HKSAR v. CHEUNG KWOK KUEN AND OTHERS

CACC 171/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 171 OF 2001

(ON APPEAL FROM DCCC 432 OF 2000)

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REASONS FOR JUDGMENT

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Stuart-Moore VP (giving the judgment of the Court):

Introduction

1. On 27 April 2001, the Applicants, D1, D2, D3, D4, D6 and D9 respectively, were convicted, following a trial lasting 96 days in the District Court before Deputy Judge Browne, on a charge of conspiracy to defraud, contrary to Common Law and section 159C(6) of the Crimes Ordinance, Cap. 200. Also found guilty were D7, D8, D11, D13, D14 and D16. Four other co-defendants, D5, D10, D12 and D15 who absconded during the trial, were convicted in their absence.

2. D1 was also convicted on a second charge against him alone which alleged that he had dealt with property, knowing or having reasonable grounds to believe that the sum of $26,101,670.30 in whole or in part directly or indirectly represented the proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organised and Serious Crimes Ordinance, Cap. 455.

3. On 2 May 2001, D1 was sentenced to concurrent terms of six years' imprisonment on charges 1 and 2. D2 also received a sentence of six years' imprisonment on charge 1. D4, (D5) and D6 were each sentenced to five years and eight months' imprisonment. D3, (D7, D15 and D16) were sentenced to four years and the remaining defendants at trial (apart from D13 about whom we have no information) were given sentences of three years and eight months' imprisonment.

4. D1, D2 and D3 sought leave to appeal against conviction and sentence. D4 and D6 made applications for leave to appeal against sentence only. D9 originally sought leave to appeal against conviction and sentence. As she did not pursue her application relating to conviction, this was dismissed.

5. On 25 June 2002, at the conclusion of the hearing, we gave judgment.

6. We dismissed D1's applications in relation to conviction and sentence. However, on the latter application we exercised our powers under section 83I of the Criminal Procedure Ordinance, Cap. 221, and increased his sentence by one year by imposing concurrent sentences of seven years' imprisonment on each charge in place of his existing six-year sentences which were quashed.

7. D2's applications relating to conviction and sentence were dismissed.

8. D3 was successful in his application on conviction, and treating the hearing as the appeal, we allowed his appeal and quashed his conviction. We refused an application for the payment of D3's private legal costs which he had incurred in the court below.

9. D4 and D6's applications for leave to appeal against sentence were dismissed and we made no order, following an application on behalf of the Respondent, for D4 and D6 to pay costs.

10. D9's application for leave to appeal against sentence was dismissed and, using our powers under section 83W of the Criminal Procedure Ordinance, Cap. 221, we ordered that two months of the time she had spent in custody pending determination of this matter should not be reckoned as part of the term of her sentence.

11. We now give our reasons for the conclusions we reached.

The facts

12. The case involved a so-called 'street fraud' which, like others we have encountered in this court, amounted to a relatively sophisticated fraudulent scheme designed to prey on gullible victims. The victims were recruited through advertisements appearing in local newspapers offering attractive salaries for relatively menial clerical and such-like work for a trading company. Once they had been offered employment, they were deceived into paying money to the company for apparent investment into the Loco-London Silver Market (LLS). Far from making quick returns on their investments, victims were invariably informed that all their money had been lost and that they must leave the company.

13. The scheme concerned the purported trading activities of a company called 'Million Profit Far East Limited' ('Million Profit'). A total of 69 victims gave evidence. Between them, they parted with just over HK$25 million. A further twelve witnesses testified that when they had refused to invest, they were told to leave. The victims who had been enticed to "invest" their money in Million Profit lost amounts ranging from HK$10,000 to over HK$2.5 million as a result of the false promises they were given about investment returns. Some of them were then squeezed for even more money under the pretence that they had to repay the losses to the company caused by their dealings in LLS. These activities, covered by the conspiracy in charge 1, occurred over a period of about nineteen months, between 1 May 1998 and 7 December 1999.

14. D2, shortly afterwards joined by D3, were the registered directors of Million Profit. Minutes of a meeting, purportedly having taken place at Million Profit's registered office in Wanchai, signed by D2, showed the appointment of D2 as chairman and the passing of a resolution regarding the opening of a Dao Heng Bank account on which D2 was the sole signatory. Numerous cash deposits were paid into this account during the period of the conspiracy and we were informed that D2 wrote 42 cheques for company expenses on this account amounting to just under $2 million.

