HKSAR v. IP WING LUN

CACC 368/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 368 OF 2014

(ON APPEAL FROM HCCC NO. 476 OF 2012)

________________________

________________________

________________________

REASONS FOR JUDGMENT

________________________

Hon Macrae JA (giving the Reasons for Judgment of the Court):

Introduction

1. The Appellant, who was D5 at trial, appealed with leave of the Single Judge[1] against his conviction on Count 2 on an indictment which originally contained two counts, namely Conspiracy to defraud, contrary to common law and punishable under section 159C(6) of the Crimes Ordinance, Cap 200 (Count 1), and Conspiracy to offer advantages to an agent, contrary to section 9(2)(a) and 12(1) of the Prevention of Bribery Ordinance, Cap 201 and sections 159A and 159C of the Crimes Ordinance (Count 2).  At the hearing of the appeal, we dismissed the appeal and said we would give our reasons for doing so in due course.  These are our reasons.  Throughout this judgment, the parties will be referred to by their numerical trial designations.

2. By Count 1, the prosecution alleged that between 1 January 2008 and 14 May 2010, D1 and D2, conspired with Tan Sim-chew (“Tan”), Fu Zi-cong and Chan Yiu-kuen, Holfred (“Holfred Chan”) to defraud The Stock Exchange of Hong Kong Limited (“SEHK”), Benefun International Holdings Limited (“Benefun”), and Benefun’s existing shareholders and potential investors, by dishonestly: (a) falsely representing that the acquisition of Ample Rich Enterprise Limited (“Ample Rich”) by Benefun from Blackpool Stadium Limited (“Blackpool”) for the consideration of $500 million was a transaction conducted and concluded at arm’s length; (b) concealing the fact that $100 million of the $500 million was to be paid to Tan, chairman of Benefun, and/or his authorised person(s); (c) falsely representing that the acquisition would not result in a change in the composition of Benefun’s board of directors; (d) causing SEHK to approve the publication by Benefun of an announcement and a circular in respect of the acquisition; and (e) causing Benefun to approve, confirm and ratify an agreement in relation to the acquisition.

3. By Count 2, the prosecution alleged that D1, D2, D5, Lai Yiu-keung (“D3”), Chang Kin-man (“D4”), and Sik Siu-kwan (“D6”) had in the same period conspired with Holfred Chan to offer, without lawful authority or reasonable excuse, advantages to Tan, chairman and executive director (and as such, an agent) of Benefun, the advantages being (i) a gift, loan, fee, reward or commission consisting of Benefun’s promissory note to the value of $100 million, and/or (ii) the payment of $80 million, as an inducement to or reward for or otherwise on account of Tan doing or having done certain acts in relation to his principal Benefun’s affairs or business, namely causing (a) Benefun to acquire a plantation business in Xinjiang, China, (b) causing Benefun to commit to pay a purchase price of $500 million, and/or (c) causing a change to the composition of Benefun’s board of directors.

History of the matter

4. On 9 October 2014, after trial before Deputy High Court Judge Lugar-Mawson and a jury, D1 and D2 were convicted of Count 1, and D2 and D5 were convicted of Count 2.  D1 and D5 were sentenced to 3 years’ imprisonment.  D2 was sentenced to 5 years’ imprisonment.  They were all disqualified from acting as a director of a company for 10 years.

5. An application for leave to review the sentences of D1, D2 and D5 was also made by the Director of Public Prosecutions on 31 October 2014, which was granted by Cheung CJHC on the same day.

6. D5’s appeal against conviction and the Application for review of sentence were heard together on 18, 19 and 20 November 2015.  This judgment is only concerned with the appeal by D5 against his conviction, leave having been granted by the Single Judge in relation to D5’s first ground of appeal only.

The prosecution case

Benefun, Tan, D1 and Holfred Chan

7. Benefun was a limited company listed on the main board of SEHK and was at all material times governed by the Listing Rules (“the Rules”), made pursuant to section 23 of the Securities and Futures Ordinance, Cap 571.

8. Under the Rules, a connected transaction includes any transaction between a listed issuer and a connected person, for example, a director or a substantial shareholder of the issuer.  In May and June 2008, Tan was the chairman and an executive director of Benefun; he and his associates held some 41% of its shares.  Tan was therefore a connected person within the meaning of the Rules.

9. D1 was Benefun’s financial director and company secretary.  Upon his appointment as Benefun’s director back in May 1997, he had signed an undertaking to SEHK to comply with the Rules: to act honestly and in good faith in the issuer’s interest, to avoid actual and potential conflicts of interest and duty, and to disclose fully and fairly his interest in contracts with the issuer.  Needless to say, Tan had the same duties and responsibilities under the Rules; and both he and D1 must have been aware of this.

