LAM YUK FAI, STEVE v. HKSAR

FACC No. 12 of 2005

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

 FINAL APPEAL NO. 12 of 2005 (CRIMINAL)

(On appeal from CACC No. 94 of 2001)

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J U D G M E N T

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Chief Justice Li :

1.  I agree with the judgment of Lord Woolf NPJ.

Mr Justice Bokhary PJ :

2.  I agree with the judgment of Lord Woolf NPJ.

Mr Justice Chan PJ :

3.  I agree with the judgment of Lord Woolf NPJ.

Mr Justice Ribeiro PJ :

4.  I agree with the judgment of Lord Woolf NPJ.

Lord Woolf NPJ :

Background to the appeal

5.  On 3 January 2001, the appellant was tried before Beeson J and a jury on three counts.  Count 1 alleged an offence of conspiracy to possess an unlawfully obtained travel document, contrary to s.159A of the Crimes Ordinance, Cap.200, and s.42(2)(c)(i) of the Immigration Ordinance, Cap.115.  Count 2 alleged an offence of possession of a false travel document, contrary to the same section of the Immigration Ordinance and Count 3 (the subject of the present appeal) alleged a conspiracy between the appellant and Philip Chu Hak Lan (“Philip Chu”) to transfer diplomatic passports of the Government of the Democratic Republic of Sao Tomé and Principe to a person known to the appellant as “Arkadiy” without reasonable excuse.  The offence was said to be contrary to the same statutory provisions as are referred to in Count 1, except that the provision of the Immigration Ordinance involved was s.42(2)(a)(ii).

6.  On 18 January 2001, the appellant was acquitted unanimously on Count 1, convicted by a majority verdict of six to one on Count 2 and convicted by a unanimous verdict on Count 3.

7.  On Count 2, the appellant was sentenced to 4 years’ imprisonment and on Count 3 was sentenced to 10 years’ imprisonment concurrent.

8.  The appellant’s appeal was dismissed by the Court of Appeal on 27 February 2002.  The Court of Appeal refused leave to appeal to this Court.

9.  On 14 November 2005, an Appeal Committee of this Court (Li CJ, Bokhary PJ and Chan PJ) refused leave to appeal in respect of Count 2 but granted leave to appeal in relation to Count 3.

10.  The points of law certified were :

(1)	What is the meaning of the word “transfer” in s.42(2)(a)(ii) of the Immigration Ordinance, Cap.115?  (“the Interpretation Point”)
(2)	Under that subsection of the Immigration Ordinance, who has the burden in relation to “without reasonable excuse” and depending on the answer, is that provision “constitutional”?  (“the Constitutional Point”)

These points were not argued at the trial or before the Court of Appeal and so were not considered by those courts.  They were certified by this Court because of their importance.

11.  At the time that he committed the alleged offences, the appellant was a serving immigration officer in the Immigration Department of the Hong Kong Special Administrative Region.  As already stated the conspiracy, the subject of Count 3, was alleged to have been between the appellant and Philip Chu.  It was said to have been made between 1 November 1998 and 3 March 1999, and to have been to transfer diplomatic passports of the Government of the Democratic Republic of Sao Tomé and Principe without reasonable excuse to a person known to the appellant as “Arkadiy”.

12.  Philip Chu was a Customs and Excise officer.  He had been involved in money laundering, dealing in cigarettes and running a business involving the sale of passports, especially West African passports, including passports issued by Sao Tomé, Angola and Guinea Bissau.  In relation to these activities, Philip Chu had pleaded guilty to two offences in the District Court.  He was given immunity because it was intended that he should give evidence against the appellant at the appellant’s trial.

13.  According to Philip Chu’s evidence, the appellant had been engaged in similar activities to his own relating to passports.  The passports included diplomatic passports.  The particular attraction of diplomatic passports was that they protected their holders from customs and immigration inspections.  This is a fact that makes them especially attractive to people who wish to bring into a country contraband, weapons, drugs and money.

