HKSAR v. OU JIEJING

CACC 460/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 460 OF 2011

(ON APPEAL FROM DCCC 316 OF 2011)

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BETWEEN

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REASONS FOR JUDGMENT

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Hon Line J (giving the reasons for judgment of the court):

1.  The applicant sought leave to appeal against her conviction after trial by Judge Geiser on 14 October 2011 on two charges of dealing with the proceeds of an indictable offence, contrary to section 25 (1) and (3) of the Organized and Serious Crimes Ordinance, Cap 455. On the 17 January 2013 we dismissed the application and said we would give reasons later. These are our reasons.

2.  The Particulars of Offence of charge 1 averred that the applicant had dealt with a total of $2,645,700.75 in a bank account in her name with the Bank of China in the period on and between 5 January 2006 to 13 May 2009, knowing or having reasonable grounds to believe that the property represented the proceeds of an indictable offence.  The averment in the Particulars of Offence in charge 2 was to the effect that she had conducted herself in the same way in respect of an account in her name at the Shanghai Commercial Bank Limited in respect of a total of $3,722,133.45 in the period on and between 6 June 2008 and 22 June 2009.

3.  The sums mentioned in each charge represented the whole of the deposits into the two accounts, save that in respect of charge 2 the amount stipulated did not include a bank transfer of $2.2 million in respect of a mortgage loan.

4.  The prosecution’s case was simple.  It consisted, firstly, of unchallenged banking evidence, which included the facts that there were many cash transactions and that the applicant described herself as either retired or as a housewife and had sole control of the two accounts; unchallenged evidence that for the material periods she had filed no tax returns and that the tax returns for the three preceding years declared no income; and evidence that she had said nothing on arrest or in a subsequent interview.

5.  Secondly, two witnesses testified.  The first proved that 27 % and 12.9 % of the deposits into the Bank of China account (charge 1) occurred on Mondays and Thursdays respectively.  The second proved that it was bookmaking practice for settlement to be made on the day following race days for horse race betting and that race days were limited to Wednesdays, Saturdays and Sundays.

6.  In his reasons for verdict, the judge identified two issues for the court to decide, namely the provenance of the funds in the two bank accounts and the truthfulness or otherwise of the defence witnesses.  The judge determined that no issue of credibility arose in respect of the prosecution witnesses, whose evidence he accepted.  However, concerning the evidence of the day of the week of some of the deposits, he said that whilst he found it useful he did not find it "crucial". Whilst he accepted the evidence of Sergeant 49664 as to the practice of settlement in bookmaking on the day after racing, having regard to the evidence of the deposits and withdrawals of monies in the accounts, he said that evidence:

“. . . would not, of itself, I find be sufficient to establish that the defendant was engaged in book making.”

7.  Of that issue, he noted:

"I say this because there is a lack of any other physical evidence linking the defendant to bookmaking such as gambling chits, books of accounts, computer records and the like."

8.  Nevertheless, he said:

"However, this does not matter I find as it is not incumbent on the prosecution to prove any underlying offence.  They merely need to prove that the defendant either knew or had reasonable grounds to believe that property represented in whole or in part, the proceeds of an indictable offence."

9.  The judge rejected the evidence of Madam Au Kit Sheung, the applicant’s sister, and Madam Ho Chi Wah, two witnesses called in the defence case.  Each gave evidence of the circumstances in which they caused payments of monies to be made into bank accounts in the name of the applicant in the material period.  Madam Au said that she had made payments directly to the applicant and had caused payments to be made to a bank account in the applicant's name in Shenzhen with the Bank of Communications.  For her part, Madam Ho testified that she had transferred $300,000 into the applicant's account with the Bank of China (charge 1).

10.  By contrast, the judge said of the evidence of Mr Chan Tat Mo, namely that a cheque made out in favour of the applicant and deposited into her Bank of China account for $105,430 represented a repayment in connection with the purchase of a cross‑border vehicle licence, that, whilst he found it "highly suspicious”, nevertheless he felt unable to "discount it".

11.  Noting that it was not the prosecution’s case that each and every transaction in the two bank accounts stipulated in the Particulars of Offence were the proceeds of crime, “…whether bookmaking or anything else”, the judge found:

"Clearly there are some transactions that can be explained such as the payment of the mortgage loan of 2.2 million on 20 June 2008 into the defendant's Shanghai Commercial bank account and I daresay there may be others.”

12.  Nevertheless, the judge went on to say:

“The fact remains, however, that for the vast majority of the transactions occurring in both accounts, some of which are for extremely large sums of money, I find that no explanation has been given or for those that have been given by DW1 and DW2, I have rejected as being untrue.”

