HKSAR v. SZE MEI MUN AND OTHERS

FAMC No.56 of 2014

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO.56 OF 2014 (CRIMINAL)

(ON APPLICATION FOR LEAVE TO APPEAL FROM

CACC NO.60 OF 2013)

_______________________

________________________________

REASONS FOR DETERMINATION

________________________________

Mr Justice Stock NPJ :

1. In January 2013, the applicants were convicted by Judge Geiser in the District Court of an offence of conspiracy to export unmanifested cargo, contrary to section 18(1)(b) of the Import and Export Ordinance, Cap 60 and section 159A of the Crimes Ordinance, Cap 200; and of a number of offences of dealing with property having reasonable grounds to know or believe that they represented the proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap 455.  In March 2014, their appeals were, save in relation to some of the dealing charges, dismissed by the Court of Appeal[1]. On 24 July 2014, that Court refused to grant a certificate that its decision involved a point of law of great and general importance.  The applicants then applied to this Court for leave to appeal on the basis, first, of suggested points of law of great and general importance and, second, that substantial and grave injustice had been occasioned.

2. On 11 December 2014, we refused leave.  These are our reasons for doing so. 

3. The allegation against the applicants was that they were party to a scheme of smuggling marked oil by supplying, from barges owned or leased by a company to which they were connected, unmanifested oil to fishing vessels under the charge of four Mainland captains who in turn were acting under the direction of a Mainlander named Cheng.

4. Put broadly, the case rested upon the oral testimony of the four captains taken in Shenzhen before a Mainland judge and Judge Geiser pursuant to the provisions of Part VIIIA of the Evidence Ordinance, Cap 8; upon the evidence of documents and massive amounts of cash discovered in the dwelling premises of some of the applicants and in their bank accounts and in the company’s premises; and upon other circumstantial evidence.  Some of the documents revealed a double accounting system whereby one set of invoices, designed to back up representations to the Customs and Excise authorities, showed significantly smaller quantities of oil sold per transaction during the alleged conspiracy period than another set of invoices which showed the true but unrevealed quantity per transaction.

5. It was argued before us:

(1) that the judge wrongly imposed on the applicants a burden to show that the exported goods were manifested and that the Court of Appeal, having recognised this error, itself erred in applying the proviso in section 83(1) of the Criminal Procedure Ordinance, Cap 221;

(2) that a conspiracy to smuggle goods is not to be equated with a conspiracy to export unmanifested goods, since for the latter it is said to be necessary to prove against each applicant that he or she directed his or her mind to the question of manifests, a test allegedly not applied by the courts below;  and

(3) that the judge ought not to have admitted as evidence the depositions of the four captains, for it is contended that the potential efficacy of cross-examination of them in the Part VIIIA proceedings was hampered by the non-disclosure of a number of statements made by the captains to Mainland authorities after their arrest and that, although there is no allegation that the Hong Kong prosecutors failed to disclose material in its possession, nonetheless the circumstances were such that the judge erred in concluding that no unfairness was likely to occur in the proceedings by the admission into evidence of the depositions[2].

6. As to the first complaint, section 18(1) (b) of the Import and Export Ordinance (the Ordinance) makes it an offence to export unmanifested cargo.  The judge relied on section 94A of the Criminal Procedure Ordinance in rejecting an assertion by the applicants at trial that it was for the prosecution to prove that there was no manifest.  He failed to recognise that since the charge was conspiracy – alleging in this case that what was agreed was the export of goods without a manifest - the reverse burden said to arise by reason of section 94A[3] could not apply: see section 159A(2) of the Crimes Ordinance and Lam Yuk Fai v HKSAR (2006) 9 HKCFAR 281. 

7. In considering the proviso, the Court of Appeal was satisfied that notwithstanding his erroneous assertion of a reverse burden, the trial judge did not in fact apply the reverse onus to his analysis of the facts.  There are indicia in the Reasons for Verdict which support the Court’s conclusion; including, but not limited to, the judge’s articulation of the issue which he had to determine as : “Did [ the applicants] know and intend that marked oil would be exported from Hong Kong without a manifest?”; and his findings, supported by overwhelming evidence, that there was “a conspiracy to smuggle marked oil out of Hong Kong and into the PRC” and that each applicant was “actively engaged in a conspiratorial agreement to smuggle marked oil”. 

8. The first question posited as constituting an issue of great and general importance is:

“Whether the proviso under section 83(1) of the Criminal Procedure Ordinance can ordinarily be applied where the conviction is otherwise liable to be quashed on the grounds that there was a misdirection of law relating to burden of proof?”

9. That question was not pressed before us as an appropriate basis for leave, counsel recognising that it begs a host of further fact sensitive questions; including the broad question, if the issue posed were answered affirmatively, in what circumstances may it nonetheless be permissible to apply the proviso.  It is a question the answer to which could not in any event assist these applicants, since we were satisfied that the Court of Appeal was not in error in applying the proviso.

10. The second question goes to the application of section 77F(1) of the Evidence Ordinance:

“Whether the nature of the obligation to disclose the prior statements of prosecution witnesses necessarily gives rise to unfairness within the meaning of section 77F(1) of the Evidence Ordinance, where the evidence of accomplice witnesses is admitted under that section without disclosure of their prior statements ?”

11. Putting aside the fact that there was no breach of prosecutorial obligation in this case, for the prosecution produced whatever material was in its possession, the application of section 77F(1) is necessarily fact and context sensitive. 

12. We were further satisfied that this was not a case which justified leave on the basis of substantial and grave injustice. 

13. The principal business of the company was, and had for years been, the trading of maritime gasoline.  The notion that regular exporters of goods might not know of the requirement for true manifests to be maintained for production and inspection when required is an unrealistic notion.  In this case, figures of oil sales were sent by the company to the Customs and Excise Department which showed lower sales per transaction than was the truth, at a time when the Department was warning the company and other operators of oil barges against smuggling to the Mainland with fishing vessels adapted for that purpose; and, in that case specific context,  the idea that anyone intended other than that such documents as were or might be required by the authorities touching upon the shipments and their cargo, if kept at all, would be other than misleading is equally unrealistic.

14. The section 77F argument included concern at the trial judge’s comment that even if there were inconsistencies in the undisclosed statements, “this would go to weight only.”  Since no-one suggested other than that they went, or might well go, to weight, and since credibility was in issue, the judge’s statement is puzzling.  So too a comment by the trial judge that one could but speculate as to the content of the undisclosed statements.  If by that he meant that as long as one knew not what the statements said, their absence could be ignored – and we do not think he went that far – the proposition would be circular since the very reason defence counsel wish to see undisclosed statements is to ascertain what they said.

15. Even so, we were satisfied that no case for leave on the grave and substantial basis was established.  A key objective of the cross-examination of the four captains was to undermine evidence that such smuggling as took place involved the company’s oil barges.  The depositions of the witnesses which implicated these oil barges were not depositions taken by a judge of another jurisdiction alone; this trial judge had the advantage of seeing and hearing the witnesses testify over eight days, subject to extensive cross-examination (see sub-section 77F(1)(d)(ii) as a material consideration) conducted with the advantage of disclosed statements of the witnesses which were in material parts discrepant; there was evidence at trial of a connection between the company and Cheng; and extensive evidence showing an intention to provide false information to the Customs and Excise authorities in relation to sales from these very barges. 

16. This is not the fabric from which is made the exceptional basis for leave on the grave and substantial injustice limb of section 32.