14.  The evidence for the prosecution included evidence from two undercover operatives of ICAC, namely Richard and Arkadiy.  Philip Chu told Richard about the availability of diplomatic passports.  This resulted in Richard and later Arkadiy (who claimed to be the agent of a Russian Mafioso called Boris) being introduced to the appellant.  According to Philip Chu, an agreement was reached between Philip Chu and the appellant to supply a Sao Tomé diplomatic passport to Richard and Arkadiy for Boris so that Boris would be able to use the diplomatic passport for laundering money in Hong Kong.  The price which was to be payable for the passports was discussed.  It was to be HK$3 million for the three passports subject to a possible discount.  It was not alleged by the prosecution that the passports which were to be obtained would be false or unlawfully obtained by the appellant.  However on the evidence for the prosecution it was clear that the passports, when obtained, were to be used to assist in carrying out unlawful activities involving the avoidance of customs control.

15.  The appellant in his evidence said that he believed that the scheme for providing the passports was legal and that he was properly authorised by Sao Tomé government officials to provide the passports to carry on his activities.  He accepted there were discussions about changing names or particulars appearing on the passports after they had been issued.  This was because otherwise the names of the holders would be Russian which might cause unnecessary difficulties for the holders because Russians were not popular tourists.  He contended that he was acting as the agent of the Sao Tomé Government in relation to the scheme.  The travel documents involved were going to be genuine passports lawfully obtained and conveyed to the rightful holder in accordance with authority given to him by the Government.  It was his case that his authority from the Government entitled him to carry out his proposed activities which were therefore lawful.

The interpretation point

16.  Although it is convenient to deal with the two points certified by this Court separately, as will become apparent, the answer to the interpretation point has a significant impact upon the constitutional point.

17.  Section 42(2)(a)(ii) of Cap.115 referred to in Count 3 was introduced into the Immigration Ordinance by way of an amendment on 31 October 1986 by clause 3 of the Immigration (Amendment) Ordinance, Ord. No. 61/1986.  The section reads as follows :

“(2)	(a)	(i)	Any Person who-
			….
		(ii)	transfers to another without reasonable excuse,
			any travel document, certificate of entitlement, entry permit, re-entry permit, certificate of identity, document of identity, APEC business travel card, travel pass or Vietnamese refugee card or any document whatsoever issued, kept, made under or for the purposes of Part IB, II, III or IV of this Ordinance;
			….
		shall be guilty of an offence.”

18.  “Travel document” is defined by s.2 of Cap.115 as meaning “a passport furnished with a photograph of the holder, or some other document establishing to the satisfaction of an immigration officer or immigration assistant the identity and nationality, domicile or place of permanent residence of the holder”.

19.  In interpreting the Ordinance, it is important to bear in mind the part played by travel documents in the contemporary world.  They play an essential role in facilitating travel from one country to another.  They identify the holder and enable a decision to be made expeditiously as to whether the person using the travel document should be or should not be allowed admission or to remain in a country that the holder is visiting or seeking to visit.  In addition, travel documents can be used in a multitude of different circumstances to verify the identity of the holder and in this way facilitate trade and commerce.

20.  In this situation it would not be unreasonable for the responsibility to be placed on the person in possession of a passport to exercise care to ensure that a travel document is not misused while he is responsible for it.  The responsibility could exist because he is the holder, or because it is in his possession, or because he has a role in its official distribution.  However, the subsection with which we are concerned is clearly intended to create a serious offence since it is punishable with up to 14 years’ imprisonment.  As Mr Gerard McCoy SC, who appears on behalf of the prosecution accepted, in the course of his helpful and realistic submissions, this offence was not intended to address mere want of care on the part of a member of the public.  If this was the purpose, the offence would be a disproportionate response for carelessness in looking after a travel document.  The legislature’s intention in adding the subsection by amendment to the Ordinance was to address more serious wrongdoing than mere carelessness of the sort that any member of the public can be guilty.  However, subject to this proviso there is nothing objectionable in principle to the creation of an offence which is intended to prevent travel documents coming into the possession of an individual who intends either to use it himself for an unlawful or dishonest purpose or who intends that it should be altered in a way that facilitates its use for such a purpose by others.

