HKSAR v. MAEDA HISATO

CACC 367/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 367 OF 2014

(ON APPEAL FROM DCCC 353 OF 2014)

------------------------

------------------------

_________________________

REASONS FOR JUDGMENT

_________________________

Hon McWalters JA (giving the reasons for judgment of the court):

1. The applicant was tried in the District Court on a joint charge, with one other, of dealing with property known or believed to represent the proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap 455. He pleaded not guilty to the charge but on 16 October 2014, was convicted after a trial before District Judge Sham (“the judge”). His co-accused, D1, pleaded guilty to this offence and also to a charge of using a false instrument, contrary to section 73 of the Crimes Ordinance, Cap 200. On 22 October 2014, the applicant was sentenced to 6 years’ imprisonment. The same starting point was adopted by the judge when sentencing D1 for this offence but, of course, D1 received the benefit of a one third discount for his plea of guilty.

2. On 30 October 2014, the applicant filed a Notice of application for leave to appeal against sentence (Form XI).  After the refusal of his application for legal aid on 19 December 2014, the applicant filed a Notice of Abandonment dated 2 January 2015.  However, the applicant subsequentlyfiled an affirmation dated 23 March 2016 in which he sought to treat his previous abandonment as a nullity and to revive his application for leave to appeal against sentence. 

3. At the hearing of his application to treat his abandonment as a nullity, we allowed the application and adjourned the hearing of the application for leave to appeal the sentence to a future date.  We said we would hand down our reasons for doing so at a later date.  This we know do.

The background to the offence

4. In early October 2013, a Madam Chan (PW1) bought a cashier order in the amount of US$1.9 million from the Standard Chartered Bank (SCB).  The cashier order was payable to Evzen Mobilya Limited and was for the purpose of demonstrating proof of funds to an overseas supplier.

5. Towards the end of October 2013, the applicant, together with his co-accused D1, came to Hong Kong and set up a company in the same name as the payee company of the cashier order, that is, Evzen Mobilya Limited (“Evzen”).  They set up bank accounts of the company at Citibank before they left Hong Kong on 1 November 2013.  These acts, together with the admissions made by him in his video record of interview, formed the basis of the prosecution’s case against the applicant on the money laundering charge. 

6. In mid-November, D1 came back to Hong Kong.  He presented a cashier order, identical to that purchased by PW1, to Citibank and successfully negotiated it, thereby obtaining the deposit of US$1.9 million into the account that had been set up in the name of “Evzen”. This cashier order was later confirmed to be a forged document.  These acts formed the basis of the prosecution’s case against D1 on the using a false instrument charge.

7. On the following day, D1 remitted a substantial part of the deposit to an overseas account also in the name of “Evzen Mobilya Limited” held with the Bank of Tokyo Mitsubishi UFJ in Tokyo, Japan.  The company account of Evzen at Citibank was then left with a balance of US$10,681.46.

8. When PW1’s business dealings fell through in December 2013, she returned to SCB intending to cash in the cashier order, but she was told that the money had already been paid out.  She made a report to the police and both the applicant and D1 were placed on the Immigration Department’s wanted list.  The applicant and D1 were arrested on separate days when they returned to Hong Kong about two weeks later.

The mitigation

9. The applicant was 58 years old at the time of his sentence.  He was from Japan and had come to Hong Kong with D1 on the instruction of another Japanese, Kinoshita Shunji.  Mr Polson, counsel for the applicant at trial, submitted that the evidence showed that the applicant was asked to set up the company accounts in Hong Kong and was told a number of deposits would be made into the company accounts, and that he, the applicant, would be paid 2.5% of the money passing through the accounts.  He argued that the applicant had clearly been used and although the court found he had reasonable grounds to believe that the money was the proceeds of an indictable offence, it was very close to being a case of so‑called blind eye knowledge.  Mr Polson submitted that the role played by the applicant in the crime should place him at the lower end of the scale in sentencing. 

The Reasons for Sentence

10. The judge referred to the case of HKSAR v Boma Amaso [2012] 2 HKLRD 33 where the Court of Appeal set out various factors for a sentencing court to take into consideration when determining the appropriate sentence for this offence.  The judge considered that there was an international dimension in the present case.  Although the size of the syndicate was not clear, he considered that the fraud and the money laundering must have been carefully and well thought out. 

