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

CACC 185/2021

[2022] HKCA 1059

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 185 OF 2021

(ON APPEAL FROM HCCC NO 309 OF 2019)

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JUDGMENT

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Hon M Poon JA (giving the Judgment of the Court)

Introduction

1.  In 2016, the respondents (hereafter referred to as D1, D2 and D3), who were indicted for multiple charges of conspiracy to defraud and money laundering, were convicted of the charges. Their convictions were subsequently quashed by the Hong Kong Court of Final Appeal. The case was ordered to be remitted to the Court of First Instance for retrial. The retrial was heard before Deputy High Court Judge Bruce SC (the “Judge”) and a jury.

2.  Mr Kerry Joel Knight gave evidence as a prosecution witness on 7 June 2021, which was Day 57 of the re-trial. In the course of his evidence-in chief, he revealed that (1) D2 had been convicted; (2) she had served time in jail; and (3) she had been released from prison and was in a retrial. That caused a joint application to discharge the jury to be made on 8 June 2021. On 15 June 2021, the Judge discharged the jury and the retrial was aborted. The Judge ruled that while Mr Knight’s revelation of the result of the previous trial was inadvertent,[1] the prejudice to the respondents posed by the said testimony was substantial.[2] An application for costs of the retrial was made by the respondents pursuant to section 4 and alternatively, section 17 of the Costs in Criminal Cases Ordinance, Cap 492 (the “Ordinance” or the “CCCO”).

3.  On 6 August 2021, the Judge held that he had jurisdiction to award costs under section 4 of the Ordinance in the circumstances and he exercised his discretion in favour of granting costs to the respondents (the “Costs Order”).

4.  On 19 August 2021, the appellant filed its notice of appeal against the Costs Order.

The Judge’s ruling on the costs application

5.  On the issue whether the Court had jurisdiction to award costs under section 4 of the Ordinance in the circumstances, the Judge held that:[3]

“38. …In my opinion, the use of the words “not tried” clearly suggests a liability for costs until the accused becomes “tried”, that is at the conclusion of the trial. Although section 4 does not define the conclusion of the trial it clearly links with section 5 which speaks of costs on an acquittal after trial. Indeed, the use of the phrase “after trial” in section 5 carries with it the implication that section 4 is meant to cover the position after committal or transfer up until the time which could be characterised as “after trial” has arrived.

39. The prosecution argued, as noted above, that consistent with all the other provisions in Part II of the Ordinance, in order to found jurisdiction to award costs, there is a concluding event in each section. For example, the argument was that the concluding event in section 5 was an acquittal after trial. The problem with the argument of the prosecution in relation to section 4 was that there was no concluding event that could be identified which could not have happened at some stage after a trial had gone for some time possibly for many months. Obviously a nolle prosequi could happen at the beginning of the trial process. However, it could equally occur at any stage until verdict. Normally, the order to leave a charge or indictment on the file not to be proceeded with without leave occurs at the beginning of the proceedings. That almost invariably occurs at the beginning of the proceedings but there is no reason in principle why it could not occur at a later stage. On the prosecution argument, if a nolle prosequi was entered before the jury was sworn then a Court would have jurisdiction to at least consider the issue of costs under section 4. Sometimes, but not invariably, a nolle prosequi is entered at the beginning of proceedings. However, on that argument, the minute proceedings moved beyond that point but never reached the point of an acquittal, the Court had no jurisdiction. The same analysis, on the prosecution argument, applies where there is a stay of proceedings before a jury is empanelled but not after or where there is a finding that an accused is unfit to conduct a trial. Again, normally, that is determined before a trial commences but as history demonstrates (see Spens and Stewart) that is not always the case. The question has, nevertheless, been correctly put by the prosecution: when is the concluding event in section 4? The answer is provided by the section itself: when the accused has been tried which is the opposite of being not tried.

40. In my opinion, as a matter of construction, the accused in the present case were undergoing a trial but could not have been regarded as having been tried because that carries with it the implication of bringing the process of being tried to a conclusion. Accordingly, I am of the opinion that section 4 of the Ordinance gives the Court jurisdiction to award costs to an accused person where the jury has been discharged while that accused is undergoing trial.”