13.  Of the mental element of the offence, the judge identified two questions or tests that arose:

“Firstly, the objective test, that is, were there grounds that a right thinking member of the community, properly informed, would consider sufficient to believe that the property in question contributed in whole or in part to the proceeds of crime and, if so, the subjective test, that is, was the defendant aware of those grounds?”

14.  Then, applying those questions or tests to the evidence he determined:

“. . . taking account of the fact that for the periods in question covering the two charges, that is, from 2006 to 2009, substantial deposits and withdrawals were made from these accounts at a time when no tax returns were filed by the defendant, I am drawn to the irresistible inference that is strengthened of course by the lack of any credible explanation for the existence of these deposits and withdrawals, that there were reasonable grounds for the defendant to believe that the property in whole or in part in these accounts represented the proceeds of crime. It is beyond per adventure I find that the defendant, being the custodian of these two accounts and operated them, was not aware of those grounds. I come to these findings despite the clear record of the defendant.”

We pause to remark that the "not" in the penultimate sentence was an obvious slip, for it is clearly implicit that the judge found that the applicant was aware of those grounds.

15.  We turn to the grounds of appeal.  Ground one read as follows:

“The learned judge having found that the prosecution had failed to prove ‘the whole thrust of its case’ that the applicant dealt with the proceeds of the indictable offence of bookmaking, nevertheless convicted the applicant on both charges a wholly different basis without identifying to her that he had not found a case to answer on the basis that she had handled the proceeds of bookmaking so that she could direct her defence to the relevant issues.”

16.  The history of ground one is revealing.  The ground depended on an assertion that the prosecution had proceeded only on the basis that the funds in question were the proceeds of the applicant’s bookmaking.

17.  Counsel who appeared at trial, who would have known what occurred below, did not settle this ground.  It was drafted, before transcript was provided, by counsel, Mr Philip Wong, who does not appear before us.

18.  Leading counsel, who does appear before us, then took the ground into amended perfected grounds which he signed.

19.  Transcript then became available.  It shows without the slightest room for doubt that the prosecution had not committed itself to any such position.  It was the case that, after the opening, defence counsel had raised before the judge the question of what would happen if the prosecution could not prove bookmaking by the applicant.  Counsel for the prosecution made it clear that he did not so confine his case.  He said in terms that in relation to charge 1 that his case was that the circumstances demonstrated dealing with the proceeds of crime and that the evidence indicating that the crime was bookmaking was something extra and not fundamental to his case.

20.  This position was repeated when a submission of no case was made and rejected.  It was repeated again in closing submissions.  No one who was present in court could have been under any misapprehension.  Trial counsel could never have honestly drafted ground one.

21.  The written submissions of the respondent set out in extenso quotations from the transcript which demonstrate the position summarised above.  There is no need for us to set it all out again in this judgment.  One quotation from what prosecuting counsel said at the outset will suffice:

“As far as the issue of bookmaking is concerned, first of all, it is confined only to charge 1. And in fact it is only additional evidence to let the court to make a finding at the end of the day whether the . . . income arise from the offence of bookmaking. If . . . at the end of the day the court is not satisfied with this particular issue, certainly the court has to go back to the original point and in fact the court, in my respectful submission, the court need not consider at all whether it was an offence of bookmaking or not.”

22.  Indeed, we find at paragraph 22 of an affirmation from the defence solicitor's clerk an express acknowledgement of reliance by the prosecution on the second limb of section 25(1) of the Organised and Serious Crimes Ordinance.  Beyond that it is entirely unrealistic to suppose that the judge would have addressed the second limb of the statutory provision in the way he did unless he knew full well that the prosecution case was not restricted in the manner now suggested.

23.  It was no surprise therefore when re‑amended perfected grounds, signed by leading counsel, deleted ground one and substituted another ground in its place.

24.  It was a surprise, however, when a further document entitled re‑re‑reamended perfected grounds, dated 3 January 2013, again signed by leading counsel, was delivered to this court, re‑instating the ground.

25.  The ground is unarguable.  It proceeds on the basis that the prosecution limited itself to proving that the questioned dealings were the proceeds of the applicant’s bookmaking to the exclusion of reliance on the wider ground of having reasonable grounds to believe they were from an unspecified indictable offence.  The transcript proves the contrary.  It is clear, from what we see defence counsel saying at trial, that he was never in any doubt that he faced the wider ground.

26.  Attempts to argue to the contrary by reference to the fact that prosecuting counsel asked questions about bookmaking when cross examining the defence evidence does not begin to undo the position he set out so clearly.

27.  Whilst it is not necessary to our disposal of ground one, it is worthy of mention that what the judge rejected was a finding that the applicant had engaged in bookmaking.  He placed reliance in this regard on the fact that there was an absence of evidence that usually accompanies bookmaking such as gambling chits, books of account and computer records and the like.  The distinction between this and the fact that the funds in charge 1 could have come from bookmaking carried on by someone other than the applicant seems to have evaded those settling this ground.

