HKSAR v. SHUM CHIU AND OTHERS

CACC 424/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 424 OF 2008

(ON APPEAL FROM DCCC NO. 687 OF 2004 (PART A))

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BETWEEN

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J U D G M E N T

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Hon Stock VP (giving the judgment of the Court):

1.  This is an application for costs arising out of two orders of the court whereby we stayed proceedings against the three appellants.

2.  In January 2010 we stayed proceedings against D2 and D3, thereby overruling the decision of Judge Chan in the District Court in June 2008.  Our reasons for doing so are to be found in our judgment dated 11 May 2010, a judgment which sets out the history of these proceedings in some detail.

3.  In August 2008 the trial of D1 was severed from that of D2 and D3.

4.  D2 and D3 were convicted in December 2008.  They launched an appeal which D1 tried unsuccessfully to join in early 2009.  He then pleaded guilty at his own trial in June 2009.  Pursuant to his plea, a forfeiture order was made in respect of the sum of $600,000 which he had tendered as representing the amount of a bribe to which he had been party and which formed the subject matter of the charges to which he pleaded guilty.

5.  As a result of our decision in January 2010 in favour of D2 and D3, D1 then sought leave to appeal his conviction on the basis of the same abuse which resulted in the stay of proceedings in the case of D2 and D3.  On 10 December 2010, we decided in his favour, quashed his conviction and stayed the proceedings against him.  The reasons for that decision are to be found in our judgment dated 28 February 2011.

6.  The appellants now seek costs of the trial before Judge Chan (including the costs of the stay application) as well as costs of the appeal.

7.  Clearly they are entitled to the costs of their appeals subject to the question of what can be said to have been reasonably necessary.  The argument comes down to the number of counsel for when a certificate should be granted.

8.  We see no basis upon which to certify for more than two counsel in any one instance and the certificates we grant are so limited.

9.  As for the costs of the trials, the stay applications aside, it seems to us that the appellants must have those too.

10.  The respondent argues that the appellants brought suspicion on themselves in the sense that the evidence established that they or one or more of them were bent on the destruction of documents and that there was evidence that shortly after police inquiries went overt, they were conspiring to make up bogus defences, a conspiracy evidenced by taped conversations.

11.  As far as the cost of the trials are concerned, this could not assist the respondent because the effect of our judgments is that the stay applications ought to have succeeded; and, that being so, the trials ought not to have taken place.

12.  It is difficult in those circumstances to see how the respondent can properly resist an award to the appellants of the cost of the trials.

13.  This, however, does not dispose with the question of quantum or proportion of costs to which the applicants should be entitled because the respondent says that there was much time-wasting at trial by those conducting the defence.

14.  We were asked for this purpose to trawl through the minutiae of the evidence but this we are not prepared to do.  There was no application for costs by the prosecutor after conviction and no suggestion by them then that there had been time-wasting.  It was a matter which the judge, not this court, would have been well placed to assess but what we are asked to do is to say that in a trial lasting months there was time wasting here and there.  We cannot possibly achieve an appropriate feel for that and we decline to do so.  If costs cannot be agreed, that is a matter for the taxing master.

15.  There is an issue as to the costs of D1’s application for bail pending appeal in February 2010.  It seems to us that in the circumstances of that application, which succeeded in anticipation of an arguable case for D1 in his appeal then recently lodged, that the application was well justified and that he should have his costs of it.

16.  The costs of the stay applications is a less straightforward issue.  There was clearly evidence that D3 was concerned that the witness Tang should assist in making up stories to cover the truth about the purpose of the payments which were the subject of the ICAC investigations.  That evidence came from Tang himself about a series of conversations which he had held with Keith Leung, D3’s underling, speaking on D3’s behalf, and with D3 as well.  Given the doubts which we have expressed in an earlier judgment about Tang’s credibility, that in itself might not have been enough.  But his evidence in this regard was supported by taped-recordings of conversations which Leung held with Tang (11 November 2003) and a conversation between D3 himself and Tang on 16 November after the Amaroni Restaurant conversation.

