that could also be drawn is that when he was so conducting himself, he did not have the intent to defraud.
151. Although these points are relevant to mens rea, which might cast doubt on the prosecution case, the Judge did not address them when he found that the applicants had the requisite intent to defraud.
J. Disposition
152. For the above reasons, we give the applicants leave to appeal against conviction, allow the appeals, quash the convictions and set aside the sentences imposed on them.
(Jeremy Poon)
Chief Judge of the
High Court
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(Derek Pang)
Justice of Appeal
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(Anthea Pang)
Justice of Appeal
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Ms Maggie Yang, DPP, Mr Derek Lau, SADPP and Ms Karen Ng, SPP, of the Department of Justice, for the Respondent
Mr Derek Chan SC, Ms Tinny Chan and Mr Ernie Tung, instructed by Robertsons, for the 1st Applicant
Ms Maggie Wong SC, Ms Rachel Lau and Ms Karry Lau, instructed by Robertsons, for the 2nd Applicant
[1] The Estate was registered as “Tseung Kwan O Town Lot No. 39 and Extension Thereto”.
[2] Also referred to as “No. 8 Premises” below.
[3] For brevity, where the discussion at hand applies to both HKIEC and HKSTPC, we will simply refer to them as “the Corporation”.
[4] Apple Daily Printing was named as Maxhope Limited at its incorporation on 18 July 1995 and later as Next Media Printing Limited between 10 October 1995 and 13 February 1995. Again, for brevity, we will simply use “Apple Daily Printing” to describe the company whenever it appears in evidence and in the narrative below.
[5] Exhibit P14.
[6] Exhibit P13.
[7] Clause 8(b) which concerned mortgage is irrelevant for present purposes.
[8] Exhibit P26.
[9] The 1st and 2nd applicants were respectively the 1st and 3rd defendants at the trial. The 2nd defendant was Chow Tat Kuen, who gave evidence as an immunized witness, PW6.
[10] Reasons for Verdict [2022] HKDC 456.
[11] Reasons for Sentence [2022] HKDC 1462.
[12] The 2nd applicant initially also applied for leave to appeal against sentence. He abandoned that application on 14 March 2024, which was dismissed accordingly.
[13] The bulk of the facts in the prosecution case was adduced by way of the Admitted Facts, Exhibit P1, and the exhibits attached to it. The Admitted Facts, containing 169 paragraphs, were reproduced verbatim at [9] of the Reasons for Verdict. The prosecution called 43 witnesses. The Judge summarised their evidence at [10] to [156] of the Reasons for Verdict. It would appear from the Judge’s summary that their evidence was not seriously in dispute. As to PW6, the Judge, having treated his evidence with caution, found him to be reliable and generally accepted his evidence: Reasons for Verdict, [218] to [219]. The applicants, who did not give evidence or call any witness, added nothing substantial to the facts, other than adducing some further documentary exhibits.
[14] Repealed on 7 May 2001, the same day when HKSTPC was established.
[15] See further discussion at Part C below.
[16] Next Digital was formerly named at different times as Wai Wah Shipping Co Limited, Paramount Development Limited, Paramount Printing Group Limited, Paramount Publishing Group Limited and Next Media Limited.
[17] See the pamphlet issued by HKSTPC explaining the procedure of application for admission to the industrial estates, Exhibit P2, p.1. Although the pamphlet was issued by HKSTPC, its contents are equally true for HKIEC for all intents and purposes. Unless otherwise stated, that is also the case for other documentary exhibits coming from HKSTPC referred to below.
[18] The other two industrial estates are the Tai Po Industrial Estate and the Yuen Long Industrial Estate.
[19] Reasons for Verdict, [166].
[20] See Exhibit P2, p.2.
[21] See the Timetable for Leasing of Site, Exhibit P3.
[22] See the standard application form, Exhibit P4.
[23] Exhibit P5.
[24] Exhibit P7.
[25] Exhibit P8.
[26] Exhibit P12.
[27] Exhibit P48. Although it was dated 8 February 2011, it is not in dispute that it applied to the periods covered by the charges.
[28] PW1 was Mr Wong Hak Keung, Chief Executive Officer. PW2 was Ms Man Hay Wah, Director of Development. PW3 was Mr Wu Man Ho, Senior Manager, Development. PW4 was Mr Ku Yu Ping, Manager, Development. PW5 was Mr Lee Wai Kin, Senior Manager, Development. The Judge summarized their evidence at [10]-[17]; [18]-[33]; [34]-[37]; [38]-[43]; and [44]-[48] of the Reasons for Verdict respectively. PW2 to PW5 also dealt with inspections generally and at the said Premises specifically, as to which see below.
[29] Reasons for Verdict, [220].
[30] Reasons for Verdict, [45].
[31] Reasons for Verdict, [34]-[37].
[32] Reasons for Verdict, [39].
[33] Exhibit P19.
[34] The Undertakings were said to have been attached to the letter issued by Apple Daily Printing to HKIEC dated 25 September 1997, Exhibit P20, but apparently the Undertakings were not produced as exhibits.
[35] Exhibit P25.
[36] Exhibits P44, P61 and P68 respectively.
[37] Reasons for Verdict, [61]-[63].
[38] Reasons for Verdict, [64]; Exhibit P60.
[39] Reasons for Verdict, [65].
[40] Reasons for Verdict, [100]-[102].
[41] Notification of Situation of Registered Office, Exhibit P107.
[42] Reasons for Verdict, [58]; and Exhibit P882.
[43] Reasons for Verdict, [51]-[58], [66]-[83].
[44] Exhibit P311.
[45] Reasons for Verdict, [54].
[46] Reasons for Verdict, [52].
[47] Reasons for Verdict, [65].
[48] Exhibit P81.
[49] Exhibit P811.
[50] Reasons for Verdict, [84].
[51] Reasons for Verdict, [105].
[52] Exhibit P890.
[53] PW6’s oral testimony, Transcripts, pp.136H-J; Reasons for Verdict, [268]. The exact date is unclear from the evidence.
[54] Exhibit P82.
[55] Reasons for Verdict, [88]
[56] Transcripts, pp.421-426.
[57] A redacted copy was produced as Exhibit D3-53(1).
[58] A redacted copy was produced as Exhibit D3-53(2).
[59] Exhibit P84.
[60] Transcripts, ibid.
[61] Pursuant to section 37(1) of Cap 565, a general vesting provision.
[62] Pursuant to section 7 of Schedule of Cap 565, one of the transitional and savings provisions.
[63] Together with Mr Derek Lau, Senior Assistant Director of Public Prosecutions and Ms Karen Ng, Senior Public Prosecutor.
[64] Leading Ms Tinny Chan and Mr Ernie Tung.
[65] Leading Ms Rachel Lau and Ms Karry Lau.
[66] See the prosecution’s opening submissions at [100] – [101]; and closing submissions at [253].
[67] Since 1996, the law on deception in England had undergone significant developments, accumulating in the Fraud Act 2006. As Hong Kong has not experienced comparable developments, the local law in this aspect remains essentially the same as per the quotation.
[68] See [21(1)] above.
[69] See [21(2)] above.
[70] See [33] – [37] above.
[71] See [23]-[26] above.
[72] See [39]-[40] above.
[73] The relevant parts of Clause A read: “The Corporation shall grant [the said Land] … for the construction of a factory building or factory buildings and other structure thereon … and for the installation of machinery, plant and equipment thereat … for [the Specified Purpose] …”
[74] Transcript, pp.245L-Q; 299O-300E.
[75] Transcript, pp.424A-426N.
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