28.  It is a matter of regret that we feel obliged to draw to the attention of leading counsel paragraph 5 of Practice Direction 4.2 to the effect that grounds settled by counsel “are only put forward where he has satisfied himself that they are arguable” and “afford some real chance of success”.  It is difficult to see how he so satisfied himself when he came to sign the amended perfected grounds, adopting grounds signed by counsel who was not at the trial and in the absence of transcript.  How he then abandoned and then re‑instated the ground, with transcript available, is difficult to understand.

29.  A second dimension to ground one is a claim that the applicant was disadvantaged because the judge said no more than that there was a case to answer after hearing submissions at the close of the prosecution’s case.  It is said that he should have indicated that the prima facie case did not depend on there being prima facie evidence of the applicant bookmaking and dealing in its proceeds and existed on a wider basis.

30.  There was no obligation on the judge to do so.  There can have been no doubt that proof of the applicant bookmaking was not something which had to be established to prove a prima facie case.  The fact that defence counsel tried to argue that it was otherwise makes no difference to that.  This was not a case of the applicant or her advisors being misled or wrong footed. It was rather a case of her advisors seeking tactically to limit the scope of the prosecution’s case without justification to achieve an advantage that was not merited.

31.  We reject the criticism that the judge merely declared that there was a case to answer after hearing submissions at the close of the prosecution case and that he did not indicate what he may have thought about either bookmaking or bookmaking by the applicant.

32.  His only obligation in the situation he faced in this case was to do as he did.  The discussion about how the prosecution put its case could have misled no one as to the nature of the case that the applicant had to meet.  Further, we would positively discourage judges from indicating at that stage of the case what they thought about aspects of the evidence.  It was too early to make findings: a judge could not then know what defence evidence was to come and how it may affect the issues.  Further, the basis of counsel’s submission before us assumes that because the judge was not at the end of the case prepared to conclude that bookmaking was proved, it followed that he must have found as well that there was no prima facie case of it.  This is not logical.

33.  It is worthy of mention in this regard that in any event the evidence called by the defence went to the issue of the provenance of some of the questioned dealings.  It was not limited to traversing a claim that the dealings were the proceeds of bookmaking.

34.  There is nothing in ground one and it fails.  It should never have seen the light of day.

35.  Ground two read thus:

“The learned judge was presented with misleading evidence and submissions by the Prosecution in relation to Charges 1 and 2 as to the source of the deposits into the applicant’s Bank of China and Shanghai Commercial Bank accounts. The judge considered both charges together in finding the applicant guilty including the misleading evidence. In the circumstances, the convictions are unsafe and unsatisfactory.”

36.  In ground two of the re‑re‑reamended perfected grounds it is contended that the judge was presented with misleading evidence and submissions by the prosecution in relation to charges 1 and 2 as to the source of the deposits into the two bank accounts thereby rendering the convictions unsafe and unsatisfactory.

37.  It would appear that the main complaint here concerns a deposit of $939,500 on 1 August 2008 into the applicant’s bank account held at the Shanghai Commercial Bank.

38.  There had been separate restraint proceedings.  In the course of those proceedings the applicant, in an affirmation dated 29 July 2011 at paragraph 9(d), had deposed that she had sold a flat for $990,000 and that she deposited the proceeds into her Shanghai Commercial Bank account.  She exhibited a copy of the relevant record from the Land Registry.  This information comes to us from paragraphs 11 and 12 of Lau Kei Yan’s affirmation dated 5 September 2012.  Lau Kei Yan was a clerk in the employ of the applicant’s solicitors at trial.

39.  The credit of $939,500 on 1 August 2008 in the Shanghai Commercial Bank account was referable to the presentation of a cheque drawn by a firm of Hong Kong solicitors.

40.  The substance of the complaint is that the prosecution either did not lead evidence as to it or tell the judge of it.

41.  Secondly, even though this ground relates to deposits into the applicant's two bank accounts, it seems there is a complaint that the prosecution failed to tell the judge or lead evidence that between 16 April 2008 and 5 February 2009 there were nine transfers from the applicant's Bank of China account into her Hong Kong Jockey Club account totalling $203,000.  Complaint is made that counsel for the prosecution had submitted in his closing address that there had been no payments into the applicant’s Hong Kong Jockey Club account. (See paragraph 16 Lau Kei Yan’s affirmation).

42.  Paragraph 15 of Lau Kei Yan’s affirmation reveals that the applicant had produced the Hong Kong Jockey Club account in an affirmation dated 29 July 2011 in the restraint proceedings.

43.  It is thus clear that the two matters in question were known to the applicant and to her lawyers before and at the time of her trial.  Indeed defence counsel had the applicant's relevant affirmations in court with him.