10. Holfred Chan, D1’s subordinate, was Benefun’s company accountant; he gave evidence for the prosecution under an immunity from prosecution.

D5 and Super Aim

11. D5 was a certified public accountant and ran an accounting firm.

12. On 8 April 2008, Super Aim Group Limited (“Super Aim”) was incorporated in the British Virgin Islands and was purchased by a Hong Kong company of which D5 was the sole director and shareholder.  On the same day, D5 attested a power of attorney, by virtue of which D4 became the authorised agent to manage Super Aim’s affairs.  On 25 April 2008, D5 paid for the costs incurred in the acquisition of Super Aim.  He retained Super Aim’s company kit and chop in his own office.

The undisclosed agreements between Tan and Super Aim

13. In 2007, Benefun had run into financial difficulties, incurring losses of over $38 million, as a result of which Tan and his associates wished to divest themselves of their interests in Benefun.

14. In around April 2008, D2 had been introduced to D4 by a person named Peter Ho[2]. D2 was an entrepreneur who was involved in ‘green businesses’; he was also the sole shareholder and director of Blackpool, which held a wholly owned subsidiary, Ample Rich[3].

15. On 5 May 2008, Tan and D4, acting for Super Aim, entered into an agreement, the principal terms of which were that: (i) Tan would, for a consideration of $80 million, sell to Super Aim 626 million shares in Benefun, ie, 32% shareholding of which Tan was the legal and beneficial owner; (ii) Super Aim would ensure that all the original assets of Benefun were transferred – free of charge – to Tan or persons designated by him; (iii) Tan would cause the appointment to Benefun’s board of directors such number of persons as Super Aim would nominate to constitute a majority in the board; (iv) Tan and Super Aim would cause the passing of a resolution with respect to the acquisition of a mining business, the pre-determined price or consideration for which was $500 million; (v) the consideration for this acquisition would be settled by a $100 million promissory note to be held by Tan or his authorised representative and $400 million worth of convertible notes; (vi) Benefun would settle the $100 million promissory note with its assets, including a company and certain property development projects in Zhangzhou, and a company and various properties in Xiamen.

16. Between 30 May and 4 June 2008, D1 sent drafts of a supplementary agreement to D6 and prepared two time-tables for the implementation of the Super Aim agreements.  The supplementary agreement was executed on or about 4 June 2008.

17. On 4 June 2008, D6 called a meeting at the offices of Messrs Johnny KK Leung & Co, Solicitors, at which D1, D2 and D5 attended, together with D3, D4, D6, Holfred Chan and Peter Ho[4]. D3 was to be the purchaser of Tan’s own 32% shareholding in Benefun.  At the meeting, a cheque issued by D3 for $20 million in favour of Tan was given to Holfred Chan, and an escrow instruction letter was given to Messrs Johnny KK Leung & Co, under cover of which Benefun’s documents were placed inside an envelope.

18. D2 was also at the meeting; his role was to arrange for an underlying asset worth $500 million.  On 10 June 2008, he was able to acquire a long-term operating right over a forestry plantation on the mainland for a mere RMB81 million, while a valuation report subsequently referred to in Benefun’s circular published on 30 September 2008 “hammered” – said the prosecution – the price or value of the operation right into RMB530 million in order to fit the Super Aim agreements.

Blackpool vis-à-vis D5 and D2’s undertaking to perform Super Aim’s contractual obligations

19. The plantation operation right was held by Ample Rich.  D5 was one of Blackpool’s contact persons in a time-table or work schedule prepared by Veda Capital.  In May 2008, D5 went to Benefun’s office to perform due diligence[5].

20. On 24 June 2008, Benefun entered into an agreement with Blackpool to acquire Ample Rich for $500 million to be settled by way of $400 million worth of convertible notes and a $100 million promissory note in favour of Blackpool, redeemable at the expiry of 18 months from the date of the agreement (ie, from 24 December 2009).  The acquisition agreement was signed by D2 on behalf of Blackpool and Ample Rich, and D1 on behalf of Benefun[6].  On the same day, D2 executed an undertaking, which stipulated specifically that Blackpool beneficially owned Super Aim, by virtue of which Blackpool undertook to perform the Super Aim agreements.

Benefun’s announcement and circular vis-à-vis D1 and D5

21. Under the Rules, Benefun’s acquisition of Ample Rich amounted to a Very Substantial Acquisition (“VSA”).  Accordingly, full and frank disclosure to independent shareholders was required in respect of the following matters: (i) the arrangement for the sale by outgoing shareholders of their shares; (ii) the injection of assets into the issuer; and (iii) the buyback of the issuer’s assets by outgoing controlling shareholders. In addition, an announcement and a circular had to be vetted by SEHK and then published on its news website.  The issuer’s directors had the sole responsibility under the Rules for deciding what information was material and must therefore be disclosed in the announcement and circular, which were to contain complete and accurate information in all material respects.