6.  The Judge made it clear that the basis upon which he exercised his discretion under section 4 to award costs to the respondents was solely to compensate the respondents for the conduct of the retrial ordered by the Court of Final Appeal.[4]

7.  In respect of the alternative basis of the respondents’ costs application under section 17 of the Ordinance, the Judge found the questions (which elicited Mr Knight’s answers) were relevant, and so the preconditions for the application of that section did not exist.[5]

Grounds of appeal

8.  Two grounds of appeal against the Costs Order are advanced by the appellant. Ground 1 avers that the Judge erred in finding that section 4 of the Ordinance gives the Court jurisdiction to award costs to the respondents. Further or in the alternative to Ground 1, Ground 2 avers that the Judge erred in the exercise of his discretion in awarding costs of the retrial to the respondents in the terms he imposed.

The appellant’s submissions

9.  Ms Vinci Lam, on behalf of the appellant, submits that there is no inherent jurisdiction to award costs in criminal cases and the Court’s jurisdiction to award costs depends entirely on statute. It is submitted that the wording in section 4 of the Ordinance stipulating that the defendant may be awarded costs if he or she “is not tried” in the District Court or the Court of First Instance is unambiguous. Emphasis is placed on the word “is” before the words “not tried” connoting that “not tried” indicates a singular event or prerequisite before section 4 can be invoked. It is contended that the term “not tried” must mean that the defendant’s trial has not started and if started, has not concluded and will not conclude with a verdict in the future. In the alternative, the appellant relies on statements made in the legislature before and during the passage of the legislation to ascertain the purpose of enacting section 4. Ms Lam submits that the legislative material shows that the section is intended for circumstances where a defendant is not tried due to a procedural event, instead of conferring a more general power to award costs any time between committal or transfer until the conclusion of trial. It is argued that examples which can fall within the ambit of the section include where a case is stayed, the Secretary of Justice declines to file an indictment under section 15 of the Criminal Procedure Ordinance, Cap 221 (“CPO”), a nolle prosequi has been entered into, or the prosecution withdraws the charge, but not in the circumstances in the present case. There are no other provisions of the Ordinance that cater for the circumstances of the present case which can provide jurisdiction for the granting of costs of the retrial to the respondents.

10.  Ms Lam submits that the appellant’s construction of section 4 is consistent with the existing authorities in Hong Kong and England and Wales. She relies on HKSAR v Lee Ming Tee[6], section 16(2) of the Prosecution of Offences Act 1985, R v Central Criminal Court ex part Lord Spens[7] and R v Stewart[8].

11.  In Ground 2, Ms Lam argues that the Judge erred in using compensation as a basis for determining liability under section 4 as that would produce an absurd result entitling a defendant to apply for costs at any time during the trial before a verdict is reached. Ms Lam highlights the fact that leading counsel for the prosecution was simply performing proper trial duties and the questions asked were both relevant and necessary. It was the prosecution witness who volunteered the unsolicited impugned evidence. All these, it is submitted, militate against adopting compensation as the starting point.

The respondents’ submissions

D1’s submissions

12.  Mr Tim Owen QC accepts that there is no inherent jurisdiction to grant costs. However, he advocates for a purposive interpretation of section 4 of the CCCO. He submits that the purpose of enacting the CCCO can be gauged from the General Principles as set out in section 15(c), that “an order as to costs shall be such as a court or a judge considers just and reasonable” and in section 15(a), “…shall not be punitive but …reasonably sufficient to compensate any party to the proceedings for any expenses properly incurred by him…”. Mr Owen relies on the normal practice regarding successful appeals against conviction that “an order should be made unless there are positive reasons for not making an order”.[9]

13.  He submits that section 4 of the Ordinance is not limited to situations where a defendant has not stood trial at all. Rather, it is engaged whenever proceedings do not result in a verdict and it is contended that the word “tried” necessarily means a process whereby the guilt or innocence of an accused has been ascertained, so “is not tried” would mean that there is no determination of guilt or innocence and covers the circumstances of the present case.

14.  Mr Owen further submits that a construction which leaves the respondents uncompensated for costs reasonably incurred in proceedings which were aborted through no fault of theirs produces absurdity and could not have been the legislative intent. He relies on HKSAR v Wong Tsz Yuk[10]and contends that the CCCO is intended to cover all eventualities in a criminal matter at First Instance and seeks to resolve all the anomalies and lacunae which existed previously in the law and practices relating to costs in criminal cases and to provide a complete and self-contained code on the applicable law and practices for all costs orders.

15.  We are referred to section 16(2)(a) of the Prosecution of Offences Act 1985 (the “POOA”) from which section 4 of the Ordinance originated. We are invited to compare the POOA against its predecessor, section 12 of the Costs in Criminal Cases Act 1973 (the “CCCA”). It is submitted that the side note in the CCCA “Awards where prosecution not proceeded with” is left out in the POOA and the words “not ultimately tried” were replaced by “is not tried”. Therefore, it is contended that this shows that there is no longer any requirement of finality in section 16 of the POOA and it confers a far wider jurisdiction for costs to be awarded to the defence.