44.  It is equally clear from Lau Kei Yan’s affirmation that counsel for the prosecution was unaware of these matters.  The explanation for that was that the information had been disclosed by the applicant in compliance with an order made in the restraint proceedings.  Clause 3(b) of the order provided "the information disclosed in compliance with this order shall not be used for any purpose other than these proceedings and confiscation proceedings, and shall not be disclosed or otherwise divulged to any third party without leave of this court”.

45.  In his affirmation Mr Lau described what had happened in the proceedings below.  He described it in the following terms:

“22. . . . The prosecutor stated that, if he failed to prove that the said deposits were from bookmaking, he would rely on the second limb of section 25(1) OSCO in relation to both charges (see Appeal Bundle, p 160B‑1). For the first time, he made it clear that he was not seeking to prove that the deposits into the SCB account were from bookmaking.

. . .

25. Defence counsel then offered (see Appeal Bundle p 163G) to make the affirmations available to the prosecutor outside court, which he had in fact attempted to do before the case began (see Appeal Bundle, p 163H) stating that this might shorten the case (Appeal Bundle p 163Q). The judge adjourned for this to happen commenting that it was a matter for the prosecution to deal with the prosecution ‘as they see fit’ (Appeal Bundle p 164E‑F). The prosecutor – at the judge’s suggestion that he should see the affirmations in view of what had been said about their contents – ‘In order to do justice’ agreed to look at the affirmations, ‘Just to be fair to the defendant’ (Appeal Bundle pp 164H‑165B). Earlier, before the trial began, the prosecutor had said he knew nothing about the affirmations and so he could not agree anything.

26. During the adjournment granted by the judge, the prosecutor maintained that the police officer instructing him would not let him agree to anything and it would be inconvenient for him to see the affirmations and exhibits thereto. Defence counsel protested and an argument between counsel followed.

27.  The trial resumed and the prosecutor continued to present the prosecution case on the same basis as prior to the adjournment.”

46.  One might be forgiven for thinking, on the basis of that description, that prosecuting counsel had been less than conscientious in seeking the information and was happy to present the case on an incomplete factual basis.  The transcript produced for our consideration of this issue does not include what prosecuting counsel told the judge after he consulted the police officer.  However, prosecuting counsel in his affirmation does relate what happened. In deference to his integrity and the trouble to which he has been put, we repeat what he said:

“7. I remembered that when outside court, defence counsel told me that his client was innocent. He also asked me if I knew that there was a Restraint order. I replied in the negative. He told me that I should read the contents and I would have a better picture of the case. I believe that the defence counsel also told me about the mortgage money deposited in the SCB account by Madam Ou.

8. The defence counsel said in open court that he was surprised that I was not aware of the Restraint and Charging proceedings (Appeal Bundle p 162O and p 163H‑J). He wished me to look at the affirmations. Since my duty as a prosecutor was not to secure a conviction, I was very willing to give any assistance that I could if that would shorten the trial and serve the interest of justice. That is the reason that I told the court that I was prepared to look at the affirmations (Appeal Bundle p 165A).

9. After the court adjourned the case, inspector Yau told me that upon the application for the Restraint Order in the Court of First Instance, the court made an order that any information under the proceedings could only be used for the Restraint Order proceedings and the prosecutor should not use the material in the criminal trial of the defendant and the information should not be disclosed to a third party. The police inspector also opined that the defence counsel should have known this. The police inspector also explained to me that that was the reason why she did not tell me anything about the Restraint Order. The police inspector adopted a very cautious attitude for the use of such information.

10. Upon what the police told me, I believe that I did not ask the defence counsel to show me any affirmations of Madam Ou.

11. During the adjournment, I was able to look up the authorities in relation to the Restraint Order. I noticed that in the case of Secretary for Justice and S [2009] 2 HKLRD 398, it was mentioned that it was not the practice of the Department of Justice to disclose the information obtained to prosecuting counsel in any criminal proceedings. In addition, the court made an order (inter alia) that the information disclosed in compliance with the Restraint Order should not be used for any purpose other than the proceedings and confiscation proceedings and should not be disclosed or otherwise divulged to any third party without the leave of the court.

12. I was confirmed that similar restrictions were imposed on the Restraint Order of the applicant.

13. It was my view that the information obtained in the Restraint Order could only be confined to the Restraint Order proceedings and confiscation proceedings only. Without the leave of the court which granted the order, it would not be appropriate for me to have access to any information obtained under such order.

14. I also considered that there might be risks that the affirmation of Ou containing other informations that would unfairly prejudice her case in the trial and that I should not have access to them at all.

15.  Besides police officers were against my reading affirmations filed for the Restraint Order, it was also my decision not to look at any affirmations filed for the Restraint Order or Variation Order.  I believe that when the court resumed hearing, I told the learned judge that I was not allowed to have access to those information.  The learned judge understood the situation and the case carried on.”