11. Although the judge agreed with Mr Polson’s submission that the applicant’s case was very close to one of so-called blind eye knowledge, he nevertheless considered that the applicant and D1 had a significant role and without them the fraud could not have succeeded.  As to their respective culpability the judge said:

“ D1 and D2 clearly joined together in this criminal enterprise for the purpose of laundering money from the proceeds of crime, though on the face of it D1 seemed to have done a little more than D2 (i.e. by presenting the forged cashier order), there was no significant difference between the two in terms of culpability for, in my view, they were simply playing different roles in executing their criminal plan. In a joint enterprise, one is always responsible for the acts of the other.”

12. In determining the appropriate sentence, the judge also had regard to the amount of the money laundered and he referred to the judgement of the Court of Appeal in HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, where Cheung JA canvassed a large number of money laundering sentencing cases.  Based on what was revealed by all these cases the Court of Appeal in the subsequent case of Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201 said at page 205, paragraph 15:

“The sentencing starting point is 3 years or so where the ‘black money’ involved is between $1 million and $2 million; 4 years or so where it is between $3 million and $6 million; and could be over 5 years where it is above $10 million.”

13. In view of the amount of money involved in the present case, namely about $15 million, the judge adopted a starting point of 6 years’ imprisonment for each of the offences for each defendant.  This meant that for D1, the judge adopted starting points of 6 years’ imprisonment for both offences and then discounted these starting points by one third to allow for D1’s plea of guilty.  This brought the sentences for D1 down to 4 years’ imprisonment for each charge.  The judge then ordered that these sentences should run concurrently with each other thereby resulting, for D1, in a total sentence of 4 years’ imprisonment.  As the applicant was convicted after trial there was nothing to justify any reduction of sentence and so he was sentenced to 6 years’ imprisonment.

The grounds of appeal against sentence

14. In his initial ground of appeal attached to his Form XI, the applicant complained that his sentence was too long when compared to the sentence imposed on D1 as D1 was involved in two charges and was sentenced to only 4 years’ imprisonment.

15. In his written submissions filed on 5 July 2016, the applicant repeated his complaint that he should have been sentenced less heavily than D1.  He also sought leniency from the court on humanitarian grounds arising from three different aspects of his personal circumstances.

16. However, there is no point at this stage considering the merits of these complaints.  The court must first determine the application to treat the Notice of Abandonment as a nullity and only if it resolves that issue favourably to the applicant does it turn to examine the merits of his grounds of appeal.

The grounds for treating his abandonment as a nullity

17. The applicant first wrote to the court expressing a wish to treat his abandonment as a nullity in a letter in English bearing only the date of March 2016[1] but filed in the High Court on 17 March 2016.  In it the applicant said:

“As you know I was just helped by a person ‘co-prisoner’ who just come in here to our workshop who can speak Japanese and English. That’s why I send you this letter. However I don’t really have a knowledge about the law and legal system in H.K. I cannot speak Cantonese and English that’s why I discontinue to appeal. I don’t have any guide or any assistance to process my application is not that I abandon my case. It’s because there’s no interpreter or legal guide in prison to comply my needs.”

18. In his subsequently filed affirmation, the applicant explained the reason for seeking to withdraw his previous abandonment was that he thought he could not pursue an appeal without a lawyer.  He simply said:

“Because, I thought I cannot appeal without a lawyer last time.”

This echoed what he had said in a note which he attached to his Notice of Abandonment.  In it he wrote:

“I request to apply for cancellation of my appeal against sentence because the Legal Aid Department has refused my application.”

19. Finally, in a letter to the court dated 1 July 2016 he said:

“Last time, the reason why I declined the application to appeal is that I thought the trial cannot start with a lawyer. I received a letter from Legal Aid which said that they cannot provide a lawyer several days before that.

I cancelled the application at that time because I thought I can apply any time later in case I manage to hire a lawyer.

But, as I listened to various stories, I found I can defend by myself without a lawyer.  So, I wrote a letter because I want to apply again.”

