RE MR TIM OWEN QC

HCMP 2531/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2531 OF 2016

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J U D G M E N T

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Introduction

1. This is an application for ad hoc admission of Mr Tim Owen QC for the purposes of appearing at the hearing for leave to appeal to the Court of Final Appeal in FAMC 41/2016 before the Appeal Committee for and on behalf of Mr Ha But Yee (“Mr Ha”), and rendering advice in conferences in Hong Kong.

2. The application is opposed by both the Bar Association and the Secretary for Justice.

HCCC 323/2012

3. Mr Ha and the other four defendants faced a total of 8 offences under section 9(2)(a) of the Prevention of Bribery Ordinance, Cap 201 in HCCC 323/2012.  The trial took place before P Li J sitting with a jury.  It took 56 days to finish.

4. The prosecution case was that Mr Ha, together with the 3^rd to 5^th defendants, offered advantages to the 1^st defendant totaling HK$24.8 million between July 2007 and May 2008.  At the material times, the 1^st defendant was the chief trader of the derivative warrant trading group in Deutsche Bank Aktiengesellschaft (“DBA”) and Deutsche Securities Asia Limited (“DSAL”).  Mr Ha (the 2^nd defendant) and his two sons, the 3^rd and 4^th defendants, were active traders of derivative warrants issued by DBA.  The 5^th defendant was Mr Ha’s sister.  The said sum of HK$24.8 million paid to the 1^st defendant came from four bank accounts, one held by the 3^rd defendant, one by the 4^th defendant and two by the 5^th defendant, under Mr Ha’s instructions.  The value of the advantage for each count was made up of a number of payments emanating from the same bank account.  The corrupt purpose for which these advantages were offered by Mr Ha to the 1^st defendant was the giving of information on derivative warrants issued by DBA, of which DSLA was the liquidity provider, which assisted Mr Ha and his associates in their trading of those derivative warrants.

5. The prosecution heavily relied on Mr Cheng Kai Sum (“Mr Cheng”) to give evidence as an expert on (a) the derivatives warrants market and :

“ (b) In relation to the trading by the HA family;

i. the existence of any peculiar trading patterns (including those conducted between the HA Family and the liquidity providers);

ii. whether the trading patterns identified above were consistent with what normal investors would do; and

iii.  impact of the transactions between the HA Family and the liquidity provider on the market in those derivative warrants.”

6. The defence challenged Mr Cheng’s qualification as an expert, which resulted in a voir dire before the empanelment of the jury on 9 September 2013.  The Judge gave his ruling on the voir dire on 13 September 2013.  He found that with Mr Cheng’s trading experience in futures, options, foreign exchange and securities, plus his 10 years’ experience in the surveillance department of the SFC, Mr Cheng had substantial knowledge in the present derivative warrants market and was qualified as an expert to give opinions on it.  He further remarked that the fact that Mr Cheng had no actual trading experience in derivative warrants since the year 2002 would only affect the weight of his opinion.

7. In the event, Mr Cheng gave evidence as an expert and his evidence was, as the Court of Appeal observed in CACV 424/2013, unreported, 17 June 2016, on appeal from HCCC 323/2102, at [119], “the prosecution case; without [which] there was no prosecution case”.

8. The defence case was that the monies paid to the 1^st defendant represented his profits from trading in Hang Seng Index futures.

9. At the conclusion of the trial on 6 December 2013, the 1^st defendant was convicted of all the 4 charges that he faced and was sentenced to a total of 7 years’ imprisonment.  Mr Ha was also convicted of all the 4 charges he faced and was likewise sentenced to a total of 7 years’ imprisonment.  The other 3 defendants were all acquitted of the charges they faced.

CACV 424/2013

10. The 1^st defendant and Mr Ha sought leave to appeal against conviction and sentence.  They raised a number of grounds of appeal.  The first and foremost ground was that the Judge erred in ruling that Mr Cheng was qualified to give expert evidence on the derivative warrants market and to interpret the meaning of the recorded telephone conversations between them in the context of a trader/client situation.  They also complained that the Judge had misdirected the jury on, among other things, the issue of Mr Cheng’s credibility.

11. In a judgment dated 17 June 2016, the Court of Appeal quashed the 1^st defendant’s and Mr Ha’s convictions on the ground that the Judge had failed to properly direct the jury on Mr Cheng’s credibility.  In light of its ruling on misdirection, the Court of Appeal did not see the need to consider the other grounds of appeal.  Upon the prosecution’s application, the Court of Appeal ordered a retrial against the 1^st defendant.