47.  We note in particular the last passage: "I believe that when the court resumed the hearing I told the learned judge that I was not allowed to have access to the information.  The learned judge understood the situation and the case carried on."  That assertion of what happened has not been challenged and that being so it was quite wrong for that fact not to have been volunteered by Mr Lau.  More to the point, there was nothing whatsoever to preclude defence counsel at trial producing the evidence in the course of the defence case. If there was a problem about that, which we cannot discern, and defence counsel was anxious for the evidence to be produced before the end of the prosecution’s case, then it was open to him to hand the prosecution the evidence afresh or even obtain leave from the appropriate forum for its disclosure. Instead of which we have an assertion that as a result of prosecutorial conduct relevant information, at all times in the hands of the defence, was kept from the court. The fact of the matter is that if relevant information helpful to the defence has been withheld from the court, the fault lies at the hands of the defence and the matter has been stood on its head.

48.  We find it simply astonishing that complaint was made that material did not reach the ears of the judge when that material emanated from the applicant and when there was good reason, because of the provision designed to protect the applicant, that prosecuting counsel did not know of it.

49.  The applicant was represented by experienced counsel at trial.  We have no doubt that his decisions as to how he conducted the case were made on the basis of what he saw tactically to be to the applicant's advantage.  It was always open to the defence to prove these matters themselves.

50.  We would add that even if the judge had been aware of these matters, we judge it would have made no difference to his verdicts.  He did not convict on the basis that each and every dealing in the two accounts concerned the proceeds of an indictable offence.  He specifically disavowed that.  We judge that this material would not have significantly diminished the impact of the prosecution's case as the picture of an unemployed housewife dealing in large sums, a significant amount of it in cash, when there was no apparent lawful explanation to explain it, would have remained intact.

51.  Even if the judge had been told of the nine transfers from her account to her Jockey Club account, its relevance would essentially have been to rebut the suggestion that she was involved in bookmaking.  Since the conviction proceeded on the basis that her bookmaking was not proved, the ignorance of the judge in this regard can have no impact on the safety of the conviction.

52.  There was a suggestion that the prosecution should have put the applicant’s jockey club account in to evidence.  There was no obligation on them to do so.  It was, of course available to the applicant at the time of her trial.  The suggestion made in argument to us that it would support a claim that she was a successful gambler and that winnings could account for deposits into her accounts lacked an evidential basis since the account was not before the trial court.  Even if it had been it would not of itself have proved who was operating the account and it would not have explained the repetitive cash deposits into the account.

53.  It was argued that there was no distinction between the applicant in the restraint proceedings and the prosecution at the trial and that with the same police officer having roles in both it should have been the case that the criminal court was told of the two matters and the order of the High Court prohibiting disclosure without its leave be ignored.  The proposition is wholly misconceived.

54.  Further, it was apparent from the evidence adduced at trial that the source of the payment of $939,500 on 1 August 2008 into the applicant’s bank account held at the Shanghai Commercial Bank was a firm of Hong Kong solicitors.  Their cheque was exhibited.  In those circumstances, the prospect that the judge may have used knowledge of the deposit to the detriment of the applicant is not to be sensibly countenanced.  We repeat that the judge made it clear that he did not regard all the deposits in to the applicant’s accounts as being the proceeds of an indictable offence.

55.  There is nothing in ground two.

56.  Ground three complains that the judge erred in effectively moving the burden of proof to the applicant to explain all the transactions in her two bank accounts.

57.  He did no such thing.  He correctly stated the correct burden and standard of proof.

58.  The judge had found (paragraph 30) :

“. . . for the vast majority of the transactions occurring in both accounts, some of which are for extremely large sums of money, I find that no explanation has been given or for those that have been given by DW1 and DW2, I have rejected as being untrue.”

59.  At the conclusion of his analysis of the evidence the judge set out the basis upon which he determined the applicant to be guilty of the two charges (paragraph 33):

". . . taking account of the fact that for the periods in question covering the two charges, that is, from 2006 to 2009, substantial deposits and withdrawals were made from these accounts at a time when no tax returns were filed by the defendant, I am drawn to the irresistible inference that is strengthened of course by the lack of any credible explanation for the existence of these deposits and withdrawals, that there were reasonable grounds for the defendant to believe that the property in whole or in part in these accounts represented the proceeds of crime." [Italics added.]

60.  Of course the judge was entitled to regard the inference as being strengthened by the lack of any credible explanation for the existence of these deposits and withdrawals.  To say that is to reverse the burden of proof in simply wrong. If authority is need for such a basic proposition one need look no further than the well known case of Li Defan v HKSAR (2002) HKCFAR 320 at 335E‑F, paragraph 32.