21.  It is no doubt for this reason that the amended Ordinance established an offence that has two limbs.  The first limb involving the transfer of a travel document and the second limb being the requirement that the transfer should be without reasonable excuse.  In giving effect to the amendment the two limbs have to be considered together.  It is only a transfer that is without reasonable excuse that is an offence.  The second limb constrains what would otherwise be the ambit of the word “transfer”.

22.  As to the constraining effect of the words “without reasonable excuse”, they are to be treated as limiting the transfers that constitute an offence to those made knowingly by the alleged offender to facilitate the travel document being used for an unlawful or dishonest purpose.  This last requirement establishes the need for there to be intent, that is mens rea on the part of the alleged offender.  This is a desirable requirement for an offence of this gravity.

23.  Mr HY Wong, on behalf of the appellant, appropriately and helpfully draws our attention to the speech of Lord Millett NPJ in the case of Ho Choi Wan v. Hong Kong Housing Authority, [2005] 4 HKLRD 706 at para.109.  In that case Lord Millett NPJ said :

“In construing the language of a statute, it is the task of the court to ascertain and give effect to the intention of the legislature.  But that does not mean that the Court must give a literal construction to every word or phrase in the statute.  As Lord Bingham of Cornhill said in R (Quintavalle) v. Secretary of State for Health[2003] 2 AC 687 at p.695

‘The court’s task, within the permissible bounds of interpretation, is to give effect to Parliament’s purpose.’

Whenever the legislature enacts or amends an Ordinance, its purpose is to remedy a perceived mischief or defect in the pre-existing legislation.  It is to be presumed that it did not intend the statute to go wider in its operation than is necessary to remedy the mischief or defect in question.  If it has inadvertently employed general words which, if given their fullest effect, are wider than necessary, the court not only may but must restrict them by construing them in a narrower sense which, while still falling within the ordinary meaning of the words, gives effect to the legislative intent but does not go beyond it, still less frustrate it.”

24.  It is precisely because this will achieve the desirable result to which Lord Millett NPJ refers that the two limbs of the offence have to be read together with the effect set out.  Mr Wong is therefore not entitled to complain that the ordinary and common sense meaning of the relevant provision of the Ordinance would offend Lord Millett NPJ’s admonition.  In particular, it is not correct, as he submits, that the judge was wrong to direct the jury that the word “transfer” is to be understood in its ordinary meaning. 

25.  As to the ordinary meaning of the word “transfer”, the judge directed the jury that it means move, take or convey from one place or person or situation or time of occurrence to another, and it can mean transmit, transport or hand over from one to another.  Her language was almost identical to that used by the Shorter Oxford Dictionary in giving its first meaning of the word “transfer”.  That meaning does indeed coincide with the ordinary meaning of that word, but, of course, it has to be here read subject to the fact that the word “transfer” does not stand alone, it is only a transfer “to another” that can be an offence, so to that extent the judge’s direction has to be qualified.  In her summing up, the judge also gave the jury helpful examples of situations involving transfers of travel documents which could and could not have amounted to an offence.  Contrary to Mr Wong’s submission, in this way she correctly and sufficiently directed the jury as to the ingredients of the offence.

26.  Both counsel placed reliance on the legislative history of the section with which we are concerned and also drew our attention to the similar but more explicit language of the Registration of Persons Ordinance, Cap.177 that contains a definition of “transfer”.  However, it is not necessary to pray this material in aid in order to come to the views expressed above.  The same is true of the respondent’s very substantial Brandeis Brief, which is largely designed to spell out the undoubted mischief that the section with which we are concerned is designed to tackle.

