HKSAR v. LAM KWAN TO BORUS

CACC 297/2017

[2018] HKCA 487

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 297 OF 2017

(ON APPEAL FROM DCCC NO 433 OF 2017)

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J U D G M E N T

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1.  On 25 August 2017, the applicant pleaded guilty in the District Court before HH Judge Sham (“the judge”) to a single charge of trafficking in a dangerous drug, namely 35.90 grammes of a solid containing 17.50 grammes of ketamine, contrary to section 4(1)(a) and (3) of the Dangerous Drugs Ordinance, Cap 134 (“the Ordinance”). The applicant thereupon indicated through counsel that he opposed the prosecution’s application for forfeiture of, inter alia, $14,220 in cash seized from him upon his arrest (the “forfeiture application”). After hearing mitigation and oral submissions in respect of the forfeiture application, the judge disposed of all exhibits save the $14,220, and then adjourned his decision on sentence and the contested forfeiture application until 7 September 2017.

2.  On 7 September 2017, the judge sentenced the applicant to 34 months’ imprisonment and ordered that the entirety of the $14,220 be forfeited under section 56(1)(a) and (b) of the Ordinance.

3.  On 20 September 2017, the applicant filed a Notice of Application by way of Form XI for leave to appeal against the order for forfeiture only.

Facts admitted by the applicant

4.  At 6:19 pm on 15 February 2017, while conducting an observation near Tsim Sha Tsui MTR station exit N4, B2 floor, K11 Art Mall, Tsim Sha Tsui, PC 18852 noticed the applicant acting furtively.  Accordingly, he intercepted the applicant together with other colleagues and revealed his identity.

5.  When PC 18852 was searching the applicant’s waistband, the applicant said “Ah Sir, I only have a small amount, please don’t arrest me”.  Inside the waist bag were then discovered 23 plastic bags containing ketamine, the subject matter of the charge, with a retail value of $9,980.20.

6.  Upon arrest and caution, the applicant said that he was selling ketamine because he was unemployed.  In his possession were also found two sums of cash, namely $600[1] in the right pocket of his jacket and $14,220 in the left pocket of his jacket, as well as two mobile telephones.  The $14,220 comprised banknotes in denominations ranging from $10 to $1,000[2].

7.  In a subsequent video-recorded interview, the applicant stated, inter alia, that whilst the $600 was the proceeds of selling (for the first time) one packet of ketamine before his arrest, the $14,220 was his earnings from work.  In contrast to his claim upon arrest that he was unemployed, he said in interview that he worked as a casual construction worker.  However, the income from this work[3] was insufficient for him, as a result of which he sold ketamine to make more money to support his family.  He also claimed that he had been taking ketamine for some 10 years on an irregular basis.

8.  In pleading guilty to the charge, the applicant accepted that he was in possession of the ketamine for the purpose of trafficking.

Mitigation and sentence

9.  The applicant was a divorced man of 40 years of age.  He did not rely upon the fact that some of the drugs were for his own consumption in mitigation.  In passing sentence, the judge adopted a starting point of 51 months’ imprisonment, which was reduced by one‑third because of the applicant’s timely plea of guilty, resulting in a final sentence of 34 months’ imprisonment.

The forfeiture proceedings

10.  The applicant did not give evidence himself or call any witness in the contested forfeiture proceedings[4].  Opposition to the application for forfeiture by the prosecution was made by way of oral submission advanced on his behalf by counsel.  In particular, counsel invited the judge to note that the $14,220 represented some 1½ times the retail value of the ketamine seized and hence could not possibly be the proceeds of sale. It was submitted to the judge that “if this court is to find that the $14,220 was in connection with or money received for the drug-trafficking offence, you have to make a finding that before the defendant was arrested he sold more drugs than what he was found in possession subsequently”[5].  The judge’s attention was also drawn to the video-recorded interview[6], where the applicant said he received his wages in cash on an accumulated basis[7].

11.  In his ruling on the forfeiture application, the judge noted that the prosecution had the burden of establishing a prima facie case that the money in question was liable to forfeiture. Thereupon, the burden shifted to the defendant to persuade the court, on the balance of probabilities, why the money should not be forfeited but rather restored to him.  The judge referred to HKSAR v Ngoma Juma Shabani[8] for the relevant legal principles set down by this Court.

