HKSAR v. LI SHUK WOON

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Press Summary (Chinese)

FACC No. 3 of 2016

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 3 OF 2016 (CRIMINAL)

(ON APPEAL FROM CACC NO. 161 OF 2013)

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REASONS FOR JUDGMENT

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Mr Justice Fok PJ:

1.  The appellant was convicted of one charge of dealing with property known or reasonably believed to represent proceeds of an indictable offence contrary to section 25(1) of the Organised and Serious Crimes Ordinance.[1] Her application for leave to appeal to this Court against that conviction was heard on 22 March 2016, prior to the Court hearing the appeals in Yeung.[2]  In the light of those pending appeals, the Appeal Committee granted leave to appeal on the substantial and grave injustice ground on the basis it was reasonably arguable that the charge on which the appellant was convicted was duplicitous.[3]

2.  After hearing counsel for the appellant, we dismissed the appeal indicating that our reasons for doing so would be handed down in due course.  These are the reasons of the Court for dismissing the appeal.

A. The facts

3.  The appellant co-habited with her partner, surnamed Chu, who was the 1^st defendant (D1) at trial below, in premises at Euston Court, 6 Park Road, Hong Kong (“the Park Road flat”).  On 31 January 2011, D1 was seen by police in suspicious circumstances outside commercial premises in Yuen Long.  He was arrested and found to have in his possession equipment fit for stealing.

4.  A subsequent search led to the discovery, in the Park Road flat and in two bank safe deposit boxes under the appellant’s sole control, of a large quantity of jewellery, coins, foreign currency notes and other property believed to have been stolen in various burglaries, namely:

(1) 290 pieces of jewellery;

(2) 24 watches;

(3) 166 coins;

(4) 38 gold nuggets;

(5) 5 foreign exchange certificates;

(6) Cash of HK$399,737.20, RMB¥36,217.06, US$9,998, NTW$49,980, €13,515, $58,600 Argentine Peso, S/97,100 Peruvian Nuevo Sol and 10,000 Romanian Leu.

The total value of this property was estimated to be HK$3,962,358.20.

5.  The appellant was also found to have bank accounts with five banks in which, as at 1 January 2006, there was a balance of about HK$4.5 million and into which, between 1 January 2006 and 26 October 2011, a total of over HK$80 million and RMB¥2.6 million had been deposited.  Particulars of the five banks where the accounts were held, the total number of deposits and total amounts of deposits are set out in the Annex to this judgment.

B. The charges

6.  D1 and the appellant were charged in the same indictment with a total of seven charges.  D1 was charged alone with going equipped for stealing (Charge 1), burglary (Charges 2 and 3) and resisting a police officer in the execution of his duty (Charge 4), whilst the appellant was charged alone with handling stolen goods (Charge 5).

7.  Both D1 and the appellant were also charged together with handling stolen goods (Charge 6) and with dealing with property known or reasonably believed to represent the proceeds of an indictable offence[4] (Charge 7).

8.  At the close of the prosecution case at trial,[5] a submission of no case to answer in respect of Charges 6 and 7 was made by the defence.  The Judge gave leave to the prosecution to amend Charge 7 to add some of the property from Charge 6 to the particulars under Charge 7 and then found that there was no case for D1 and the appellant to answer in respect of Charge 6 but that there was a case for both to answer on amended Charge 7.

9.  So amended, the Particulars of Offence under Charge 7 read as follows:

“CHU Shue-lung and LI Shuk-woon, between the 1^st day January [sic], 2006 and the 26^th day of October, 2011, both dates inclusive, in Hong Kong, knowing or having reasonable grounds to believe that property, namely:

(i) deposited money in the sum of $8,730,235.76 Hong Kong currency and ¥2,212,789.71 Renminbi in account of Bank of China (Hong Kong) Limited held in the name of LI Shuk-woon;

(ii) deposited money in the sum of $15,216,450.17 Hong Kong currency, €1,750 Euro, £1,005 Pound Sterling, $800 Canadian currency, $20,582.09 United States currency and ¥435,818.65 Renminbi in account of Hang Seng Bank Limited held in the name of LI Shuk-woon;

(iii) deposited money in the sum of $36,966,989.83 Hong Kong currency in account of Citic Bank International Limited held in the name of LI Shuk-woon;

