HKSAR v. POON CHUN KIT AND ANOTHER

CACC 56/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 56 OF 2006

(ON APPEAL FROM DCCC NO. 614 OF 2005)

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REASONS   FOR   JUDGMENT

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Stuart-Moore, VP, Tang VP and McMahon J (giving the reasons for judgment):

Introduction

1.  These were applications for leave to appeal against conviction.  The 1^st and 4^th defendants were convicted of one count of conspiracy to offer advantages to an agent.  The 2^nd defendant, who was also convicted, has abandoned his application for leave to appeal.  The 3^rd defendant was acquitted at trial.

2.  At the conclusion of the hearing, the 1^st defendant’s application was dismissed.  The 4^th defendant’s application was allowed and consequently his appeal.  These are our reasons.

3.  The defendants were charged with a conspiracy with four named individuals, namely, Ng Mo-ling (“Ng”), Nip Fung-sui (“Nip), Chung Tak-man (“Chung”) and Tang Shuk-yee (“Tang”).  Ng Mo-ling died on 2 April 2002.  Nip (PW1 at trial), Chung (PW2) and Tang (PW3) all gave evidence under immunity.

4.  The charge read:

“Conspiracy to offer advantages to an agent, contrary to sections 159 A and 159C of the Crimes Ordinance, Cap. 200, and sections 9(2)(b) and 12(1) of the Prevention of Bribery Ordinance, Cap. 201.

Particulars of Offence

Poon Chun-kit, being an agent, namely an employee of Shui On Construction & Material Limited (‘Shui On’), Cheng Wai-sun, Ng Chung-ying and Wong Fai-sing, between the 1^st day of January 1997 and the 31^st day of January 2002, in Hong Kong, conspired together and with Ng Mo-ling, Nip Fung-sui, Chung Tak-man and Tang Shuk-yee to, without lawful authority or reasonable excuse, offer advantages, namely gifts, loans, fees, rewards or commissions consisting of a sum or sums of money to the said Poon Chun-kit, as an inducement to or reward for or otherwise on account of the said Poon Chun-kit showing or having shown favour to Wise Security Limited in relation to his principal’s affairs or business.”

Prosecution’s case

5.  The prosecution’s case was simple.

6.  The 2^nd and 4^th defendants and Ng were the shareholders of Wise Security Ltd (“Wise”), a security service provider to Shui On.  The 1^st defendant was the only security officer of Shui On.  Since 1995, Wise had been on the list of approved security contractors of Shui On, although it did not have much business from Shui On.

7.  In about mid-1997, the 2^nd defendant asked PW1, the general manager of Wise, to approach the 1^st defendant to see if Wise could receive more work from Shui On.  PW1 then approached the 1^st defendant who indicated to PW1 that whether Wise could get more work from Shui On would depend on what advantage Wise would give the 1^st defendant.

8.  PW1 then devised a “5-6-7” formula for calculating the amounts to be paid to the 1^st defendant: namely, 5% for the first $100,000, 6% for the second, 7% for the third and any further $100,000 of the monthly turnover Wise received from Shui On.

9.  PW1 then discussed the 5-6-7 formula with his colleague PW2.  PW1 asked PW2 to convey the 1^st defendant’s message to the “bosses” of Wise.  At that time, the shareholders of Wise were the 4^th defendant (40%), Ng (25%), the 2^nd defendant (25%) and Mr Tony Clarkson (10%).  PW2 related the message to the 4^th defendant.  Shortly afterwards, at a meeting attended by PW1, PW2, the 2^nd and 4^th defendants, the formula was discussed and approved.  It was agreed that Wise would pay rebates to the 1^st defendant according to the formula.  That formula was subsequently accepted by the 1^st defendant.  Secret rebates were paid to the 1^st defendant during the currency of the conspiracy.  The rebates were an inducement to or reward for or otherwise on account of the 1^st defendant showing or having shown favour to Wise in relation to Shui On’s affairs or business.