22. D1 and D2[7], together with others, were involved in the drafting and publication of Benefun’s announcement on the acquisition of Ample Rich, which was published on 7 July 2008.  In respect of the 30 September 2008 circular, calling for an Extraordinary General Meeting (“EGM”) to be held on 20 October 2008 to approve the acquisition, both D1 and D5 had been shown its drafts, either directly or indirectly.  The announcement and the circular were lengthy documents, but they contained no reference to the Super Aim agreements, Tan’s disposal of his shares, Tan’s buyback of the Xiamen properties, or D2’s undertaking to perform the Super Aim agreements; and there were, in both documents, misrepresentations concerning the circumstances of the acquisition.

23. In the announcement, it was said, contrary to the terms of the Super Aim agreements, that after the acquisition, Benefun intended to retain the existing management and professional team of the PRC company, and its directors confirmed that there would be no change in the composition of the board.  It further stated, again contrary to the Super Aim agreements, that to the best of the directors’ knowledge, information and belief, the vendor and its ultimate beneficiary were not connected persons within the meaning of the Rules, that no shareholders had any material interests in the acquisition and that no shareholders were required to abstain from voting to approve the acquisition, including the issue of the convertible notes.  The announcement also averred that the consideration was arrived at after arm’s length negotiation, when the truth was that the consideration had been pre-determined with no negotiation at all.  Similar false representations were made in the circular.

24. On 20 October 2008, Tan, Holfred Chan, D2 and his wife attended the EGM chaired by D1[8]. The acquisition was approved unanimously and the resolution signed by D1[9].

Change in composition of Benefun’s board and D5

25. All of the four executive and three independent non-executive directors appointed to Benefun’s board before 1 January 2008 resigned or stepped down between 14 July 2008 and 14 May 2010; active steps had been taken to secure the resignation of one of them.  Of the directors who were appointed after 1 January 2008, available evidence showed that one was D2’s wife, another joined the board at D2’s invitation, and yet another at the invitation of D2’s wife.

26. A handwritten note and other documentation relating to Benefun’s change of directors were seized in D5’s office, and D5 had sent e-mails to D6 and to one of Tan’s associates concerning Benefun’s change of directors.  Further, D6 had advised D5 that firm control of the board would be maintained until full payment to Tan of the outstanding $30 million was made.

Tan’s disposal of Benefun’s shares and the $80million payment to Tan and D5

27. Under the Super Aim agreements, Tan was to sell 626 million shares in Benefun for $80 million.  Between 30 June and 31 July 2008, he and his associates sold through the market and by private placement some 488 million shares in Benefun.  Between 13 May and 26 June 2008, D3 paid him a total of $50 million.  There were, however, problems in respect of the payment of the balance of $30 million.

28. On 18 November 2008, D6 sent an e-mail to D5 spelling out conditions which must be fulfilled before the completion of the acquisition, in particular, confirmation as to the payment to Tan of the outstanding balance of $30 million.  There followed a series of e-mails, some involving D5, in which references were made to matters pertaining to the agreement and the undertaking.  In early February 2009, D5 was present at a meeting with Tan, D4 and Holfred Chan, in which the issue of the outstanding balance was addressed.

29. At the end of March 2009, D2 took a loan of $49 million from a moneylender introduced by Tan[10] in order to pay the balance of $30 million.  By 15 October 2009, the $80 million had been paid to Tan.[11]

Settlement of the $100million promissory note with Benefun’s assets

30. On 9 July 2008, D1 sent Tan a list of BVI companies and asked him to select one to be the holder of the promissory note.  Headfame International Limited (“Headfame”) was the chosen company and on 16 July 2008, Holfred Chan purchased it at Tan’s instructions.  The only shareholder of Headfame was Tan’s nominee, who also acted as one of the two directors, while a colleague of Holfred Chan at Benefun was asked “to lend his name” to stand as the other director of Headfame.  D1 had control of Headfame’s bank account, being the contact person in the account opening document and having possession of blank cheques pre-signed by the only authorised signatory to the account.