(iv) deposited money in the sum of $6,118,551.61 Hong Kong currency in account of Bank of East Asia Limited held in the name of LI Shuk-woon;

(v) deposited money in the sum of $12,452,452.44 Hong Kong currency in account of Public Bank (Hong Kong) Limited held in the name of LI Shuk-woon; and

(vi) concealed property, namely 290 pieces of jewelleries, 24 watches, 166 coins, 38 gold nuggets, one bank [sic] of China Foreign Exchange Certificate, cash of $399,737.2 Hong Kong currency, cash of ¥36,217.06 Renminbi, cash of $9,998 United States currency, cash of $49,980 New Taiwan currency, cash of €13,515 Euro, cash of $58,600 Argentine Peso, cash of S/.97,100 Peruvian Nuevo Sol and cash of 10,000 Romanian Leu, 3 gold nuggets and 10 gold coins.”

C. The proceedings below

10.  After trial, D1 was convicted by the Judge of Charges 1 to 4 and D1 and the appellant were both convicted of amended Charge 7.[6] The appellant was acquitted of Charge 5 by the Judge on the footing that her awareness of the status of the 13 items of stolen property particularised in the charge as stolen goods had not been proven.  D1 was sentenced to a total of 7 years’ imprisonment and the appellant was sentenced to 6 years’ imprisonment.

11.  As to amended Charge 7, D1’s defence was that the property in the Park Road flat and the two safe deposit boxes belonged to him and the appellant.  The appellant’s defence was that the money in the bank accounts was her earnings obtained legally and some of the property in the flat and safe deposit boxes belonged to her or were gifts from relatives or friends, whilst the rest was obtained by D1 by legal means before being passed to her.

12.  The Judge evaluated the evidence in relation to the deposits in the five bank accounts and considered the items of property particularised in amended Charge 7 by reference to three groups: Group A, being those the appellant claimed were gifts from relatives and friends (other than D1); Group B, being those she claimed to have purchased herself; and Group C, being alleged to be gifts from D1 and property kept on D1’s behalf.

13.  The Judge’s conclusion on amended Charge 7 was as follows:

“90. The prosecution has proved beyond reasonable doubt that D1 had, over the period of 70 months in question, dealt with the deposits in the said Hang Seng and Ka Wah accounts jointly with D2, and the majority of those deposits represented, directly or indirectly representing [sic] the proceeds of an indictable offence. The prosecution has already proved beyond reasonable doubt that D2 had, over the period of 70 months in question, dealt with the accounts invovled [sic], (including dealing with the said Hang Seng and Ka Wah accounts jointly with D1), and the majority of those deposits were property directly or indirectly representing the proceeds of an indictable offence.

91. The prosecution has proved beyond reasonable doubt that D1 had, over the period of 70 months in question, dealt with the exhibits of the above Group C, and those exhibits were property directly or indirectly representing the proceeds of an indictable offence. The prosecution has already proved beyond reasonable doubt that D2 had, over the period of 70 months in question, dealt with the exhibits of the above Groups A, B and C, and those exhibits are property directly or indirectly representing the proceeds of an indictable offence.” (Italics in original)

14.  On appeal,[7] both D1 and the appellant initially sought leave to appeal against the convictions and sentence but D1 later abandoned his applications.  On 4 February 2015, the Court of Appeal dismissed the appellant’s applications for leave to appeal against conviction and sentence.

15.  Neither at trial, nor before the Court of Appeal, was any argument raised on behalf of the appellant that amended Charge 7 was duplicitous or that there was any prejudice to her in the conduct of her defence to that charge by reason of duplicity.

D. Leave to appeal to this Court

16.  The appellant applied for leave to appeal to this Court on the basis of substantial and grave injustice, relying on various grounds.  As noted above, in the light of the appeals in Yeung, the Appeal Committee granted leave to appeal on the basis it was reasonably arguable that amended Charge 7 was duplicitous.  The Appeal Committee refused leave to appeal on the other matters raised by the appellant.[8] The sole issue in the present appeal, therefore, is concerned with the issue of the alleged duplicity of amended Charge 7.