10.  On the instruction of Ng, PW2 calculated the payments to the 1^st defendant based on the formula.  PW1 would pass the payments to the 1^st defendant.  The payments were in cash except for one occasion in late November / early December 1999, when payment was made to the 1^st defendant by way of a Jockey Club cash voucher.  The records of the Jockey Club showed that the 1^st defendant had an $89,000 cash voucher transaction on 8 December 1999.

11.  During the currency of the conspiracy, Shui On paid Wise over $45,000,000 for the security services provided.  The rebates that the 1^st defendant received under the formula amounted to about $2.9 million.

The 1^st defendant’s appeal

12.  The first ground of the appeal advanced on behalf of the 1^st defendant by Mr Ching Y Wong, SC, and adopted by Mr Chan Siu-ming, on behalf of the 4^th defendant, is one of law.

13.  Under the charge, the conspiracy to offer advantages to an agent was said to be contrary to sections 159A of the Crimes Ordinance, Cap. 200 (“section 159A”), and section 9(2)(b) of the Prevention of Bribery Ordinance, Cap. 201 (“section 9(2)(b)”).

14.  Section 159A provides:

“(1) Subject to the following provisions of this Part, if a person agrees with any other person or persons that a course of conduct shall be pursued which, if the agreement is carried out in accordance with their intentions, either-

(a)   will necessarily amount to or involve the commission of any offence or offences by one or more of the parties to the agreement; or

(b)   would do so but for the existence of facts which render the commission of the offence or any of the offences impossible, he is guilty of conspiracy to commit the offence or offences in question.

(2)   Where liability for any offence may be incurred without knowledge on the part of the person committing it of any particular fact or circumstance necessary for the commission of the offence, a person shall nevertheless not be guilty of conspiracy to commit that offence by virtue of subsection (1) unless he and at least one other party to the agreement intend or know that that fact or circumstance shall or will exist at the time when the conduct constituting the offence is to take place.

(3)   In this section ‘offence’ means any offence triable in Hong Kong and includes murder notwithstanding that the murder in question would not be so triable if committed in accordance with the intentions of the parties to the agreement.”

15.  Section 9(2)(b) provides:

“(2)   Any person who, without lawful authority or reasonable excuse, offers any advantage to any agent as an inducement to or reward for or otherwise on account of the agent’s-

……

(b)     showing or forbearing to show, or having shown or forborne to show, favour or disfavour to any person in relation to his principal’s affairs or business,

shall be guilty of an offence.”

16.  Thus, the substantive offence with which the charge of conspiracy was concerned was the offence of offering advantages to an agent.

17.  According to Mr Wong, the legal issues raised by ground 1 are:

(1)   “for statutory conspiracy, does the prosecution have to prove an intention to participate in the pursuance of the agreed course of conduct against each conspirator?”

(2)   “whether a charge alleging a conspiracy between the conspirators to offer an advantage to one of themselves (as inducement etc.) constitutes an offence known to law.”

18.  Mr Wong submitted that the prosecution must prove against the 1^st defendant an intention to participate together with others in the agreed course of conduct alleged.  We understand Mr Wong’s submission to be that the charge required the prosecution to prove that the 1^st defendant must have agreed to participate in the conspiracy in the sense that he must have agreed to offer advantages to himself.  The central tenet of his submission was that since the agreed course of conduct consisted of offering advantages to the 1^st defendant as an agent, and since the 1^st defendant was the agent and could not offer advantages to himself, he did not have the intention to participate in the agreed course of conduct.

19.  The answer to Mr Wong’s submission can be found in the words of section 159A.  Nowhere in the provisions of that section is there any requirement that a person himself intend to participate in any particular aspect of the agreed course of conduct.  If A, an agent, agrees with B and C, that advantages be offered by B and C to A, such that if the agreement is carried out in accordance with their intentions, it would necessarily have amounted to or involved the commission of the offence under section 9(2)(b) of the Prevention of Bribery Ordinance by B and C, the offence of conspiracy would be made out against A if A had intended that B and C should offer the advantages to himself.  That is clear from the language of section 159A(1)(a) and (b).  We think that is a complete answer to Mr Wong’s submission.  However, we will deal with the whole of the argument mounted by Mr Wong.

