HKSAR v. CHEN KEEN (alias JACK CHEN) AND ANOTHER

CACC 228 /2023, [2026] HKCA 1061

On Appeal From [2024] HKCFI 327

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 228 OF 2023

(ON APPEAL FROM HCCC NO 309 OF 2019)

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REASONS FOR JUDGMENT

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Hon Macrae VP (giving the Reasons for Judgment of the Court):

1.  By its judgment dated 7 May 2026[1] (“the Judgment”), the appeals of the appellants (D1 and D2)  against conviction in respect of Counts 1, 2 and 4 were allowed but the appeal in respect of Count 3 was dismissed by a majority. We adjourned the hearing for their applications for leave to appeal against sentence, namely 7 years and 3 months’ imprisonment in the case of D1 and 7 years and 9 months’ imprisonment in the case of D2; although in relation to Count 3, the individual sentences passed were ultimately 7 years and 3 months’ imprisonment in respect of D1 and 6 years and 9 months’ imprisonment in respect of D2.

2.  Having heard argument from the parties on 1 June 2026, we allowed the appeals and reduced their sentences whilst at the same time ordering that the appellants be immediately released.  These are the reasons for our decision.

3.  We shall not repeat the essential facts and evidence set out in the Judgment.  However, it is relevant to note the very lengthy procedural history of this case, the relevant stages of which may be summarised as follows:

16 December 2010	The appellants were arrested for the present offences.
29 April 2016	The appellants were convicted after a trial (HCCC 83/2014)  before A Pang J (as A Pang JA then was)  lasting 107 days from 2 November 2015 to 6 June 2016[2].
6 March 2017	Pang JA dismissed D1’s application for bail pending appeal.
12 April 2017	Pang JA dismissed D2’s application for bail pending appeal.
16 April 2018	The Court of Appeal dismissed the appellants’ appeal (CACC 172/2016), which was heard over 10 days from 18-21, 24-28 and 31 July 2017.
14 December 2018	The Appeal Committee of the Court of Final Appeal granted the appellants leave to appeal (on two questions of law and two points of substantial and grave injustice)  and gave bail pending appeal (FAMC 27, 28 and 29/2018).
30 August 2019	The Court of Final Appeal allowed the appellants’ appeals but ordered a retrial (FACC 26, 27 and 28/2018).
16 June 2021	Deputy Judge Bruce, SC discharged the jury during the 1st retrial, which commenced on 22 February 2021[3].
30 November 2021	Deputy Judge Bruce, SC dismissed the application for a permanent stay of proceedings and directed a 2nd retrial[4].
30 November 2023	The appellants were convicted after a 2nd retrial lasting 75 days which commenced on 3 July 2023 before Anna Lai J (“the judge”).
8 May 2024	Macrae VP, sitting as a Single Judge, granted the appellants bail pending appeal.
7 May 2026	This Court allowed the appeal in part,following a 3-day appeal on 21, 22 and 23 January 2025.

4.  It is common ground that throughout this protracted procedural history, during which they have each been in and out of custody at least twice, D1 has served 3 years and 60 days in custody, while D2 has served 3 years and 23 days in custody.  Throughout those periods of imprisonment, it is accepted by all parties that neither appellant has committed any disciplinary infraction so as to disentitle them to the normal remission of one-third for industry and good conduct under Rule 69 of the Prison Rules, Cap 234A.

The appellants’ sentences in 2016

5.  Following the original trial before A Pang J, which concerned two (rather than four)  counts of conspiracy and one count of money laundering (against D1 only), the following overall sentences were passed:

(i)  D1: 7 years and 9 months’ imprisonment, including a wholly concurrent sentence for the money laundering offence.  There was no appeal against that sentence;

(ii)  D2: 8 years and 3 months’ imprisonment. Although she had filed an application for leave to appeal that sentence, D2 subsequently abandoned the appeal; and

(iii)  D3: 5 years’ imprisonment.  His application for leave to appeal against such sentence was refused by Lunn VP, sitting as a Single Judge, as not being reasonably arguable[5].

