SECRETARY FOR JUSTICE v. WONG LIK KEUNG DAVID

[English Translation – 英譯本]

HCMA 133/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 133 OF 2007

(ON APPEAL FROM ESCCNO. 5298 OF 2005)

____________________

Between

____________________

Judgment

1.  Originally 11 charges were laid against the Defendant. Charges 1 to 7 were brought under sections 9(1)(b) and 12(1) of the Prevention of Bribery Ordinance, Cap. 201 of the Laws of Hong Kong. Charges 8 to 11, brought under sections 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455 of the Laws of Hong Kong, alleged that the Defendant dealt with property, knowing or having reasonable grounds to believe that such property in whole or in part directly or indirectly represented the proceeds of an indictable offence, namely agent accepting an advantage. 

2.  The magistrate ruled that the Defendant had no case to answer on charges 8 to 11 and dismissed those four charges accordingly. After trial, the magistrate convicted the Defendant of charges 1 to 7 and sentenced him to a total of 9 months’ imprisonment. The present appeal does not concern these  seven counts. The Appellant appeals to the Court of First Instance, by way of case stated pursuant to section 105 of the Magistrates Ordinance, Cap. 227, against the magistrate’s ruling of no case to answer in relation to charges 8 to 11.

Findings of fact

3.  The prosecution case on charges 8 to 11 as accepted by the magistrate is as follows:

The defendant, being an agent, namely an employee of Dairy Farm Company Limited and a Senior Category Supervisor of Wellcome Supermarkets, on the four different dates stated in Charges 8 to 11, in a casino in Macau, without lawful authority or reasonable excuse, accepted an advantage, namely, a gift, loan, fee, reward or commission consisting of chips worth $5,000 on each occasion from Ling Wai-yip Jackie, as an inducement to or reward for or otherwise on account of his showing or having shown favour or disfavour to Wah Cheuk Investment Company Limited in relation to his principals’ affairs or business, namely, selling of meat at Wellcome Supermarkets; the defendant had used the abovementioned chips in gambling at the casino, cashed in the chips gained (or remaining) into Hong Kong currency (ranging between $3,500 and $6,300), and brought the same back to Hong Kong. 

The Ordinance

4.  “A person’s proceeds of an offence”, which is in dispute in this case, is defined in section 2(6)(a) of the Organized and Serious Crimes Ordinance as follows:

2(6)      For the purposes of this Ordinance-

(a)   a person’s proceeds of an offence are-

(i)       any payments or other rewards received by him at any time (whether before or after 2 December 1994) in connection with the commission of that offence;

(ii)      any property derived or realised, directly or indirectly, by him from any of the payments or other rewards; and

(iii)     any pecuniary advantage obtained in connection with the commission of that offence.

The magistrate’s views

5.  The magistrate ruled that there are two elements in the above definition of “proceeds of an offence” in section 2(6)(a). The first one is that the money involved must be “payment or other reward received”, which covers the meaning of modern civilized transactions, namely, it is limited to a reward or payment in the nature of a reward, and does not include any money obtained from a criminal act, such as in a robbery. The second element is that the money involved must be accepted “in connection with the commission of that offence”. The magistrate was of the view that the term “in connection with” points to a causal relationship, namely, an involvement of at least two separate things.

6.  The magistrate found that in this case, the Defendant’s “act of receiving payment was itself a commission of an offence”, but the money involved was not received “in connection with the commission of that offence”.

Questions of law

7.  The magistrate poses the following questions of law for the opinion of this court:

Question 1. Is it correct that ‘any payments or other rewards received’ do not include money obtained from robbery, theft, deception, blackmail or bribery?

Question 2. Does the term ‘in connection with’ refer to two separate things with a causal link?

Question 3. Is it correct that the money in Hong Kong currency brought by the Defendant to Hong Kong from Macau does not fall within the definition of ‘a person’s proceeds of an offence’?

Question 4. Did I err in law in finding that the Defendant had no case to answer on the 4 counts of information [charges 8 to 11] and dismissing them?

