HKSAR v. YIP KIM PO AND ANOTHER

CACC 353/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 353 OF 2010

(ON APPEAL FROM DCCC 960 of 2007 and DCCC 551 of 2008)

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J U D G M E N T

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Hon Macrae J (giving the judgment of the Court):

1.  On 9 May 2013, application was filed by the applicants’ solicitors for an order certifying that two points of law of great and general importance are involved in the decision of this Court dated 7 March 2013.  The points of law said to be of great and general importance are as follows:

1. In considering a charge of conspiracy to defraud, what are the circumstances in which the criminal courts are entitled to treat corporate contractual arrangements as a sham and to pierce the corporate veil for the purpose of determining that a contract is to be characterised as bogus or dishonest?

2. Whether, for the purposes of determining whether a defendant is guilty of an offence under section 25 of the Organised and Serious Crimes Ordinance (Cap 455), the court ought to find that it is necessary to prove an awareness of the particular funds charged and their specific provenance, rather than a general awareness that any funds might be tainted by criminal activity?

2.  Since it is obvious from the above dates that the Notice of Motion in respect of the certificate was filed well outside the period required by the practice direction, application is also made for the Court to entertain this application out of time, for reasons which are set out in the affirmation of the applicants’ solicitor, attached to the Notice of Motion.

3.  The reasons for the lateness of this application are stated to be these.  After the judgment of this Court was handed down on 7 March 2013, the applicants instructed their current firm of solicitors, who had hitherto not been involved in the appeal for any of the six applicants.  On 28 March 2013, notice of application for leave to appeal out of time to the Court of Final Appeal (Form B) was filed on half of both applicants.  In that application, it was averred at paragraph 11 that the applicants were relying solely on the ‘substantial and grave injustice’ limb of section 32(2) of the Hong Kong Court of Final Appeal Ordinance, Cap 484 (the Ordinance), which was a matter for the Court of Final Appeal alone.

4.  On 10 April 2013, the applicants’ solicitors were asked by the Acting Registrar of the Court of Final Appeal to amend their Form B to rectify certain defects in the grounds of appeal.  In the meantime, advice had been sought by the applicants’ solicitors from two Leading Counsel in London.  Consequent upon the advice of one of them, an amended Notice was filed on 23 April 2013, which widened the application to include the ‘point of law of great and general importance’ limb.  On the following day, the Acting Registrar wrote to the applicants’ solicitors querying whether a certificate had been sought from this Court in respect of the two points of law of great and general importance averred.

5.  After further correspondence between the applicants’ solicitors and the Acting Registrar, the solicitors indicated that they would make an application for a certificate on the ‘point of law of great and general importance’ limb under section 32(2) of the Ordinance as a matter of urgency.  Hence the Notice that is before us today which, as we say, was filed on 9 May 2013.

6.  We are, with respect, unimpressed by the reasons for the lateness of this application.  Whilst we are prepared to accept that the applicants’ solicitors were instructed after the deadline for giving notice of application for leave to appeal to the Court of Final Appeal and that they thereafter acted in good faith, the fact remains that the points of law said to be of great and general importance were not articulated before the court until 23 April 2013.  There are good reasons both in principle and for practical purposes for the time limits in practice directions relating to appeals. One practical consideration is that they allow the three judges who dealt with a particular appeal, particularly a factually complex one, to retain the papers and consider the issue while matters are relatively fresh in their minds before the appeal papers are despatched to be stored, as they were in this case.  The applicants’ handling solicitor candidly acknowledges in her affirmation:

“a certificate was not sought from the Court of Appeal earlier as (the solicitors) and the applicants’ Hong Kong counsel team took the joint view that there was no need to do so on the basis that only arguments on the ‘substantial and grave injustice limb’ of section 32 of (the Ordinance) were being/would be pursued. Only in the light of the advice of Queen’s Counsel (in London) after the filing of the Form B have the applicants decided to add arguments that there are points of law of great and general public importance involved in the judgment.”

7.  We wish to make clear to the profession that the obtaining of advice from Leading Counsel in London or elsewhere is not a good reason for ignoring the practice directions governing the procedures for further appeals to the Court of Final Appeal, nor should it be assumed that this Court is likely to be impressed by such a course into granting leave out of time.  Mr Grossman SC was involved in the appeal on behalf of the second applicant and is instructed on behalf of both applicants in respect of this hearing.  Presumably, therefore, he was part of the “Hong Kong counsel team” which made the decision to proceed by way of the ‘grave and substantial injustice’ limb only.  For reasons we shall come to, we think the initial instincts of those advising the applicants were correct.

8.  Notwithstanding the late notice of the application for a certificate under section 32(2) of the Ordinance, we have nevertheless examined the arguments presented to us both in writing and orally this morning by Mr Grossman on behalf of both applicants to see whether there is any merit in the application.

9.  In respect of the first question, we are of the view that there is nothing new in the issue it raises, nor does it raise an issue of great and general importance.  The complaint which is said to lead to the proposed question is really a factual one that the trial judge and this Court did not explain why, on the evidence, they regarded a superficially valid contract as a sham so as to permit the piercing of the corporate veil.  With respect, such an argument is totally divorced from the reality of the facts of this particular case.  It is perfectly obvious from a reading of the trial judge’s findings (as well as the reasoning of this Court) why the contracts were rightly considered a sham and why both applicants knew them to be so.  It could fairly be said that that was ultimately the main issue at the trial (and the appeal) so far as the two applicants were concerned.

10.  As for the second proposed question, we cannot see how such a question remotely arises in the circumstances of the evidence against the second applicant. In our summary of the case on the second conspiracy, we noted at para 16 of our judgment that in purported pursuance of the contracts, Kenlap PGC paid HK$7,014,016 to Long Asset and HK$7,580,520 to Fong Long; and at para 4 that the second applicant was a director of Kenlap PGC and, together with the first applicant, one of its two signatories. The telegraphic transfer in the above amount from Kenlap PGC to Long Asset was signed by both applicants on 28 March 2006, as was the cheque of the same day in the above amount from Kenlap PGC to Fong Long. The second applicant did not give evidence about these substantial payments, which she had authorised.

11.  That being the evidence, together with the testimony of PW40 (which in this regard was accepted by the trial judge) as to how he had obtained, at the second applicant’s instigation, the assistance of D6 (the sole director and shareholder of Long Asset) and subsequently supplied D6’s contact details to the second applicant, we cannot see any factual foundation for the point which is sought to be certified.

12.  There is no merit whatsoever in this application and the application for a certificate out of time must be refused.