20.  In support of his submission that the prosecution has to prove an intention to participate in the agreed course of conduct against a conspirator, Mr Wong relied on R v Anderson [1986] AC 27, a decision of the House of Lords.

21.  There, the appellant was convicted of conspiring to effect the escape of a prisoner from prison.  The appellant agreed with the prisoner to supply diamond wire which he claimed was capable of cutting through metal bars.  The appellant’s case was that he had never intended that the escape plan should be carried into effect.  In other words, he never intended the commission of the substantive offence.  He submitted that he therefore lacked the mental element necessary for conviction.  The trial judge rejected the submission and the appellant pleaded guilty.  The Court of Appeal dismissed the appellant’s appeal against conviction but certified the following question:

“Is a person who ‘agrees’ with two or more others, who themselves intend to pursue a course of conduct which will necessarily involve the commission of an offence, and who has a secret intention himself to participate in part only of that course of conduct, guilty himself of conspiracy to commit that offence under section 1(1) of the Criminal Law Act 1977 ... ?”

22.  Lord Bridge, in delivering the leading judgment of the court, analysed section 1(1) of the Criminal Law Act 1977, which is indistinguishable from section 159A, and said at 37–38 in his judgment:

“For purposes of analysis it is perhaps convenient to isolate the three clauses each of which must be taken as indicating an essential ingredient of the offence as follows: (1) if a person agrees with any other person or persons that a course of conduct shall be pursued (2) which will necessarily amount to or involve the commission of any offence or offences by one or more of the parties to the agreement (3) if the agreement is carried out in accordance with their intentions.

Clause (1) presents, as it seems to me, no difficulty. … To be convicted, the party charged must have agreed with one or more others that ‘a course of conduct shall be pursued’. … The agreed course of conduct may be a simple or an elaborate one and may involve the participation of two or any larger number of persons who may have agreed to play a variety of roles in the course of conduct agreed.

Again, Clause (2) could hardly use simpler language. Here what is important to note is that it is not necessary that more than one of the participants in the agreed course of conduct shall commit a substantive offence. It is, of course, necessary that any party to the agreement shall have assented to play his part in the agreed course of conduct, however innocent in itself, knowing that the part to be played by one or more of the others will amount to or involve the commission of an offence.

It is only clause (3) which presents any possible ambiguity. … I am clearly driven by consideration of the diversity of roles which parties may agree to play in criminal conspiracies to reject any construction of the statutory language which would require the prosecution to prove an intention on the part of each conspirator that the criminal offence or offences which will necessarily be committed by one or more of the conspirators if the agreed course of conduct is fully carried out should in fact be committed. …”  (Emphasis added)

23.  With respect to Mr Wong, Lord Bridge’s analysis shows that the 1^st defendant did not have to agree to take part in the actual offer of advantages to himself; it is sufficient for him to have agreed that one of the conspirators should do so.  Clause (2) is therefore satisfied.  Since the 1^st defendant, as well as the other convicted defendants, intended that advantages should be offered to the 1^st defendant, clause (3) is also satisfied, because the 1^st defendant had intended that the offence of offering advantages should be committed.

24.  The possible ambiguity in clause (3), “if the agreement was carried out in accordance with their intentions”, was important in Anderson because it was the appellant’s defence that although he had agreed to acquire the diamond wire which was to be smuggled into the prison and that he had been paid £2,000 on account of the agreed fee of £20,000, he intended “to insist that before he could proceed further he should be paid a further £10,000 on account, on receipt of which he would have left the country and gone to live in Spain, taking no further part in the scheme to effect Andaloussi’s escape”.  It was in that context that Lord Bridge’s observation on clause (3) should be read.  On those assumed facts, the House of Lords answered the question reserved for them in the affirmative.