31. In October 2008, Blackpool assigned, via an intermediary who paid Blackpool a nominal sum of $10, the $100 million promissory note to Headfame also for a nominal consideration of $10.  The promissory note was subsequently redeemed by (i) Benefun paying Headfame $43 million on 31 December 2008; (ii) Benefun assigning, via its subsidiary Fun Xiamen for which D1 acted, the Xiamen properties to Headfame for $50 million, which was settled on 21 May 2009 by a partial redemption of the promissory note for that amount; and (iii) Benefun paying Headfame $2.8 million directly on 27 May 2009 and $5,916,878.29 indirectly via Zhangzhou Gao Hui on 31 May 2009 (the overpayment in the sum of $1,716,898.29 was subsequently returned to Benefun in two amounts between 4 and 29 March 2009).

Convertible notes

32. Upon the completion of the acquisition on 19 November 2008, three convertible notes with a face value of $270 million, $60 million and $70 million, thus totalling $400 million, were issued in favour of Blackpool.  Since SEHK’s permission for the conversion shares to be allotted and issued was required, Benefun sought such an approval on 24 October 2008, which approval was granted on 30 November 2008.  D1 signed these convertible notes on behalf of Benefun[12]. D2 held a substantial part of the convertible notes (1,720,520,000 shares with a total conversion value of $110,113,280), thus becoming Benefun’s largest shareholder from 2009 to 2011[13].

33. Neither D1 nor D5 had received any allotment of Benefun’s shares upon conversion of the notes.

The prosecution’s position

34. The prosecution alleged that D1 and D2 had conspired with others to defraud SEHK, Benefun and its existing shareholders and potential investors on these bases.  First, the Super Aim agreements took no account of the interests of the independent shareholders and the investing public; these shareholders and the investing public had been seriously misled by the announcement and the circular, there being no disclosure in them of the Super Aim agreements and its related dealings.  Secondly, the independent non-executive directors of Benefun were deprived of material information necessary for the making of an informed decision in respect of the Ample Rich acquisition.  Thirdly, SEHK had been misled and prevented from discharging its statutory duty to regulate the issuer pursuant to the Rules.

35. Further, the prosecution alleged that the $80 million and/or the $100 million promissory note received by Tan himself and Headfame constituted an advantage which D1, D2 and D5 had conspired with others to offer Tan.

D5’s defence at trial

36. The case for D5 was summarised in his counsel’s closing speech which spanned two days[14].  We should say that trial counsel was neither Mr Blanchflower SC nor Mr Chan or Ms Chiu, who appear with him at this appeal.

37. In essence, three main issues were raised in that speech: the legality of the Super Aim agreements, the lack of knowledge on D5’s part of the intention of the other parties, and the fact that D5 did not himself do anything to fulfil the aims of the conspiracy[15].

38. First, so far as legality was concerned, it was contended that the Super Aim agreements never contained any unlawful plan or element of illegality[16], and the details of the agreements were thus analysed in relation to the elements of the charge[17].  The connected transactions in which Tan received $80 million for his shares and later received $100 million by way of promissory note for approving the asset injection into Benefun were also said to be lawful[18].  Any agreement to carry out these agreements was accordingly lawful[19].

39. Secondly, it was submitted in closing that D5 did not know that the two agreements were meant to be implemented[20].  On the face of the two agreements, D5 could not have known whether the agreements were intended to be performed or were merely for preliminary use[21].  The view that the documents were memoranda of understanding, according to D5, was supported by the defence expert’s opinion[22].  D5 was led to believe that the two agreements were no longer being pursued[23].  A number of documents were not disclosed to D5[24], including the undertaking from D2, which explained the connection between the VSA and the undisclosed agreements[25].  The terms of the undisclosed agreements were also said to be inconsistent with the subsequent development of the deal[26].

40. It was further submitted that the role of D5 was distinguishable from those of the other parties[27].  D5 was not involved in the negotiation or execution of the deal[28]. His position was merely to provide professional services in the ordinary course of business[29] in which he neither acted for Tan nor D2[30].  He may not have attended all their meetings[31], and was generally kept in the dark regarding many matters[32].  It was pointed out that D5 was not charged as a conspirator on Count 1 and was not, therefore, alleged to have been involved in the false representations contained in the announcement and circular[33].

41. Ultimately, all of the matters handled by D5, or his related companies, were spread over a number of months so that he would not have related them to one conspiracy[34]; he was instructed to carry out logistic work without knowledge of its real purpose[35]. It was suggested that D5 may have delegated the work and was not directly involved in the matters handled by his firm[36].  The documents found at his firm were part of the professional work of an accounting firm and secretarial company ordinarily undertaken on behalf of a client[37].  In the end, D5 received no commission or benefit from the transaction[38].

42. The third issue raised by counsel for D5 was that, from D5’s knowledge and point of view, none of the four aims of the conspiracy were performed[39]: namely, the 100 million promissory note offered to Tan, the change of Benefun’s board of directors, the $80 million paid to Tan for his shares, and the acquisition of the plantation.