61.  It is not right to say that the judge required or expected an explanation of all the transactions in the two accounts.  He made it clear that that he appreciated that it was not each and every transaction that was to be impugned as criminal.  He actually mentioned some that were not. It is clear that what he took into account was the lack of a credible explanation for the general operation of the accounts, especially in relation to cash transactions, bearing in mind that the applicant was the sole signatory.  It was reasonable to expect that someone who passed herself off as a housewife with no taxable income would have an explanation for the amounts of cash deposited and withdrawn from her accounts.  One just has to look at the summary concerning the cash deposits:

“cash deposited into her two bank accounts: $52,000 in June 2008, $320,000 in October 2008, $34,000 in December 2008, $311,100 in January 2009, $100,000 in April 2009, $550,000 in May 2009 and $760,000 in June 2009.”

62.  The judge was quite entitled to have regard to a failure to explain such transactions.  In doing so he did not reverse the burden of proof.

63.  It was suggested that, because defence counsel in his closing submission spoke of a burden falling on the applicant on the balance of probabilities, the experienced judge would have adopted his error.  The proposition only has to be stated to be seen to be groundless.

64.  Ground 4 alleged that the learned judge erred in drawing the inference that any right thinking member of the community would conclude beyond reasonable doubt that the proceeds in the two bank accounts of the applicant were the proceeds of an indictable offence from two proven facts, namely that some of the amounts credited to and withdrawn from the accounts were large and that the applicant had not filed any tax returns for the years 2005‑2009 (without considering whether the applicant was required to do so).

65.  The ground misstates the inference drawn when it asserts that the right thinking member of the community would conclude beyond reasonable doubt that the proceeds in the two bank accounts of the proceeds of an indictable offence.

66.  It was the judge and not the right thinking member of the community who had to be sure.  The judge had to be sure the right thinking  member of the community would have reasonable grounds to believe that the proceeds came from an indictable offence.

67.  We have already set out the words used by the judge in drawing the inference.  He spoke of "substantial deposits and withdrawals".  The context in which the judge’s finding is to be viewed is the undisputed evidence that in various documentary assertions to the two banks in which she held the accounts the subject of charges she was described as a housewife.  Of the "substantial deposits and withdrawals", to which the judge made reference it is to be noted that in the material period, 5 January 2006 to 17 February 2009, in the applicant's Bank of China account 46 cash deposits totalling $969,210 and 94 cash withdrawals to a total of $1,686,760 were made respectively.  Further, 47 transfer deposits to a total sum of $1,522,132 and 64 transfer withdrawals to a total of $951,493 were made respectively.  Also, is it be noted that 38 of the transfer deposits to a total value of $944,500 were made from an account of the Jockey Club.  In the material period, June 2008 June 2009, in the applicant’s Shanghai Commercial Bank account there were 21 deposits and cash to a total of $2,282,000 and 14 cash withdrawals a total of $1,935,000.

68.  We have no doubt that a right thinking member of the community being aware that the applicant had described herself to her banks as either retired or as a housewife; that the applicant had sole control of the two accounts; that the applicant had filed no tax returns at the material time; that tax returns for the preceding three years revealed no income ; that the applicant operated the accounts at the volume just described; that the applicant’s operations involved cash deposits and withdrawals as set out earlier in this judgement, would have reasonable ground to believe that the dealing in the two accounts represented dealing in the proceeds of an indictable offence.

69.  We further have no doubt that the right thinking member of the community would have that view substantially reinforced on learning that the applicant, faced with the threat of conviction and imprisonment, was either unable or unwilling to offer any credibly innocent explanation as to the provenance of the funds, or part of the funds, in her accounts.

70.  The respondent was right to emphasise in its submissions that the offence was committed if the applicant was proved to have dealt with part, as opposed to the whole of, the questioned funds.

71.  Finally, it was not to the point whether or not the applicant was obliged to file a tax return because the significance of the matter was limited to it being an indication only that she had declared no taxable income.

72.  There is nothing in ground four.

73.  Ground five concerned the judge’s rejection of the evidence of Madam Au, the judge said:

“. . . I reject entirely the account that DW1 (Madam Au) gave to the court. Her evidence was vague, it lacked detail and this was compounded by the lack of any documents at all relating not only to the alleged purchase by the defendant of vehicle CDs in the form of invoices and also simple accounting documents relating to have businesses in China. I do not accept her evidence that it was unnecessary for them to keep business records as they were sisters. This enterprise, according to DW1, was not insignificant, both shops together producing an annual turnover of RMB 6 to7 million in 2008. . . the idea that there are no business records, I find to be absurd. Clearly the defendant had travelled to China frequently. . . but I'm satisfied this had nothing to do with any enterprise involving the purchase and transportation vehicle CDs over to China in respect of the business that she had a 50 % stake in with her sister .”

