HKSAR v. JARIABKA JURAJ

CACC 321/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 321 OF 2014

(ON APPEAL FROM DCCC NO. 54 OF 2014)

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J U D G M E N T

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Hon Lunn VP (giving the Judgment of the Court) :

1. With the leave of McWalters JA granted on 24 November 2015, the appellant appeals against his conviction on 8 September 2014, after trial by District Court Judge Dufton, of an offence of inciting Mr Antonio Aldo Papaleo between 10 May and 14 June 2013 to deal with property known or believed to represent proceeds of an indictable offence, contrary to Common Law and section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455 (“OSCO”). Also, again with the leave of McWalters JA, the appellant appeals against the sentence of 4 years’ imprisonment imposed on him in consequence of his conviction.

The charge

2. The Particulars of Offence of the charge stated :

“ Jariabka Juraj, between the 10th day of May, 2013 and the 14th day of June, 2013, both dates inclusive, in Hong Kong, unlawfully incited Papaleo Antonio Aldo to deal with property, namely the chose in action owed to Vindex (HK) Limited and/or East Ray (HK) Limited by Hong Kong bank, knowing or having reasonable grounds to believe that the property, in whole or in part directly or indirectly represented the proceeds of an indictable offence.”

3. Following the arraignment of the appellant the prosecution provided further particulars.  First, counsel said that the reference in the Particulars of Offence to the phrase “chose in action” was to the monies which would be deposited in the bank accounts once those accounts were opened.  Secondly, the phrase “Hong Kong bank” was a reference to Hong Kong banks generally.[1]

The prosecution case

4. Mr Papaleo testified that he was an Italian national who lived and worked as a freelance journalist in Slovakia.  He was interested in pursuing investigative journalism into financial crime and posed as a corrupt journalist who had serious drug and alcohol problems.  In early May 2013, he was approached by his acquaintance Jozef Drlicka who told him of a Slovakian friend working in Hong Kong, who turned out to be the appellant, who needed help to conduct his business in Hong Kong.  The business was illegal, but not criminal in that it did not involve guns or dangerous drugs.

5. Mr Papaleo testified that he had video recorded some of the subsequent meetings that he had with the appellant, some of which videos and related transcripts were produced at trial.

6. On 10 May 2013, Mr Papaleo met the appellant in the Goblin pub in Bratislava, Slovakia together with Jozef Drlicka.  Mr Papaleo was asked to go to Hong Kong to acquire a company and open a related bank account.  His assistance was required because someone was needed who was not Slovak and also because Jozef Drlicka had a recently issued passport, which was not useful for what was proposed.  The appellant told him that he would be given travelling and accommodation expenses to go to and stay in Hong Kong.  After he returned to Bratislava and handed over control of the companies and the bank accounts to the appellant, he would be paid €5,000.

7. On 14 May 2013, Mr Papaleo came to Hong Kong.  At about 9:00 a.m. the following day he met the appellant in the IFC Mall.  There, the appellant provided him in writing with the name of two companies, namely Vindex (HK) Limited and East Ray (HK) Limited, which he asked him to incorporate and then to open bank accounts in their names.  The appellant provided him with the telephone number of Offshore Incorporations. He was told that, if asked, he was to say that the business of the companies involved publishing and buying and selling LED light products.  Further, the appellant said that, if he was asked, he could say that the two companies could have a turnover of €1 million.

8. Having been told by the first corporate services business that he approached that it would take three or four days to incorporate a company, Mr Papaleo was told by the appellant to approach Acorn Business Services.  He did so and acquired the two companies the next day.  He paid the $14,000 fees with money that he had been given by the appellant.  Mr Papaleo was warned not to open the bank accounts with HSBC because of the anti-money laundering views of the bank.

9. Although Mr Papaleo acquired the two companies, he did not open the bank accounts in the company names.  He gave the appellant various untrue excuses for not opening the bank accounts.  Mr Papaleo and the appellant returned to Bratislava.  However, he agreed to return to Hong Kong to continue his efforts to open a bank account and arrived in Hong Kong on 11 June 2013.

10. In June 2013, Mr Papaleo reported the matter to the Hong Kong police.  On 14 June 2013, the appellant was arrested in the company of Mr Papaleo when they met in the IFC Mall.

11. The prosecution case was that the appellant had incited Mr Papaleo to deal with property by concealing the true identity of the person in control of the bank accounts and thereby the true owner of the monies to be deposited in the bank accounts, knowing or having reasonable grounds to believe that the monies passing through the accounts, in whole or in part directly or indirectly represented the proceeds of an indictable offence.

The defence case

12. The appellant elected to give evidence and testified that he was involved in running various businesses.  In May 2013, he entered into an agreement with his long-standing friend Jozef Drlicka to conduct business in Hong Kong.  In order to do so, it was decided to incorporate two companies in Hong Kong.  One company was to trade in LED lighting and the other in publishing.  Originally, it was intended that Jozef Drlicka would incorporate the companies and manage the Hong Kong operation but, as Jozef Drlicka did not have a passport, Mr Papaleo was asked to go to Hong Kong to incorporate the companies and open the bank accounts on Jozef Drlicka’s behalf.  That request was made of him at a meeting of the three of them at the Goblin pub in Bratislava in May 2013.  It was intended that once Jozef Drlicka was able to travel to Hong Kong, Mr Papaleo would hand over control of the two companies and the bank accounts to him.  The appellant said that he had agreed to pay Mr Papaleo €5,000 for his assistance.

