HKSAR v. CHUN YEUNG

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

1995, No. 89
(Criminal)

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J U D G M E N T

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Liu, J.A. (delivering judgment of the court):

1. The appellant stood trial in the High Court before Chief Judge Chan, as he now is, and a jury on five counts of conspiracy to traffick in a dangerous drug. In January 1995, he was convicted of all his five 1993 conspiracies and sentenced to 25 years' imprisonment on each. The sentences were ordered to run concurrently. In November 1995, the Chief Judge made a Confiscation Order in the sum of $57,598,843. The appellant was to serve a further term of 7 years consecutive to the 25-year concurrent sentences in default of payment. The appellant now appeals against the amount to be recovered from him under the Confiscation Order and the 7-year term imposed on him in default of payment. He also seeks a further reduction on his 25-year concurrent sentences.

2. It is sought to demonstrate that in the Confiscation Order the sentencing judge failed to give credit for $8 million which the appellant claimed in his submissions in the confiscation proceedings to be an aggregate sum owed to him from his alleged dangerous drugs activities, for which he had not been paid. Reference to this unpaid amount was made in his court evidence as well as in some of the statements he gave to the police. These references included that to $1.6 million said to be due in April 1993 and that to $3 million due in October 1993. These references made outside the confiscation proceedings did not assist the appellant who gave no evidence and called no witnesses before Chief Judge Chan. The Confiscation Order was made by the Chief Judge under the Drug Trafficking (Recovery of Proceeds) Ordinance, Cap. 405.

3. Under the Ordinance, the Secretary of Justice may apply to court for a confiscation order after a defendant is, inter alia, convicted of and sentenced for a drug trafficking offence. In the application, the court is obliged to determine whether the convicted person has benefitted from drug trafficking. If the convicted person is found to have benefitted from drug trafficking, the court shall determine the amount recoverable from him and order him to pay that amount by a confiscation order. At each stage of the assessment process, the judge is guided by statutory criteria which lay down the ground rules for calculating the recoverable amount in the confiscation order. Take for instance, the recoverable amount in a confiscation order is to be quantified by reference to "the value of proceeds of drug trafficking" and "the amount that might be realised". The computation of these items is prescribed by the provisions of the Ordinance. It is draconian legislation, strongly biased in favour of the prosecution in the process of quantifying the recoverable amount to be included in a confiscation order. It is hardly a deterrent if convicted drug barons can look forward to a life-long fortune on his release. The provisions of the Ordinance are, so explained Lord Lane CJ in Dickens (1990) 91 Cr App R 164 at p.167, "intentionally draconian". The statutory regime is calculated to cast evidential burdens on a convicted person "of a kind which are, to say the least, unusual in the area of the criminal law and this, despite the fact that the confiscation order and the penalties for failing to comply with it may be vigorous." Ibid., per Lord Lane. A great many assumptions may be made against the convicted trafficker. The prosecution may also tender and serve a statement which would virtually exact a response from the person convicted on pain of adverse findings. For example: the tendered statement served on a convicted person may even include the core question as to whether he has benefitted from drug trafficking. At all stages, the sentencing judge acts on a mere balance of probabilities. There is nevertheless one small consolation viz. in broad terms, the convicted person may not be called upon to pay more than "the actual property held [or controlled] by him or by a person to whom he has given it". See R. v. Comisky, (1991) 93 Cr App R 227 at p.232, per Tucker, J. In other words, the judge must have regard to the actual property belonging to the convicted person. We have endeavoured to outline, in plain language, the statutory regime for recovering a convicted person's benefit from his alleged dangerous drugs dealings.