16.  Lastly, Mr Owen submits that, on the assumption that the Judge had jurisdiction to award costs as argued, he exercised his discretion properly and correctly in favour of the respondents.

17.  The second respondent, acting in person, and counsel for the third respondent adopt the submissions of Mr Owen.

Discussion

18.  Costs in criminal cases are governed by statute. There is no inherent jurisdiction to award costs. The provisions in the CCCO is now the only basis for founding the jurisdiction for awarding the costs in question: paragraph 33, HKSAR v Wong Tsz Yuk. Macrae J (as Macrae VP then was), said in Secretary for Justice v N[11]:

“25. …there is no general right to costs in criminal cases. The CCCO delineates in specific terms the particular circumstances in which a costs order might be made in criminal proceedings. If a party to proceedings cannot bring himself within a particular section of that Ordinance, he cannot obtain an order for costs.”

19.  The respondents sought to bring themselves within section 4 and the Judge found that there is jurisdiction and exercised his discretion accordingly. The Judge referred to the case of HKSAR v Lee Ming Tee[12]. This was a trial which was aborted after a 76-day hearing. Counsel for the defence and prosecution both conceded that the court had no power to make a costs order simpliciter, whether by statute or in the court’s inherent jurisdiction. The Judge said:

“34. …A fair reading of the judgment is that Seagroatt J was plainly influenced by the concession of leading counsel that section 4 could not avail the accused in that case... It appears that Seagroatt J did not have the advantage of the arguments that have been heard in the present proceedings. While this Court is not strictly bound by the decision in Lee Ming Tee & Anor the principles of judicial calamity [comity] enjoin (sic) this court to accord great respect to that judgment.

…

38. … With respect to the judgment of Seagroatt J, I agree with his conclusion but not his reasoning. In my opinion, the use of the words “not tried” clearly suggests a liability for costs until the accused becomes “tried”, that is at the conclusion of the trial…”

20.  The present appeal turns on the correctness of the Judge’s interpretation of section 4 of the CCCO. Section 4 reads:

“Defence costs if not tried

Where a defendant is not tried for an offence for which he has been indicted or committed for trial, the District Court or the Court of First Instance may order that costs be awarded to the defendant.”

21.  Mr Owen invites this court to take a purposive construction. He refers us to the principles laid out in section 15 in awarding costs as a tool to interpret section 4. This, in our view, is not the correct approach. The general principles provide guidance as to how a court should exercise discretion in awarding costs judiciously. However, the discretion only arises when there is jurisdiction. It is wrong to use the general principles to confer jurisdiction and to do so is to put the cart before the horse.

22.  We pause here to quote a passage in China Field Ltd v Appeal Tribunal (Buildings) (No 2)[13]:

“…There can be no quarrel with the principle that statutory provisions should be given a purposive interpretation, but there has been a distressing development by the courts which allows them to distort or even ignore the plain meaning of the text and construe the statute in whatever manner achieves a result which they consider desirable. It cannot be said too often that this is not permissible. Purposive construction means only that statutory provisions are to be interpreted to give effect to the intention of the legislature, and that intention must be ascertained by a proper application of the interpretative process. This does not permit the Court to attribute to a statutory provision a meaning which the language of the statute, understood in the light of its context and the statutory purpose, is incapable of bearing.”

23.  In the recent judgment of HKSAR v Chan Chun Kit[14], the Court of Final Appeal provided useful guidance on the context and the purpose of a statutory provision to be taken into account during statutory interpretation[15]:

“10. The rules of statutory construction are well established. Words are construed in their context and purpose. They are given their natural and ordinary meaning with context and purpose to be considered alongside the expressed wording from the start, and not merely at some later stage when an ambiguity is thought to arise. A purposive and contextual interpretation does not mean that one can disregard the actual words used in a statute. Rather, the court is to ascertain the intention of the legislature as expressed in the language of the statute. As has been repeatedly pointed out, one cannot give a provision a meaning which the language of the statute, understood in the light of its context and purpose, cannot bear …There can be no quarrel with the principle that statutory provisions should be given a purposive interpretation, but there has been a distressing development by the courts which allows them to distort or even ignore the plain meaning of the text and construe the statute in whatever manner achieves a result which they consider desirable. It cannot be said too often that this is not permissible. Purposive construction means only that statutory provisions are to be interpreted to give effect to the intention of the legislature, and that intention must be ascertained by a proper application of the interpretative process. This does not permit the Court to attribute to a statutory provision a meaning which the language of the statute, understood in the light of its context and the statutory purpose, is incapable of bearing.