13. The appellant said it had been decided to conduct business in Hong Kong because the lighting and publishing material would originate in Hong Kong, the Mainland or Taiwan and because there was no value-added tax in Hong Kong.  The business of the two companies was genuine and there was no intention of laundering money through the bank accounts.

14. Having arrived in Hong Kong on 14 May 2013, the appellant met Mr Papaleo in the IFC Mall the following morning.  He told Mr Papaleo to set about buying two companies.  However, after they found that the costs quoted by the first company approached were too high, the appellant told Mr Papaleo to contact Acorn, a company the appellant had used in the past.  Although he provided Mr Papaleo with the monies to acquire the two companies, he did not accompany him to Acorn.  He had other things to do.  As he had requested of Mr Papaleo two companies, East Ray (HK) Limited and Vindex (HK) Limited, were acquired.

15. The appellant did not accompany Mr Papaleo to the banks, where attempts were made to open bank accounts.  The appellant had other things to do.  Mr Papaleo told him that he was unsuccessful in his attempts to open bank accounts because he was unable to meet the requirements of the banks to provide proof of address, verification of the businesses and production of a business plan.  So, each of them returned to Slovakia.

16. Having returned to Slovakia, in due course Mr Papaleo told the appellant that he had worked on a business plan and it was possible now to return to Hong Kong to continue trying to open bank accounts.  Having arrived in Hong Kong on 14 June 2013, the appellant met Mr Papaleo at the IFC Mall, where he was arrested.

Reasons for Verdict

Incitement

17. Of the elements of the offence of incitement, the judge said in his Reasons for Verdict:[2]

“ A person is guilty of incitement to commit an offence if:

(a) he incites another to do or cause to do an act or acts which, if done, will involve the commission of the offence by the other;

(b) he intends or believes that the other, if he acts as incited,

(c) shall, or will do so with the fault required for the offence

  (see Smith & Hogan, Criminal Law, (12^th ed.), paragraph 13.4).”

18. In applying the law to the facts in issue, the judge said:[3]

“ The unlawful act alleged is to deal with property, knowing or having reasonable grounds to believe that the property, in whole or in part, directly or indirectly represented the proceeds of an indictable offence. The prosecution must prove that the defendant incited Mr Papaleo to deal with property intending or believing that if Mr Papaleo so acted Mr Papaleo shall or will do so knowing or having reasonable grounds to believe that the property, in whole or in part, directly or indirectly represented the proceeds of an indictable offence.”

The issue

19. The judge said that an issue in the case arose from a material conflict in the evidence as to why it was necessary for Mr Papaleo to go to Hong Kong to incorporate two companies and open bank accounts for these companies.  Relevant to that issue was the evidence of Mr Papaleo that:[4]

“ … he was recruited by Jozef Drlicka who said the defendant needed urgent help in his business in Hong Kong, which was described as illegal but not criminal. Mr Papaleo was to hand over control of the companies and the bank accounts to the defendant.”

20. Of the appellant’s testimony on the issue, the judge said:[5]

“ The defendant on the other hand says that he had reached a business agreement with Jozef Drlicka whereby Jozef Drlicka would run the companies in Hong Kong. As Jozef Drlicka did not have a passport Mr Papaleo went to Hong Kong as a substitute for Jozef Drlicka. The control of the companies and bank accounts were to be handed over to Jozef Drlicka.”

21. Having stated that, unless he stated otherwise, he accepted the evidence of Mr Papaleo, the judge said that he rejected the evidence of the appellant as not credible, in particular that Mr Papaleo was to set up the two companies and open the related bank accounts only then to transfer ownership to Jozef Drlicka, when the appellant himself had already arranged a trip to Hong Kong.[6]

22. Having made those determinations, the judge went on to say that the issue to be determined, was “…why was Mr Papaleo asked to go to Hong Kong to incorporate a company and open a related bank account?” [7]  In addressing that issue, the judge noted the testimony of Mr Papaleo that Jozef Drlicka had told him prior to their meeting with the appellant that “…the business was illegal but not criminal, meaning not involving guns or drugs.” [8]  Then, the judge went on to note that it was Mr Papaleo’s evidence that in the meeting in the Goblin pub “Jozef Drlicka used the term “illegal” twice and the defendant “not legal” once.” [9]  Next, the judge noted that in video C [10] the appellant was heard saying “And listen, there is no risk there.  It’s no guns, nothing, yeah? ”[11]  In the event, the judge said he accepted the evidence of Mr Papaleo that he was told by the appellant that the business was not legal.[12]

23. Having determined that Mr Papaleo was “a credible and reliable witness, who gave cogent and compelling evidence”, the judge said:[13]

“ Having carefully considered all the evidence I find as a fact, inter alia, the following:

(a) Mr Papaleo was a freelance journalist who was interested in investigating financial crime;

(b) Mr Papaleo posed as a corrupt journalist who had serious drug and alcohol problems so he could make contact with the underworld in Bratislava and Prague in order to “fish” for a good story;

(c) posing in this way Mr Papaleo met the defendant through the introduction of Jozef Drlicka;

(d) prior to the first meeting with the defendant on the 10 May 2013 in the Goblin pub in Bratislava Jozef Drlicka told Mr Papaleo that he had a Slovakian friend working in Hong Kong who needed urgent help in order to do his business in Hong Kong;

(e) Jozef Drlicka said the business was illegal but not criminal in that it did not involve guns or drugs;

(f) Mr Papaleo secretly recorded all the meetings with the defendant;

(g) Mr Papaleo was asked to go to Hong Kong to incorporate a company and open a related bank account for the company;

(h) after incorporating the companies and opening the bank accounts the control of the companies and the bank accounts would be given to the defendant;

(i) after Mr Papaleo handed over to the defendant control of the companies and the bank accounts the defendant would pay Mr Papaleo a €5,000 reward;

(j) the defendant paid all the expenses of going to Hong Kong and incorporating the companies;

(k) Mr Papaleo and the defendant went to Hong Kong both arriving in Hong Kong at different times on the 14 May 2013;

(l) in Hong Kong the defendant instructed Mr Papaleo to incorporate two companies giving him the names of the two companies East Ray (HK) Ltd and Vindex (HK) Ltd;

(m) the defendant instructed Mr Papaleo to go to Acorn for assistance in incorporating the two companies and to ask for bank introduction telling Mr Papaleo what to say about the business of the companies and to use the Standard Chartered Bank and not HSBC;

(n) East Ray (HK) Ltd and Vindex (HK) Ltd were incorporated on the 15 May 2013;

(o) the defendant then instructed Mr Papaleo to open bank accounts for these two companies;

(p) Mr Papaleo went to various banks but did not open any accounts giving various excuses to the defendant why accounts could not be opened including making up the bank required proof of business;

(q) Mr Papaleo returned to Slovakia where he was asked by both the defendant and Jozef Drlicka to prepare the proof of business supposedly requested by the bank;

(r) the defendant instructed Mr Papaleo andJozef Drlicka how to falsify the documents; and

(s) Mr Papaleo prepared four or five letters from companies who did not know of his existence saying they had business transactions with him.”

24. Having regard to those findings, the judge concluded:[14]

“ I am sure the only inference to draw is that Mr Papaleo was asked to go to Hong Kong and incorporate East Ray (HK) Ltd and Vindex (HK) Ltd and open related bank accounts so that:

(1) the true holder and user of the bank accounts would be unknown; and

(2) the subsequent use of the bank accounts could not be traced to the defendant.

I am satisfied so I am sure the only inference to draw is that the disguising of the true holder and user of the bank accounts was because the bank accounts would be used to launder proceeds of an indictable offence.”

25. Having noted that the definition of “dealing”, provided by section 2 of OSCO, included “(b) concealing or disguising the property (whether by concealing or disguising its nature, source, location, disposition, movement or ownership or any right with respect to it or otherwise)” the judge said:[15]

“ … I am sure that by asking Mr Papaleo to incorporate the two companies and open the company bank accounts, the control of which were to be given to the defendant, the defendant incited Mr Papaleo to deal with property.”

Mr Papaleo

Knowledge

26. Then, having noted that the mens rea of dealing has two limbs, namely knowing or having reasonable grounds to believe, the judge found that Mr Papaleo knew that the bank accounts would be used to “launder proceeds of an indictable offence.” [16]

Reasonable grounds to believe

27. Notwithstanding that finding, the judge went on to address the second limb of mens rea, namely “having reasonable grounds to believe.”  In doing so, he adverted to the judgments of this Court in HKSAR v Shing Siu Ming & Others [17] and HKSAR v Pang Hung Fai [18], together with the judgment of the Appeal Committee of the Court of Final Appeal in Seng Yuet Fong v HKSAR.[19]

28. In the result, the judge concluded that Mr Papaleo had reasonable grounds to believe that the bank accounts “…would be used to launder proceeds of an indictable offence.” [20]

29. Having made that determination, the judge cited with approval the statement in the judgment of this Court in HKSAR v Wong Chor Wo & Another as to the drawing of inferences in circumstances where a man allows another person to use his bank account to deposit and withdraw funds.[21]

30. In convicting the appellant, the judge said:[22]

“ I am sure that the defendant incited Mr Papaleo to deal with property intending Mr Papaleo to act as incited with Mr Papaleo knowing or having reasonable grounds to believe that the monies to pass through the accounts, in whole or in part, directly or indirectly represented the proceeds of an indictable offence.”

Reasons for sentence

31. In sentencing the appellant, the judge noted that he had no previous criminal convictions in Hong Kong, but went on to say that “carries little weight where you are a visitor to Hong Kong who commits serious crime.”