15. D1 used his savings account at the Hang Seng Bank, numbered 293-1-261560 (the '293' account), allegedly to receive and dispose of the proceeds of the fraud from 15 May 1998 onwards. Statements of various Hang Seng Bank accounts of D1's co-defendants at trial showed that all of them, with the exception of D3, received monetary transfers by means of an ATM situated in Wanchai which matched debits from Dl's '293' account and others which he held.

16. The prosecution adduced bankers' evidence relating to large, unexplained, sums of money which found their way into D1 and D2's accounts. Other documentary evidence was produced to illustrate the roles allegedly played by D1, D2 and D3 in Million Profit. The prosecution contended that the combined effect of this evidence was to demonstrate, despite the absence of direct visual evidence of their presence at the company's business premises, that between them they controlled the company and benefited from its funds.

17. Between June 1998 and August 1999, deposits of $26,905,732.10 were made into Dl's '293' account through various banks in Wanchai which is approximately the sum reflected in charge 2.

18. Turning to the roles played by the other participants in the conspiracy, when job seekers went to Million Profit, someone posing as a genuine staff member would make an assessment of their background and financial status. Most of the job applicants, and all of those who were actually defrauded, were female and middle-aged with little or no commercial experience. The offices of the company at 9/F, Henan Building, 90-92 Jaffe Road, Wanchai, portrayed a thoroughly convincing front for an honest business.

19. Each job applicant was asked to complete and sign an application form. On the reverse side of the form, there was an agency agreement written in English. This purported to appoint self-employed agents for the purpose of procuring trading orders in spot gold or silver. None of the victims read the reverse side and, in any event, few of them were able to speak any English. In due course, following D1's arrest, police found nine signed client agreements of this kind in the boot of his car.

20. The interviewers never mentioned that the company dealt in LLS. The interviewees were told a variety of different things concerning the company's business. Amongst the stories they were given, victims were variously told that Million Profit dealt in mobile telephone parts, electronic components, motor vehicle accessories, health foods, cleaning products, shipping and metal. There was no evidence found at the company's premises to support trading of the types mentioned to the victims and none was produced at trial.

21. None of the victims was ever employed to work in any of the positions which had been advertised although most were offered 'employment' immediately.

22. Either at interview or shortly after their recruitment, victims were told to bring their bank passbooks, ostensibly to facilitate salary payment. The passbooks were handed to a manager or interviewer for what the victims believed was for the purpose of photocopying but this was merely a ruse to ascertain each victim's financial position with some precision.

23. On the first day of work, the victim would be paired with another member of staff, referred to by the judge as a 'Staff 1'. This person's job was to gain the trust, friendship and confidence of the victim, and to isolate the victim from other new recruits who had been targeted. Each victim was led to believe that the 'Staff 1' was also a relatively new recruit. Irrespective of what the victims had been told about the nature of the job they were to do, they were all given 'calculation work' to carry out.

24. Some victims initially did what they were led to believe was calculation work relating to trading in goods but later this was replaced by calculations for trading in LLS. Most victims began their 'work' in a general office. This was a large room with two tables and a staff of approximately twenty. After a short time, each victim was moved to one of the side offices together with a 'Staff 1'. From then on, a victim's movement around the offices was restricted.

25. After a period of working together with a 'Staff 1', the victim would be approached by another conspirator, a 'Staff 2' whose role was to introduce the victim to making an investment in LLS. The 'Staff 2' would talk of the profits to be made but would play down the risks involved. Eventually, every victim was enticed to open a trading account with Million Profit. They then made deposits into their accounts having signed account opening documents and an 'agreement'. The victims were told that the documents were required by the company's solicitors. Importantly, they were also led to believe that 'Staff 1' and 'Staff 2' members were investing in the same way as themselves.