12.  The judge did not believe the applicant’s contention that the $14,220 cash was his earnings from work[9], evidence about what he did and when he was paid being unclear.  He considered that the larger banknotes were received from selling ketamine, while the lower denomination banknotes would also be used as change in respect of illegal drug transactions[10].

13.  In the result, the judge ordered that the whole of the $14,220 be forfeited under section 56(1) of the Ordinance.

Ground of appeal

14.  In his Form XI, the applicant asserted that the $14,220 was his legitimate personal property unconnected with drug trafficking. He indicated that he would not appeal against his custodial sentence.  The applicant has told me this morning that, on the afternoon of his arrest, he had withdrawn $2,500 from an ATM machine in denominations of $100 because the machine did not have any $500 notes.  He said he needed the extra money to pay rent, water and electricity bills and to make certain family expenses.

Respondent’s submissions

15.  For the respondent, Ms Audrey Parwani, submitted that given the fact that the $14,220 found on the applicant comprised banknotes in large and various denominations, the judge was entitled to infer from the overall circumstances that they were connected with his drug-trafficking activities, and hence liable to forfeiture under section 56(1) of the Ordinance.  As for the assertions made this morning from the dock, these explanations were never mentioned in his police record of interview, nor in the submissions of his counsel at the forfeiture proceedings.  They remained simply assertions, which had neither been made nor tested in cross-examination and were of no weight or value whatsoever.

Consideration

16.  The judge examined the evidence in respect of the application for forfeiture and the inferences that could be drawn from it very carefully, notwithstanding that the applicant did not himself give evidence in support of his claim.  Quite apart from the issue of whether the applicant was in fact employed at all, given the conflict between his answer to caution upon arrest and his record of interview, this was a very large amount of cash for anyone to be carrying on a Wednesday evening in Tsim Sha Tsui, when that person happened to be trafficking at the same time in illegal dangerous drugs worth $9,980.20, accompanied by two mobile telephones.  The denominations of the cash notes were also highly unusual, in particular 14 x $500 and 38 x $100 banknotes.  The judge did not accept the assertions made, in the absence of the applicant’s evidence, as to the provenance of the cash from his supposed work or that the applicant had only had one sale prior to his arrest.

17.  The judge also observed that the applicant had admitted selling drugs that evening, albeit that he claimed that he had only conducted one transaction[11]. However, the judge did not believe the claim that he had only had one sale that evening[12]. It would have been remarkable indeed if the applicant had suddenly for the first time set himself up that evening at this location in Tsim Sha Tsui as a ketamine trafficker, because he was suddenly short of money.  That is not to convict him of past offences but to make the point that the money was obviously the proceeds of an ongoing and lucrative process of trafficking in ketamine.

18.  The judge directed himself in accordance with the relevant law and found that the money fell to be forfeited under both limbs of section 56(1) of the Ordinance.  Given his findings on the evidence that the money represented both the proceeds of the sale of dangerous drugs and, necessarily, change for other sales, I can accordingly see no reasonably arguable grounds of appeal against the order for forfeiture.  I regret to say that no Court is likely to accept the assertions made now at the appeal, when they were never made before, to the police, at trial or on oath.

19.  On the interesting issue of whether change (as distinct from the proceeds of sale of the drugs) can be said to have been used in the commission of, or in connection with, a drug trafficking offence under section 56(1)(a) of the Ordinance, the answer has been given by the majority in Ngoma Juma Shabani.  The subsection requires that the money seized “has been used … in connection with” an offence of drug trafficking, not that it has been spent in connection with, or otherwise derived from, the same.  A drug trafficker who has money for change has brought it along with him to use in connection with drug trafficking.  In that sense, it has been used in accordance with the subsection.

20.  For the sake of completeness, I have also examined the sentence of 34 months’ imprisonment passed upon the applicant.  I do not think there are reasonably arguable grounds of appeal against the sentence, which was in accordance with the relevant guidelines in Secretary for Justice v Hii Siew Cheng[13].

21.  The application for leave to appeal is refused.