HKSAR v. LAI, CHEE YING

HCCP 727/2020 & HCCP 738/2020

(Heard together)

[2020] HKCFI 3161

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 727 OF 2020

________________________

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 738 OF 2020

________________________

________________________

REASONS FOR RULING

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Introduction

1.  This is about the Applicant’s two applications for bail review pursuant to s9J of the Criminal Procedure Ordinance, Cap 210 (“CPO”).   The matter was first listed before me on 15 December 2020.  At that time, the Applicant was seeking bail from this court only in relation to WKCC 4217/2020 which is about a charge of “fraud”[1] (“the Fraud case”).  However, on 11 December 2020 the Applicant was taken to court again by the prosecution for a new charge of “collusion with a foreign country or with external elements to danger national security”[2] (WKCC 4341/2020) (“the NSL case”) for which he was also refused bail.  At the request of the Applicant, the hearing on 15 December 2020 was vacated so as to allow him time to file papers with a view to seek a bail review in relation to the NSL case as well. 

2.  On 23 December 2020, I heard the two applications for bail review together.  Having considered the materials placed before me by the parties and having heard counsel, I granted bail to the Applicant on terms, saying that reasons would be handed down.  This, I now do.    

The Charges

3.  As regards the Fraud case, it is about a lease made in May 1999 between the Hong Kong Science and Technology Parks Corporation as the landlord and Apple Daily Printing Limited (over which the Applicant has substantive control) as the tenant.  The subject premises is a site at Tseng Kwan O Industrial Estate. The allegation is that between 27 June 2016 and 22 May 2020, the Applicant together with two others defrauded the landlord by concealing and making false representation about the use of the subject premises by a secretarial company (called “Dico”[3]) for purposes not permitted under the lease.  It is alleged that the fraud on the one hand allowed Apple Daily Printing to receive rental fees for the period at least between 2011 and 2014 and on the other hand allowed Dico to pay less than it would otherwise have to for a substitute.

4.  As regards the NSL case, it is alleged that between 1 July 2020 and 1 December 2020, the Applicant requested a foreign country or an institution, organisation or individual outside the mainland, Hong Kong, and Macao of the People’s Republic of China (“PRC”), to impose sanctions or blockade, or engage in other hostile activities against the PRC or the Hong Kong Special Administrative Region (“HKSAR”).  The charge, I note, is based on what the Applicant had allegedly said in articles published in Apple Daily, in interviews with various overseas media and in Twitter posts.  It is noted that during the charge period, the United States passed legislation and imposed financial sanctions on officials of the PRC and the HKSAR.       

The Respondent’s objection

5.  The Respondent has advanced four grounds of objection:

(a)     the two charges are serious and the evidence against the Applicant is “strong” and therefore substantial terms of imprisonment are likely in case of conviction;

(b)     in view of matters including (a) above, there are substantial grounds for believing that the Applicant would fail to surrender to custody as the court may appoint: s9(1)(a), CPO;

(c)     there are also substantial grounds for believing that the Applicant would commit an offence whilst on bail;

(d)     as regards the NSL case, there are insufficient grounds for believing that the Applicant will not continue to commit acts endangering security for the purpose of NSL 42(2). To the contrary, given the nature of the case, there are substantial grounds for believing that the Applicant will continue to commit such acts if bail is granted to him.

6.  Mr Chau for the prosecution also draws my attention to the following outstanding trials that the Applicant is facing:

(1)	DCCC 536/2020
	Offence date:	18 August 2019
	Charge:	(i)    Organizing an unauthorized assembly; and
		(ii) Knowingly taking part in an unauthorized assembly
	First appearance:	18 May 2020 (WKCC 1266/2020)
	Next hearing date:	5 January 2021 for Pre-Trial Review
	Trial dates:	16 February to 1 March 2021
	Bail condition:	$1000 cash bail
(2)	DCCC 537/2020
	Offence date:	31 August 2019
	Charge:	Knowingly taking part in an unauthorized assembly
	First appearance:	5 May 2020 (WKCC 957/2020)
	Next hearing date:	8 March 2021 for PTR (DCCC 537/2020)
	Trial dates:	7-15 April 2021
	Bail condition:	$1000 cash bail
(3)	DCCC 534/2020
	Offence date:	1 October 2019
	Charge:	(i)   Organizing an unauthorized assembly; and
		(ii) Knowingly taking part in an unauthorized assembly
	First application:	18 May 2020
	Next hearing date:	19 April 2021 for PTR
	Trial dates:	17-31 May 2021
	Bail condition:	$1000 cash bail
(4)	DCCC 872/2020
	Offence date:	4 June 2020
	Charge:	Incitement to knowingly take part in an unauthorized assembly
	First mention date:	13 July 2020 (ESS 13461/2020)
	Next hearing date:	5 February 2021 for mention (DCCC 872/2020)
	Bail condition:	none (as D1 was summonsed for the offence)

7.  My attention has also been drawn to the fact that the incident giving rise to DCCC 872/2020 and the present two offences are said to have occurred whilst the Applicant was on bail for other matters.  I bear in mind that this is relevant to the Applicant’s risk of committing further offences, if bail is granted.  I also have regard to other factors listed in s9G(2), CPO when I consider whether bail should be granted to the Applicant in all the circumstances. 

Legal principles

8.  The legal principles applicable to a bail review under s9J, CPO are well-known and have been summarized in HKSAR v Vu Thang Duong^[4]and HKSAR v Wong Chi-fung^[5].  As regards bail applications for accused charged for offences under the NSL, the relevant legal principles have been considered in Tong Ying Kit v HKSAR^[6] and HKSAR v Tong Ying Kit^[7].  All of which, I am not going to repeat now.

Merits of the application

As to (a): nature and seriousness of the offence and the weight of the evidence

9.  I bear firmly in mind that it would be premature to have any form definite view under this head as the investigation is still on-going.  Moreover, it would be inappropriate for the bail court to say anything which may be taken to have any influence on the trial court.  That said, since it is necessary for this court to explain how the ruling is arrived at, caution will be exercised when giving the reasons below.

The fraud case

10.  As regards the fraud charge, I note that it is not the prosecution case as pleaded in the charge that the lease was obtained in by deceit; otherwise the charge period would start in May 1998 when the lease commenced.  As to why the charge period begins on 27 June 2016, I am told that this is because the documents from the Company Registry show that Dico has been providing company services to others since that day.[8]  In other words, based on the present state the evidence the unpermitted user began in June 2016.

11.  An issue then arises as to whether the prosecution’s case for “deceit” is one of omission or commission: see s16(3), Cap 210. If it is the former, whether there was a special relationship between the tenant and the landlord or whether the lease was of a special nature so that the concealing party (the defendants) had a duty to disclose the relevant fact to the landlord: see HKSAR v Chan Shu-hung[9].  It may be that the prosecution can in due course establish a duty to disclose on the part of the defendants.  However, the material before me now is not at all clear on this point and the defence seems to have an arguable case that the defendants did not owe such a duty.

12.  Mr Chau informs me that, apart from relying on deceit by way of omission, the prosecution also relies on an allegedly false statement of one of the co-accused made in April 2020 that “Dico does not occupy and is not operating” on any part of the subject premises.[10]  Noting that the charge period ends on 22 May 2020, this representation, if shown to be false, came only towards to the end of the alleged offence and not from the Applicant.  Whether this representation is admissible against the Applicant, for example pursuant to the co-conspirator rule, remains to be seen. 