27.  As the offence with which the appellant was charged in Count 3 was a conspiracy and not the substantive offence of transferring a passport without authority, it was important that the summing up should explain the requirements that have to be proved by the prosecution to establish the conspiracy.  The manner in which the judge did explain this is not subject to criticism on behalf of the appellant.  Doing this, appropriately, the judge informed the jury that it had to be the appellant’s “intention that they (the parties to the conspiracy) should carry out the crime”.  In relation to Count 3 “the intention (needed to be) to transfer travel document to another without reasonable excuse” so that it should then be used for an unlawful or dishonest purpose in the circumstances she had described and illustrated by the examples she had already given.

28.  Mr Wong submits that there must have been the intention on the part of the legislature to draw a distinction between an issue of a travel document for the first time and the “transfer of a travel document” thereafter.  That there is a distinction between the two situations is correct, but this does not mean as Mr Wong goes on to argue that no matter how broad the meaning the word “transfer” may have, it could never have been the intention of the legislature to make it an offence for an individual to do what the appellant was alleged to have done.  This was not merely to hand over a passport issued to him by the issuing authority for the first time, it was to do this when he knew the passport was clearly going to be used thereafter for unlawful or dishonest purposes.  The facts of this appeal alleged by the prosecution make it clear that there was a need, even in relation to a newly issued travel document for this to be conduct which contravened the criminal law.  It amounted to knowingly facilitating the breach of the criminal law.  If, as the appellant alleges, he had been authorized to issue passports the authority he had been given could not, under Hong Kong law, justify the appellant issuing passports, with the intention that they should be used thereafter to commit a crime by the person to whom they were transferred. 

29.  Mr Wong’s submission is that “transfer” does not cover the supply of genuine and lawfully obtained passport issued to the bearer for the first time is not correct.  It is perfectly appropriate for this conduct to be treated as contravening the criminal law.

The constitutional issue

30.  In relation to the second limb of the offence, the judge directed the jury in these terms:

“ Although I have told you that the burden of proving these charges remains on the prosecution throughout the trial, the burden shifts slightly here in relation only to the question of reasonable excuse.  If you are satisfied that there has been the agreement and the intention to transfer these passports, you then have to consider the question as to whether or not the accused had a reasonable excuse to transfer them in the manner that he was proposing to do.

 In doing that, the accused does not have to establish beyond reasonable doubt that this was the case.  All he has to do is show that it is more likely than not that this was the reason for his transferring the document, …”

In giving this direction the judge was not only placing an evidential reverse burden of proof on the appellant she was placing a legal or persuasive burden on him to establish a reasonable excuse.  In doing this, the judge had no doubt in mind s.94A, Criminal Procedure Ordinance, Cap.221, that is in the following terms:

“	(1)	It shall not be necessary in an indictment, charge, complaint or information alleging an offence to negative any exception or exemption from or qualification to the operation of the law creating the offence.
	(2)	For the avoidance of doubt it is hereby declared that in criminal proceedings-
		(a)	it is not necessary for the prosecution to negative by evidence any matter to which this subsection applies; and
		(b)	the burden of proving the same lies on the person seeking to avail himself thereof.
	(3)	This section applies to criminal proceedings in the District Court or a magistrate’s court.
	(4)	The matters to which subsection (2) applies are any licence, permit, certificate, authorization, permission, lawful or reasonable authority, purpose, cause or excuse, exception, exemption, qualification or other similar matter.”

31.  Mr Wong’s submission is that the offence here (which it must be remembered charged a conspiracy) is not merely to transfer the travel document; it is to transfer the document without reasonable excuse.  This submission is correct.  He then submits that a reverse burden is not properly imposed on the accused, as it is not proportionate and it has not been demonstrated that it went no further than was necessary to secure the stated object.  He submits that this contravened the appellant’s constitutional rights as being incompatible with the presumption of innocence contrary to art.11(1) of the Hong Kong Bill of Rights Ordinance, Cap.383 (based on art.14.2 of the ICCPR) as applied by art.39 of the Basic Law.