26. Trading was allegedly done by way of purchasing lots of silver. The price quoted was in US$ per ounce. Each lot of silver represented 5,000 ounces on which the victim had to meet a margin requirement of US$2,500 or US$3,000. In the first and second transactions, the victims' investments would make what appeared to be profits on paper, but they were not allowed to withdraw any money from their accounts. Each victim was told that there must be at least three transactions traded before money could be withdrawn. Subsequent trading transactions resulted in losses, some of which were very large. This led to the victims being required to deposit substantial additional funds to make good the losses. Inevitably, once a victim had paid over more funds, these were lost. Eventually, the stage was reached where the victims had exhausted their personal savings. They were then asked to leave the company. Some victims lost their entire life savings. In the worst example, PW34 lost HK$2.54 million. Others were encouraged to take out mortgage loans to cover their losses.

27. PW91 (a Treasury Accountant) and PW68 (an expert on LLS) gave evidence of calculations based on the alleged trading activities of Million Profit. They were able to identify a number of practices which demonstrated that the so-called LLS trading at Million Profit was bogus and fraudulent.

28. In due course, complaints were made to the police and the investigation which followed led to the arrest of the sixteen defendants named on the charge sheet. The large sums of money paid over by the victims to various defendants who were later identified by them were not to be found in the company's bank account. In fact, no records of any kind were found to suggest any trading of any kind had been taking place.

29. In the course of the investigation, police looked for evidence to demonstrate a relationship between the defendants. One illustration of potential importance was the discovery of D1's resident's card for a flat in a block known as 'Vista Paradiso' in D3's possession. The premises were occupied by D3 alone although D1 was paying the monthly instalments of HK$31,189.90 on the HK$3.5 million mortgage for the flat against its purchase price of $5.68 million. However, the main documentary links between D1 and all the defendants except D3 were provided by banking evidence.

30. On 7 January 2000, production orders were issued by a judge of the Court of First Instance, pursuant to section 4 of the Organised & Serious Crimes Ordinance. These were directed to D1, D2 and D3 all of whom failed to comply with the orders. D1 ignored the order completely. D2 and D3 issued letters through their solicitors denying their involvement although D3 appeared to be putting the blame on D2. His solicitors said that "the whole company affairs were handled by the other director, Lam Chun-ling ( D2)". Solicitors for D2, by way of response, denied that D2 was in possession of any of the material specified in the order. It was claimed that during D2's employment with the company he had not handled any of the items to which the production order related

31. None of the Applicants elected to give evidence although a total of three witnesses (DW1-3) were called on behalf of D1. DW2, a professional gambler, also gave evidence for D2.

Grounds of appeal against conviction

D1's application

32. A wholly unsatisfactory notice setting out perfected grounds of appeal against conviction, signed by Mr Philip Ross as counsel on D1's behalf, was served on 14 June 2002. The effect of this notice was merely to state that there was insufficient evidence to prove the charges and that the conviction of D1 on both charges was unsafe and unsatisfactory. No particulars were given and no written argument was supplied until the day before the application was heard. We were told by Mr Ross that he had only recently been instructed.

33. We do not propose to dignify the grounds of appeal by going into the evidence against D1 in any depth. The effect of much of this we have already dealt with in summarising the general nature of the case presented against D1 and his co-defendants. The majority of this evidence, as the judge rightly pointed out, came from various bank witnesses and the documents they produced. This, in combination, showed that unexplained deposits were placed through banks in Wanchai in D1's '293' account from May 1998 onwards amounting to over $26 million. Transfers of sizeable sums were then made from this and three other accounts utilised by D1 to all his co-conspirators except D3.

34. The evidence of PW97, a Treasury Accountant who analysed all of D1's accounts, provided a demonstration that about $97 million had been handled by D1 through his accounts during the period covered by the conspiracy. He was not, however, able to trace the source of any of these funds.

35. The judge was fully entitled, as he understandably expressed it, to be left in "not the slightest doubt that D1 was the financial controller of Million Profit and that he laundered the proceeds of its fraudulent operations".

36. The circumstantial evidence against D1 was of such an overwhelming nature as to give rise to no cause for interference with the verdicts. It is plain from the judge's careful analysis of the evidence that he had fully understood many of the issues which had arisen in the trial. One such issue involved the testimony given by DW2. This was designed to show, as the judge had observed, that the movement of funds in D1's accounts was explicable in ways other than the prosecution had suggested. Although great reliance was placed on DW2's evidence, it is plain that the judge had weighed this with great care before concluding that crucial aspects of his account were either not believable or were evasive.