32. Of the gravity of the offence of money laundering, the judge said that it required a deterrent sentence. 　Further, he enumerated “significant factors” that had been identified as being relevant in determining the culpability of a defendant. 　In doing so, he adverted to the judgments of this Court in the Secretary for Justice v Jerome Yuval Arnold Herzberg [23], HKSAR v Hsu Yu and HKSAR v Boma [24].

33. Of the appellant’s conduct of inciting Mr Papaleo to open bank accounts for the two companies, which accounts were to be handed over to others to operate, the judge said that facilitated money-laundering.

Sentence

34. The judge said that, having regard to the appellant’s role and the international element in the commission of the offence, he sentenced the appellant to 4 years’ imprisonment.

Grounds of appeal against conviction

35. With the leave of the single judge, Mr Egan advanced grounds 1 and 2 of the grounds of appeal against conviction.  Ground 3, involving an issue of law only, was advanced as of right.  At the hearing, there being no opposition by Mr William Tam SC, we granted leave to Mr Egan to re-amend the perfected grounds of appeal to advance an additional ground of appeal.

36. By ground 1, Mr Egan submitted that the offence alleged was not capable of being incited.  All Mr Papaleo had been asked to do was acquire two companies, open bank accounts in their names and hand over the companies and the bank accounts to others to operate.  The chose-in-action, stipulated in the Particulars of Offence, had never existed nor was it ever going to exist because Mr Papaleo was clear in his evidence that he was never going to open bank accounts in the name of the companies.  All he had done was to arrange for two companies to be acquired.  He had not transferred the ownership of the companies to the appellant and had not opened any bank accounts.  Mr Papaleo had not been provided with any monies to open the bank accounts.  At most his conduct amounted to taking preparatory steps to commit an offence. 

37. By ground 2, it was contended that the judge had erred in finding that the appellant had been incited to deal in the proceeds of an indictable offence when there was no evidence that, even if the provenance of the monies was illegality, it was the proceeds of an indictable offence.

38. By ground 3, it was submitted that the judge had erred in determining that the phrase “having reasonable grounds to believe” was to be construed having regard to the judgment of this Court in HKSAR v Shing Siu Ming, as qualified in the judgment of this Court in HKSAR v Pang Hung Fai.  That approach to the subjective/objective elements of the phrase had been rejected in the judgment of the Court of Final Appeal in Pang Hung Fai v HKSAR.

39. By the additional ground of appeal it was submitted that the judge had erred in failing to direct himself that he should approach the evidence of Mr Papaleo with caution before accepting such evidence.  He suggested that Mr Papaleo fell to be regarded as a witness “having some purpose of his own to serve” and that his “evidence may be tainted by an improper motive”. [25]  He characterised Mr Papaleo as a sensation-seeking, self appointed, agent provocateur journalist with an axe to grind.

Grounds of appeal against sentence

40. With the leave of the single judge the appellant appealed against the sentence of 4 years’ imprisonment imposed on him.  Mr Egan submitted that the sentence was wrong in principle and/or manifestly excessive. He contended that many of the factors which the judge had identified as relevant in determining culpability in the commission of the offence did not apply in the case of the appellant.

The respondent’s submissions

Conviction

41. In respect of ground 1, Mr Tam submitted that two issues arose.  First, was the issue of incitement and secondly, the issue of dealing.  Of the issue of incitement, Mr Tam submitted “it is an offence for D to incite another person P, to do or cause to be done an act or acts which, if done by P, would involve the commission of an offence by P.”  The actus reus of the offence was the act of solicitation.  So, the offence was complete at the time of the incitement regardless of the actual outcome.  The offence was complete without the need for the existence of the subject matter at the time of the incitement.[26] 

42. The mens rea of the offence is the incitement that is made with the intention that, if the other person does as he is asked, he will commit a criminal offence.  It is not required that it is proved that the person incited shared with the inciter the intention to commit the full offence.  The fact that the person incited did not intend to do so did not render the commission of the offence impossible.[27]  Although the monies to be deposited in the bank accounts that the appellant was incited to open did not exist at the time of the incitement, they were capable of existence in the future.

43. Of the issue of ‘dealing’, Mr Tam submitted that the nub of the issue arising was articulated in the judgment of McWalters JA in granting leave to appeal:[28] 

“ In HKSAR v Salim Majed & anor CACC 184/2013, unreported, 14 November 2014, the Court of Appeal at paragraph 109 of the judgment, rejected the proposition that simply lending one’s bank account to another to use is itself a dealing with property for the purposes of section 25(1) of OSCO.  The respondent’s argument requires for its support a broad construction of “dealing” that at present has no authority to support it and, arguably, is inconsistent with the Court of Appeal’s decision in the Salim Majed case.”

44. Mr Tam submitted that the judgment of the Court of Final Appeal in HKSAR v Yeung Ka Sing, Carson and HKSAR v Salim Majeed provided authority for a “broad construction” of “dealing”.  There, the Court noted of the definition of “dealing” provided by section 2 of OSCO that, whilst some of the subparagraphs provided for conduct that would normally consist of an individual act, section 2(1)(b) provides that dealing includes “(b) concealing or disguising the property (whether by concealing or disguising its nature, source, location, disposition, movement or ownership or any rights with respect to it or otherwise).”  That is capable of covering a continuing process.  So, it could encompass the continuing process of concealment involving multiple individual acts of dealing.