4. There is no onus on the prosecution to satisfy the sentencing judge what actual property is held by or for the defendant. Put another way: the prosecution is not obliged to show that the recoverable amount quantified under the Ordinance does not exceed the actual assets of the convicted person. In a series of drug purchases, the sentencing judge may infer that the purchase price of drugs was met by "payments received by [the convicted person] in connection with drug trafficking carried on by him. The burden of proof would then shift to the [the convicted person] to displace the assumption". See R. v. Satchell, [1996] 2 Cr App R (S) 258 at p. 264, per Brooke, J. As a matter of fact, s. 4(3)(b) of the Ordinance expressly allows a rebuttable presumption of this kind to arise. In a case where the activities are reasonably transparent, "the court cannot close its eyes to the obvious and cannot ignore the fact that some [truly out-of-pocket] expenses must have been incurred." See David Comiskey, supra. Such out-of-pocket expenditure which was not met out of a convicted person's proceeds of drug trafficking should obviously be excluded.

5. The case background succinctly set out by Mr Blanchflower is accepted by Mr Mullick for the appellant. It is this : the case against the appellant was successfully prosecuted wholly on the appellant's own admissions. He was arrested in January 1995. These charges arose from trafficking in April and October 1993. The appellant had been a major international drug trafficker for a number of years. He was heavily involved with trafficking large quantities of heroin to Netherlands, Canada and Thailand. In his five counts of 1993 conspiracy, he transported enormous quantities of dangerous drugs from Burma for delivery in Guangzhou for his Hong Kong customers, involving 280 kilogrammes. The Hong Kong courts have yet to deal with a more massive quantity. Before conviction, Deputy Judge Wong made a Restraint Order against, inter alia, the appellant in February 1994. The appellant was required to disclose to the predecessor of the Secretary of Justice on affirmation the value and location of his assets by mid-February 1994. The appellant failed to meet the requirement. Nearly a year later in January 1995, the appellant was convicted and sentenced. The following month, the Attorney General applied for a confiscation order. The prosecution tendered and served a statement under the Drug Trafficking (Recovery of Proceeds) Ordinance, and the appellant was directed to lodge a reply within 4 weeks. In March 1995, the appellant caused to be filed and served his affirmation purportedly in reply to the served statement, but he provided no information sought by it. He did not refer to his bank accounts. He made no mention of the $8 million which he later claimed in submissions to have been owed but unpaid. The appellant and his common law wife applied to vary the Restraint Order principally with a view to securing the release of funds for legal expenses. The affirmation of the appellant filed in support of the application again provided no answer to the statement tendered and served in January 1995. The application for the Confiscation Order was heard in November 1995, in which the appellant gave and called no evidence. Clearly, there was no material available to the sentencing judge to enable him to realistically approach the $8 million which, it was submitted, had not yet been received by the appellant from his dangerous drugs transactions. The sentencing judge was not provided with evidence on the precise nature or the provenance of this sum of $8 million. No proof was proffered as to whether it was the purchase price or other expenditure for the acquisition of drugs. The sentencing judge was not tendered any reliable figures to invoke common sense to exclude the $8 million mentioned in the appellant's submission. On the contrary, the financial status of the appellant was unclear and the Chief Judge found that he made no or no full disclosure. The circumstances of this appeal and those in the case of David Comiskey are decidedly different. There was no obvious item here to which in reality the sentencing judge must have regard. The sentencing judge has not been shown to be wrong in the quantification he made on the balance of probabilities in accordance with the statutory criteria. In conclusion, the judge was right in not giving credit for this unpaid sum of $8 million submitted to be due to the appellant.

6. We have not been led through the quantification exercise of the judge. Far be it from us to surmise whether the sentencing judge could or would have included this sum of $8 million. In any case, there is no Respondent's Notice on this amount. The appeal based on this $8 million therefore fails.