D5’s grounds of appeal against conviction

43. Mr Blanchflower submits that the judge erred in failing properly to summarise D5’s case and the evidence and points in D5’s favour, leading to a summing-up which was unbalanced and unfair.  In his written submissions dated 5 October 2015 for the purposes of the application for leave, Mr Blanchflower characterised this ground as being a question of mixed fact and law: “in the circumstances of D5’s case (fact), did the summing-up satisfy the legal requirements of adequately identifying his case and being fair and balanced (law)?”[40].

44. It was submitted that the judge, instead of setting out the salient features of D5’s case, as he had earlier in his summing-up said he would do[41], merely repeated certain points for the prosecution before demolishing those made on behalf of D5 by his counsel at trial.  This he achieved in less than two pages of summing-up.  The points made by D5’s counsel in his closing speech that were mentioned by the judge included: D5 did not receive any benefit; he was not allocated any convertible notes; and he was not involved in the settlement of the promissory note.  However, Mr Blanchflower argues that the jury were not assisted on how these matters assisted D5’s defence[42].

45. The closing speech of counsel for D5 was given on 23 and 24 September 2014.  The judge’s summing-up commenced on 29 September and concluded on 7 October, which was also the day on which the judge dealt with D5’s case.  Mr Blanchflower argues that in those circumstances, it was particularly important for the judge to remind the jury of the salient features of defence counsel’s speech: instead, his summary of the defence case was rudimentary, unhelpful and dismissive.

The Respondent’s submissions

46. Mr Willam Tam SC, with him Ms Peggy Lo, submits that D5’s case was in essence that he was engaged to provide accounting services without knowledge of the underlying fraud(s)[43].  Since D5 had not given evidence at trial, nor was there any record of interview before the jury setting out his case, the case against D5 was an inferential one[44].  Proper directions regarding inferences were given by the judge[45].

47. Mr Tam accepts that there were matters mentioned in D5’s counsel’s closing speech which were not dealt with by the judge but submits that it is not the function of the judge to give a second speech for the defence.  He says that the summary of D5’s case in the summing-up wassufficiently balanced and fair in the circumstances.  He submits that there is no authority requiring a judge in a lengthy or complex case to repeat points made in the speeches of defence counsel, particularly where the issues would be obvious to a jury.

The judge’s summing-up in respect of D5

48. Mr Blanchflower’s principal complaint on behalf of the appellant is concerned with that part of the summing-up, delivered on 7 October 2014, in which the judge specifically dealt with D5’s case.  In view of the criticism, we set out that passage in full[46]:

“ The 5^th defendant. Again, it is an inescapable fact that he was involved in the early days of the matters we are concerned with. He is the one who bought or formed Super Aim. Super Aim’s statutory records, in fact, were found in his office. If you want to know what Super Aim is, that black file is Super Aim, plus a rubber chop.

There were a very large amount of documents relating to the matters in May, June and July found in the 5^th defendant’s office. Out of interest, I asked my clerk to make copies of it. I am not going to go through them but they are there. They relate mainly to share transfers. We have pre-signed payment instructions. I am just turning it round. There is one from Neo Guek Peng, pre-signed, or appears to be pre-signed. There are bought and sold notes which appear to be pre-signed. A very clear involvement in what went off - or what went on in May, June, July of 2008.

He went with the 4th defendant to Benefun’s office to perform due diligence in May 2008, where Holfred Chan says it was stated that the price could not be changed, it was going to be $500 million. He witnessed various security firms’ account opening forms for Neo Hock Soon and Neo Guek Peng. I pointed that out to you when I went through the evidence on that.

He represented Benefun on the ONC working party, though we have very little evidence as to what his actual role on that working party was. There is no evidence at all that the 5^th defendant received any benefit. He was not allocated any convertible notes. And I made my very early introductory remarks to say that he was. Well, I was wrong. There is no evidence the 5^th defendant received any allocations of convertible notes.

He was not involved in the settlement of the promissory note. There is certainly no evidence that he was involved in that. His role past the acquisition agreement appears to be, on the evidence, a very indistinct one. He played some part in attempting a conciliation when the parties fell out in 2009, because there is one email I would like you to look at. It is at AE-02404, please. AE-02404. For my benefit, can you turn to the translation of that, please. It is a letter; it is sent from Alan Ip and it is to Gary Sik and the subject is ‘Letter to T’. It appears to be a draft of a letter that the 5^th defendant was intending to send to Mr Tan. It looks as though he was asking for the 6^th defendant’s views on it:

“Dear Mr Tan, concerning the transaction in the shares of your company, no solutions have been worked out for all those things ever since I met you last time.  Bearing in mind there is an agreement on paper between us, I am someone who keeps his promises.  I wish very much to meet you, Mr Tan, personally, once again in the hope of implementing the undertaking contained therein.  If, Mr Tan, you have any idea of your own, I will also be glad to work out a solution together with you such that Mr Sik will not be put in a quandary between us.  Would you be free for a meeting in Shenzhen between 6 and 9 April.  Thanks.”