74.  Issue was taken on behalf of the applicant of the observations adverse to the credibility of Madam Au that the judge made in respect of the "lack of any documents".  It was submitted that, Madam Au having testified that she had brought some business records to court, the judge erred in failing to inspect those documents or adjourning the case in order to have them translated.

75.  Given the interchange that occurred between counsel for the applicant and the judge at trial it beggars belief that this ground was advanced in the application.  Shortly after that brief exchange between counsel for the applicant and Madam Au, as to the existence and presence of those documents, the following interchange ensued between counsel and the judge:

“Court: are you producing these documents then?

Mr Oderberg: no I'm not producing…they have…we don't have translations for them.

Court: I see.

Mr Oderberg: we haven't had time to get them translated.

Court: right.

Mr Oderberg: it was really my way of letting my friend know that there are records in existence.

Court: I see. Alright.

Mr Oderberg:  surely wish to see them. They won't assist, your Honour, because they are not translated unfortunately.”

76.  Needless to say, it was for the defence to determine what documentary material it wished the court to receive.  As is apparent from the interchange, for whatever reason, the defence had failed to have the documents translated so that they could be adduced into evidence.  It was for the defence to seek an adjournment for that purpose, if it wished to put them into evidence.  It was not a matter for the judge.  However, the defence made no such application.  In those circumstances, it ill behoves those representing the applicant to complain as they do.

77.  The documents were either in evidence or they were not.  They did not become evidence because they were mentioned by counsel. They would not be in evidence by being waved about.  It was not for prosecuting counsel to pick up an illusory gauntlet.  It was not for the defence counsel to say in effect "if you the prosecution don't ask questions about evidence which is said to exist, then the court is bound to transform that which is not in evidence into evidence and, what is more, to give weight to details which have not been proved".  This is bizarre.  Mr Marash SC was constrained to concede that he would not have taken the course adopted by his predecessor in the court below yet he could not bring himself to concede that the judge was entitled to ignore the suggestion of documentary support.

78.  There was no issue that the applicant travelled to and from the Mainland frequently.  The judge acknowledged as much in the passage quoted earlier, in which he rejected the evidence of Madam Au.  Clearly, he was entitled to reject her evidence and to do so for the reasons he stated.

79.  There are no merits in the proposed grounds of appeal against conviction.  Accordingly, the application for leave to appeal against conviction was refused.

80.  We note that three significant areas of argument before us had their genesis in the conduct of defence counsel at trial.  For it was he that sought to confine the prosecution to a basis they disavowed; it was he that raised the contents of the affirmations yet declined to prove what they revealed; it was he that did not prove records indicating, directly or indirectly, an alleged innocent provenance of funds.  In relation to the last two matters he addressed the judge and revealed matters capable of advancing his case without proper proof.  This was impermissible and we would commend to trial judges limiting counsel in these circumstances to adherence to proper procedure which would have him asking questions of witnesses, making proper objections or applications or addressing the court in proper submissions based on the evidence.  The mischief of allowing counsel the freedom to “voice their concerns” and the like goes beyond attempts to avoid the requirements of the rules of evidence as it also generates material for bad points to be made in this court, as this case well demonstrates.

81.  However justified prosecuting counsel may have thought his actions, we have no doubt that for him to be required by us to explain and to be summoned to this court, with the prospect of public blame and censure, was a thoroughly unpleasant experience.  We wish to make it absolutely clear that in our view no criticism attaches to his behaviour.  On the contrary, criticism is to be made of those who brought about his attendance.  That criticism is to be more fully made in the separate judgment of the Vice President.

82.  We would also point out that this was always a simple case.  It depended on an inference being drawn based on the fact that the applicant had represented she was a housewife; that she had disclosed no source of taxable income on her tax returns and that she had dealt with substantial amounts of cash and that there was nothing to explain why.  It had a simple added dimension that there were indications in relation to charge 1 of association with bookmaking due to the timing of deposits after race days. The case should never have taken on its apparent complexity.

83.  When counsel defend at first instance they must follow their instructions and do their best within the confines of their professional obligations and their duty to the court.  This will result in them on occasion advancing matters that are bound to fail.  The defendant with a hopeless defence is still entitled to have it put forward.  That is not the case in this court.  We should not have to point this out, but now feel obliged to do so.  When counsel settle grounds of appeal this court is entitled to proceed on the basis that they have satisfied themselves that they are arguable and afford some real chance of success.

84.  This court has some protection from unarguable and time wasting grounds of appeal if counsel honour their professional obligations in this regard.  The mischief of their failure to do so lies not only in the extra judicial burden imposed on a busy court but in the fact that the meritorious suffer by having their hearings delayed.