17.  The point is this: that it is clear that the ICAC officers had sound cause to suspect that D3 was up to no good in the sense we have described and there is evidence to support their suspicion, which it is difficult for D3 to gainsay.  What the ICAC officers did was to carry their enthusiasm in investigating D3’s conduct in this regard beyond permissible bounds; which is why the stay application succeeded.  It seems to us that it is one thing for D3 to derive the benefit of a stay but quite another in the light of his own conduct to award him costs as well.  The evidence of his own misbehaviour is such that the discretion should, in our judgment, be exercised against him in respect of the costs of the stay application and that no order in his favour in that regard should be made.

18.  The same point cannot be made against D1 and D2 because the allegation that there was an attempt to secure the destruction of evidence and a perversion of justice is not supported as against D1 and D2 and, accordingly, they shall have the costs of the stay application itself; again limited to two counsel each.

19.  Accordingly, as to costs:

(1) D1 shall have his costs of all proceedings before Judge Chan, including the costs of proceedings incidental thereto; the costs of the bail application and of this costs application, and the costs of his appeal against conviction; to be taxed if not agreed and, where more than one counsel has been engaged, with a certificate for two counsel;

(2) D2 shall have his costs of all proceedings before Judge Chan, including the costs of proceedings incidental thereto and of this costs application and the costs of his appeal against conviction; to be taxed if not agreed and, where more than one counsel has been engaged, a certificate for two counsel; and

(3) D3 shall have costs of all proceedings before Judge Chan including the costs of proceeding incidental thereto, save for the costs of and occasioned by the stay application as to which there shall be no order. He shall also have his costs of his appeal against conviction. All these awards are to be taxed if not agreed; and where more than one counsel has been engaged, there will be a certificate for two counsel. As for this application for costs, he has partially succeeded and partially failed, for which reason we will make no order as to costs.

20.  There remains one issue in respect of D1.

21.  He pleaded guilty on 22 June 2009 to two offences: one of conspiracy to offer an advantage to public servants and one of conspiracy to falsify accounts.  Before that hearing commenced, D1 passed to the ICAC a cashier order in the sum of $600,000 drawn in favour of the Government of the HKSAR.  This was intended to represent D1’s share of bribe money paid by him or his company to an official or officials of the Housing Authority.  This was reflected in the agreed summary of facts which recorded that: “D1 agreed to pay the sum of $600,000 to the HKSAR and paid this sum in full on the 22^nd June 2009.”  The idea had apparently emanated from the prosecution; but, be that as it may, it was treated as mitigation and a discount of a few months granted in respect of it.  The ICAC attempted to deposit the sum with the District Court but the accounts office would not accept it without an order from the court.  There was some discussion about which statutory provision was apt for the order sought and the court alighted upon section 102 of the Criminal Procedure Ordinance, Cap. 221 which states:

“(1) Where-

(a) any property has come into the possession of a court … in connection with any offence;

(b) it appears to a court that an offence being committed in respect of any property in the possession of the court…; or

(c) it appear to a court that any property in the possession of the court … has been used in the commission of an offence,

then … a court may dispose of such property in the manner provided in this section.

(2) Of its own motion or upon application, a court may –

(a) in respect of property to which subsection (1)(a) applies –

(i) make an order for the delivery of any such property to the person who appears to the court to be entitled thereto;

(ii) where the person so entitled is unknown or cannot be found, make an order that the property be sold or retained in the possession of the court …; or

(iii) if the property is no value, order that the property be destroyed; and

(b) in respect of property to which subsection (1)(b) or (c) applies –

(i) deal with such property under paragraph (a) in the like manner as property to which subsection (1)(a) applies; or

(ii) make an order for the forfeiture of the property.”

