HKSAR v. CHEN KEEN (alias JACK CHEN) AND ANOTHER

HCCC 309/2019

[2023] HKCFI 1802

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 309 OF 2019

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REASONS FOR RULING

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The application

1.  This was a joint application by the 1^st accused (“D1”) and the 2^nd accused (“D2”) to reserve for the consideration by the Court of Appeal the questions of law set out in the Notice of Motion pursuant to section 81 of the Criminal Procedure Ordinance, Cap. 221 (“CPO”). The questions of law had arisen from my ruling on 13 June 2023 (Reasons for Ruling handed down on 26 June 2023) that the particulars in the current indictment were not limited to the context of the Listing Rules, and the prosecution were not required to prove that the acquisition in question was a “connected transaction” under the Listing Rules (“the Ruling”).

2.  After hearing submissions I refused the application. These are my reasons.

Background

3.  On 29 April 2016, D1, D2 and the 3^rd accused were convicted on two counts of conspiracy to defraud contrary to common law after a lengthy trial before Anthea Pang J, as Anthea Pang JA then was, and a jury (HCCC 83/2014). D1 was also convicted on a count of money laundering in respect of his dealing with the alleged proceeds of such conspiracies to defraud (Count 3). Their convictions were subsequently quashed by the Court of Final Appeal with a retrial ordered[1].

4.  The fresh indictment (HCCC 309/2019) consisted of four counts of conspiracy to defraud contrary to common law, and one count of money laundering. The retrial was heard before Deputy High Court Judge Bruce SC and a jury in 2021. On Day 57 of the retrial, a prosecution witness gave unsolicited evidence which was prejudicial to the accused. Upon the defence application, DHCJ Bruce discharged the jury on 16 June 2021 and the retrial was aborted as a result. Following the discharge of the jury, on 25 June 2021 the accused made applications to permanently stay the criminal proceedings. The applications were refused by DHCJ Bruce on 30 November 2021.

5.  The retrial of the three accused was due to commence before another jury on 3 July 2023 with 100 days reserved.

The questions of law

6.  The following questions of law were set out in the Notice of Motion filed by D1 and D2 on 28 June 2023:

(1)  In the context of charges of conspiracy to defraud the Stock Exchange and shareholders of a listed company, where false representations are said to have been made as to connections between the directors of the listed company and the vendor in a very substantial acquisition governed by the Listing Rules, for the purpose of the direction on falsity, is the Judge required to determine and direct the Jury, as a matter of law, on the meaning of a “connected transaction” and “connected persons” under the Listing Rules?

(2)  Whether it is sufficient to convict the Defendants on the current indictment on the basis of a finding that D1 and D2 had been “working together” in the specified context without examining whether D2 was a “connected person” so as to render the acquisition of a “connected transaction” for the purposes of the Listing Rules?

(3)  When assessing falsity in the context of a charge of conspiracy to defraud alleging specific (false) representations as essential element of the offence (which representations were made by a director under and pursuant to specific Listing Rules requirements in a very substantial acquisitions) must the impugned representations be interpreted as having specific/special meanings in the context of “connected transactions” under the Listing Rules, or can they simply be given an unspecified “ordinary plain meaning?”

7.  It was submitted that Question 1 was identical to Legal Question 1 in respect of which the Court of Final Appeal granted leave for D1, D2 and the 3^rd accused to appeal against their convictions in HCCC 83/2014. Questions 2 and 3 were said to be closely related to the two issues on the Substantial and Grave Injustice (“SGI”) basis for which leave to appeal was also granted by the Court of Final Appeal[2]. Having quashed the accused’s convictions on the ground of duplicity (Legal Question 2) in their final appeals, the Court of Final Appeal concluded that it was unnecessary and undesirable to deal with the issues under Legal Question 1 and the SGI basis.

Defence submission

8.  Section 81 of the CPO provides, inter alia:

“81. Power to reserve question of law for consideration of Court of Appeal

(1) The judge of the court of trial may reserve for the consideration of the Court of Appeal any question of law which may arise on the trial of any indictment.

(2) In exercising his power under subsection (1), the judge may act either of his own motion or on the application of the Secretary for Justice or the defence.