12. The prosecution’s application for a retrial against Mr Ha was adjourned so that evidence on his medical condition could be obtained. Having obtained and considered such evidence, the Court of Appeal on 11 July 2016 ordered a retrial against him.  The Court of Appeal handed down the reasons for judgment on 15 July 2016.  There, Lunn VP noted :

“15. In the context of the likely timeline for the commencement and completion of a retrial, Mr Hui informed the Court that the respondent had taken steps towards securing another expert to be called at a retrial, either in replacement of or in addition to [Mr Cheng]. He accepted that such an expert had not been instructed as yet and that, even if his report was served in the next several months, the defence would be entitled to consider and respond to such a report before trial.”

Having referred to the law on ordering a retrial at [16]-[20], Lunn VP went on to say :

“ 21. We are satisfied that the offences of which the appellant were convicted were indeed very serious offences. Clearly, they undermined the reputation for integrity in Hong Kong as a financial centre. The conduct of the appellants struck at the very core of the relationship of agent and principle between the 1^st appellant and [DBA]. The seriousness of the offences was reflected in the sentences imposed on the appellants.

22. Regrettably, it was judicial error that led this Court to squash the convictions of the appellants. Such an error should not baulk or prevent the public interest in securing justice in cases of serious crimes.

23. Of the strength of the prosecution case, it is to be noted that, even on the defence case as articulated in the first trial, a substantial sum of money paid to the 1^st appellant through the Ha family accounts is not accounted for as being profits made in the account in the name of the 5^th defendant in which it is said trading in Hang Seng Index futures was performed for the benefit of the 1^st appellant. Given that we have ordered that the appellants be retried, it is not appropriate that we say more on this subject.

24. We are conscious that a retrial is an ordeal for appellants who, together with their families, have undergone the stresses and strains inevitably resulting from the first trial. Also, there is the factor of the financial burden of the costs of a retrial to the appellants. Whilst the offences concern events in the period January 2007 to May 2008, there is no suggestion that the prosecution is culpable of undue delay in the investigation or in bringing the mater on for trial. The delay in the hearing of the appeal, of over two years, was in significant measure due to the fact that the parties estimated that no less than five days was required for the hearing. In the event, the hearing took six days.

25. Whilst the appellants have served a substantial period of imprisonment, nevertheless a substantial period of imprisonment remains to be served.

26.  Having made enquiries into the medical condition of the 2^nd appellant and, in light of the prognosis provided to the Court by Dr Tsang, we are satisfied that his medical condition is not such that, in conjunction with the other factors to which we have referred, tips the balance in favour of not ordering a retrial.  On the contrary, we are satisfied that it is appropriate to order a retrial of both appellants.”

Leave application to the CFA

13. Mr Ha now seeks leave to appeal to the Court of Final Appeal on the following grounds :

“ 1.1 Substantial and grave injustice has been done to the Applicant within the terms of s.33(2) of the Hong Kong Court of Final Appeal Ordinance (Cap 484) because, having quashed the Applicant’s conviction by reason of a misdirection by the trial Judge, the Court of Appeal ordered that he be retired despite the fact that he had already served some two and a half years of his 7 year sentence and now faces a 50 day retrial notwithstanding his fragile state of health. Furthermore, the Court of Appeal’s order was made on the basis that the prosecution will be permitted substantially to recast its case by adding a completely new expert witness in circumstances where there were plainly fundamental defects affecting the admissibility of the trail testimony of the original expert instructed by the Department of Justice. And the Court of Appeal sanctioned this approach in the context of having declined to determine the grounds of appeal advanced by both D1 and the Applicant which challenged the admissibility of the prosecution’s original expert witness on the basis that they had decided to quash the convictions on the other grounds. Had they ruled in favour of the Applicant on this fundamental ground, the Court of Appeal would inevitably have found there was no case to answer and thus could not conceivably have ordered a retrial.

1.2  In the circumstances, the Applicant respectfully submits that the decision to order a retrial was perverse, constituting a manifest department from established norms governing a decision to order an accused to be re-tried after the quashing of the original conviction.”

14. The Appeal Committee will hear the leave application on 8 November 2016.

15. Mr Ha has already engaged Mr Andrew Bruce SC and Mr Joseph Lee to represent him.  Mr Bruce did not appear at the trial below whereas Mr Lee, led by another senior counsel, represented the 3^rd to 5^th defendants.

16. Mr Ha wishes to engage Mr Tim Owen, QC, too.  Mr Owen is a leading counsel of the highest standing and ability.  He has a renowned reputation as a specialist in dealing with complex criminal cases.  He has previously appeared before the Court of Appeal and the Court of Final Appeal.