25.  However, Mr Wong prays in aid the following statement by Lord Bridge at 39:

“… I have said already, but I repeat to emphasise its importance, that an essential ingredient in the crime of conspiring to commit a specific offence or offences under section 1(1) of the Act of 1977 is that the accused should agree that a course of conduct be pursued which he knows must involve the commission by one or more of the parties to the agreement of that offence or offences. But, beyond the mere fact of agreement, the necessary mens rea of the crime is, in my opinion, established if, and only if, it is shown that the accused, when he entered into the agreement, intended to play some part in the agreed course of conduct in furtherance of the criminal purpose which the agreed course of conduct was intended to achieve. Nothing less will suffice; nothing more is required.” (Emphasis added)

26.  Even read mostly favourably to Mr Wong, this passage suggests that a conspirator must have “intended to play some part in the agreed course of conduct …” it does not require him to take part in the entire course of conduct.

27.  In our view, Lord Bridge’s dictum, read in its context, gives Mr Wong no support.  The dictum was made when Lord Bridge was dealing with “the important question whether a person who has agreed that a course of conduct will be pursued which, if pursued as agreed, will necessarily amount to or involve the commission of an offence is guilty of statutory conspiracy irrespective of his intention, and, if not, what is the mens rea of the offence” (at 38).  Lord Bridge had “no hesitation in answering the first part of the question in the negative”.  He gave the example of an innocent person, including an undercover agent, playing the part of an intending conspirator, in the course of criminal conduct proposed to be pursued, in order to expose and frustrate the conspiracy.

28.  Lord Bridge was not saying that a person cannot be guilty of a conspiracy unless he had agreed to play some active part in the furtherance of the conspiracy in addition to agreeing with it and intending that it be carried out.  Of course, in real life, people who join in a conspiracy, will normally have a part to play in the conspiracy.  That is common sense.  A person who joins a criminal conspiracy will hope to benefit from it and such a person would not often be given a share of the spoils if he was to do nothing.  But as a matter of law, it is not necessary for every conspirator to play an active part.

29.  In Siracusa [1990] 90 Cr App R 340 at 349, O’Connor LJ in giving the judgment of the court said at 349:

“… We think it obvious that Lord Bridge cannot have been intending that the organiser of a crime who recruited others to carry it out would not himself be guilty of conspiracy unless it could be proved that he intended to play some active part himself thereafter.  Lord Bridge had pointed out at p. 259 and p. 38 respectively that

‘in these days of highly organised crime the most serious statutory conspiracies will frequently involve an elaborate and complex agreed course of conduct in which many will consent to play necessary but subordinate roles, not involving them in any direct participation in the commission of the offence or offences at the centre of the conspiracy.’

The present case is a classic example of such a conspiracy.  It is the hallmark of such crimes that the organisers try to remain in the background and more often than not are not apprehended.  Secondly, the origins of all conspiracies are concealed and it is usually quite impossible to establish when or where the initial agreement was made, or when or where other conspirators were recruited.  The very existence of the agreement can only be inferred from overt acts.  Participation in a conspiracy is infinitely variable: it can be active or passive.  If the majority shareholder and director of a company consents to the company being used for drug smuggling carried out in the company’s name by a fellow director and minority shareholder, he is guilty of conspiracy.  Consent, that is the agreement or adherence to the agreement, can be inferred if it is proved that he knew what was going on and the intention to participate in the furtherance of the criminal purpose is also established by his failure to stop the unlawful activity.  Lord Bridge’s dictum does not require anything more.”

30.  The other legal issue raised by Mr Wong is whether a charge alleging a conspiracy between conspirators to offer an advantage to one of themselves constitutes an offence known to law.

31.  Again we refer to the provisions of section 159A.  So long as the agreed course of conduct involves the commission of an offence by one or more of the parties to the agreement that is sufficient.

32.  However, Mr Wong submitted that there are conflicting English authorities on the point, in particular, the judgment of Mantell LJ in R v Barker [1998] EWCA Crim 1105 and the judgment of Waller LJ in R v Drew [2000] 1 Cr App R 91.

33.  In our view, there is no conflict.  The cases simply show that if a charge, whether explicitly or implicitly, charges A, B and C with the offence of unlawfully supplying an item to another person, then A, B and C cannot be convicted of supplying that item to one of themselves, because that is not what is alleged in the charge.