…”

9.  The defence pointed out that section 81 of CPO provided a route of interlocutory appeal from a criminal court of first instance on a question of law arose “on the trial of any indictment”, and the court’s discretion to make a reference to the Court of Appeal was unfettered.

10.  The defence referred to the case of HKSAR v Mak Wan Ling (No.1)[3] in which the Appeal Committee of the Court of Final Appeal identified the criteria in determining whether a ruling by the Court of Appeal on a question of law reserved under section 81 CPO was to be regarded as a final appeal for the purposes of section 31 of the Hong Kong Court of Final Appeal Ordinance, Cap. 484 (“HKCFAO”). In granting leave to appeal in respect of the question of law, the Court in that case held that a broad common-sense approach should be applied. If the issue of law dealt with and determined by the Court of Appeal in the section 81 reference was a substantive part of or a crucial issue in the trial or a point that went to the root of the case or a dominant feature of the case, then the judgment arising from the section 81 reference, even if it did not finally dispose of the whole action, should nevertheless be regarded as a final judgment. Otherwise, in the event of conviction it would not be opened to the applicant in that case to argue the issue of law to the contrary either at her retrial or on any intermediate appeal to the Court of Appeal. The applicant would then have to pursue an appeal to the Court of Final Appeal to challenge the conviction. This would be unduly cumbersome.

11.  In the present case, counsel for D1 and D2 submitted that the question of legal certainty (and the true meaning of the pleaded particulars in Counts 1 and 3) was a fundamental question of law which required resolution in advance of the retrial. They said the defence would have raised this issue before DHCJ Bruce in their no case to answer submission in the previous retrial had that retrial proceeded further[4]. The issue was crucial and went to the root of the case or a dominant feature of the case upon which the jury would ultimately be directed. Moreover, the issue was found to be reasonably arguable by the Court of Final Appeal given that leave was granted to the accused in their appeals against the convictions in HCCC 83/2014.

12.  Counsel submitted that the sensible approach would be to secure a final decision from the Court of Final Appeal before the present retrial proceeded. The quickest way to achieve this would be for this Court to refer the questions of law to the Court of Appeal pursuant to section 81 of the CPO; then for the Court of Appeal to consider itself bound by its own decision on this matter in CACC 172/2016[5], and to refer the matter to the Court of Final Appeal for determination.

13.  Counsel accepted that the impending trial would need to be adjourned for an uncertain period of time should this application be granted, but contended that the risk of conviction on an unlawful basis would amount to a prejudice significantly greater than any further delay that might be occasioned by the interlocutory appeal to the Court of Appeal and the further appeal to the Court of Final Appeal.

14.  Counsel for D1 and D2 also informed this Court that should this application be refused, they intended to appeal the Ruling to the Court of Final Appeal pursuant to section 31(b) of the HKCFAO and/or to make an application to the Court of Final Appeal to “re-open” the appeals in FACC Nos 26, 27 and 28 of 2018[6] such that the legal questions might be resolved by that Court directly.

Prosecution submission

15.  The prosecution did not dispute that this Court had the jurisdiction to reserve a question of law for the consideration of the Court of Appeal either before or after conviction, and the powers to reserve were discretionary both as to the original reservation and as to the time at which the matter was to be placed before the Court of Appeal. The Court of Appeal would not be bound to resolve the questions of law referred to it. It could decline to do so and direct the judge to continue with the trial[7].

16.  The position of the prosecution was that the questions of law stated in the Motion were not such as to warrant this Court making a reference to the Court of Appeal and, further, the test of “most exceptional circumstances” had not been met.

17.  The prosecution submitted that the reservation should only be made in the most exceptional circumstances, as the Court of Appeal reiterated in Re Judge’s reservation (No.1) of 1994[8]:

“ On a more general note we feel bound to state for the guidance of judges that in our view resort should only be made to section 81 in the most exceptional cases. It is the duty of a judge to ensure that the trial over which he presides proceeds to conclusion with a minimum of disruption. To that end it is his duty to resolve issues of law, be they simple or difficult, as they arise in the course of a trial. It hardly needs stating that reference of any but the most exceptional points of law to the Court of Appeal would inevitably seriously disrupt the orderly disposal of other appeals that have already been listed for hearing and, where the trial is before a jury, result in inconvenience to jurors. We do not think that it was the intention of the legislature that other than in wholly exceptional cases the continuity of trials should be interrupted by references under section 81.