45. It was contended that the prosecution had opened and closed its case on the basis that Mr Papaleo had been incited to open the bank accounts in order that they be used to receive the proceeds of crime, “…so as to conceal the true identity of the person who is in control of the accounts.” [29]  In his closing speech, counsel for the prosecution suggested that Mr Papaleo had been asked to open the bank accounts for the appellant “…to hide the identity of D in the course of money laundering activities.” [30]

46. Mr Tam said that it was clear that the judge was alive to the nature of the prosecution case, namely that the appellant had “…incited Mr Papaleo to deal with property by concealing the true identity of the person in control of the bank accounts and thereby the true owner of the monies to be deposited in the bank accounts.” [31]  Furthermore, the judge was entitled to determine, as he did, that the appellant had “…incited Mr Papaleo to deal with property, Mr Papaleo knowing… that the property… represented the proceeds of an indictable offence.” [32]

47. In the alternative, Mr Tam invited this Court, pursuant to section 83A of the Criminal Procedure Ordinance, Cap. 221 to substitute a verdict of guilty of an offence of “incitement to conspire to deal with the proceeds of an indictable offence.”  This Court has jurisdiction to do so.[33]  He contended that there was no prejudice to the appellant and that, on the evidence led by the prosecution at trial, he could have been convicted of that charge.

Reasonable grounds to believe

48. Mr Tam submitted that, in all the circumstances Mr Papaleo had reasonable grounds to believe that the bank accounts which he was incited to open would be used to launder the proceeds of an “indictable offence”, rather than some minor offence as suggested by the appellant.  Mr Papaleo had been recruited by the appellant to come to Hong Kong to acquire two companies and open related bank accounts, which he was to hand over to others, for a reward of €5,000.  The expenses thereby incurred were settled by the appellant.  The appellant was in Hong Kong at the relevant time.  Moreover, the appellant had told Mr Papaleo that the underlying business activities were “not legal” but that they did not involve guns or drugs.

49. Mr Tam acknowledged that in its judgment in HKSAR v Pang Hung Fai the Court of Final Appeal rejected the two-stage test identified in the judgment of this Court in HKSAR v Shing Siu Ming to which the judge made reference.  However, he submitted that, even if the judge had fallen into error in applying that two-stage test, his finding that the appellant “incited Mr Papaleo to deal with the property intending Mr Papaleo to act as incited knowing that the monies to pass through the accounts… represented the proceeds of an indictable offence” [34] was a sufficient basis on which to convict the appellant.  Finally, it was contended that the judge was correct to rely on dicta in the judgment of this Court in HKSAR v Wong Chor Wo.

50. Mr Tam invited the Court to note that section 60 of the Criminal Procedure Ordinance, Cap. 221 had abrogated the corroboration rule in respect of alleged accomplices.  In any event, he submitted that the judge had addressed the multiple challenges advanced on behalf of the appellant in respect of the credibility of Mr Papaleo. In doing so, it was apparent that he had approached his evidence with circumspection.  Nevertheless, he had determined him to be “a credible and reliable witness who gave cogent and compelling evidence.” [35]

Sentence

51. In opposing the appeal against sentence, Mr Tam submitted that the commission of the offence involved substantial planning and organisation.  Mr Papaleo, an Italian, had been recruited in Slovakia and, for the promise of a reward of €5,000, had come to Hong Kong to acquire two companies and set up related bank accounts.  The companies had been acquired and steps taken to open bank accounts.  The appellant, a foreign national, was the mastermind of the scheme and met up with Mr Papaleo in Hong Kong on two occasions to commit the crime.  The appellant had told Mr Papaleo that about €1 million, the equivalent of about $10 million in 2013, could be moved in the two bank accounts.

A consideration of the submissions

The appeal against conviction

Impossibility

52. We are satisfied that the fact that no chose in action came into being, indeed no bank account was ever set up in Hong Kong in the names of the two companies that Mr Papaleo acquired, is not an impediment to proof of the elements of the offence alleged against the appellant. Clearly, such choses in action were capable of being brought into being in the future.

53. In R v Shepherd [36] the appellant’s appeal against his conviction for soliciting the murder of a child yet to be born was dismissed. In a letter to the pregnant mother of the child the appellant had written “When the kiddie is born you must lie on it in the night. Do not let it live.” The child was born alive. In giving the judgment of the Court of Criminal Appeal of England and Wales, Bray J said: [37]

All that is essential to bring a case within the section is that there should be a person capable of being murdered at the time when the act of murder is to be committed. If there is such a person then in existence it is quite immaterial that that person was not in existence at the time of the incitement.”

54. The judgment of the Court was cited with approval in the judgment of the Court of Criminal Appeal in R v McDonough [38].  In that case, the Court dismissed an appeal from convictions for soliciting to receive stolen lamb carcasses where the evidence was that there were no lamb carcasses in existence at the time of the solicitation.  In the judgment of the Court, having referred to R v Shepherd, Ashworth J said:[39]

“ By parity of reasoning, one would suppose that the solicitation to receive stolen goods is likewise an offence notwithstanding the goods themselves have not been stolen at the date of the incitement.”