Basis of the present application

17. In the Junior Counsel’s Certificate, Mr Lee stated the basis of the present application thus :

“ a) this case involves a determination of legal principles which may have an impact on the development of local jurisprudence. The CFA would have to consider whether substantial and grave injustice was done to the Applicant where the intermediate court has allowed his appeal on one of his grounds of appeal and proceeded to order a retrial without dealing with an additional, fundamental ground of appeal on which full argument had been heard and which, if successful, would have not merely disposed of the appeal but would have made any prospect of a retrial inconceivable. The complexity of the trial, if the retrial is to take place, should also be born in mind. The trial of the case in the High Court before judge and jury took 56 days and the Appeal in the CA took 7 days. Both the potential injustice to the Applicant of a retrial and the basis upon which the intervention of the CFA is sought is exacerbated by the prosecution indicating that on the retrial they will seek to call additional expert evidence to, in effect, reinforce and/or replace the challenged expert evidence. The consequence of this is that what is now proposed by the prosecution is no ordinary retrial but rather a retrial in which the prosecution seeks to recast its case. The purpose of a retrial is not to give the prosecution an opportunity to correct the deficiencies of the first trial by attempting to improve its case. Yet in ordering a retrial in full knowledge that the prosecution intend to recast their case and without resolving whether the original trial was fatally flawed by reason of the non-admissibility of its main witness, the CA has arguably set a precedent which raises fundamental questions of fairness and principle concerning the exercise of the discretion to require an acquitted defendant to be subject to the ordeal of a lengthy retrial.

  b)  The CFA factor.”

Discussion

18. The principles applicable to ad hoc admissions of overseas counsel are well settled : see the admirable summary of McWalters JA in Re Perry QC [2016] 2 HKLRD 647, at [24].  I shall not repeat them here.

19. Mr Bruce, for the applicant, essentially repeated the grounds as set out in the Junior Counsel’s Certificate as to why the leave application before the Appeal Committee merits the admission of Mr Owen. He stressed the risk and prejudice of exposing Mr Ha to a retrial in which the prosecution would recast its case by engaging an unnamed expert to replace or in addition to Mr Cheng.  He submitted with some force why the Court of Appeal erred in ordering a retrial in the circumstances of the present case.

20. Mr Bruce further submitted that the appeal to the Court of Final appeal potentially raised important question as to whether the Court of Final Appeal could determine the issue of admissibility of Mr Cheng’s evidence in deciding if the Court of Appeal erred in ordering a retrial and whether in allowing Mr Ha’s appeal the Court of Final Appeal could remit the mater back to the Court of Appeal to reconsider the admissibility issue. He submitted that it might raise important jurisdictional and practical problems on which Mr Owen could contribute significantly.

21. Despite Mr Bruce’s efforts, I am not persuaded.

22. Whether to order a retrial is a matter of discretion to be exercised by the Court of Appeal judicially on the facts of the individual case.  The legal principles are well settled.  The point before the Appeal Committee is simply whether the Court of Appeal erred in the exercise of its discretion in the particular circumstances of the present case.  It raises no novel or difficult point of law.  The only question is whether in ordering a retrial the Court of Appeal departed from the established norm such that substantial and grave injustice has occurred.  As Mr Clive Grossman SC, for the Bar Association, rightly observed, Mr Bruce, with his exemplary skill and substantial experience, has no difficulty whatsoever in arguing the point and the problems arising from it, as demonstrated by his able submissions before me.  In other words, suitable Hong Kong counsel is already available.  The need to instruct overseas counsel, however eminent he might be, is not made out.

23. In response, Mr Bruce submitted that the question is not whether he could argue the matter before the Appeal Committee but rather who is the best person to do it.  But that is not the test for admitting overseas counsel.  The suitability of Hong Kong counsel is not to be gauged by a comparative assessment against the rest of the common law world or a comparison with the overseas counsel whose admission is sought.  It is to be done by reference to the level of competence and ability that it required in order to provide the court with professional assistance and the litigant with proper legal representation commensurate with the case concerned.  Where the competence of local counsel is not in doubt, the issue becomes whether, given the case raises issues of unusual complexity and difficulty, it would be highly desirable to have specialist counsel from overseas because they can add a significant dimension to the case.

24. Applying the test here, I do not see that the present case involves issues of unusual complexity and difficulty.  Even if it did, it has not been demonstrated to my satisfaction that Mr Owen could add a significant dimension on top of Mr Bruce’s able contributions to the case.

25. The CFA factor does not add much to the application.  To rely on the CFA factor, an applicant has to show that the matter is one that is substantial and that he is able to contribute significantly by reason of his expertise.  Even assuming that the matter before the Appeal Committee is a substantial one, as said, I am not satisfied that Mr Owen could add a significant dimension on top of Mr Bruce’s able contributions to the case.  In the circumstances, I do not consider that Mr Owen, despite his highest standing and ability, is able to contribute significantly by reason of his expertise.

Conclusion

26. For the above reasons, I refuse the applicant’s application.

27. As Mr Grossman for the Bar Association and Mr Jonathan Kwan for the Secretary for Justice did not seek costs in the event that the application failed, I will make no order as to costs.

28. Last but not least, I thank counsel for their assistance.