And then: “Please bear to Mr Chang(?) or Mr Ip”. No indication that that letter was ever sent to Tan. But it is certainly a clear indication that, in April, the 5^th defendant was emailing the 6^th defendant with a suggestion that there be some sort of reconciliation meeting held with Mr Tan.

Mr Yu, in his closing address, said the evidence only shows that the 5^th defendant was doing what accountants do. That may be so, but if it was done as part of the conspiracy charged in the 2^nd count, it would be no defence that the 5^th defendant’s role was just limited to the work accountants usually do.

  A point was made that the resignation letters that were actually sent by the directors who resigned do not follow the form of the drafts that were found in the 5^th defendant’s possession.  Whether that point commends itself to you or not is entirely a matter for you.  For myself, my view is, basically, so what?  The fact remains that draft resignation letters were found in the 5^th defendant’s possession.”

Analysis

49. Before addressing the respective arguments of the parties, we should make some general observations about the scheme and method of a judge’s summing-up.  First, there is no universal template or blueprint for a summing-up in any particular case.  Every trial will be different and it is within the judge’s discretion as to how best he considers the law, the issues in the cases and the salient evidence relevant to the resolution of those issues should be presented before the jury.  Some judges may consider that the summing-up should be more “issue-based”, in which the issue and the evidence bearing on that issue will be compartmentalised and dealt with as discrete sections of the summing-up.  Others may consider that a so-called “note-book” approach is more appropriate, in which the issues are set out and the evidence summarised as separate sections of the summing-up.  Others may combine the approaches.

50. The issue-based summing-up may perhaps more easily lend itself to cases where there is a simple, straightforward issue, or a number of discrete issues: the note-book approach may lend itself more to cases involving a multiplicity of defendants and counts, or a multiplicity of issues, the evidence in relation to which overlaps.  We would not criticise a judge who preferred one approach to the other.  He is in the best position to determine what the real points of contention in a case are likely to be for the jury, how best to marshal the issues and the evidence relating to the issues, and to appreciate the capabilities of a particular jury in a particular case; especially in a long trial, as in this case.  The judge in the present case used a combined approach.

51. Secondly, where there is likely to be a long period of time between a defendant’s evidence and the jury’s deliberations, a judge will want to ensure that the jury are adequately and appropriately reminded of the defendant’s evidence.

52. Thirdly, where a defendant has not given evidence, and where there is no record of interview before the jury setting out his case, the judge will want to ensure that the jury are adequately and appropriately reminded of his defence.  That does not mean that a judge should give a second speech for the defence but, in a very lengthy case with multiple defendants, or where there has been a significant break in proceedings between speeches and summing-up, it may mean that he takes sufficient care to work into his directions some of the salient features of the defence case as espoused in defence counsel’s speeches.  Again, how he does so, and to what extent, are matters very much within the judgment of a judge who has the feel of the case.  At the end of the day, however, what any appellate court will want to ensure is that a defendant has had a fair trial.

53. In the present case, D5 did not give evidence, nor was any record of interview setting out his defence adduced before the jury.  His counsel, however, gave a closing speech which spanned two days, namely 23 and 24 September 2014; and which was then followed by the speech of counsel for D6.  The judge’s summing-up commenced on 29 September 2014 and concluded nine days later on 7 October, although there were two public holidays and a weekend, as well as a single day wedged in between, on which the court did not sit.  The jury retired on 7 October 2014, thirteen days after hearing from D5’s counsel.

54. In the context of a 5-month complex commercial fraud/bribery trial involving six defendants, such a timeline is hardly exceptional.  Nor can it sensibly be criticised.  It came nowhere near, for example, the circumstances described in R v Cohen and ors (1992) 142 NLJ 1267, where the closing speeches of counsel in a multi-handed commercial fraud trial had concluded on 17 December 1991 and the summing-up commenced 51 days later on 6 February 1992.  Of that history in Cohen, the English Court of Appeal observed, at 1268:

“In our judgment by January 1992 the only course open to the judge was to discharge the jury. By that date and probably by an earlier one, the position had been achieved where it was clearly arguable that any verdict would have been unsafe and unsatisfactory. The awesome time-scale of the trial, the multiplicity of issues, the distance between evidence, speeches and retirement and not least the two prolonged periods of absence by the jury (amounting to 126 days) could be regarded as combining to destroy a basic assumption. This assumption is that the jury determine guilt or innocence upon evidence which they are able as humans both to comprehend and remember, and upon which they have been addressed at a time when the parties can reasonably expect the speeches to make an impression upon the deliberation…”[47]

55. To be fair to Mr Blanchflower, he is rightly not advocating that the distance of 13 days between D5’s counsel’s speech and the summing-up of his case was unconscionable, or such as to render the verdicts unsafe and unsatisfactory per se.  Rather, he is suggesting that because of the time-scale involved, particularly in a complex case where D5 had not given evidence, it was particularly important that the judge should have adequately summarised the case which was being presented on his behalf.

56. If one were to isolate the judge’s remarks concerning D5’s case at the end of his summing-up and treat it as the limit of what the judge had to say about his defence, there would be a superficial attraction to the notion that the judge did not say very much that was particularly helpful to D5.  But, as we have observed, given the way the judge approached his summing-up, several issues relevant to D5’s defence were, as one might expect, dealt with elsewhere in the summing-up.  To take an obvious example, when summarising the prosecution case concerning the allotment of conversion shares to the various defendants, the judge said[48]:

“Now let us deal with the allotments to the defendants. The 2^nd, the 3^rd, the 4^th and 6^th defendants were all allotted shares under the conversion of the notes. The 5^th defendant was not. I particularly ask you to note there was no allocation to the 5^th defendant.” (Emphasis supplied)

57. In fact, defence counsel made what he listed as 28 points in his closing speech to the jury on behalf of D5 (and D4, whom he also represented); some of them, it must be said, being better points than others.  Mr Tam has persuasively demonstrated that at least nine of those points were in fact covered at other stages of the summing-up than the passage specifically dealing with D5’s defence, which we have set out supra at para 48[49].

58. In our judgment, the essentials of D5’s case, bearing in mind that he did not give evidence, and given that the jury had no record of interview articulating the basis of his defence, were adequately placed before the jury in the summing-up; namely, the legality of the Super Aim agreements, D5’s lack of knowledge of the conspiracy, and his non-involvement in carrying out of the aims of the conspiracy, given his limited function in providing normal accounting services.  At the end of this long trial, we are in no doubt that the jury would have well appreciated the distinction which could be drawn between D5 as an accountant and the other conspirators, what D5’s defence was, and the points in his favour.  We do not accept that the trial of D5 was rendered unfair by the failure of the judge to deal adequately with his case.

59. We should add that there is no merit or magic in statistical comparisons between the length of the judge’s summing-up with regard to D5 and the other defendants.  As a matter of fact, the judge dealt with the case of D4, who was also represented by counsel for D5, in half the time he dealt with the case of D5 and in less than a page of transcript, yet D4 was acquitted.

60. Nor can we accept that the judge indulged in a demolition exercise of those points which could be made on behalf of D5.  Perhaps, the high point of the argument is the way the judge dealt with the main thrust of the defence case, namely[50]:

“Mr Yu, in his closing address, said the evidence only shows that the 5^th defendant was doing what accountants do. That may be so, but if it was done as part of the conspiracy charged in the 2^nd count, it would be no defence that the 5^th defendant’s role was just limited to the work accountants usually do.”

However, the judge’s comment was fair and correct.  If D5 was a conspirator, it did not avail him that, pursuant to the conspiracy, he performed the normal functions of an accountant. However, making that obvious point did not denude the force of the point being made by defence counsel, which was that D5’s role was limited to that which an accountant ordinarily performs.

61. Similarly, the judge directed the jury[51]:

“A point was made that the resignation letters that were actually sent by the directors who resigned do not follow the form of the drafts that were found in the 5^th defendant’s possession. Whether that point commends itself to you or not is entirely a matter for you. For myself, my view is, basically, so what? The fact remains that draft resignation letters were found in the 5^th defendant’s possessions.” (Emphasis supplied)

In fact, this point was advanced before the jury by counsel for D3 as well as by counsel for D5[52].  We would agree with Mr Blanchflower that it is not appropriate for a judge in a summing-up to state baldly his own opinion or view of certain evidence, particularly where that evidence is contentious or relied upon by a defendant as a significant aspect of his defence, even if it is balanced by the reminder that the jury are free to disregard that opinion or view.  Commenting on the evidence is one thing: stating a personal opinion or view of the evidence is another[53].