  Where after reservation to it by a judge of a point of law this court concludes, on an examination of the papers and without hearing counsel, that the point of law is not one which it ought to consider at that stage, it will decline to consider it and direct the judge to continue with the trial. If a conviction then follows the point of law should be determined at the hearing of an appeal that takes its place in the list of those already awaiting hearing.” (emphasis added)

18.  In HKSAR v Chen Keen (No.2)[9], the Court of Final Appeal re-emphasized that such a reference should only be made in the most exceptional circumstances. The underlying principle was the policy against fragmentation of the criminal process and the delay which would inevitably arise. The prosecution emphasized that this was very pertinent in the present case because of its long history. This application, if granted, would inevitably result in a delay in the commencement of the retrial and may even result in the whole retrial being refixed. Given the long history of this matter, it would be in the interest of all for the retrial to proceed to conclusion without disruption. Should the retrial proceed to the conviction of the accused, they would be at liberty to take the matter on appeal.

19.  It was pointed out that the same issue had been canvassed by Pang J in the original trial and the Court of Appeal in CACC 172/2016. The Court of Final Appeal granted leave on this issue but decided that it was unnecessary and undesirable to deal with it after the appeals were allowed with convictions quashed and a retrial ordered. DHCJ Bruce had also expressed his views on this issue based on the evidence he had heard and the no case submissions filed by parties in the retrial.

20.  The prosecution submitted that if the application was granted, the Court of Appeal would be asked to look at this matter without the benefit of any evidence because no evidence had been led on this particular matter. It would only have the benefit of the trials before Pang J and DHCJ Bruce who both rendered rulings or expressed views on the issue based upon the evidence they had heard.

21.  In the event of this Court refusing this application, the prosecution submitted that it remained open for the defence to take such steps as they considered appropriate. Whether or not they could appeal the Ruling and/or make an application to re-open the final appeals would be a matter for the Court of Final Appeal.

Consideration

22.  It is trite that a section 81 reservation should only be made in the most exceptional circumstances. In the case of R v Sin Yau Ming, Silke VP said[10]:

“While it is not for this court to fetter a discretion conferred upon a judge nevertheless recourse to and reservation under section 81 should be the subject of the most careful scrutiny and orders made only in the rarest of cases.

It is not helpful to reserve a question of law … and to require this court to consider its decision on the question raised before any evidential background is available.” (emphasis added)

23.  The same view was shared by Kempster JA[11], “In the exercise of their discretion judges may well reserve questions and adjourn hearings pursuant to s 81 sparingly and bearing, among other considerations, the effect on jurors in mind.”, and Penlington JA[12], “ I do however also entirely agree that a reference to this Court before conclusion of the trial should be rare indeed.”

24.  The principle was reiterated by Macdougall VP in giving the judgment of the Court of Appeal in Re Judge’s reservation (No.1) of 1994[13].

25.  As explained by the Appeal Committee of the Court of Final Appeal in HKSAR v Chen Keen (No.2)[14]:

“17. The criminal appeal regime in Hong Kong is primarily governed by Pt. IV of the CPO and the criminal jurisdiction of the Court of Appeal is set out in s.13(3) of the High Court Ordinance (Cap.4). The prohibition against an immediate appeal is dictated by the policy against fragmentation of the criminal process. An interlocutory challenge to a decision made in the course of a criminal trial, if permitted, would result in the fragmentation of the criminal process which would inevitably bring disruption and delay to the final disposition of a criminal matter, see Yeung Chun Pong v Secretary for Justice.[15] To safeguard against such disruption and to foster prompt disposal of criminal matters, our criminal appeal regime does not provide for interlocutory appeals to the Court of Appeal. Instead, erroneous judicial decisions in the course of a trial could and should be corrected by way of appeal against conviction. Appeals in criminal matters to the Court of Appeal are thus primarily restricted to appeals against convictions and sentences, see ss.82 and 83G of the CPO. If an appellant is aggrieved by the judgment of the Court of Appeal in such an appeal, subject to leave being granted, a further appeal can be brought to this Court under s.31(a) of the HKCFAO.