The appellants’ present sentences

6.  The overall sentences of the two appellants (D1 and D2)  in the appeal before us were 6 months lower than their original sentences at the 1^st trial, namely, 7 years and 3 months’ imprisonment in respect of D1; and 7 years and 9 months’ imprisonment in respect of D2.

7.  Of the defence contention that there was a lack of evidence to show actual economic loss to 462 and its existing shareholders, the judge said[6]:

“...this is only just one of the factors to be considered. By the verdict of the jury, the approval of the acquisition must have been the result of the conspiracy carried out on 462 and its existing shareholders.

As soon as the money became available, about 10 million New Zealand dollars was used to purchase two New Zealand properties under the name of a company held by the 1^st accused, and then another sum of HK$73.7 million was paid into the bank account controlled by the 1^st accused...

...the offence of conspiracy to defraud targets not only at actual economic loss, but also putting others’ economic interest at risk, which the culprits intended or realised.”

8.  In addressing Count 3 and the fraud upon 462 and its existing shareholders specifically, the judge said of D1’s role in the conspiracy[7]:

“As a director of 462, he has failed to declare his relationship with the 2^nd accused, and also he had made false representations on various occasions, including the representations in the director’s declaration and the declarations in the announcement and the circular, as well as the declaration as a director when he joined the Board meeting on 22 May 2009.

On the other hand, he also failed in his duties to declare about the interest with respect to the commission sharing agreement. By their verdict, it may be the case that the jury find that the commission sharing agreement was one that was with respect to the acquisition and he had failed in his duty, both fiduciary duty and also public … also his duty to the stock exchange to make the declaration.

Having taken into account the 1^st accused’s conduct throughout the period, I am satisfied that he was there from the beginning to the end to oversee how things were developed so that the acquisition could go through.”

9.  Of D2’s role in respect of the conspiracy in Count 3, the judge said[8]:

“In respect of the 2^nd accused, again, she was there to oversee the progress of the acquisition from the very beginning to the very end. She was at the centre of the conspiracy together with the 1^st accused. In early 2008, she was the one who asked Barry Fraser to look for dairy farms available for purchase. She instigated and drafted the commission sharing agreement, Exhibit P515. She signed the farm agreements with the six farm companies on 18 May 2009, just a few days before signing the sale and purchase agreement with 462 on 22 May. She also actively participated in the fundraising exercise, including the roadshow in Singapore, intending to get as many investors possible for the acquisition.

And that in respect of the financial information of the CraFarms assets, the information was either provided to 462 and/or ShineWing by the 2^nd accused directly or by the 3^rd accused directly and, at that time, the 3^rd accused was acting as her agent.”

10.  However, the judge went on to explain why she was adopting a different starting point of 8 years’ imprisonment in respect of D1 and 7 years’ imprisonment in respect of D2[9]:

“In respect of the sentencing for Counts 1 and 3, I accept that the role being played by the 1^st accused - even though both of them are prime movers - the role of the 1^st accused was slightly more serious than that of the 2^nd accused. The evidence revealed that the 2^nd accused had made false representations in the sale and purchase agreement and again in her reply to the complaint letter to the stock exchange. Nonetheless, most of the false representations in respect of those two counts were made by the 1^st accused, in particular in his role as a director of 462.

In respect of the concealment or the failure to declare the commission sharing agreement, I accept that it is the 1^st accused’s duty as a director, either his fiduciary duty or his duty to the stock exchange, to make full and honest disclosure. However, the 2^nd accused did not have such a duty, and her role in this particular regard is that she had entered into an agreement with the 1^st accused with intent for that object to be carried out. But in the case of the 1^st accused, this is a breach of trust situation because of his duty as a director.”

11.  The judge accepted that there were two mitigating factors relevant to D1.  The first was his positive good character[10]; the second was the matter of delay.  Of this latter consideration, the judge said[11]:

“Delay, per se, is not a mitigating factor, and I do not accept that there was any fault on the part of the prosecution that has caused the delay in this particular case. Nonetheless, I am prepared to exercise mercy and to grant a slight reduction for the distress suffered by the accused over the years.”