7. Turning to the sentence of 7 years' imprisonment for default payment, it is submitted that the judge was wrong to assume a minimum sentence as one of 5 years and that the totality principle was or must have been ignored given the 25 years imposed for drug trafficking. In practical terms, the assumption made by the judge of a minimum prison term had minimal effect on his approach to the 7-year sentence. The question central to the appellant's complaint is whether the sentence is itself manifestly excessive or whether the totality principle has been ignored. We are referred to R. v. Clark and Bentham, [1997] 2 Cr App R (S) 99 in which sentencing in default of paying a sum in a confiscation order was considered by the English Court of Appeal. The Hong Kong recovery proceedings are structured on the same statutory regime of the United Kingdom. Bentham was given 12 years for drug trafficking. A confiscation order for slightly over 3 million was made and a consecutive sentence of a 10 years' term was imposed in default of payment. Clark was sentenced to 7 years with a confiscation order for 83,000 for which he was given an additional 2 years in default. The Confiscation Order in this case seeks to recover $57,598,843, well over the 3 million in Bentham's case. In Clark and Bentham at pp.107 and 108, Lord Bingham C.J. drew attention to the need to take into account the gain of a convicted person, the drug trafficking in the charge and the purpose for "ensuring that the sum ordered to be paid was in truth paid". The seven years additionally imposed by the judge in default of payment of the sum confiscated is, in the circumstances, neither manifestly excessive nor in breach of the totality concept. It is also not wrong in principle. We dismiss the appellant's appeal against the additional 7 years' imprisonment.

8. We turn finally to the further reduction sought by the appellant for the assistance he has rendered to the authorities since conviction. It is trite law that in the sentencing process, this is a proper matter for review by this court on a convicted person's cooperation with and assistance given to the police since sentence. For an ordinary convicted person, it may merit a maximum reduction of 50 per cent. In the case of a supergrass, he may deserve a maximum of two-thirds. It always falls upon this court to evaluate the status of the appellant in the particular circumstances of the case. We note the appellant's remorse, his apologies and his offer of amends. The appellant assisted the police in the realisation of personal risk and risk to his family. It is fortunate that his wife received only uncivil telephone calls. The appellant is subjected to a more restricted custody. He was at one time an inmate in Stanley, but after an assault, he was again transferred back to Siu Lam. There is no evidence to associate his assault with his cooperation with and assistance given to the police, but the authority apparently took precaution and it is not suggested that the Correctional Services Department was over cautious. We take into consideration that in fact the appellant does suffer from a more restricted custody in what would appear to be the result of a precautionary measure. He gave evidence for the prosecution of one Chau on a charge of conspiracy to traffick in a dangerous drug. The evidence of the appellant came up to proof, but Chau was acquitted. The appellant was one of three accomplices who gave evidence for the prosecution. Chau called three inmates to testify on an alleged conspiracy to pervert the course of justice by these three accomplices under the instigation of the appellant. The jury gave no indication as to why Chau was not convicted. It is impossible and unfair to speculate. Only last week, the police arranged for the appellant to identify a suspect at an identification parade which was aborted by the suspect's refusal to participate. It could not be said that the authority subscribes to the view as contended for by Chau in his criminal trial that the appellant was guilty of perverting the course of justice.

9. The appellant also assisted ICAC in relation to four matters which led to investigations and these investigations are pending. This court has read an ICAC memo regarding the appellant's cooperation. The memo is useful but we are not overwhelmed by the information therein disclosed.

10. The appellant also cooperated extensively with the Narcotics Bureau. The information is acknowledged to be "extremely useful for intelligence purposes". Further, the appellant provided two statements to the Public Security Bureau of Yunnan Province, on which one person was convicted in the largest drug case in Yunnan Province. We note, however, that no drug seizures were made and no drug kingpins were arrested.

11. Mr Mullick directs our attention to the hardship of the appellant having to pay interest on the substantial sum in the Confiscation Order but one has to recognise the factual premise on which the Confiscation Order was made. The appellant was regarded as having realisible assets to meet the over $57.5 million. On that premise, the withheld amount could comfortably earn higher interest elsewhere for the appellant.

12. On the information supplied, we are unable to put the appellant in the supergrass category, but his highly useful information provided to the authorities cannot be overlooked as his personal involvement at a criminal trial should be taken into consideration. He is willing to continue to cooperate with ICAC. We would reduce his 25 years' sentence by slightly more than half to one of 12 years.

13. Save for the 25-year consecutive sentences, we dismiss the appeal. For the reasons given, we set aside these 25-year sentences and substitute therefor a sentence in each conviction of 12 years. They are, of course, also to be served concurrently.