11. Context here is to be taken in its widest sense and includes other statutory provisions and the general law. The purpose of a statutory provision may be evident from the provision itself, the recommendation of a report such as that published by the Law Reform Commission, the explanatory memorandum to the relevant bill or a statement by the responsible official of the government in relation to that bill in the Legislative Council. It may also be relevant in any given case to look at the history of the provision concerned”

24.  The legislative history to the enactment of CCCO has been analysed in detail by Poon J (as Poon CJHC then was) in the case of Wong Tsz Yuk. It is useful to set out paragraph 38 in full:

“In my judgment, when viewed against the legislative history leading to the enactment, the overall purpose and the extent of reform introduced, CCCO and CCCR is, patently, a complete and self-contained code on the applicable law and practices for all the costs orders that they specifically provide for, aiming at removing all the anomalies and inconsistencies, insofar as those costs orders are concerned…”

25.  The words “all the costs orders that they specifically provide for” render Mr Owen’s contention that the CCCO is intended to cover all eventualities in a criminal matter at First Instance and seeks to resolve all previously existent anomalies and lacunae unsustainable. It is our view that the word “tried” should be given its ordinary and natural meaning in the light of the purpose of the legislation. The contextual setting of the CCCO has to be looked at as a whole.

26.  Part II (sections 3 to 10) and Part III (sections 11 to 14) of the CCCO deal with defence and prosecution costs respectively. Section 3 applies to summary proceedings where “an information or complaint … is not proceeded with”; a magistrate “… determines not to commit the defendant for trial”; “…summarily dismisses the information…”; or on review takes a certain course. Sections 4 to 9 respectively provide for defence costs if not tried; in case of acquittal or partial acquittal on multiple charge; on discharge after committal without a hearing; where a judge allows an appeal from a magistrate; where an appeal is allowed by the Court of Appeal. A common theme that runs through these sections is that the proceedings have come to an end, likewise for the sections governing the award of costs to the prosecution.

27.  Therefore, contextually, to construe section 4 as conferring open-ended jurisdiction to award costs so long as a trial has not concluded with a verdict as advocated by Mr Owen would be inconsistent with the spirit of the CCCO.

28.  We now turn to the Chinese language text of section 4, which, came into operation at the same time as the English language text[16] and by virtue of section 10B of the Interpretation and General Clauses Ordinance, Cap 1, is as equally authentic and has equal status as the English language text. It says:

“在未經審訊的案件中的辯方訟費

凡被告人已就某罪行被提起公訴或交付審訊，但其後並無就該罪行接受審訊，區域法院或原訟法庭可命令將訟費判給被告人。＂

29.  It is thus clear and unambiguous that the words “is not tried” has to be read together with “其後並無就該罪行接受審訊” in Chinese and in English, “is not tried for an offence for which he has been indicted or committed”. The words “for an offence” in the section shed light on why the appellant’s interpretation of the meaning of “is not tried” is to be preferred. Ms Lam avers that these words, taken together, do not just confine the time frame to before arraignment in the Court of First Instance or plea taking in the District Court. The prerequisite to invoking jurisdiction in that section is that a defendant so indicted or committed “is not tried for an offence for which he has been indicted or committed”, which clearly indicates that the proceedings against the defendant for that offence have come to an end without the defendant being tried. This covers the situations where there is finality, for instance, when the prosecution enters a nolle or offers no evidence, or the court orders a stay. This construction of section 4 sits comfortably with the English authorities of ex part Lord Spens and R v Stewart.

30.  (1) In ex part Lord Spens, Henry J made an order to permanently stay the prosecution and to leave the matter on the court file marked “not to be proceeded with”, but he refused an order for costs on the basis that Lord Spens had brought the prosecution on himself. Henry J directed himself in accordance with a Practice Direction worded similarly to section 16(2) of the POOA. Glidewell LJ made the remark (p.9) that “the order of Henry J was intended to, and did, prevent there being any trial of Lord Spens on these charges in future”. (2) The case of Stewart concerns section 16 of the POOA. Before the commencement of trial, prosecution and defence psychiatrists were of the view that it would be difficult for the defendant to cope with a prolonged trial and the trial judge made an order staying the proceedings[17]. Senior Costs Judge Hurst said:

“23. …In the case of this defendant he has been indicted and there has been no trial. Proceedings are stayed and the Crown confirm that the prospect of the trial being resumed, should the defendant recover, may be discounted. …since the Act clearly contemplates such an order being made only once the proceedings have concluded. I am satisfied that for the purpose of this application these proceedings may be treated as having concluded.” (At page 509)”

31.  These two cases lend support to the appellant’s construction that the jurisdiction to invoke section 4 only arises where there is finality relating to the offence/s that were indicted or committed.