85.  This court has been driven to repeated criticism of counsel for the applicant.  We have used the word "astonished" and the phrase “beggars belief” in relation to some of the grounds he advanced.  The case is not an isolated example of its kind.  We doubt if public rebuke holds any deterrent.  We will look to costs.  We propose to make an order nisi that the applicant pay to the respondent the costs of this application.

86.  This is a case where we feel it appropriate to remind the applicant that she is entitled to have her own costs taxed and for the court to direct the attention of the taxing master to these reasons and the views we have expressed as to the grounds of appeal.

87.  The order as to costs and the direction will become absolute within 14 days with leave to the parties to make representations in writing within the next 7 days.

Hon Stock VP:

88.  I wish to add comments about the allegations made concerning the conduct of prosecuting counsel in the court below.

89.  The assertion in the re‑re‑re‑amended perfected grounds of appeal, dated 3 January 2013, is that the judge was presented with misleading evidence by the prosecutor in relation to charges 1 and 2; and Line J has particularised the complaint and its lack of merit.  The ground is purportedly supported by written submissions of the same date.

90.  The ground is itself a repetition of one made in earlier versions of the grounds of appeal and counsel who prosecuted in court below was put to the trouble – to say nothing of the anxiety that is caused to any responsible practitioner when such an allegation, even where unfounded, is made – of making an affirmation date 14 December 2012 in which he explained how it came to be that he knew not of the restraint order and why it was that given the terms of the restraint order, the officer whom he consulted during the course of the proceedings – at the invitation of defence counsel and then of the trial judge – considered it inappropriate without leave of the Court of First Instance for prosecuting counsel to examine information revealed by the applicant for the purpose of the restraint proceedings.  Counsel researched the matter and took the same view.  Counsel explained, correctly, that it was a term of the restraint order that the information disclosed in compliance with the order was not to be used for any purpose other than the restraint proceedings themselves and “shall not be disclosed or otherwise divulged to any third party without leave of the court.” I note the standard notice in the order to the effect that it was a contempt of court for any person notified of the restraint order knowingly to assist in or commit a breach of the order.

91.  I wish, first, to make it clear that counsel who prosecuted in the court below acted with total propriety.

92.  What we saw in the affirmation made on behalf of the applicant by Mr Lau, a clerk to the solicitors who acted for the applicant at the time of trial, is the statement that “during the adjournment granted by the judge, the prosecutor maintained that the police officer instructing would not let him agree to anything and it would be inconvenient for him to see the affirmations and exhibits thereto” (my emphasis); - “maintained” as if counsel’s word to the court below was not necessarily to be taken at face value.

93.  And then, despite counsel’s explanation – on affirmation, mind you – we find in the written submissions for the applicant filed with the court well after that affirmation no hint of an acknowledgement that counsel had at all material times acted in good faith.  Instead we have phrases such as:

·     “prosecuting counsel said he did not think it right to see those restraint proceedings affirmations but the judge rightly told him that he should see them – no doubt because he was under a duty to present his case fairly and not mislead the court” (as if counsel needed to be told of these duties);

·     “…the prosecutor – at the urging of the O/C case …- refused to look at the affirmation and documents that the judge said he should read so that he could present his case fairly and which he had agreed to read” (as if counsel was reluctant to perform his duty).

All of this, as Line J has correctly emphasised, was in relation to evidence of which the defence was at all material times in full possession.  Nothing had been withheld from the defence.

94.  In my opinion these submissions on their face and at first reading carry the colour of, or hint at, doubt about counsel’s integrity or about his willingness to do all that he reasonably could to ensure that the court was not misled.  That is how I read them. Mr Marash, at this Court’s invitation, made it clear at the hearing before us that no issues as to fact arose on the affirmations and no allegation of impropriety was made against prosecuting counsel.  That being so, prosecuting counsel should have been told long ago that there was no doubting what he said and that his integrity and sense of fairness were not impugned and an apology tendered should any such imputation have been read from the affirmation of Mr Lau or from the written submissions.  Instead of which prosecuting counsel was left to sweat it out and came to this Court expecting to be cross‑examined and expecting to have to defend the performance of his professional duty.  This was not the right way for counsel to be treated.

95.  All this stems, not from a desire to cause anxiety, but from a culture that has developed at the criminal bar in this jurisdiction whereby allegations against other counsel are too easily made with insufficient regard, unless one has been at the receiving end, to the burden that is placed on counsel (or solicitor, as the case may be) against whom the attack is launched, and to the heavy anxiety suffered by a person whose competence or integrity is thereby placed under scrutiny.  It is incumbent on appellate counsel never to advance such allegations unless there is a palpably sound basis to do so; and to be ever sensitive to the gravity of such allegations and to the courtesy that should flow between counsel, dictating a fulsome apology the moment it is apparent that an assertion is ill‑founded or exaggerated.