34.  On the other hand, in R v Drew, the charge was that:

“Samantha Jane Jones, Christian Mayo and Martin Ralph Drew on a day between the 2^nd day of June 1997 and the 6^th day of June 1997 conspired together to supply a controlled drug of Class A, diamorphine, to Martin Ralph Drew.”

35.  Waller LJ dealt with three authorities which were cited to the court.  The first in time was the case of Smith (Brian Hugh William) (unreported) February 14, 1983, where the charge against the conspirators in that case was to supply a controlled drug to another, contrary to section 1 of the Criminal Law Act 1977, Waller LJ said:

“The particulars of offence were:

‘Brian Hugh Williams Smith, between 1^st day January 1981 and 24^th day April 1981, conspired with Diane Wilkins, to supply a class B controlled drug, namely, cannabis or cannabis resin to another.’

Griffiths L.J., who gave the judgment of the Court, explained that the nature of the case being made was that the supply was to be by Diane Wilkins to Smith. He said as follows (page 3C):

‘The prosecution said that their evidence revealed an agreement between Smith and Diane Wilkins that Diane Wilkins should supply Smith with cannabis. That, of course, could have been charged as a conspiracy and would, of itself, have been an offence but objection was taken during the course of the trial that the prosecution had not charged the accused with that offence. The judge accepted the prosecution’s submissions that the word ‘another’ in the particulars of the offence could refer to Smith. This Court is quite unable to accept that construction of the wording of the particulars of the offence. As a matter of ordinary usage of English, ‘another’ clearly does not refer to Smith but refers to some other third party.’

Then he goes on to say the whole of the summing-up was directed to there being a supply, Wilkins to Smith, and thus the court in that case ruled that the offence of which the appellant there was convicted was not the offence described in the particulars. So it will be noted that the decision in the case is confined to a ruling that the particulars of the offence were not of the offence on· which the jury convicted and, in giving that decision, Griffiths L.J. accepted that there could have been a charge of conspiracy to supply to a co-conspirator if it had been properly particularised on the facts of that case.”  at 93.

36.  The next case was Ferrara (unreported) July 17, 1984, which, as Waller LJ explained, did not take the matter further because it simply relied on the decision in Smith.  It was another case in which the court held that the appellant had been convicted of an offence with which he had not been charged.  He then went on to deal with the case of Barker, (unreported) March 27, 1998 where Mantell LJ gave the judgment of the Court of Appeal.  The particulars in that case of the conspiracy were:

“Neil Scorer and Edward Barker on or before 7 August 1996, conspired together to distribute indecent photographs of children.”

This is what Waller LJ said about Barker:

“What the prosecution alleged in Barker was that there was a distribution of those photographs from one to the other of the two conspirators.

This was a case in which the appellant pleaded guilty after a ruling by the judge. What Mantell L.J. said in allowing the appeal was this:

‘Here two men were charged with agreeing to distribute dirty photographs. Although the charge as laid does not include the words ‘to another’ that must be implicit. It must be implicit if for no other reason than that the substantive offence which they were accused of conspiring to commit was an offence of distributing indecent photographs to another person. It necessarily follows that the other person to whom it was intended distribution should be made was someone other than the two conspirators. …

……

As it seems to us, all three of those cases were actually concerned with how the defendants would properly understand the charges being made against them and whether the defendants had been convicted of the offence actually charged. If in the instant case the charge had been in broad terms, alleging, for example, simply a conspiracy to supply contrary to section 4(1) of the Misuse of Drugs Act 1971, the obvious inference to draw would be that what was being charged was a supply to another, i.e. someone other than the conspirators. It is that primarily, as it seems to us, which Mantell L.J. is emphasising.

On the basis of the above authorities, the appellant would have a justified complaint if the charge he had come to meet was to be correctly interpreted as a charge that all three conspirators had conspired to supply another person when in fact the only case being made by the prosecution was of a supply to one of them.

We do not read those authorities in the way contended for by Mr Longman as demonstrating that in no circumstances can there be a conspiracy to supply one of the conspirators. Indeed, the passage to which we have already referred in Smith, in the judgment of Griffiths L.J., is to the contrary effect. …

……

… In our view one should simply pose the question: why should not the appellant have been charged with conspiring with his other two conspirators to commit a criminal offence, namely, the supply by them of heroin to him? In our judgment, there is no reason why such a charge is not a lawful charge within section 1(1) of the Criminal Law Act 1977, and it is not an offence to which section 2(1) applies.”