E. Duplicity and money laundering

17.  In Yeung, the Court considered the issue of duplicity in relation to a charge of money laundering under section 25 of OSCO.  The Court held that it was not the case that criminal behaviour can never be treated as one offence for the purpose of rules 2 and 3 of the Indictment Rules[9] if it was capable of being broken down into a number of offences.  However, conversely, the prosecution does not have an unconstrained discretion such that an offence is constituted by whatever conduct the prosecution decides to make the subject of one charge.[10]

18.  The Court cited (at [135]) the following passage from the speech of Lord Diplock in DPP v Merriman[11] as stating the general principle:

“The rule against duplicity, viz. that only one offence should be charged in any count of an indictment, which is now incorporated in rule 4 (1) of Schedule 1 to the Indictments Act 1915, has always been applied in a practical, rather than in a strictly analytical, way for the purpose of determining what constituted one offence. Where a number of acts of a similar nature committed by one or more defendants were connected with one another, in the time and place of their commission or by their common purpose, in such a way that they could fairly be regarded as forming part of the same transaction or criminal enterprise, it was the practice, as early as the eighteenth century, to charge them in a single count of an indictment.”

19.  The crucial question is how to determine whether acts are so connected that they can fairly be regarded as forming part of the same transaction or criminal enterprise. The answer, given by the Court in Yeung at [138], is that:

“A judgment as to what can fairly be regarded as the scope of a criminal enterprise for the purpose of framing an indictment is likely to be affected by the nature of the crime, the circumstances of its commission, potential grounds of defence or exculpation, and the considerations of practice and procedure that will follow from adoption of one course or another.”

20.  In relation to charges of money laundering, the Court held that section 25 of OSCO does not create an offence of carrying on the business of money laundering, which would be a continuing offence giving rise to no question of duplicity.  It held that most of the forms of “dealing” set out in the definition in section 2 of OSCO involve conduct that would normally consist of a single act but that some forms of dealing, in particular concealing, could cover a continuing process and the individual acts could be undertaken as part of that process of concealment.[12]

21.  The principle in relation to a charge of money laundering was stated by the Court at [159] as follows:

“Where a number of acts of money laundering are connected in such a way that they can be regarded as forming part of the same transaction or criminal enterprise then it will be legitimate to charge them in a single count unless there is a risk of injustice to the defendant. Such injustice might lie in uncertainty or inadequate notice as to the case the defendant has to meet, confusion or prejudice resulting from different defences to different aspects of the prosecution case, problems of admissibility of evidence, or uncertainty as to the scope of an ultimate verdict. If these or other considerations that may be raised in a particular case are capable of being met, without unfairness, by appropriate measures of trial management then a court may well conclude that the rule does not prevent aggregation for the purpose of framing a charge or charges.”

22.  The aspect of concealment, in a charge of money laundering, is relevant to the duplicity argument because it may provide part of the connection which makes the individual acts of dealing of a similar nature which could fairly be regarded as forming part of the same transaction or criminal enterprise.[13]

23.  Even if a charge is duplicitous, it does not follow that the indictment or the relevant count is a nullity.  The duplicity can be cured by amendment at trial, either to a separate count for each offence or a group of charges depending on the defences raised.  Where the complaint of non-compliance with the rule against duplicity involves one of the forms of unfairness that the rule aims to prevent, then the trial judge may need to consider whether that problem can be addressed by available powers of trial management.[14]

24.  At [147], the Court held:

“When the point is raised for the first time on appeal, the appellate court will consider whether the objection based on duplicity is well-founded and whether the form of the indictment resulted in the risk of injustice. The appellate court will have the benefit of hindsight. It will know the nature of the defence case at trial, whereas a trial judge may have had to consider potential unfairness on the basis of the charges and particulars, and the prosecution opening. It will have the trial judge’s reasons for verdict. If no complaint about duplicity was made at trial that may have a bearing on a claim of unfairness.” (Footnote omitted)

F. The contentions raised on this appeal

25.  As noted above, the appellant’s complaint of duplicity was not raised at trial or in the Court of Appeal.  It was raised for the first time in this Court.  Mr Andrew Bruce SC,[15] on behalf of the appellant, realistically accepted that this Court’s decision in Yeung limited the scope of argument that might be advanced in this appeal.  However, he contended that the circumstances of the present case did not fall within the concept of “an enterprise” as discussed in Yeung because the offence pleaded in amended Charge 7 took place over a period of 70 months and, unlike Yeung where there was only one form of property, namely money, here the subject properties particularised in the charge included deposits in 5 bank accounts, hundreds of pieces of concealed property and cash in different currencies.