D2's application

37. It was alleged by Mr Oderberg, on D2's behalf, that the judge had erred in concluding that the records showing the involvement of D2 in the management of Million Profit amounted to evidence on which he could "properly base fully or in part a conviction on the charge". He further submitted that the judge, having accepted that DW2 had been involved in financial activities with D2, "could not properly be satisfied .... that (D2's) involvement with Million Profit was criminal in nature". It was also argued that there was no reasonable basis to conclude that D2 knew Million Profit was trading or that it was involved in the sort of activities alleged in the charge. Mr Oderberg lastly contended that the judge's reference in his Reasons for Verdict to the lies given by D2 to the Inland Revenue Department and by his solicitors in a letter on his behalf in response to the production order, without a further statement as to how the lies had been utilised, had left open the possibility that they may have been misapplied.

38. We can deal immediately with the last point raised by Mr Oderberg. Plainly, the lies told by D2 were, when put in context, evidence which was capable of giving some, albeit very limited, support to the prosecution's case. The judge was fully entitled to treat them in such a way. However, their significance was marginal as the judge recognised when commenting that even without the evidence about the lies, the circumstantial case presented by the prosecution "overwhelmingly" implicated D2 in the conspiracy.

39. There is an equal lack of substance in the remaining points taken on D2's behalf. The judge went to considerable lengths to set out the evidence against D2 before reaching the conclusion that he was a "vital and important part" of the conspiracy. The judge's reasoning is commendable for its clarity.

40. There were numerous documentary links between Million Profit and D2. It is unnecessary to itemise these. They are set out in some detail in the Reasons for Verdict. In addition, a total of $213,652 was deposited by D1 into D2's account at Hang Seng Bank and another account held by D2 at the same bank was in regular receipt of money from D1, amounting to almost $8 million, all of which was deposited during the period of the conspiracy. On 24 September 1998, D2 withdrew $130,000 from the Million Profit's account by means of a cash cheque. He also became the sole signatory on the Million Profit bank account after the early departure of another director who was originally a co-signatory. D2 was the Chairman of Million Profit and, in that capacity, he signed what purported to be the minutes of company meetings.

41. Small wonder, therefore, that D2 was found by the judge to have been involved in this conspiracy despite evidence from DW2 which the judge said: "Could not explain the nature and extent of D2's involvement with Million Profit". The only reasonable inference to be drawn, as the judge understandably found, was that D2 was a knowing party to the conspiracy.

42. There was no basis for saying that D2's conviction was unsafe or unsatisfactory. On the contrary, the evidence against him was very strong.

D3's application

43. D3 became a director of Million Profit and one of its two shareholders in August 1998. This was about three months after the conspiracy had commenced, and he remained as D2's co-director during the remainder of the time covered by the conspiracy. During that period, he signed company minute sheets recording his presence at two meetings which were purportedly held at Million Profit's offices on 8 December 1998 (in which it was stated that no statement of accounts would be presented at the next annual general meeting) and on 31 December 1998 (in which it was stated that no accounts were available and that the appointment of auditors should be deferred). Following his arrest, D3 was found in possession of D1's resident's card for Vista Paradiso. D3 told police he was living at those premises. It was later confirmed that he lived there alone. The monthly mortgage instalments were $31,189.90 which, as we have said already, were being paid by D1.

44. It was submitted by Mr Robert Andrews, on D3's behalf, that the judge was in error to have concluded that D3 was party to the alleged conspiracy in view of such paucity of evidence. He contended there was no evidence of active participation on D3's part in the management of the company and no evidence of him having knowingly received any financial benefit from it. It was submitted that the judge had erred in concluding that D3 was aware of the fraudulent activities of the company bearing in mind that it had not been proved that the two purported company meetings at Million Profit's offices were "other than paper meetings". Mr Andrews also argued that even if the meetings had taken place and that D3 was living at the flat mortgaged by D1, this was insufficient to establish D3's knowledge about the undoubted fraudulent activities of Million Profit. It was suggested that there were other reasonable inferences to be drawn from the facts in D3's case which could lead to the conclusion that the connection which existed between D3 and Million Profit on the one hand, and D3 and D1 on the other, did not necessarily involve an agreement by D3 with any of his alleged co-conspirators to defraud.