12.  In respect of each count, the starting point and resulting sentence were as follows:

	Starting point (imprisonment)	Mitigating factor		Resultant sentence (imprisonment)
		Positive good character	Delay
D1
Counts 1 and 3	8 years	6 months	3 months	7 years 3 months
Counts 2 and 4	7 years	6 months	3 months	6 years 3 months
Wholly concurrent sentences for Counts 1 – 4:  7 years 3 months
D2
Counts 1 and 3	7 years	N/A	3 months	6 years 9 months
Counts 2 and 4	8 years	N/A	3 months	7 years 9 months
Wholly concurrent sentences for Counts 1 – 4:  7 years 9 months

It is perhaps relevant to note that D2 did not have the advantage of positive good character; indeed, she had two previous convictions recorded in New Zealand.  In the case of D1, despite the finding of positive good character, he had been the subject of disciplinary sanction in Shanghai and been disqualified from holding a directorship for 3 years. Furthermore, the judge passed a longer sentence on D2.  It is also noteworthy that the judge adopted a higher starting point in respect of D2 for Counts 2 and 4 than for Counts 1 and 3.

The appellants’ arguments

13.  The primary thrust of the submissions by Mr Owen KC, with him Ms Wong SC, for D1, and Mr Winter KC, with him Mr Tsoi SC and Ms Chiu, for D2, was that this Court should not send either appellant back to prison, they having served on and off just over 3 years in actual custody since the conclusion of the 1^st trial in April 2016.  It was submitted that the sentencing exercise was now more difficult because of the Court’s allowing of the appeals on Counts 1, 2 and 4 and the jury’s acquittal on Count 5, so that the sentence on Count 3 should not go beyond the basis of the appellants secretly working together on the same side of the transaction to defraud 462 and its existing shareholders.  Such a basis would thereby have to exclude, for example, the notion that the sale of the farms to 462 were at an over valuation, or that any fraud had been practised on SEHK. Mr Winter further pointed out that D2’s position should be contrasted with that of D1, since D2 had done nothing positive to advance the conspiracy in Count 3 and owed no duty of disclosure towards 462; moreover, she would not necessarily have known whether D1 had disclosed the CSA to 462 or not.

14.  Both leading counsel laid particular emphasis on the unique history of the proceedings, the extraordinary delay that had resulted and the fact that the two appellants had had to undergo no less than three trials.  Mr Owen relied on the decision in HKSAR v Law Wai Choi[12] for the latter proposition, to which we shall return in due course.

The respondent’s submissions

15.  Mr Chau, the Director of Public Prosecutions, appeared on behalf of Mr Mitchell, who was indisposed, together with Ms Ng and Mr Li, and we were very grateful for his attendance at short notice given the volume and complexity of the case, and for his measured submissions.  Whilst he conceded that the delay in the present case was exceptional and would have merited more than a reduction in sentence of 3 months, he was concerned that the sentence should nevertheless reflect the fact that the conspiracy to defraud in Count 3 was one of the worst kind, involving a vulnerable public company, a great deal of money, a very substantial acquisition, as well as a breach of trust by D1 inveigling himself as part of the plan into 462 to oversee the acquisition.  He submitted that the repeated representations as to D1 and D2’s relationship in response to SEHK’s enquiries underscored the significance of the enquiries they received and the obvious impact of their answers on 462’s decision making process. 

16.  To Mr Winter’s suggestion that D2 would not necessarily have known whether D1 had disclosed the CSA to 462, Mr Chau countered that she must have known D1 would have to conceal the CSA from 462 as part of the conspiracy to defraud 462 and its existing shareholders.  It was their joint plan to profit from the difference between the purchase price and sale price of the farms to 462.

Decision

17.  The delay in the present case is unprecedented. The two appellants were first arrested almost 16 years ago, since when they have undergone three trials, one of which was aborted after four months through no immediate fault of their own, two lengthy hearings before the Court of Appeal, an application to the Appeal Committee of the Court of Final Appeal and a full hearing before the Court of Final Appeal.  They were taken into custody following their sentencing at the conclusion of the 1^st trial in April 2016, were bailed by the Appeal Committee of the Court of Final Appeal in December 2018, were returned to custody following their sentence at the 2^nd retrial in November 2023 and were granted bail pending their appeals to this Court by the Single Judge in May 2024.  As a result of this process, D1 has served a total of 3 years and 60 days in custody, while D2 has served 3 years and 23 days in custody in connection with a matter that commenced with their arrest in December 2010.