13.  Secondly, there is an issue of “dishonesty” which, according to HKSAR v Lam Hin Fai[11], was an element imported into the offence of fraud.  In this regard, I am told that:

●     “According to the Companies Registry (“CR”) records of Dico, the address of registered office of Dico had been the Premises since 1998-04-01.”[12]

●     “Apply Daily Printing had earned rental fees from Dico according to the annual reports of Next Digital for financial year 2011/2012 to 2013/2014 on the Hong Kong Stock Exchange during which Dico paid less for the rent of offence when compared with the average rent in the market.”[13]  

Therefore, there had been information in the public domain showing Dico’s use of (part of) the subject premises.  This may to some extent weaken the prosecution’s case on “dishonesty” as there is evidence suggesting an absence of intention to conceal. I reckon, of course, that this is a jury question and the strength of the prosecution case may well change over time so that it may not be eventually present a problem for the prosecution.  However, as the matter now stands there is some evidence in favour of the defence.      

14.  Thirdly, there is the question of the likely sentence in case of conviction.  During submission, I am given to understand that the total area of the subject premises is about 38,000 sq meters (including offices and car-parking spaces). On the other hand, according to the defence the space occupied by Dico in that site was about 50 sq meters, which accounts for only about 0.13% of the total area.  The prosecution has some dispute about this but in any view it does seem that the space occupied by Dico only constituted a small portion of the subject premises.  This is a matter which would need to be taken into account when it comes to sentence.

15.  Mr Duncan also makes the valid point that the offence of fraud is one for which bail is routinely granted and this is reflected in this case by the granting of bail to the Applicant’s two co-accused, notwithstanding the prosecution’s opposition.

The NSL case

16.  It goes without saying that any offences under the NSL would be serious in nature, although their gravity would vary according to the facts of the case; otherwise, there would not be different levels of minimum sentences stipulated in different articles of the NSL.  For the purpose of this application, I am prepared to assume that the alleged criminality of the Applicant, if proved, is on the high side.

17.  The substance of the NSL charge is that the Applicant had made a “request” which contravene NSL 29(4).  In the absence of any assistance from the parties as to what “request” means in the context of that article, I am prepared, for the purpose of this bail review, to take a view that is more favourable to the Respondent, that is, the offence can be committed by the offender if he or she asks a foreign country or institution, etc, to do the things covered by NSL 29(4), whether or not the request was successful and whether or not there was a prior agreement between the offender and the foreign institution in question.  However, it is Mr Duncan’s submission that there is no evidence that the Applicant has not made any such requests at all after 1 July 2020 from which date the NSL has come into operation.  

18.  Under the cover of the affirmation filed in support of the Respondent’s case[14], this court is provided with a number of public statements made by the Applicant. Some of those were made before 1 July 2020 and some after.  Although what the Applicant did before 1 July 2020 cannot be in law form the subject matter of the NSL charge, I readily accept that the Applicant’s words and conduct before that date are capable of forming the background in the light of which his subsequent conduct can be interpreted and his state of mind inferred. 

19.  In reply to Mr Duncan’ submission, Mr Chau referred me to two statements of the Applicant, one was made during an interview hosted by the Applicant on 30 July 2020 titled “Live Chat with Jimmy Lai” through Apple Daily which was available on the internet.  The other was made in the interview he hosted on 18 August 2020 which, I note, was about a week after his arrest for the NSL offence.  For obvious reasons, I would not delve into the details of what the Applicant had said in those interviews, the gist of which can be found in the aforesaid affirmation[15].  Suffice to say that the statements in question on their face appear to be comments and criticisms rather than requests, albeit one might find those views disagreeable or even offensive. Upon enquiry by the court, Mr Chau says the prosecution case is that, based on all the background materials, it can be inferred that the statements in question are requests in disguise.  Whether or not the prosecution can make good their case must be a matter for the jury.  As I have stressed, the strength of the evidence may change and it may be that the evidence would become stronger in the future.  For the present purpose, however, the defence’s stance is on its face arguable.   

20.  For the above reasons, in my assessment at present the factors relied upon by the prosecution under this head do not weigh in their favour.

As to (b): risk of absconding

21.  Apart from factors under the head of (a) above, I also have regard to other factors relied upon by Mr Chau including, but not limited to, the multiplicity of proceedings that the Applicant is facing, that he has family and extensive business ties overseas and that he has financial resources at his disposal.  Mr Chau also emphasises that the Applicant owes two pleasure boats which, if need be, can be used for leaving the jurisdiction illegally. 