55. In Director of Public Prosecutions v Nock [40], the House of Lords allowed an appeal against conviction of appellants convicted of a conspiracy to produce a Class A drug, namely cocaine.  The agreement was to pursue a course of conduct which could not in any circumstances produce cocaine.  In the course of his speech, with which all the other judges agreed, Lord Scarman cited the judgment in R v McDonough with approval:[41]

“ …the Court of Criminal Appeal held that the incitement to receive stolen goods was completed on the making of the incitement even though there were no stolen goods, perhaps, even no goods at all…the actus reus was the making of the incitement.”

56. In R v Fitzmaurice [42], the Court of Appeal of England and Wales dismissed an appeal of an appellant who had been convicted of unlawfully inciting three men to commit robbery by robbing a woman at Bow, East London.  He had been asked by his father to find someone to carry out the robbery of a woman who it was said would be carrying wages from a factory to a bank in Bow.  The appellant recruited one man who in turn recruited two others as would-be robbers.  They excluded the appellant as one of the band of robbers.  They were arrested when they lay in wait to commit the robbery at the place pointed out to them by the appellant’s father, on which earlier occasion they had seen a woman carrying a bag walking from the factory to the bank.  However, the appellant had been tricked.  He had been set up, so that his father could claim a reward for reporting the planned robbery to the police, which information he had provided to the police.

57. The court rejected the submission that the appellant could not be guilty of inciting other men to commit a crime which in fact could not be committed.  Having referred to the passage of the speech of Lord Scarman in DPP v Nock quoted earlier, Neill J said that it “…did not support the proposition that cases of incitement are to be treated quite differently from cases of attempt or conspiracy.”  He went on to say:[43]

“ The explanation of McDonough’s case, as it seems to us, is that though there may have been no stolen goods or no goods at all which were available to be received at the time of the incitement, the offence of incitement to receive stolen goods could nevertheless be proved because it was not impossible that at the relevant time in the future the necessary goods would be there.”

58. Of the correct approach at common law to any inchoate offence, Neill J said:[44]

“ It is necessary in every case to decide on the evidence what was the course of conduct which was (as the case may be) incited or agreed or attempted. In some cases the evidence may establish that the persuasion by the inciter was in quite general terms whereas the subsequent agreement of the conspirators was directed to a specific crime and a specific target. …

The crucial question is to establish on the evidence the course of conduct which the alleged inciter was encouraging.”

59. In dismissing the appeal, Neill J said:[45]

“ As was made clear by counsel on behalf of the Crown, the case against the appellant was based on the steps he took to recruit Bonham. At that stage the appellant believed that there was to be a wage snatch and he was encouraging Bonham to take part in it. As counsel put it, ‘The appellant thought he was recruiting for a robbery not for a charade’. It is to be remembered that the particulars of offence in the indictment included the words ‘by robbing a woman at Bow’. By no stretch of the imagination was that an impossible offence to carry out and it was that offence which the appellant was inciting Bonham to commit.”

60. In Director of Public Prosecutions v Armstrong [46] the Divisional Court of England and Wales addressed a case stated by the magistrate who had ruled that there was no case to answer in the trial of an information, which alleged that the respondent had incited a man to distribute indecent photographs of children, contrary to common law.  In doing so, he said that he was bound by the decisions of the Court of Appeal and the Divisional Court in R v Shaw [47] and R v Curr [48].  The magistrate determined, inter alia, that proof was required that the person to whom the incitement was made had “parity of mens rea to the inciter.”  The alleged incitement was made to an undercover police officer, for the supply of pornography involving young girls.  In his testimony, the police officer said that, although he had access to pornographic material, he had no intention of supplying the material as requested.  The magistrate said that in consequence he had found that commission of the full offence was impossible.

61. Of the issue of impossibility, in the judgment of the Court, Tuckey LJ said:

“ The only basis upon which the magistrate found impossibility was that the police officer would not supply the material. In considering whether there is a defence of impossibility the court must look carefully at what it is that the person incited has been asked to do. In this case the officer was asked to supply child pornography. The fact that he did not intend to do so is irrelevant. The requests made to the police officer was in general terms for child pornography and one which he could have met from material in the police’s possession, as the finding of the magistrate made clear. The officer could therefore have committed the offence which he had been asked to commit. It cannot therefore be said that it was impossible for him to do so.”

62. We are satisfied that it cannot be said it was not possible for Mr Papaleo to commit the offence which the appellant incited him to commit.

Incitement

63. Of the offence of incitement, Tuckey LJ said:[49]

“ The actus reus of the offence is the indictment (sic) by the defendant of another to do something which is a criminal offence. He must do so with the intention that if the other person does as he asks he will commit a criminal offence. That is the mens rea. On this analysis the intention of the person incited is entirely irrelevant.”

64. He noted that the editors of Archbold asserted “to solicit another to commit a crime is indictable at common law, even though the solicitation or incitement is of no effect.”