18.  Not surprisingly, none of the parties have been able to find any case that is comparable with the procedural history of this case.  In HKSAR v Tam Ho Nam (No 2)[13], for example, which was a murder case, the appellant had originally been arrested in April 2009, had then undergone two trials, two hearings before the Court of Appeal and one full hearing before the Court of Final Appeal, in which the Court granted leave to appeal some 5 years out of time in view of the change of the law in HKSAR v Liang Yaoqiang[14]and ordered a retrial, before being finally convicted at a 3^rd trial in July 2019.  That whole process, even with a 5-year interregnum before the law changed took just over 10 years, the Court of Final Appeal noting that[15]:

“Although by the time of any retrial there will certainly have been a considerable period of time since the killing, that delay has fortuitously worked to the appellant’s advantage in that, but for the hiatus during which he was seeking legal aid …, he would not have been able to rely on this Court’s decision in Liang Yaoqiang.”

19.  The delay in the present case is undoubtedly a factor to be borne in mind, as the respondent properly recognises.  The question is to what extent?  In answering that question, it is important that judges are vigilant to ensure that the trial and appeal process is not deliberately engineered, or filibustered, in order for a defendant or appellant to put the trial or appeal off for as long as he can and then argue for a discount for delay, much of which would have been occasioned by himself.  We hasten to say that, although the 2^nd trial (or 1^st retrial)  was aborted at the request of the appellants, Deputy Judge Bruce, SC must have resolved that the trial could not be saved by immediate and emphatic direction to the jury.  Otherwise, although some points were taken by the defence at all three trials which were judged to be without merit, it cannot be said that the delay has been deliberately occasioned by the appellants.

20.  In answering the question we have posed, there were two authorities which the Court drew to the attention of the parties.  The first was the decision of the Court of Appeal of England and Wales in R v Burdett & Smith[16], in which Thomas LJ (as Thomas LCJ then was), giving the judgment of the Court, held in relation to an appeal by two appellants against sentence following a 3^rd trial (or 2^nd retrial)  for money laundering[17]:

“They, of course, do not have the mitigation of a guilty plea. But there are matters to which we should have regard and to which we think, with respect to the learned recorder, he did not have sufficient regard. First of all, there had been two previous trials and a very significant delay in bringing the matter on.”

Although the 3^rd trial in Burdett & Smith only took four days and the period of delay cannot have been more than three years, nevertheless the fact of three trials and the consequent delay involved was regarded by the Court as the primary reason, which, together with another concerning the uncertainty of the extent to which each appellant had benefitted from the scheme, was enough to reduce the sentence by one third from 3 years’ to 2 years’ imprisonment.

21.  In an early decision of this Court in R v William Hung[18], in which there was discussion of the question of “undue delay” in the context of Articles 5(3)  and 11(2)(c), as set out in section 8, of the Hong Kong Bill of Rights Ordinance, Cap 383, the Court ultimately upheld and applied the trial judge’s deduction of 3 years from its own reduced starting point of 10 years’ imprisonment for trafficking in dangerous drugs because of undue delay in prosecuting the offence.  The deduction amounted to 30%.  Before departing from this case, which is still helpful in addressing the approach to cases where undue delay is alleged, we should observe that it was decided in 1993 and appears to have been a generous discount, given a delay of only some three years between arrest and appeal.  Cases have become much more complex and necessarily take far more time than those heard in the early 1990’s.  Moreover, the discount in William Hung reflected some fault on the part of the prosecution, for the Court held that it was “driven to the conclusion that the Crown’s management of its role in the present case did, in the result, fall short of the standard of expedition which we trust will be maintained in future”[19].

22.  In Law Wai Choi, referred to us by Mr Owen, the Court acknowledged the significant discount given to the appellant “because of the trauma which (the judge)  felt the applicant must have suffered by reason of his having to undergo two trials prior to this trial in which he was again convicted”, although it is fair to say that it also considered that the trial judge had exercised a “considerable degree of leniency” in doing so, as a result of which the Court felt it could not properly interfere with the resulting sentence.  In HKSAR v Sham Kwok Kee[20], to which Mr Chau helpfully drew our attention, the Court found that “such long delay (almost 8 years between arrest and charges)  also justified a reduction of sentence because of the prolonged anxiety that the applicant had to put up with”[21].