22.  I reckon the sheer pressure of facing a multiple of proceedings may in some cases provide sufficient incentive to an accused not to face his or her trials, not to mention the possible aggregate sentences and their consequences.  This is a case-and-defendant specific consideration.  

23.  On the other hand, I note Mr Duncan’s submission that the Applicant has hitherto complied with each and every condition of bail provided for by the Courts.  As regards the Applicant’s ties, the affirmation evidence before me is that the Applicant also has family and extensive business ties in Hong Kong and is a person rooted in Hong Kong.

24.  As to Mr Chau’s reliance on the fact that the Applicant had once applied before this court for permission to leave Hong Kong in relation to another matter[16] as evidence of his intention to leave the jurisdiction, with respect this is not something to which this court is able to attach much weight.  Although this court refused the Applicant’s application for the lifting of the travel restriction on the last occasion, there was no “finding” that he had the intention to leave the jurisdiction in the sense of absconding.

25.  I have also regard to the contents of the two additional affirmations[17] filed on behalf of the Respondent the day before the hearing.   The two police officers draw my attention to the fact that a number of foreign countries have either terminated or suspended their mutual legal assistance and surrender of fugitive offenders arrangements with Hong Kong.  I reckon that this will increase the difficulties of seeking the return of the Applicant should he leave Hong Kong, either legitimately or illegitimately. As to the newspaper reports referred to by the police that various foreign countries have been exerting political pressure seeking the release of the Applicant, with respect I have difficulties seeing how those reports would strengthen the prosecution about the alleged “request” or their relevance generally.  All this court needs to say is that the present application is to be and can only be determined according to the law, the evidence available, the merits of the application and nothing else.

26.  The police officers also referred in their respective affirmations to recent incidents of people not answering bail.  I can understand their frustration when their suspects have absconded.  However, each case has to be decided on its own merits.  I note that there is no allegation from the Respondent that the Applicant had anything to do with the absconding of other people or that he had acted with them in concert. 

27.  I reckon that the factors relied upon by the Respondent to show a flight risk should not be considered in segregation but have to be taken as a whole.  On the other hand, the risk has to be balanced against factors in favour of the Applicant and also the conditions which he is prepared to accept for granting of bail.  In this regard, I note that Mr Duncan says, apart from offering a total of HK$10 million cash bail and 3 cash sureties (each of HK$100,000) and other conventional terms like reporting condition and travel restriction, the Applicant is prepared to “wear such electronic device as is required by the Court so that his movements are monitored at all times by the police”.  Upon the Respondent confirming that that option is not feasible in Hong Kong, the Applicant indicates through counsel that he is willing to be confined to his residence, if bail is provided.

28.  Having looked at all the matters in the round, I am satisfied that the flight risk can be ameliorated so that it could become acceptable by imposing suitably stringent conditions.

As to (c) & (d) Risk of committing offence whilst on bail

29.  This factor is of particular importance to the NSL case.  Full weight is to be given to the importance of safeguarding national security and the terms and spirit enshrined in NSL 3 and NSL 42(1) & (2): see HKSAR v Tong Ying Kit, ante, at §§5(5), 13-15.

30.  On the other hand, as the divisional court points out in Tong Ying Kit v HKSAR, NSL 42(2) is not a “no-bail” provision.  It is therefore possible to grant bail to an accused charged with NSL an offence if there are sufficient grounds for the court to believe that the accused will not commit acts endangering national security for the future if bail is granted.

31.  In this regard, I bear in the mind what the Applicant is alleged to have committed, ie, the making a “request” contrary to NSL 29(4).  Mr Duncan proposes to address the court’s concern of the risk of “re-offending” by the Applicant making the following undertaking and to have it imposed as a bail term:

1.     The Applicant is to undertake not to engage directly or indirectly in conduct which may reasonably be regarded as requesting a foreign country or an institution, organization or individual outside the mainland, Hong Kong, and Macao of the People’s Republic of China (“PRC”), to impose sanction or blockade, or to engage in other hostile activities against the PRC and the Hong Kong Special Administrative Region.