32.  These are formidable submissions.  In considering them it is necessary to start by going back to the two limbs of the offence and ask whether the second limb constitutes an “exception or exemption from or qualification to the operation of the law creating the offence” referred to in s.94A(1)?  The answer to this question is no.  It is both limbs that are “the law creating the offence”.  Although reasonable excuse is referred to in s.94A(4), that subsection is only relevant if the offence is one to which s.94A(1) applies.  Many, if not most offences, that create an offence and then provide that there will be no offence if the defendant has a reasonable excuse for his offending conduct no doubt place at least an evidential burden on the defendant to raise the defence if not a persuasive or legal burden (see for example Tse Mui Chun v. HKSAR (2003) 6 HKCFAR 601).  The offence with which we are concerned is unusual in that the reference to without reasonable excuse is part of the particulars of a count of conspiracy.  The position is the same as it would be if the section had described the conspiracy as to transfer a travel document knowing it would be used for an unlawful purpose. 

33.  As Count 3 alleges a conspiracy, the task of the prosecution was to prove in the normal way the nature of the conspiracy; namely that (a) there was an agreement alleged between the appellant and Philip Chu and; (b) the purpose of the agreement, which on the case for the prosecution, was that the passport should be used for an unlawful purpose and so without reasonable excuse (see for example Yip Chiu Cheung v. R (1994) 99 Cr App R 406 (PC)).  This conspiracy could not either under s.94A or at common law give rise to any reverse burden.  In view of the ingredients of the offence of conspiracy it is unlikely that any charge of conspiracy should give rise to any burden being placed on a defendant.

34.  Any other interpretation of s.42(2)(a)(ii) would mean that s.94A would have to be read down as otherwise producing a result that was neither proportionate or necessary in contrast to the case of Tse Mui Chun where Bokhary PJ and Lord Scott of Foscote NPJ at para.38 described the position in law as follows :

“38

. … As to the presumption of innocence, it is true that a reverse-onus provision is involved.  But s.121 does no more than impose an evidential burden on defendants.  A shifting of the evidential burden only may be safe from a constitutional challenge even where a shifting of the legal burden itself would be vulnerable to such a challenge (see R v Lambert [2002] 2 AC 545 where the House of Lords gave a reverse-onus provision a meaning compatible with the presumption of innocence by reading it down from a shifting of the legal burden itself to a shifting of the evidential burden only).  Mr Bullett rightly recognised this, but submitted that even a presumption that shifts the evidential burden only is liable to have its constitutionality questioned.  As an example of this, he cited the decision of the Supreme Court of Canada in Downey v R (1992) 72 CCC (3d) 1.  As it happens, the constitutional challenge in that case failed.  It is true that it failed only by a majority of four to three; but it failed even though the evidential burden that was shifted extended to the entirety of the offence and was not confined merely to an element or certain elements of the offence.  As for the presumption in s.121(3), which only shifts the evidential burden, we are satisfied that it is a reasonable and proportionate response to a real need and that it is consistent with the presumption of innocence under our constitutional arrangements.”

35.  The offence here is to be contrasted with the substantive offence of carrying a bladed article in a public place without good reason or lawful authority considered in R v. Mathews [2003] 2 Cr App R 19.  In that type of case the policy of the legislation is to make the carrying of the bladed article the offence.  Here it is not transfer of the travel document alone that is the offence.  Even conspiracy apart, before there is an offence there has to be the necessary knowledge of the likely unlawful consequences of the transfer.  In any event there would be no purpose in placing an evidential burden on the defendant since in practice there could only be a prosecution if there was the evidence that transfer was taking place to assist in the travel document being used for an unlawful or dishonest purpose.

36.  The result is that in relation to the second point the burden remains on the prosecution and the provision is not unconstitutional.  We have considered whether the proviso should be exercised in the prosecution’s favour but have come to the conclusion that an otherwise perfectly satisfactory summing up is critically flawed because it placed a persuasive burden of proof on the appellant.  A retrial is ordered, and the appellant is remanded in custody pending his retrial.

Chief Justice Li :

37.  The Court unanimously allows the appeal, quashes the conviction and orders a retrial.