The Appellant’s argument

8.  The Appellant submits that the magistrate misunderstood the definition of “a person’s proceeds of an offence” under section 2(6)(a) of the Organized and Serious Crimes Ordinance, Cap. 455, in that:

(1)      The magistrate erred in confining the meaning of “any payments or other rewards” in section 2(6)(a)(i) above to rewards or payments in the nature of a reward;

(2)      In any event, the Hong Kong currency involved must fall within “any pecuniary advantage obtained” in section 2(6)(a)(iii), and the magistrate failed to take this point into account in the case stated;

(3)      The magistrate erred in ruling that the term “in connection with the commission of that offence” had in principle made a distinction between “reward for aiding the commission of an offence” and “money derived from an offence”; and

(4)      The magistrate erred in finding that the Hong Kong currency brought into Hong Kong from Macau by the Defendant did not fall within the definition of “a person’s proceeds of an offence” in the said Ordinance.

9.  Counsel for the Appellant submits that, according to HKSAR v. Lok Kar Win & Ors [1999] 4 HKC 783 (Magistracy Appeal) and [1999] 4 HKC 796 (Appeal to the Court of Final Appeal), payments/rewards/pecuniary advantages received/obtained include those received/obtained directly from that offence. A person can, for the purpose of section 25 of the Organized and Serious Crimes Ordinance, deal with the gains from one’s own criminal conduct.

10.  Counsel for the Appellant goes on to point out that according to HKSAR v. Shing Siu Ming & Ors (No. 2) [2000] 3 HKC 83, “any payments or other rewards” mean “any payments” in general and are not limited to rewards or payment in the nature of a reward.

11.  Counsel for the Appellant cites Our Town FM PTY Ltd v. Australian Broadcasting Tribunal (1987) 16 FCR 465, which held that the term “in connection with” referred to two connected things in general but which did not necessarily have a causal relationship:

One of the very generally accepted meanings of ‘connection’ is relation between things one of which is bound up with or involved in another’ … The phrase ‘having to do with’ perhaps gives as good a suggestion of the meaning as could be had.

12.  Counsel for the Appellant then points out that the scope of section 2(9) of the Organized and Serious Crimes Ordinance is very broad:

References in this Ordinance to property received in connection with the commission of an offence or organized crime include a reference to property received both in that connection and in some other connection.

13.  Counsel for the Appellant submits that the Defendant was clearly the original perpetrator of the offence of “agent accepting an advantage”. The Hong Kong currency that he brought into Hong Kong was property representing proceeds of an indictable offence. By bringing the Hong Kong currency in question into Hong Kong, he was dealing with the proceeds of the offence committed by himself, which was the same as dealing with property, knowing or having reasonable grounds to believe that such property represented the proceeds of an indictable offence, contrary to section 25(1) of the Organized and Serious Crimes Ordinance, Cap. 455 of the Laws of Hong Kong.

The Defendant’s argument

14.  Counsel for the Defendant agrees that the interpretation adopted by the magistrate was too narrow in that “any payments or other rewards” were limited to rewards only or payment in the nature of a reward and “stolen money” from an indictable offence was excluded.

15.  Counsel for the Defendant submits that “any payments or other rewards” in section 2(6)(a)(i) only states that “any payments or other rewards” must be in connection with “an indictable offence”. He agrees that the definition of “in connection with” includes the “indictable offence” itself.

16.  Counsel for the Defendant submits that although Lok Kar Win & Others [1994] 4 HKC 783 makes it clear that a person may be charged at the same time with both an indictable offence and dealing with the proceeds of the indictable offence, these two offences must involve unrelated evidence. Even on the facts as accepted by the magistrate, the Defendant’s act of receiving an advantage in Macau was an indictable offence in itself, bringing the advantage in question into Hong Kong was not a separate act of dealing with the money received. Therefore, this case actually involves “a series of connected acts” but without any separate act of dealing with the money received. Counsel for the Defendant submits that, even though the magistrate, by an indirect and complex method, unnecessarily restricted the interpretation of “any payments or rewards” and “in connection with the offence”, the magistrate did not indicate in his oral verdict or in the case stated that he had considered whether the act of “dealing with” in this case was completely separate from the act of the indictable offence. For the aforesaid reasons, the two approaches to the question would yield the same result, and thererfore the ruling of no case to answer was by and large correct. 