2.     In particular, the Applicant shall not:

(1)     Meet with any officials of a foreign government;

(2)     Attend or host any interviews, television, radio or online programmes;

(3)     Publish any articles in paper or in digital form;

(4)     Make any posts/comments/messages on social media platforms including but not limited to Twitter.

32.  It is noted that the Respondent is not prepared to accept the above undertaking which Mr Chau submits is not sufficient to reduce of the Applicant “absconding” or “re-offending”. 

33.  But for the NSL offence, this bail review would be a relatively straight forward one and in my view bail should be granted to the Applicant for the Fraud case.  Mr Chau has said all he can for the Respondent.  However, having given careful consideration to the submissions of counsel and the nature of allegation against the Applicant in respect of the NSL charge, I am satisfied that the above undertaking which is tailor-made to the present case, coupled with the Applicant’s agreement to be confined to his residence during the whole of the bail period, give this court sufficient grounds to believe that the accused will not commit acts endangering national security for the future if bail is granted.  As Mr Duncan puts it, “One more post, and the Applicant will be back in jail custody”. 

34.  I have not ignored the fact that the Applicant has been arrested for several times.  However, his previous arrests, which are of about alleged offences relating to “unlawful assembly”, are of a different nature.[18]

Conclusion

35.  Based on the above, I allow the Applicant’s applications and grant him bail for the two cases on the following terms:

(1)     HK$10 million cash (HK$5 million for each case);

(2)     3 cash sureties, each of HK$100,000 (HK$50,000 for each case);

(3)     not to leave Hong Kong;

(4)     surrender all travel document;

(5)     report to Kowloon City Police Station on every Monday, Wednesday and Friday between 3 pm to 6 pm;

(6)     the Applicant is to be confined to his residence during the bail period save and except for the purposes of reporting bail and attending court proceedings;

(7)     The Applicant is not to engage directly or indirectly in conduct which may reasonably be regarded as requesting a foreign country or an institution, organization or individual outside the mainland, Hong Kong, and Macao of the People’s Republic of China (“PRC”), to impose sanction or blockade, or to engage in other hostile activities against the PRC and the Hong Kong Special Administrative Region.

(8)     In particular, the Applicant shall not:

(i)     meet with any officials of a foreign government;

(ii)     attend or host any interviews, television, radio or online programmes;

(iii)     publish any articles in paper or in digital form; and

(iv)     make any posts/comments/messages on social media platforms including but not limited to Twitter.

Post-script

36.  Immediately after my aforesaid ruling, Mr Chau applies for a certificate of law seeking to appeal to the Court of Final Appeal my decision to grant of bail to the Applicant: see s32 of the Hong Kong Court of Final Appeal Ordinance, Cap 484.  The question of law is about the true interpretation of NSL 42(2).  Mr Chau also asks that the Applicant be detained pending the proposed appeal: see s35(2), Cap 484.

37.  Given the importance of this case, I would have granted the certificate of law as requested but for the absence of jurisdiction.  This is because there can only be an appeal to the Court of Final Court from a “final decision” of this court: s 31(b), Cap 484.  However, according to Dizon v HKSAR[19], which Mr Chau has fairly drawn to my attention,

“A final decision in that context must mean the lower court's substantive decision disposing one way or another of the offence charged. A bail application does not involve any such determination. A decision to refuse or grant bail is not final. Bail granted can be revoked. The decision to refuse bail can be reopened on new circumstances being shown.”

38.  In my view, the case of HKSAR v Mak Wan Ling (No 1)[20], which is about the decision by the trial judge about an element of the offence in the summing up to the jury, is totally different and does not assist the Respondent in the present case. 

39.  Therefore, I refuse both of the Respondent’s applications under Cap 484.