37.  Thus explained, there is no conflict between Barker and Drew.

38.  Here, the particulars made it quite clear that the conspiracy was to offer advantages to the 1^st defendant.  There is no question of the defendants being convicted of an offence with which they had not been charged.

39.  Mr Wong also referred to a number of later decisions including the cases of R v Gingell [1999] EWCA Crim 1025 (16 April 1999) and R v John Thomas Jackson, Tracey Lynn Jackson (below), in all of which Waller LJ participated.  But again it is clear from all three decisions that the critical issue in these cases concerned the nature of the charge.  If the charge was of supply to another, then if the person to be supplied was alleged to be a party to the conspiracy, they could not be convicted of the conspiracy to supply to another: R v John Thomas Jackson, Tracey Lynn Jackson [2001] 1 Cr App R 97.

40.  So, returning to Mr Wong’s second question, namely, whether a charge alleging a conspiracy between the conspirators to offer an advantage to one of themselves constitutes an offence known to law, our answer is yes.

41.  Mr Wong also submitted that R v Drew (above) must be taken to have been overruled by R v Saik [2007] 1 AC 18, although R v Drew was not even cited to their lordships in that case.

42.  R v Saik dealt with a wholly different question.  It was concerned with a conspiracy to launder money.  Reasonable grounds for suspicion that the money was the proceeds of crime were enough for the substantive offence of laundering money.  The question in R v Saik was whether reasonable grounds for suspicion were enough for a conspiracy to commit that offence.  That involved a consideration of section 1(2) of the Criminal Law Act, the equivalent of section 159A(2).  Lord Nicholls said:

“6.     Section 1(2) qualifies the scope of the offence created by section 1(1). This subsection is more difficult. Its essential purpose is to ensure that strict liability and recklessness have no place in the offence of conspiracy. The subsection provides:

‘Where liability for any offence may be incurred without knowledge on the part of the person committing it of any particular fact or circumstance necessary for the commission of the offence, a person shall nevertheless not be guilty of conspiracy to commit that offence by virtue of subsection (1) above unless he and at least one other party to the agreement intend or know that that fact or circumstance shall or will exist at the time when the conduct constituting the offence is to take place.’”

43.  Mr Wong referred to section 11(2) of the Prevention of Bribery Ordinance which provides:

“(2)         If, in any proceedings for an offence under any section in this Part, it is proved that the accused offered any advantage to any other person as an inducement to or reward for or otherwise on account of that other person’s doing or forbearing to do, or having done or forborne to do, any act referred to in that section, believing or suspecting or having reason to believe or suspect that such other person had the power, right or opportunity so to do or forbear, it shall be no defence that such other person had no such power, right or opportunity.”

44.  Mr Wong argued section 11(2) by providing that belief or suspicion or reason to believe or suspect that a person had the power to do or forbear to do an act is sufficient, triggers 159A(2).  With respect that argument on the present facts is misconceived.

45.  This is not a case where it could be said that any of the defendants did not “intend or know” that the 1^st defendant had the power, right or opportunity to do any act referred to in section 9(2)(b), and there was no merit in this submission.

46.  We turn then to deal with the 2^nd ground of appeal, which is that:

“5.1  On the basis that the conspiracy as alleged is held by this Court to be an offence known to law, there were also material irregularities in that, in respect of D1, the learned Judge had wrongly:

(i)    failed to make sufficient findings in respect of the requisite actus reus and mens rea of the conspiracy; and/or

(ii)   failed to rule that there was no or no sufficient evidence to prove such elements; and/or

(iii)  found that D1 was a party to the conspiracy.”

47.  Mr Wong has helpfully reduced this submission to one point, namely, that the judge had not found that the 1^st defendant ever agreed to be an offeror.  But that was not the charge.  He was a party to the conspiracy that an offer be made to him.  He was not charged with a conspiracy that he himself should make an offer to another person or to himself.  So there is nothing in this ground of appeal.

