HKSAR v. MAN CHAI WAH

CACC 513/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 513 OF 2001

(ON APPEAL FROM DCCC NO. 1152 OF 2000 )

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J U D G M E N T

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Hon Yeung JA (giving judgment of the Court):

1. The appellant, Man Chai Wah was the General Manager of Hung Fung Engineering Ltd (Hung Fung) and Cheng Tak-wai (Cheng), its Assistant Purchasing Manager. The prosecution alleged that in contravention of the terms of a contract between Hung Fung and China Sate Construction Engineering Corporation (CSCE), the appellant and Cheng supplied CSCE with 1.5mm thick cladding plates instead of the specified cladding plates of 2 mm thickness. The cladding plates were subsequently fitted onto the external walls of a building.

2. Arising out of the aforesaid matter, the appellant and Cheng appeared before Deputy District Court Judge Mackintosh on a charge of conspiracy to defraud.

3. The appellant and Cheng pleaded not guilty but were both convicted as charged. On 28 September 2001, Deputy Judge Mackintosh sentenced each of them to 200 hours of community service. Deputy Judge Mackintosh also ordered each of them to pay the prosecution costs of $100,000.

4. In his reasons for sentence, Deputy Judge Mackintosh sought to justify the costs order in the following terms:

"You have heard me mention the issue of costs already in the course of counsel's submissions. The costs of bringing this case to court have, on any view, been substantial. It is not just the question of a trial, it is the question of the fact that you have committed the offences which has led to the necessary investigations and the necessary legal proceedings. You have not done anything to keep those costs down by exercising your right to a trial. You are perfectly entitled to that. But it seems to me that in the circumstances of the case some contribution to the substantial public costs, which exceed $1 million overall, should be made by each of you. I emphasise to you that this is not part of any penalty because it is merely compensatory, merely compensating the government for some the costs. And the order which must be one that I consider to be just and reasonable in all the circumstances. It is an order that creates a civil debt by you to the government which the government can enforce as it sees fit."

5. The estimate costs of $1 million reflected the costs of investigation and trial preparation by the ICAC of $990,000 and the costs of the trial itself of about $90,000.

6. On 14 November 2001, Cheng appealed against the costs order out of time. He said he was heavily indebted and was unable to meet the costs order.

7. On 17 September 2002, this Court allowed the appeal and quashed the costs order against Cheng (See HKSAR v Cheng Tak Wai [2002] 4 HKC 458).

8. On 3 November 2003, the appellant also appealed against the costs order out of time despite the fact that he had settled the costs order by three monthly installments in April, May, and June 2002.

9. The installment payments were made pursuant to a settlement agreement between the appellant and the respondent after the respondent obtained a charging order charging the costs of $100,000 against a property registered in the appellant's name.

10. In support of his appeal, the applicant has explained the background leading to the settlement of the costs order. In particular, the appellant suggests that he was in financial difficulty as he had borrowed heavily to engage a lawyer to represent him at the trial. He also seeks to explain the delay as he only learned of the successful appeal against the costs order by Cheng in June 2003 through a letter from the respondent. The fact that the appellant was allowed to pay the costs by installment is perhaps also an indication of his financial difficulty.

11. Initially, the appellant hoped to obtain a refund from the respondent in order to save costs. However, he was advised that the respondent could not do it without a proper court order.

12. Mr. Hanif Mohamed Mughal, on behalf of the appellant, argues in his written submission that the costs order is punitive in nature and does not reflect the respondent's costs incurred in the proceedings. He further submits that in making the costs order, Deputy Judge Mackintosh had failed to make any or any sufficient inquiry into the appellant's means to determine if he could meet the costs order.

13. An accused in a criminal case is entitled to put the prosecution to proof of the case against him and a costs order should not normally be made against an accused who exercises such right. It is only in exceptional circumstances that an accused should be ordered to pay the costs of the prosecution. (See HKSAR v Chan Kwok Wah [1999] 1 HKC 697, HKSAR v Chim Pui-chung & Others HCCC 133 of 1997)

14. Whilst a judge or a magistrate has discretion, an order for costs should normally only be made against an accused when the way in which the accused approaches the investigation and/or the prosecution of the case constitutes an abuse resulting in the prosecution having to incur extra costs which, in the normal course of event, would not or need not be incurred. (See HKSAR v Chan Kwok-hung HCMA 707-714 of 2000)

15. Mr. David Leung for the respondent fairly points out that the appellant did not dispute much of the prosecution's case at the trial. Mr. Leung also concedes that there were no special circumstances on the facts of the case to justify the imposition of costs against the appellant. Mr. Leung only emphasizes on the delay in which the appellant prosecutes this appeal.

16. We do not find it necessary to repeat what we said in HKSAR v Cheng Tak-wai (supra) except that a lot of what we said applies equally to the appellant.

17. The appellant had not unnecessarily hindered the investigation and/or prosecution against him. Deputy Judge Mackintosh had not inquired into the financial ability of the appellant before making the costs order. The appellant appeared also to be in financial difficulty as demonstrated in his affirmations and that of his sister placed before us today in support of this appeal.

18. In all the circumstances, we are persuaded that the costs order was not just and reasonable.

19. Accordingly we allow the appeal and quash the costs order against the appellant.