45. Having heard the evidence against D3 and D3's response to the production order, when he sought effectively to lay the blame on D2 by saying that D2 had handled "the whole company affairs", the judge in his Reasons for Verdict said:

"In order to convict D3 of the offence of conspiracy I had to be satisfied beyond reasonable doubt that D3 knew of the fraudulent activities taking place at Million Profit and was a party to the agreement forming the conspiracy. On the evidence presented in this case I was satisfied that Million Profit was established for one reason only, to defraud people of their money. It carried out no legitimate trade. D3 was one of the two statutory directors of this company for the substantial part of the time when this fraudulent (activity) was taking place. He was also a shareholder.

Minutes in respect of two meetings in December 1998 assert that (D3) was at the company's premises for those meetings. PW89 said it was possible the meetings never took place. She, of course, did not know because her presence would not be required in any event. There was therefore no evidence to contradict the assertions in the documents. It would appear that at the time of his arrest D3 was a man of straw. He was living in a flat owned by D1, which D1 had purchased in January 1999 for $5.68 million and the mortgage repayments when the loan was taken out were $31,189.90. The mortgage is a sum considerably more than most people earn in Hong Kong. D3 had been a director of Million Profit for 16 months......

D3 elected not to give evidence. That is his right and no adverse inference can be drawn against him....." (Appeal bundle p. 88)

46. The judge then turned to a consideration of how he should approach the evidence against D3 standing alone. He concluded that "no jury would draw an inference other than that D3 was a party to the agreement".

47. Miss Lynda Shine, for the Respondent, was unable to point to any evidence against D3 apart from those matters to which the judge had referred. Indeed, we were left wondering whether her whole approach to D3's application might have been influenced by a particularly serious factual error on her part, amongst several others she made in her written and oral submissions. Miss Shine appeared to have been labouring under the misapprehension that D1 had originally been a director with D2 at the outset of Million Profit's activities and that D1 was soon afterwards replaced by D3 who also became an authorised signatory on the company bank account. In fact, D1 was never a director and D3 was never an authorised signatory who could, as she had suggested, "withdraw money from the Dao Heng Bank account".

48. In our view, the evidence against D3 was extremely slender. In regard to D3's signature on the minute sheets recording his presence at Million Profit, it is by no means unknown for minutes to be prepared showing purported company meetings when none have actually taken place. Equally, as to D3's residence at the flat in 'Vista Paradiso' which D1 had purchased with the assistance of a sizeable mortgage, there were many reasons why D3 might be in occupation. Whilst his connection to the flat provides evidence casting some suspicion on D3 as someone who may have been financially benefiting from his directorship of Million Profit, we feel unable to say that this was sufficient to have established his guilt to the required standard. Accordingly, his conviction was quashed.

Grounds of appeal against sentence

49. The judge made a number of observations about sentence which were of general application to all the defendants, demonstrating not only the total callousness of the perpetrators towards their victims but also the financial effect such offences had had on victims such as these whose future earning capacity was limited. This was a long trial and the judge was in an excellent position to have sized up the gravity of the conspiracy. He had found, with ample justification, that Million Profit was a total sham and a vehicle only for fraud. The major loser (PW34) had been recruited, or so she was led to believe, as a cleaner. Some of the $2.54 million she lost were her savings by honest endeavour throughout her life. The remainder she had received from her husband's estate following his death a year earlier.

50. Many victims not only lost their life savings but were later also encouraged to borrow from friends, relatives and elsewhere to make up the losses which they were told they had incurred. In one example, PW10 took out a mortgage on her flat for $560,000 to raise the money. Her previous work experience had been as a waitress.

51. The judge was aware that "similar scams" had come before the courts before but, as he rightly remarked:

"......... none of the size and scale of this one. Although only 16 have been prosecuted, 54 persons were arrested. This was a massive conspiracy carried out over a 19 month period involving substantial sums of money. Whilst in terms of economic frauds committed in Hong Kong, 25 million is certainly not the largest amount, the significance in this case is that the money was not stolen from an institution but came from people on the lower rungs of the socio-economic ladder. Earlier cases that have come before the court involve far less numbers of victims and the amounts involved were far less than involved in this case.

This was a well-planned, sophisticated and elaborate fraud. The setting up of Million Profit must have required considerable investment and involved much detailed planning and research....... The adverts were designed to attract (a) vulnerable group of people. The interviewer's job was obviously to select suitable victims whilst concealing from them the true reason for their recruitment ..........