18. Consistent with the policy against fragmentation and role of this Court as the court of final adjudication, s.31(b) on its proper construction does not permit an accused to pursue a direct appeal to this Court in respect of a decision of a trial judge when the trial has yet to be completed and the merits of the decision could potentially be reviewed in the Court of Appeal in an appeal against conviction.

19. The only exception is a reservation on a point of law to the Court of Appeal under s.81 of the CPO.[16] However, it was rightly held by the Court of Appeal in Re Judge’s Reservation (No 1) of 1994 [17] at [10] and [11] that such a reference should only be made in the most exceptional circumstances as it was not the legislative intent that the continuity of trials should be interrupted by references under s.81. The Court of Appeal also indicated that if the point of law did not appear to the court to be one which ought to be considered at that stage, it would decline to do so and direct the trial to be continued.” (emphasis added)

26.  The case of HKSAR v Mak Wan Ling (No.1)[18] concerned whether a section 81 decision of the Court of Appeal could be considered as a “final decision” under section 31 of the HKCFAO. This case was of little assistance on the trial judge’s discretion in the making of the section 81 reservation.

27.  As rightly pointed out by the prosecution, this case had a long history. The offences were alleged to have been committed in the years of 2009-2010. Following the discharge of the jury in the retrial by DHCJ Bruce on 16 June 2021, on 20 December 2021 the present trial was listed to commence on 2 May 2023 with 90 days reserved. Ten additional days were subsequently added in accordance with parties’ estimation. The commencement of the trial was postponed to 3 July 2023 to deal with pre-trial issues raised by the defence, to await the Court of Final Appeal’s decision on a costs matter and to allow the 3^rd accused to sort out his legal representation.

28.  If the application was granted, the commencement of the trial would have to be adjourned for an uncertain period of time to await results of the intended interlocutory appeal to the Court of Appeal and the intended final appeal to the Court of Final Appeal. This would cause tremendous problem to the prosecution as MLA arrangements had already been made for the overseas witnesses to give evidence at the impending trial. The availability of leading and junior counsel for parties to participate in the 100-day trial after the adjournment would be an added problem. In the circumstances, I considered that if the application was granted, refixing of the trial would be inevitable. All the valuable time and judicial resources as well as the substantial public funds spent thus far would be totally wasted.

29.  If the trial had to be refixed, it would be fanciful to suggest that the fresh trial could take place in 2024 or early 2025 given its length, the constraint of judicial resources and the availability of counsel. This unwarranted delay would be utmost unfair to the prosecution which was ready to proceed all along, and the 3^rd accused who was not charged with the offences in Counts 1 and 3. Furthermore, given the age of this matter, the impact of the further delay on the memory of the witnesses and the accused would no doubt be stronger than most of the other cases. To this regard, I also took into account the prosecution’s difficulty in securing the attendance of some overseas witnesses who could not be compelled by the Hong Kong courts to give evidence (including those witnesses specifically required by the defence). Indeed one of the overseas witnesses whose evidence was said to be highly relevant by the defence had already expressed his unwillingness to testify anymore.

30.  Having regard to all the circumstances including the continuity of the trial without disruption, the policy against fragmentation of the criminal process, the public interest to have the guilt or innocence of the accused determined at trial, and the adverse impact of the adjournment/delay as mentioned in the above paragraphs, I did not consider that this was one of the most exceptional cases that would justify an exercise of my discretion to make the section 81 reservation.

Conclusion

31.  For the above reasons, D1 and D2’s application to reserve the proposed questions of law for the consideration of the Court of Appeal pursuant to section 81 of the CPO was refused.

Postscript

32.  These reasons are provided for the parties’ information only. The only part of this judgment which may be reported publicly is the above Conclusion. The remaining part of this judgment may not be reported until further order or until the conclusion of the trial.

[Subject to Reporting Restrictions as per Paragraph 32 of this judgment]