22.  In passing sentence, Judge Chan made an order pursuant to section 102 that “$600,000 be forfeited to the Government of the HKSAR.”

23.  Two arguments have arisen in respect of this forfeiture order: first, whether in setting aside the sentence imposed, this Court on 10 December 2010, either in terms or by necessary implication, set aside the forfeiture order and, secondly, if not, whether it should now do so.

24.  We say at once that given the admissions made by D1 upon his plea and the facts lying behind the payment of the $600,000, the notion of ordering the sum to be returned to him does not sit well with the Court.

25.  The matter has come to the Court in this way.  After this Court delivered its reasons for judgment on 28 February 2011, solicitors acting for D1 wrote to the Court asking that when the Court drew up its order, it should make an express order that the sum forfeited be returned to him.  The respondent objected, saying the forfeiture order ought not to be set aside.  The Court invited written submissions on the matter, which we have considered.

26.  The respondent asserts that the forfeiture order does not depend upon the appellant’s conviction following his plea of guilty, for the sum in issue was voluntarily surrendered and, further, that section 102 of the Criminal Procedure Ordinance enables the court to make an order even where there has been no conviction.  It is, in other words, a freestanding power to make a forfeiture order in the circumstances prescribed by the provision.

27.  Those acting for the appellant assert, on the other hand, that once this Court set aside the sentence it necessarily set aside the forfeiture order for by reason of section 80 of the Criminal Procedure Ordinance (which provides that “sentence… includes any order made by a court in dealing with an offender”) the forfeiture order was necessarily also set aside and that, in any event, the Court had specifically been asked to set aside the forfeiture order and no objection was taken by counsel for the respondent, for which reason when the Court made its order setting aside the sentence it clearly intended to set aside the forfeiture order as well.  Further, the argument goes, the summary of facts would never have been admitted and the money never paid over but for the plea of guilty which in itself would not have been tendered but for the proceedings which had been stayed; so that it is idle to pretend that the forfeiture order had some independent existence.  It is argued that by reason of the decision of this Court in setting aside the conviction, the appellant stands acquitted (section 83(3) Criminal Procedure Ordinance) so that reliance upon the appellant’s alleged criminality to sustain the forfeiture order is tantamount to a violation of the presumption of innocence.

28.  The first question is what is it that the court ordered on 10 December 2010.

29.  We have listened to the recording of the order we made at the end of the hearing in December 2010.  We said that we set aside the “consequential sentence and forfeiture order in the court below.”  It seems therefore that there is validity in the assertion in the letter of 1 March 2011 from those acting for D1 that the matter had specifically been raised by counsel.  Certainly upon the Court’s pronouncement of the order, there was no objection raised by counsel for the respondent and it is exceedingly unlikely that the Court would have made such an order had there been any concern raised by the respondent prior to the pronouncement of its decision that it was not appropriate to set aside the forfeiture order.  Had counsel placed before us the arguments now raised, we would no doubt have heard extensive argument on the issue.

30.  It is difficult to see, in those circumstances, upon what basis we can properly undo the order made. 

31.  But, in any event, the contending submissions now advanced do not appear to us to assist the respondent for, in our judgment, in the circumstances described to us, there was no power in the court below to make a forfeiture order in respect of the sum in question.

32.  If the power is said to arise because the cashier order was property that had come into the possession of the court, so that subsection (1)(a) applies , there is no power under that subsection to make a forfeiture order : see subsection (2)(a).

33.  Subsections (1) (b) and (c) cannot apply because it cannot correctly be said that an offence has been committed in respect of the property in the possession of the court or that the property in the possession of the court was used in the commission of an offence.  This is not to say that section 102 cannot be used to confiscate monies offered as a bribe, but the section has in mind the monies actually offered: see as an example Attorney General v Liu Wing Chuen, Application for Review No. 7 of 1974, 4 March 1974, unreported.

34.  It seems to us therefore that the forfeiture order must in any event be set aside, and we so order.