32.  At the hearing, we asked Mr Owen for legislative materials to support his submission that the difference in wordings between section 16 of the POOA and section 12 of the CCCA connotes a change in legislative policy to remove the finality requirement. He concedes that no such material is available and that his submission is only based on a change in the wordings alone. It is our view that the fact that the word “ultimately” did not find its way into the succeeding section 16(2) of the POOA does not mean that the legislature has changed its policy to dispense with the requirement of finality so as to give the court a free hand to award costs open-endedly.

33.  We also look to other sections in Part IV of the CCCO. Section 17, which provides for costs unnecessarily or improperly incurred, uses the words “where at any time in the course of criminal proceedings”. In section 18 which provides for liability of legal or other representatives for wasted costs, the words “in any criminal proceedings” are used. They are worded differently from section 4. The judge’s construction of section 4 renders these two sections otiose.

34.  We have referred ourselves to the submission made by Mr Owen in the court below that there is “undoubtedly” a power to make an order for costs under section 4 when a jury is discharged without verdict and the courts “do all the time”[18]. We asked Mr Owen for authorities directly on that point to support this contention. Mr Owen tells us that he cannot think of a case either in England or in Hong Kong and he “just got carried away” in his submissions. Ms Lam concurs that she cannot find any such authorities and submits that had there been such cases the present appeal would not be the first of its kind.

35.  Mr Owen submits that the interpretation of section 4 by the appellant produces a perceived anomaly that whilst a person going through a trial “is tried”, he will suddenly become “not tried” if later the prosecution decides that it is not going to continue. We are of the view that this contention is misconceived. A defendant who faces trial is being tried for an offence but should a final event occur rendering a verdict or further trial unnecessary, then he is “not tried for an offence for which he has been indicted or committed” for the purpose of section 4. There is no anomaly as suggested.

36.  The suggestion that costs can be awarded to a defendant whenever there is a split or hung jury regardless of whether there will be a retrial cannot be correct. This open-endedness which entitles a defendant to apply for costs at any stage of the proceedings before verdict leads to absurdity and is fraught with difficulties.

37.  Mr Owen submits that the appellant’s construction of section 4 leaves a lacuna whereby his client would be deprived of legal costs reasonably incurred in a trial aborted through no fault of his when he has to face a trial all over again. Litigation risks is something that all litigants have to bear. Remedies for costs to compensate defendants who are acquitted after trial or on appeal are provided in other sections of the Ordinance. Counsel for the prosecution at the costs application rightly submitted that it was premature for the respondents to apply for costs at that stage when the prosecution insisted on a retrial and the stay application had not been dealt with.

38.  Lastly, in the case of Lee Ming Tee, Seagroatt J acknowledged that there was no express provision for the payment of defence costs in the circumstances under consideration but awarded costs in exercise of his “unfettered discretion”. As we have indicated earlier, there is no jurisdiction to award costs unless one can bring oneself within the sections in the CCCO. The ruling on costs in Lee Ming Tee must be overruled.

39.  We would like to conclude by quoting the following passages in T v Commissioner of Police[19]:

“195. …the object of the exercise is to ascertain the legislative intent of the language of the statute and, in this regard, a court cannot attribute to a statutory provision a meaning which the language, understood in the light of its context and statutory purpose, cannot bear…

…

278. …The issue is one of statutory interpretation, and I agree with Ribeiro and Fok PJJ that the statutory language must be interpreted in the light of its context and purpose, as laid down in the cases to which he refers… However, …that should not be seen as a judicial licence to ignore or refuse to give effect to the words which the legislature has chosen to use: when construing an Ordinance, the court is an interpreter not a legislator. …”

Disposal

40.  Section 4 of the Ordinance does not cover the circumstances of the present case. The Judge erred in finding that he has jurisdiction to award costs under that section. It is therefore not necessary for us to deal with Ground 2. We allow the appeal and set aside the Costs Order accordingly.

41.  The appellant applies for costs of and incidental to this appeal and the costs application before the Judge with certificate for three counsel. We hereby direct parties to file written submissions (which should contain submissions on s. 19(4) and (5) of the CCCO) within 14 days of the handing down of this judgment and the application will be dealt with on paper.