Judgment

17.  Section 25(1) of the Organized and Serious Crimes Ordinance, Cap. 455 of the Laws of Hong Kong stipulates that a person commits an offence if, knowing or having reasonable grounds to believe that any property in whole or in part directly or indirectly represents any person’s proceeds of an indictable offence, he deals with that property.

18.  I understand from the submissions of counsel for the Appellant and the Defendant that the Appellant’s answers in relation to questions (1) to (3) are in essence not disputed by the Defendant. In other words, the term “any payments or other rewards” in the section does cover money obtained in acts such as in robbery, theft, deception, blackmail or bribery; whereas “in connection with” does not necessarily refer to two separate things with a causal link. The Hong Kong currency that the Defendant brought from Macau to Hong Kong falls within the definition of “a person’s proceeds of an offence”.

19.  There is, on the other hand, dispute in principle over the answer to question (4).

20.  According to the case stated signed by the magistrate, which poses the questions on points of law for this court’s opinion, the magistrate has failed to consider the question of whether the two offences of accepting advantage and dealing with the proceeds consist of “a series of connected acts” without any separate act of dealing with the money received. It is common ground between both parties that in Lok Kar Win, Burrell J held that separate acts must be involved. He said:

… He submitted it was not the intention of the legislators to make an offender, such as a bank robber, guilty of not only robbing the bank but also under s. 25(1) if he in some way dealt with the proceeds later. He argued that such an interpretation could give rise to absurd results …

This court concludes that Mr Lok’s argument is incorrect. It is correct to say that the Ordinance includes, inter alia, provisions designed to deal with money laundering and criminal conduct with an international ingredient. To borrow an expression used by Mr Bruce it is saying, ‘Hong Kong doesn’t like dirty money, don’t bring it here’. It was plainly within the contemplation of the legislators to catch both the bank robber and any person who later deals in the proceeds of the robbery regardless of whether the later dealer is the robber himself or someone else. Stealing money and then, by separate conduct, dealing with that money in some way are two separate offences in Hong Kong and can be committed by the same person …

21.  The term “dealing with” is defined in section 2(1) of the Organized and Serious Crimes Ordinance to include:

(1)         receiving or acquiring the property;

(2)         concealing or disguising the property;

(3)         disposing of or converting the property;

(4)         bringing into or removing from Hong Kong the property; and

(5)         using the property to borrow money, or as security.

22.  On the evidence accepted by the magistrate, the Defendant accepted the advantage at Macau and used the chips in question to gamble in a casino. On each occasion, the chips won or remaining after losses were cashed into Hong Kong currency and brought into Hong Kong. Obviously, the Defendant, after accepting the property in question, disposed of or converted the property (by gambling with the chips and cashing the remaining ones into Hong Kong currency) before bringing the property into Hong Kong. These are separate acts of dealing with the property for the purpose of bringing the dirty money into Hong Kong. It is entirely different from the example given by counsel for the Defendant, in which a robber robbed a bank at the Hong Kong Macau Ferry Terminal before hopping into a taxi to flee the scene.

Conclusion

23.  For the above reasons, my answers to the four questions are as follows:

(1)         Question 1: No

(2)         Question 2: No

(3)         Question 3: No

(4)         Question 4: Yes, the magistrate erred in law.

24.  The Appellant does not seek to remit this case to the magistrate for handling or retrial.

25.  The parties are at liberty to make any application in writing in connection with this ruling within 14 days of the date of the written judgement. The application shall be dealt with in writing unless otherwise ordered by this court.