62. It may be that expressing a personal view or couching it in more judicial terms as objective comment is a distinction without much of a difference.  Nevertheless, the emphasis and nuance perceived by a jury may be different and judges must remember that if they directly state their own opinion about a piece of evidence, they open themselves to the suggestion of imbalance.  As the New Zealand Court of Appeal said in R v Shipton [2007] 2 NZLR 218, at 224-225, albeit in a slightly different context:

“What is said by a Judge in a criminal jury trial in summing up is said from a position of great authority, and in our experience it is viewed as such by juries. It is for this reason that balance is so important on the part of a trial judge.”

63. Notwithstanding the expression of the judge’s personal opinion on this issue, the matter was left to the jury with the reminder that whether or not the point commended itself was for them alone to decide.  In the circumstances, and given the limited significance of this particular piece of evidence, we do not think that the point has the force of mischief attributed to it.

64. Mr Blanchflower has suggested that the judge indulged in a demolition exercise of several other points which could be made in D5’s favour.  With respect, and without traversing each detail of his submission on the point, we do not accept, looking at the summing-up as a whole, that that would have been perceived by a jury as his intention, nor was it the effect of his directions.  As the Court in HKSAR v Umali [2011] 3 HKLRD 55 commented, at 61 para 14(e):

“Ultimately, it is a question of context, degree and “feel” of the summing-up as a whole.  It is one thing for a judge to offer for the consideration of the jury key apparent illogicalities and implausibilities so as to assist them in their analysis but quite another to devote almost the entire summing-up to a topic by topic destruction of details of the defence case so as to render almost otiose the reminder that the decision is that of the jury’s.”

Conclusion

65. In all the circumstances, we did not consider that there was a failure properly to put the defence case before the jury so as to deprive D5 of a fair trial.  Accordingly, we dismissed the appeal against conviction by D5.

[1] Macrae JA on 23 October 2015

[2] Appeal Bundle, p 136P

[3] Appeal Bundle, pp 136P-137B

[4] Appeal Bundle, p 137C-E

[5] Appeal Bundle, p 266Q / Table of Key Companies, p 3

[6] Appeal Bundle, p 405J

[7] Appeal Bundle, p 144C

[8] Appeal Bundle, pp 146S-147G

[9] Appeal Bundle, p 407B-G

[10] Appeal Bundle, p 151M-R

[11] Appeal Bundle, p 154G-I

[12] Appeal Bundle, pp 389Q-390A

[13] As amended in Table of Key Companies, p 2 first row

[14] Appeal Bundle, pp 477 – 519

[15] Appeal Bundle, p 481O

[16] Appeal Bundle, p 482L-R

[17] Appeal Bundle, pp 483S – 484J

[18] Appeal Bundle, p 484L

[19] Appeal Bundle, p 486I

[20] Appeal Bundle, p 485Q

[21] Appeal Bundle, p 487Q

[22] Appeal Bundle, p 488K

[23] Appeal Bundle, p 492P

[24] Appeal Bundle, pp 495H – 497T and p 509T

[25] Appeal Bundle, p 494S

[26] Appeal Bundle, pp 499P-500K

[27] Appeal Bundle, p 490A

[28] Appeal Bundle, p 489R

[29] Appeal Bundle, p 490L

[30] Appeal Bundle, p 490C

[31] Appeal Bundle, pp 501E and 509F

[32] Appeal Bundle, p 481S

[33] Appeal Bundle; p 499J-L

[34] Appeal Bundle, p 507E-L

[35] Appeal Bundle, p 507S

[36] Appeal Bundle, pp 508A-509E and pp 511O-512N

[37] Appeal Bundle, p 511I

[38] Appeal Bundle, p 512P

[39] Appeal Bundle, p 513B

[40] D5’s submissions on conviction, para 38

[41] Appeal Bundle, pp 247T-248B

[42] D5’s submissions on conviction, para 47

[43] Respondent’s submissions opposing leave, para 13

[44] Respondent’s submissions opposing leave, paras 14 and 20

[45] Respondent’s submissions opposing leave, para 18

[46] Appeal Bundle, pp 266H – 268E

[47] This passage was referred to with approval in R v Kellard and ors [1995] 2 Cr App R 134, at 144

[48] Appeal Bundle, p 229N-P

[49] Point 1, 2 and 3 at Appeal Bundle, p 138K et seq. and pp 200F-202E; Point 11 at pp 163R-165N; Point 15 at p 190L-N; Point 21 at p 229N-P; Point 23 at p 199E-J; Point 27 at p 113H-K; and Point 28 at pp 114I-115A

[50] Appeal Bundle, pp 267S-268B

[51] Appeal Bundle, p 268B-E

[52] Appeal Bundle, p 505O-S

[53] See HKSAR v Umali [2011] 3 HKLRD 55, at 66 para’s 27-28