What was particularly despicable about the conduct of the conspirators was that they would not simply take money from the victim, they would ensure that they had obtained every last dollar from them and a number of the victims were even persuaded to go into debt. At that stage they were not dealing with faceless persons or institutions, but vulnerable, often simple-minded people of whose personal circumstances they were aware and whose trust they had gained." (Appeal Bundle pp.96-98)

52. The judge continued by stressing that he would not be sentencing on the role played or acted out by the defendants at Million Profit, but on what he considered to have been the actual responsibility borne by each of them in the conspiracy.

D1's application

53. The judge described D1 as the financial controller of Million Profit who laundered the proceeds of the fraud. Despite the evidence provided by the banks, the judge said that he could not be sure that D1 was a 'mastermind'.

54. We concluded that D1 was extremely fortunate not to have been considered the 'mastermind'. Everything pointed to him being the person in charge behind the scenes. In common with many people who fit such a description, he had left no direct link between himself and the crime scene, Million Profit's offices. However, whether or not he was the mastermind behind the operation, and from what seems to have been a thorough police investigation there was no one else who emerged as the power behind the scenes, there was in our view no mitigation of any kind.

55. The single ground of appeal advanced by Mr Ross was that a term of six years' imprisonment was manifestly excessive for someone found not to have been the mastermind. Leaving aside the epithet, the facts disclosed that D1 was a fraudsman who was prepared to take the life-savings of hardworking, decent people to satisfy his own greed and ambition. That this was a persistent and determined fraud is evidenced by the length of time over which it extended, some nineteen months, before the police eventually laid it to rest.

56. D1's application was therefore dismissed, but we considered that he should have been sentenced differently for his major role in this conspiracy and for laundering the whole of its dishonestly acquired proceeds. In our view, the criminality involved in D1's offences called for a starting point for sentence of eight years' imprisonment on each charge. We, therefore, exercised our powers under section 83I of the Criminal Procedure Ordinance to increase the sentences on charges 1 and 2 to the maximum within the District Court's jurisdiction, namely seven years' imprisonment.

D2's application

57. D2 was also heavily implicated. However, there was some justification for saying, as Mr Oderberg submitted, that D2 may have been on a slightly lower rung of the ladder than D1 having regard to his involvement in a far smaller proportion than D1 of the fraudulent proceeds. We did not consider, bearing in mind the scale of this operation, that D2's sentence was manifestly excessive. Furthermore, having regard to the course we had decided to adopt for D1, there was no longer any disparity between the sentences imposed on D1 and D2. Accordingly, D2's application was dismissed.

D4 and D6's applications

58. The judge said about D4 that he had been at the fraud premises throughout. He was the person to whom most of the sixteen victims who referred to him paid their money.

59. So far as D6 was concerned, it was a feature of his case that he had had experience of a similar operation in a company known as 'Sino Rainbow'. He was directly involved at Million Profit with nine victims.

60. As to both of them, the judge said that he was satisfied they were each "involved in the organisation of the conspiracy". By this expression the judge was referring to D4 and D6 as organisers rather mere players. He then took the same six-year starting point for D4 and D6 as he had taken for D2, saying that as they had clear records he would reduce this to five years and eight months.

61. We are satisfied that these sentences cannot be criticised as they stand. We took the view that D4 and D6 should have received slightly shorter sentences than D2 who was obviously, from the remuneration he received, considerably more involved. All we should add in regard to the way the sentences on D4 and D6 were arrived at, and to avoid any sense of grievance on their part, is that they were entitled to no discount for their 'clear records'. There was no evidence of positive good character. In any event, with offences of the present type, where criminal acts are repeatedly being committed, it is wholly artificial to describe an offender as having a clear record even though technically this may be correct. For the best part of nineteen months, D4 and D6 had been living a life of crime. Fortuitous though it may be, their sentences, as they stand, were entirely appropriate.

D9's application

62. When passing sentence on D9 and others in the same category as herself, the judge adopted a four-year starting point. He then reduced this to three years and eight months as D9 was a "first offender". We merely observe in this regard that D9 was the beneficiary of a discount to which she was not entitled for the same reasons as we have expressed in relation to D4 and D6. She had no mitigation. Like everyone else in the trial, she had shown not the slightest remorse and had repaid nothing to the victims. The starting point of four years for her role was not open to criticism and her ultimate sentence veered on the side of leniency.