48.  Mr Wong accepted that the third ground of appeal depended on the first two grounds and must fail if we are against him on those ground.  That being the case, we will not deal with ground 3.

The 4^th Defendant

49.  We turn to the 4^th defendant.

50.  Some more background is necessary.  As noted, the 4^th defendant owned 40% of the shares in Wise.  His wife Madam Tong worked there full time and the 4^th defendant part time.  Until about March 1997, the 4^th defendant and Madam Tong managed Wise.  By mid 1996, Madam Ng Mo-ling had joined Wise.  At the end of 1996 or early 1997, the 4^th defendant and Madam Tong were accused of having pocketed secret profits from a contract Wise had with a business called the Super Giant Maze Project.  It seems that about one week after the Chinese New Year in 1997 (which fell on 7 February 1997), Madam Tong was required to hand over the passbook, cheque books, company chop and the accounts of Wise to the 2^nd defendant.  The 2^nd defendant also told the 4^th defendant that he was not allowed to be involved with Wise anymore.  From that time onward the 4^th defendant and Madam Tong lost control of Wise.  Thereafter, Wise was run by the 2^nd defendant, Madam Ng and Mr Clarkson.  There was an attempt by them to “remove” the 4^th defendant as a director at a directors’ meeting on 4 February 1997 which failed because that could only be done at the Annual General Meeting.  The 4^th defendant offered to sell his shares but the offer was rejected.  The shares were eventually sold in 1999.

51.  As Mr Chan pointed out, the critical evidence against the 4^th defendant was PW2’s evidence that the 4^th defendant attended the meeting where the offer of advantages to the 1^st defendant in accordance with the 5-6-7 formula was discussed and agreed.  Although PW1 also attended and gave evidence about this meeting, the judge placed no reliance on his evidence in this regard.

52.  However, it is important to note that according to the evidence of PW1, the meeting took place after 22 July 1997.  He was able to remember this because according to him the meeting was after a particular security contract called the Tin Shui Wai Project which did not commence until 22 July 1997.  According to PW1, following the success of the Tin Shui Wai contract, the 1^st defendant said to him:

“In case business of your company is to increase further then you have to see if your company can give me any favour.”  Transcript 96T.

53.  It was then that PW1 asked PW2 to consult “the bosses” about the 5-6-7 formula.  One or two days after he had spoken to PW2, the 5-6-7 meeting took place.  By July, the 4^th defendant and his wife were no longer running Wise.  According to PW2 at the time of the meeting, the 4^th defendant would only occasionally visit the office, and we note there was no evidence as to how PW2 was able to speak to the 4^th defendant and arrange the meeting within one or two days.

54.  It is also important to note that the only evidence the judge relied upon against the 4^th defendant was that of PW2 who said that the 4^th defendant was one of those present at the meeting where the 5-6-7 formula was agreed.  PW2’s evidence was to the effect that the 4^th defendant had, at that meeting, initially disagreed with the proposal to offer advantages to the 1^st defendant, but that at the end of the day, along with the meeting as a whole had agreed with the proposal.  Precisely what the 4^th defendant had said or done to lead PW2 to the conclusion that the 4^th defendant had in fact agreed was never mentioned in evidence.

55.  Against that background it is of considerable concern that PW2’s first cautioned interview by the ICAC took place in September 2004.  So basically PW2 had to recall events more than seven years after the meeting was alleged to have taken place.  The 4^th defendant’s conviction is based wholly on the accuracy of PW2’s unsupported recollection of the 4^th defendant’s presence at the meeting and his eventual acquiescence to the 5-6-7 proposal.

56.  In convicting the 4^th defendant, the judge said:

“PW2 could not be mistaken about the presence of D4 because it was D4 that he had approached.  It was D4 that he related PW1’s proposal to.  He could not be mistaken about the presence of D4.”

57.  That, of course, would depend on whether PW2’s recollection that it was the 4^th defendant whom he approached was correct.  What concerned us further was that if PW2 had spoken to the 4^th defendant immediately before the meeting that may have been another source of confusion for him in remembering whether or not the 4^th defendant was present at the meeting at the time he made his first statement to the ICAC some seven years later.