23.  We do not think any firm or uniform percentage reduction can be gleaned from any of these cases other than to say that a discount, where there have been three trials coupled with a very long period of delay, which cannot be said to be the fault of the defence and which has had a deleterious effect on the defendant or appellant, should normally be a significant one. Each case, however, will be different and is eminently a matter for the exercise of judicial discretion.  We should also make clear that we do not see any fault on the part of the prosecution for the delay that was occasioned in this case, although the making of prejudicial remarks by a prosecution witness in evidence at the end of the prosecution case in the 1^st retrial before Deputy Judge Bruce, SC was unfortunate.

24.  So far as the effect on the appellants in this case, a consistent theme of the letters placed before the Court by D1’s family members is that the lives of D1 and his family have necessarily been put on hold for some 16 years.  The proceedings have been characterised by each of D1’s two daughters as a “roller coaster”, which his wife has rather graphically described in these terms:

“Every time we caught a glimmer of hope, life thrust us back into the abyss in an instant. This cycle of gain and loss has been more tormenting than any punishment itself.”

As for D2, we are conscious that she is not a citizen of Hong Kong and, having no right to remain in Hong Kong, has had none of the benefits that come with permanent residency during the past 16 years, nor has she been able to work in Hong Kong during that time.  She has, however, been free to travel as a condition of her bail by notifying the court in advance of her intention.

25.  Turning to the question of the appropriate starting point for sentence after trial, we have concluded that the sentence for D1 on Count 3 should have been 6½ years’ imprisonment, given the nature of the fraud, the amount involved and the breach of the appellant’s positon of trust. In the case of D2, we consider that the starting point for sentence after trial should have been 5 years and 9 months’ imprisonment.  While the conspiracy plainly involved D1 positioning himself as a director of 462 in order to facilitate their fraudulent scheme, the fact remains that it was D1, and not D2, who was in the position of trust and owed the fiduciary duty to 462.  It is right, therefore, that D1’s breach of trust towards 462 and its existing shareholders should attract a higher starting point.

26.  The judge allowed a 6 months’ reduction in respect of D1 for his positive good character: the same was found not to apply to D2.  We shall honour the judge’s discount, which brings D1’s sentence down to 6 years’ imprisonment, while D2’s sentence remains at 5 years and 9 months’ imprisonment.

27.  We consider that there should be a significant reduction for what we regard as undue delay in this case, as explained above, of 18 months in the case of D1 and 16 months in the case of D2.  In applying slightly different reductions for the delay, we have adopted the same discount of about 23%.  With this reduction, D1’s sentence becomes 4 years and 6 months’ imprisonment, while D2’s sentence becomes 4 years and 5 months’ imprisonment.

28.  It is accepted that D1 has served 3 years and 60 days in custody throughout these proceedings since December 2010, whilst D2 has served 3 years and 23 days.  And it has been properly conceded by Mr Chau that there is no information or reason to believe that either appellant would not get a full one-third remission of sentence under the Prison Rules.  That being so, both appellants have already served very slightly more than they would be required to serve by operation of law.

29.  Rather than send each appellant back to his or her respective prison for however many days the process might need for the Commissioner of Correctional Services to work out their remission entitlements, which has effectively now been accepted before us, we decided that the appellants should each be spared that requirement and released immediately. Accordingly, we ordered at the end of the hearing that the appellants be immediately released.

30.  For the sake of completeness, the disqualification order made under section 168E of the Companies Ordinance (now the Companies (Winding Up and Miscellaneous Provisions)  Ordinance), Cap 32 for a period of 6 years and 9 months from 5 December 2023 will remain unaffected. Although Mr Winter raised the matter in his closing remarks, this particular order has never been the subject of an application for leave to appeal.  In any event, we deem it appropriate and the order will remain in force until its conclusion.

31.  Accordingly, we granted leave to both appellants to appeal against sentence.  The appeals of both appellants are allowed to the extent indicated.