63. D9's homemade grounds of appeal, where she wrote that she was "deeply remorseful" and would be "more careful when I look for a job in the future ....... I will not follow others instructions blindly", were impertinent. Her grounds demonstrated that she was now blaming others for her decision to become involved in heartless criminal acts against innocent and gullible victims.

64. There was no merit whatever in her application which resulted in an order being made for two months' loss of time.

Costs

65. Although D4 and D6's applications were confined to seeking leave to appeal against sentence, they had originally sought leave to appeal also against conviction. Notice of their intention to abandon their applications in relation to conviction was only given on the day before the hearing. Miss Shine informed us that, for her part, she was only made aware of this decision at about 4.30 p.m. on 24 June 2002. This was a relatively complex case, and obviously by that stage all the preparatory work for the application had already been done. It was in these circumstances that Miss Shine made an application for costs against D4 and D6 as to which we were not unsympathetic. However, it emerged from our enquiry that an investigation into all the defendants at trial had been conducted to see whether any funds could be traced for the purposes of restraint orders being made pursuant to the Serious and Organised Crimes Ordinance. Only D1 was found to have any tangible assets on which an order was duly made.

66. As D4 and D6 are serving sentences of imprisonment which mean that they will not be released for some considerable time, and as there is every indication that they have no means to pay an order for costs, we declined to make such an order.

67. However, this was a clear example where public funds had been wasted as the direct result of the omission by D4 and D6's solicitors to notify the Respondent of the decision not to pursue the conviction applications which we were informed had been made some time ago.

68. It is apparent that no fault lies with counsel, Mr Gibson Shaw. The scope of the instructions he was given was merely to represent D4 and D6 on their applications relating to sentence. The fault lay with Francis Kong & Co. who had simply not bothered to notify the court or the Respondent of their intention not to pursue the lengthier and more complicated conviction applications. This resulted in the needless waste of public funds on the part of the Respondent who had to prepare for the applications which were anticipated.

69. This situation is by no means unknown to this court. In a more extreme example (see: HKSAR v HO Hon-chung Danel and Ors CACC 269/2000 (unreported judgment on 16 November 2001)) we were confronted with a situation in which counsel had placed himself in a situation where his presence was required in two courts at the same time. In that judgment, we referred to the differences in the wording of the wasted costs provisions in Hong Kong under section 18 of the Costs in Criminal Cases Ordinance, Cap. 492, when compared to the English provisions. The former provisions effectively only permit such an order to be made where there is a "failure to appear" or "lateness" on the part of a legal representative. In England, on the other hand, costs which have been wasted by lawyers for one party to the proceedings can be made the subject of an order in favour of the party which is out of pocket when it has been shown that the wasted costs have arisen "as a result of any improper, unreasonable or negligent act or omission on the part of any representative ........ which in the light of any such act or omission .... the court considers it unreasonable to expect that party to pay."

70. It is precisely this situation which had arisen in the present case. Francis Kong & Co. were aware, well in advance of these proceedings, that their clients would not be pursuing their applications in relation to conviction. Ignoring the basic discourtesy of their failure to inform the court or the Respondent of this development, public funds were then wasted in the preparation of two applications for leave to appeal against conviction. On an application for costs to reimburse the public purse, the court once again found itself powerless to act.

71. If this was an isolated incident, it would not be worthy of mention, but it is not. We would, therefore, invite the Secretary for Justice's representatives to consider looking once more at Hong Kong's 'wasted costs' provisions with a view to considering whether legislative changes along English lines would be greatly in the public interest.

72. There was one other application for costs. Following D3's successful appeal, Mr Andrews applied for the costs incurred by D3 in the lower court at a time when he was not legally aided. We refused this application. There were two significant pieces of evidence in D3's case which brought suspicion on him. He chose, as was his right, to give no explanation about these matters. Leaving aside his residence at the flat purchased by D1, he can hardly now be heard to complain that to have signed company minute sheets purportedly showing his presence at two company meetings in the Million Profit offices did not bring suspicion upon himself. Accordingly, it was not appropriate to give him his costs.