58.  Mr Chan referred us to R v Cooper [1969] QB 267, a decision of the English Court of Appeal, where the appeal against conviction was allowed although the summing-up was “entirely fair and … everything which could possibly have been said in order to alert the jury to the difficulties of the case was clearly said by the presiding judge”.

59.  The conviction was quashed on the ground that under all the circumstances of the case it was unsafe or unsatisfactory.  In cases of this kind the court must in the end ask itself a subjective question, whether it is content to let the conviction stand, or whether there is some lurking doubt which causes the court to be concerned about whether an injustice has been done.

60.  Here, we regret to say, the judge was given little assistance by counsel then appearing for the 4^th defendant (not Mr Chan Siu-ming) and it is not apparent from the judgment that the judge had considered the possibility that after the lapse of more than seven years the 2^nd defendant’s recollection might also have been affected.  Indeed, there were signs of confusion in PW2’s evidence.  He was not clear whether when PW1 asked him to speak to “the bosses” that was before or after the 4^th defendant had lost control of Wise.  As we have said, he thought that this conversation, followed by the 5-6-7 meeting one or two days later, took place round about the time of the Super Giant Maze affair.  The Super Giant Maze affair took place around the end of 1996 and early 1997, culminating in the 4^th defendant’s loss of control shortly after Chinese New Year in February 1997.  It will be remembered that according to PW1, the meeting took place after 22 July 1997 and the Tin Shui Wai Project.  The judge dealt with it in this way:

“It is still (PW2’s) evidence that the meeting took place in mid-1997 after the dispute of the Super Giant Maze that took place in early 1997.”

Nevertheless, it is plain that PW2’s recollection of when the meeting had taken place was vague and was at loggerheads with that of PW1.

61.  There were further discrepancies between the evidence of PW1 and PW2.  According to PW1’s first statement to the ICAC, the 4^th defendant was not present at the 5-6-7 meeting but  Madam Ng was.  In his second statement, PW1 said, the 4^th defendant might have been present.  At the trial, PW1’s evidence was that the 4^th defendant was present.  The judge, rightly therefore, did not rely on PW1’s evidence in this regard.  Nevertheless, we do not believe the judge demonstrated that he had sufficiently considered the possibility that the evidence of PW2, which he did accept, might also have been mistaken.

62.  There was also the conflict between PW1 and PW2’s evidence regarding whom PW2 should approach.  According to PW1, PW2 should approach “the bosses”.  According to PW2, PW1 asked him to approach the 4^th defendant.  It is not at all clear why PW1 did not simply report back to the 2^nd defendant, one of the bosses, and the boss who asked him to speak to the 1^st defendant in the first place.  As for PW2, having regard to his confusion as to when PW1 first asked him to speak to “the bosses”, if he had thought that that took place whilst the 4^th defendant and his wife were still running Wise, it would have been quite natural for him to believe that he would have spoken to the 4^th defendant.

63.  Crucially, PW2’s evidence on the 5-6-7 meeting was very brief, and provided little assistance as a guide to the quality of his recollection.  He said:

“Mr Cheng Wai-sun did not totally agree to this proposal, and actually Mr Wong Fai-sing [4^th defendant] had some expression that he didn’t want to pay.  But lastly, Nip Fung-sui stressed that if no commission was paid we could not get the business from Shui On.  Lastly, the decision was to accept the 5-6-7 proposal raised by Nip Fung-sui.”

64.  We particularly note that there was no evidence specific to the 4^th defendant that he, as opposed to the meeting generally, had agreed to the 5-6-7 proposal.  Nor was there any evidence as to why PW2 was of the view that the 4^th defendant had agreed with the decision of the meeting.

65.  We regret to say this is one of those rare and exceptional cases where we find a palpable lurking doubt as to the safety of the 4^th defendant’s conviction.

66.  For the above reasons, leave to appeal was granted and, treating the hearing of the application as the hearing of the appeal, we allowed the appeal and quashed the 4^th defendant’s conviction.