HKSAR v. LIONEL JOHN KRIEGER AND ANOTHER

FAMC No. 1 of 2014

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 1 OF 2014 (CRIMINAL)

(ON APPLICATION FOR LEAVE TO APPEAL FROM CACC NO. 99 OF 2012)

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REASONS FOR DETERMINATION

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Mr Justice Ribeiro PJ:

1.  At the hearing, we dismissed the prosecution’s application for leave to appeal, reserving our reasons.  These are our reasons. The facts are fully set out in the judgment of the Court of Appeal.[1]

2.  The Crimes Ordinance,[2] section 159A, relevantly provides: 

... if a person agrees with any other person ... that a course of conduct shall be pursued which, if the agreement is carried out in accordance with their intentions, ... will necessarily amount to or involve the commission of any offence [triable in Hong Kong[3]] ... by one or more of the parties to the agreement ... he is guilty of conspiracy to commit the offence or offences in question.

3.  Here, the conspiracy charged was an agreement to commit an offence against section 9(2) of the Prevention of Bribery Ordinance[4] which states:

 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 –

(a) doing or forbearing to do, or having done or forborne to do, any act in relation to his principal's affairs or business; or

(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.

4.  The prosecution case was that:

(a) Krieger, Tam and Nolasco conspired to offer an advantage of about MOP 29 million to Ao in Macau to ensure the renewal of Contract A and the award of Contracts B and C;[5]

(b) the agreement was reached in Hong Kong in September 2005, a draft agreement with Ao being drawn up here and sent on 20 September 2005 as an attachment to an e-mail from Tam to Nolasco, with a view to its onward transmission by Nolasco to Ao in Macau;[6] and

(c) Nolsasco took it to Ao in Macau who agreed to the sums proposed and suggested minor alterations.[7]

5.  The prosecution accepted that section 9(2) does not have extraterritorial effect.  But it sought to argue that there was a fully constituted conspiracy in Hong Kong, relying on PBO section 2(2) which provides:

(2) For the purposes of this Ordinance-

(a) a person offers an advantage if he, or any other person acting on his behalf, directly or indirectly gives, affords or holds out, or agrees, undertakes or promises to give, afford or hold out, any advantage to or for the benefit of or in trust for any other person...

6.  The prosecution submitted that this provision means that a person can offer an advantage to an agent without communicating the offer to the agent – that it was enough in the present case that an agreement was reached among the conspirators in Hong Kong to make the offer contained in the draft consultancy agreement.[8]   

7.  Section 2(2) is an interpretation section.  The offence created by section 9(2) is constituted by offering an advantage to an agent.  The reason why section 2(2) does not mention the agent is that its focus is on what constitutes the offering of an advantage.  Applied to section 9(2), section 2(2) elaborates on the words “offers any advantage”, making it clear that those words cover variations on the ways in which an advantage might be offered, including cases where:

(a) D or someone on D’s behalf (D’s agent) offers the advantage;

(b) the offer is made directly or indirectly (through an intermediary acting for the agent) to the agent;

(c) the advantage which is offered is immediately proffered or provided (held out, given, afforded);

(d) the advantage is to be provided in the future (D agrees, undertakes or promises to give, afford or hold out);

(e) the advantage is to benefit the agent or someone else (such as a member of the agent’s family); and

(f) the advantage is held on trust for the agent or someone else.

8.  Plainly, in providing this elaboration, section 2(2) does not purport to cut down on the elements of the offence as created by section 9(2).  In particular, it does not purport to eliminate the requirement that the offer of an advantage is made to the agent.

9.  Section 2(2) does not help the prosecution.  In so far as it is textually applicable, it serves merely to make it clear (i) that Krieger and Tam can be regarded as offering an advantage via Nolasco, acting on their behalf; and (ii) that a relevant offer is involved since Nolasco is to hold out to Ao an agreement or undertaking or promise to pay in accordance with the draft consultancy agreement.  Neither of these points is in dispute.

10.  The prosecution’s difficulty was accordingly that if the agreed course of conduct were carried out, it would not amount to or involve the commission of any offence triable in Hong Kong since the offer of an advantage was to be made to Ao (the agent) in Macau, and the section 9(2) offence has no extraterritorial effect.  By virtue of section 159A, a conspiracy to make such an offer in Macau is not indictable in Hong Kong.  The case is therefore not reasonably arguable and leave to appeal had to be refused.

11.  While we respectfully are in complete agreement with the Court of Appeal’s decision allowing the appellants’ appeal, we note that in paragraphs 117 to 135, their Lordships discussed obiter a possible alternative basis for establishing jurisdiction.  We wish to state that we say nothing in this Determination as to the correctness or otherwise of that discussion.