65. Tuckey LJ went on to say:[50]

“ The nature of the offence of incitement is accurately defined in the draft Criminal Code produced by the Law Commission in their paper No 177 at clause 47 which says:

A person is guilty of incitement to commit an offence or offences if

(a) he incites another to do or cause to be done an act or acts which, if done, will involve the commission of the offence or offences by the other; and

(b) he intends or believes that the other, if he acts as incited, shall or will do so with the fault required for the offence or offences.”

66. Then, Tuckey LJ said:[51]

“ On this analysis of the law there is no principle of parity of mens rea of the kind contended for by the respondent and accepted by the magistrate.  Were that to be the law, then all the cases about agent provocateur would have been wrongly decided because in each such case (where often the agent provocateur is a policemen) if it were a defence to the defendant to say: “Well, the officer never intended to commit the offence which I asked him to commit”, there would be no offence of incitement and many people would be in prison for committing such offences who should not be.”

67. In R v Shaw the Court of Appeal of England and Wales allowed the appellant’s appeal against his conviction for an offence of incitement to obtain property by deception.  The appellant S, an after sales-coordinator of a car leasing company, was charged with dishonestly inciting a fellow employee K, a senior maintenance controller whose duties included checking invoices for work done on company vehicles and authorising related payments, to dishonestly obtain cheques from the company by falsely accepting bogus invoices.  The defence was that the scheme was to expose how easy it was to circumvent the company’s internal security arrangements.  After they had retired the jury raised a question in respect of the alleged dishonesty of the appellant.  The Court found that the judge’s further directions were inadequate.

68. Tuckey LJ said of the report of the case in the Criminal Law Review that:[52]

“ There is nothing in the report which shows why K's mens rea was relevant. But it says:

Held, allowing the appeal, the jury were concerned with the proof of mens rea both of S and of K, since both had to be considered.”

69. Tuckey LJ went on to advert to the criticism of the decision in the Criminal Law Review, noting that it was contended that:[53]

“ The decision seems to be misconceived. If I tell Bill Sykes, the burglar, about the poor state of security of my employer’s premises and encourage him to enter and steal therein, I have surely incited him to commit burglary. I have tried to persuade him to do an act which, when done, will, as I know, be the offence of burglary. How can it possibly be said that I have not incited him to commit the offence?

The court has confused the mens rea of incitement with the mens rea of the offence incited.”

70. In fact the commentary went on to assert “S was not charged with obtaining property by deception but with inciting K to obtain property by deception.  It was necessary to show that he intended K to act dishonestly and with intention permanently to deprive but quite unnecessary to show that S had any such dishonest intention.”

71. In determining that the decision in Shaw was explained on its facts, Tuckey LJ went on to say:[54]

“ …it can also perhaps be explained because the indictment specifically alleged that S had dishonestly incited K to dishonestly obtain. It is not in my judgment therefore general authority for the proposition that the person incited must act with the same parity of mens rea as the inciter.”

72. In R v Curr [55]the Court of Appeal of England and Wales allowed the appeal of the appellant in respect of various convictions at trial in the Salford Quarter Sessions, including an offence of soliciting a woman unknown to commit an offence under section 9(b) of the Family Allowance Act, 1945 [56], in soliciting her to obtain on his behalf from the Post Office money, being an allowance, knowing that it was not properly receivable by her.  The context in which the offence was alleged to have been committed was that the appellant approached women with large families of children and offered to lend them money on security of their family allowance book.  For a loan of a lesser amount, the women signed vouchers for payment of a greater amount.  He dealt with between 40 and 80 such allowance books a week employing between 3 to 5 women agents to assist him.

73. It was the defence case that the offence was “…one requiring knowledge on the part of the female agent that she is doing something unlawful in receiving the allowance.” [57]  It was contended that “…if the woman agent in fact has no guilty knowledge, perhaps knowing nothing of the assignment, or supposing that the defendant was merely collecting for the use and benefit of the woman concerned, then she would be an innocent agent... the defendant…would not be inciting her to receive money knowing that it was not receivable by her.” [58]

74. In the judgment of the Court, Fenton Atkinson J said that the prosecution argument that the offence was committed, even in circumstances where, at the request of the mother, a neighbour went to collect the allowance for her:[59]

“ gave no effect on the word “knowing” in section 9(b), and in our view the defendant could only be guilty on count 3 of the woman solicitor, that is, the woman agent sent to collect the allowance, knew that the action she was asked to carry out amounted to an offence… It was essential in our view for the jury to consider the knowledge, if any, of the woman agent.”

75. Fenton Atkinson J said that the Assistant Recorder had failed to direct the jury as to the “knowledge of the women agents”.  Further he noted that “in the whole of the summing up dealing with this matter he proceeded on the assumption that either guilty knowledge in the woman agent was irrelevant, or, alternatively, that any woman agent must be taken to have known that she was committing an offence under section 9(b).”  He concluded that “was a vital matter where the defence was not left to the jury at all and there was no sufficient direction.” [60]

76. In his judgment of the Court in DPP v Armstrong, Tuckey LJ said of the observation by Fenton Atkinson J, cited above, of the failure in the prosecution argument to consider the relevance of the knowledge of the woman agent:[61]

“ It seems to me that all the court is saying in that case is that what the appellant was doing was something short of asking the woman concerned to commit a criminal offence. 　He was not inciting her to commit an offence because the offence required her knowledge that she was committing an offence. 　There is nothing in the judgment to suggest that the court was making any general pronouncement upon whether for the offence of incitement it is necessary to prove that not only the inciter but also the person incited had the mens rea to commit the full offence.” [Italics added.]

