HKSAR v. LAM YING LUN

CACC 421/2025

[2025] HKCA 1152

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 421 OF 2025

(ON APPEAL FROM DCCC NO 1001 OF 2023)

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J U D G M E N T

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Hon K Yeung J:

1.  The applicant (D1 at trial) faced one count of money laundering, contrary to sections 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455 (“OSCO”). After trial before His Honour Judge Stanley Chan, he was convicted on 28 July 2025 of the same, and sentenced on 24 October 2025 to an immediate term of imprisonment of 33 months.

2.  This is the applicant’s application for bail pending appeal.

3.  The facts relevant to the applicant may be stated for the present purpose as follows. The applicant was the sole director and shareholder of a company called Wealth Create Trading (HK) Limited (“Wealth Create”). It had a bank account (“A/C 1”). There was an upstream telephone scam concerning the sale of mooncake coupons. Victims of that scam were told to transfer funds to A/C 1. The funds were subsequently transferred to a bank account of a money exchange service provider. Both the registered and correspondence addresses of A/C 1 were that of the applicant’s elder brother. The applicant’s case was that it was his elder brother’s idea to establish Wealth Create so that D1 could learn how to run a company.

4.  Perfected grounds of appeal have yet been filed. A draft has however been placed before me. 4 grounds against conviction are proposed to be put forward. I focus upon draft grounds 1 and 2 for the present purpose. Draft ground 1 thereof complains that the trial judge erred in law in reversing the burden of proof. Draft ground 2 complains that the trial judge erred in law in failing to properly apply the test promulgated in HKSAR v Harjani Haresh Murlidhar (2019) 22 HKCFAR 446.

5.  The focus of draft ground 1 is §62 of the trial judge’s Reasons for Verdict. It should be read in conjunction with §61. They read as follows (emphasis added for ease of presentation):

61. I find the version put forward by D1 not credible and D1 is not an honest witness. An adult person cannot exonerate his liability by saying that he had total trust on another person, even if that one is his elder brother.

62. A defendant does not have to prove anything. However, for a charge of money laundering, a defendant has to convince the Court that he had no reasonable grounds to believe that the monies in A/C 1 were not in whole or in part, directly or indirectly represented proceeds of an indictable offence. As the account holder of A/C 1, it is no doubt that D1 did deal with the proceeds, even though it was allegedly also done by [Lam Ying-kit].

6.  This is not the occasion to consider the draft grounds of appeal in any detail, and any view which I will express below is necessarily preliminary in nature. But §62 of the Reasons for Verdict alone reveals at least the following problems and concerns:

(a)  There can be no dispute that, in the context of a charge of money laundering contrary of sections 25(1) and (3) of the OSCO, the onus is on the prosecution to prove to the standard of beyond reasonable doubt the existence of mens rea, namely the defendant did what he did “knowing or having reasonable grounds to believe that any property in whole or in part directly or indirectly represents any person’s proceeds of an indictable offence”;

(b)  §62 suggests that the trial judge reversed that onus, and placed an onus of unspecified standard on the applicant to “convince the court” to the contrary;

(c)  Further, D1 was in fact not the “account holder of A/C 1”. Wealth Create was. The registered and correspondence addresses of A/C 1 were not those of D1.

7.  Mr Cheung for the respondent submits that the italicised part of §62 of the Reasons for Verdict (which Mr Cheung calls the impugned sentence) “simply means that there was no credible explanation coming from D1 when the evidence cries out for one, bearing in mind that D1 elected to testify”. I can understand why Mr Cheung takes that stance, but the impugned sentence is not simply the trial judge’s observation on the evidence. It applies specifically to “a charge of money laundering”. It conveys the message that the trial judge held the view that for a charge of money laundering, a defendant has to convince the Court of absence of mens rea on his part. It was not the trial judge’s observation on or assessment of the evidence before him.

8.  There is also clear force in Mr So’s submission that there are other parts of the Reasons for Verdict that show that the trial judge indeed held the view that D1 had the onus of disproving knowledge, such that §62 is neither a typographical error nor a slip of the tongue. One such part is §67 of the Reasons for Verdict, that (emphasis added):

  D1 cannot say because of the unavailability of company documents and records, he cannot prepare his defence properly. That is, putting the cart before the horse. D1 was arrested in August 2015 and later was temporarily released in 2016. The police did not tell D1 that the case was closed, and D1 should not be under the perception that the matter was resolved. D1 should have started to “protect” himself by keeping all the records and/or evidence, including bank records, that are favourable to him.

9.  The concern is exacerbated by the absence of any reference to or mention of Harjani by the trial judge in the Reasons for Verdict.

10.  Whilst bail pending appeal is to be granted only in exceptional circumstances on the merit and/or time basis, I am, in the circumstances of the present case, of the view that the applicant has on draft grounds 1 and 2 made out the merit basis.

11.  Given the above, I do not see any need for the present purpose to consider the other draft grounds.

12.  On merit basis, I, subject to the bail terms which I will now hear counsel, grant the applicant bail pending appeal.