20. The applicant gave evidence in support of his application.  The effect of his evidence was that at the time he filed the Notice of Abandonment he did so because he thought he had to have a lawyer in order to appeal and that as he had been refused legal aid and did not have a lawyer he had no right to appeal.  However, he believed that should he subsequently be able to obtain a lawyer he could still pursue his appeal.  He did not understand that once he filed the Notice of Abandonment his appeal would be dismissed and that he could no longer pursue it.  He thought his Notice of Abandonment would only temporarily bring an end to his appeal until he was able to engage the services of a lawyer.  Under cross-examination by Mr Wong he did not waver in his evidence or resile from this position. 

The respondent’s submission

21. The respondent submitted that in determining whether or not the abandonment can be treated as a nullity, the court must be satisfied that the abandonment was not the result of a deliberate and informed decision.  The respondent argued that the applicant knew the nature of the Notice of Abandonment signed by him and had failed to satisfy the test for treating his abandonment as a nullity. 

22. In response to the applicant’s oral testimony that he laboured under a mistake of fact as to the need for him to have legal representation in order to exercise his right of appeal, Mr Wong argued that such a claim was not credible and should be rejected by the court.

Discussion

23. In a nutshell the applicant claims:

(i)   he abandoned his appeal because he did not have legal representation for it;

(ii)  he believed legal representation was necessary in order to prosecute it;

(iii)  he did not realise that the effect of the Notice of Abandonment was to bring his appeal to an end; and

(iv)  he all along believed that he could pursue his appeal the moment he was able to obtain legal representation.

24. The chronology of events clearly evidences that his lack of legal representation was of concern to him.  The relevant dates are as follows:

19 December 2014 :	Applicant is informed that legal aid is refused for his appeal.
2 January 2015 :	Date of Notice of Abandonment to which a note is attached explaining that it is due to his inability to obtain legal representation.
22 February 2016 :	Applicant writes to Director of Legal Aid.
2 March 2016 :	Director of Legal Aid writes to applicant informing him that no further assistance will be provided.
March 2016 (Filed in High Court on 17 March 2016) :	Applicant writes to High Court seeking to have his Notice of Abandonment treated as a nullity.

25.   The conduct of the applicant is consistent with his evidence.  In determining whether that evidence is credible it has to be borne in mind that the applicant is a foreigner who comes from a country with a completely different legal system from Hong Kongand who has a very limited command of English.

26.   In all the circumstances we cannot say that his claim is so lacking in credibility that it must be rejected.

27.   That raises the next question of whether a mistake of fact of the kind under which the applicant laboured can be a basis for treating his Notice of Abandonment as a nullity.  In our view it can.

28.   The law in relation to treating a Notice of Abandonment as a nullity is derived from the English Court of Appeal’s decision in R v Medway where Lawson J, in giving the judgment of the court, said at page 98:

“In our judgment the kernel of what has been described as the ‘nullity test’ is that the Court is satisfied that the abandonment was not the result of a deliberate and informed decision, in other words that the mind of the applicant did not go with his act of abandonment. In the nature of things it is impossible to foresee when and how such a state of affairs may come about; therefore it would be quite wrong to make a list, under such headings as mistake, fraud, wrong advice, misapprehension and such like, which purports to be exhaustive of the types of case where this jurisdiction can be exercised. Such headings can only be regarded as guide lines, the presence of which may justify its exercise.”

29.   Another case to which our courts have regularly turned for an analysis of the law on this topic, and for an appreciation of the application of the Medway test, is the judgment of the Western Australia Court of Criminal Appeal in R v Bridges[2]. In that case Ipp J at page 329 said of the Medway test:

“To summarise, it is the essence of a null notice of abandonment that it was executed or served by an applicant who did not thereby intend to abandon the appeal, or did not understand the nature or effect of the notice, or misunderstood the nature or effect of the appeal itself.  It is only then that the mind of the applicant can be said not to go with the act of abandonment, or that the service of the notice is not the applicant’s true act.”

30.   In the present case the applicant laboured under a misapprehension as to the effect of the Notice of Abandonment and its impact upon his right of appeal.  Such a misapprehension satisfies the Medway test.

Conclusion

31.   For these reasons we allowed the applicant’s application to treat his abandonment of his application for leave to appeal his sentence as a nullity.  We adjourned the hearing of his application for leave to appeal his sentence to a date to be fixed.  We directed that the judge’s Reasons for Verdict and applicant’s VRI be included in the appeal bundle and further directed that written submissions by the applicant should be filed with the court 28 days before the hearing of the application and for the respondent 14 days before the hearing of the application.