26.  Mr Bruce submitted that the prosecution’s case against the appellant concerning the deposits in the bank accounts did not involve proof of any predicate offence but, instead, proceeded on an invitation to the Judge to consider the background of the appellant and her relationship with D1 to draw the adverse inference against her regarding her mens rea for the offence.  Only a portion of the property particularised in the charge was identified by prosecution witnesses as having been stolen and the prosecution’s case against the appellant in respect of the remaining property was simply based on her possession of them without any examination of the circumstances in which they came into her possession.

27.  It was therefore submitted that, had amended Charge 7 been appropriately amended to avoid offending the rule against duplicity, the Judge would have had to consider the state of mind of the appellant at different times and in different circumstances according to the approach laid down in HKSAR v Pang Hung Fai,[16] whereas the Judge in fact adopted a global approach in assessing the evidence before him.  This, it was ultimately submitted, resulted in the appellant not receiving a fair trial such that substantial and grave injustice was done to her.

G. Were the acts charged part of the same transaction or criminal enterprise?

28.  The proper application of the rule against duplicity in the context of a charge under section 25 of OSCO is now that laid down in Yeung as summarised in Section E above.  As there noted, the rule does not give the prosecution an unconstrained discretion to amalgamate any conduct into one single charge.  There must be a sufficient connection between the acts charged together such that they may fairly be regarded as forming part of the same transaction or criminal enterprise.

29.  In the present case, we were satisfied that there was a sufficient connection between the separate acts of dealing with the funds deposited in the appellant’s bank accounts, as well as the jewellery and other property discovered in the Park Road flat and her safe deposit boxes.  We were also satisfied that the appellant had dealt with the property particularised in amended Charge 7 as part of a continuing activity, the common purpose of which was to conceal the funds or property from an illicit source in her control or custody, whether in her bank accounts, safe deposit boxes or home.

30.  For the purposes of the present appeal, we would accept the contention advanced in the respondent’s written submissions that the conduct particularised in amended Charge 7 was such as fairly to be regarded as part of the same criminal enterprise.  This conclusion is justified in the present case due to the particular circumstances of the appellant’s co-habitation with D1 in the Park Road flat and her control of the funds in the bank accounts and her control and custody of the property in her safe deposit boxes and the Park Road flat, all of which funds and property, it was alleged by the prosecution, were dealt with by the appellant for the purpose of concealing their illegitimate sources for the benefit of her and D1.  The illegitimacy of those sources was clearly suggested by the lack of any documentary evidence to support either the appellant or D1 having the amount of property particularised in the charge and from her and D1’s earnings and occupations not being commensurate with the amounts of money and value of property involved.

31.  Of particular relevance, in the present appeal, is the lack of any prejudice to the appellant in the conduct of her defence at trial, or her appeal to the Court of Appeal. There was no objection to the form of amended Charge 7 at trial and the appellant’s case was that all of the funds and property particularised in that charge had a legitimate provenance to which she testified at the trial.  The trial took place before a judge alone and, in his Reasons for Verdict, he gave detailed reasons for his findings in relation to this charge by reference to the appellant’s different explanations.

32.  Applying the approach in Yeung,[17] we therefore concluded that amended Charge 7 was unobjectionable and did not offend against the rule against duplicity.  Having said that, we would make the observation that, given that the property the subject of the charge consisted of distinct types, namely money and other personal property, and was held in different places, had the question of how to charge the OSCO section 25 offence arisen before trial, a better prosecutorial approach might have been to prefer separate charges for (i) the funds in each of the bank accounts, (ii) the personal property found in the Park Road flat and (iii) the personal property found in each of the safe deposit boxes.  This would have catered for the possibility of a different defence in respect of each of these discrete forms of property dealt with by the appellant.  As it transpired, however, the same defence was advanced in respect of all the property charged, so this better approach would not have been more advantageous in the present case.  Nevertheless, depending on the facts in other cases, an omnibus charge of the type preferred here can potentially give rise to a risk of unfairness due to the inherently duplicitous nature of such a charge.

H. Conclusion

33.  For these reasons, the appeal was dismissed.