77. In the result, Tuckey LJ concluded:[62]

“ I do not think the magistrate was correct when he found that the law requires that the person incited must have parity of mens rea with the inciter. 　Applied to the facts of this case, it was not necessary for the prosecutor to show that the officer intended to supply child pornography to the respondent. 　His intention was irrelevant. 　The offence of incitement was committed when he was asked to commit the offence of supplying child pornography with the intention on the part of the respondent that in doing so he would be committing a criminal offence.”

78. Applying the law to the facts of the instant case, it was necessary that the prosecution prove that the appellant incited Mr Papaleo intending that the latter would deal in the choses in action in the bank accounts to be opened in the name of the two companies that he did acquire in Hong Kong and intending that Mr Papaleo would so deal, knowing or having reasonable grounds to believe that the choses in action were the proceeds of an indictable offence.

79. As noted earlier, at an early stage of his Reasons for Verdict the judge identified the law relevant to the offence of incitement [63] and in applying the law to the facts of this case said:[64]

“ The prosecution must prove that the defendant incited Mr Papaleo to deal with property intending or believing that if Mr Papaleo so acted Mr Papaleo shall or will do so knowing or having reasonable grounds to believe that the property, in whole or in part, directly or indirectly represented the proceeds of an indictable offence.”

80. With respect to the judge, we are satisfied that he identified the legal issues arising from the facts in issue correctly.

Application of the law to the facts

81. In his examination of the evidence, the judge noted that Mr Papaleo said of the meeting at the Goblin pub that he had enquired as to the nature of the business activities but had never been told the “origin of the funds to be transacted.” [65]  Furthermore the judge noted that the second video recording, of some of the events of 14 May 2013, confirmed Mr Papaleo’s evidence that the applicant had told him to say, in response to questions asked by the corporate services provider for information of the business of the two companies, “… you will be a publisher or something like that and that you will be buying and selling products LED lights.” [66]  Finally, the judge noted that Mr Papaleo said that on his return to Slovakia, at the request of the appellant, he had prepared one or two “proof of business” purportedly to show to banks in attempts to open bank accounts for the two companies.[67]  He met the applicant to do so.  Four or five letters were made that purported to speak to “business or possible business with him”.[68]

82. Having said that Mr Papaleo testified that he believed that he had handed those documents to the Hong Kong police, the judge acknowledged that none had been produced in evidence.  Also, he noted that Mr Papaleo acknowledged that he made no mention in any of his seven witness statements that the appellant had instructed him to falsify documents in that manner.[69] Nevertheless, the judge said that he accepted his explanation that he had informed the police of those events but did not recall if it was in the statements, which highlighted the more important aspects and did not “cover every single specific fact of the story.”  Finally, he said that, although the falsification of documents was not a minor matter, the omission did not cause him to doubt his testimony.[70]

83. The judge said that he accepted the evidence of Mr Papaleo that “…he was told by the defendant the business was not legal.[71]  However, in doing so, the judge acknowledged that the audio track on the video recording made in the Goblin pub was such that that, although the appellant could be heard saying “no drug, no taxes” that statement could not be placed in context, with the result that no reliance had been placed on the evidence.[72]  The judge went on to note that, by contrast, in video recording C, made in Hong Kong on 14 May 2013, the appellant was heard saying “And listen, there’s no risk there.  It’s no guns, nothing, yeah?” [73]  It was clearly in that context, the judge went on to accept Mr Papaleo’s evidence not only that the appellant had told him that no guns were involved but also that the business was not legal.  In doing so, the judge acknowledged that there was no mention in any of the video recording of the words “illegal” or “not legal”, but nevertheless he determined “… this does not cause me to doubt the evidence of Mr Papaleo.” [74]

84. Of Mr Papaleo’s evidence that he had also been told that the business was illegal but not criminal, the judge said that Mr Papaleo explained the meaning communicated to him by the use of the phrase “not criminal” was “that there was no physical risk to the safety.” [75]  Of that distinction, Mr Papaleo said:[76]

“ Yes, this distinction was to mean to me there was nothing of very dangerous or that would harm my safety, that was the use of “not criminal” that was made.  So the distinction was to say that there was no physical risk for me.”

85. The judge noted that Mr Papaleo explained that the appellant had told him “…not to use HSBC because of the anti-money-laundering views of the bank”,[77] but acknowledged that none of the video recordings contained a reference by the appellant to Mr Papaleo to the anti-money laundering stance taken by HSBC.[78]  However, he also noted that in video recording B, in the context of giving him instructions to open bank accounts for the two companies, the appellant told him “to use the Standard Chartered Bank and not HSBC.” [79]  In the video recording, the appellant told Mr Papaleo to tell the staff of the corporate services company that he wished to open bank accounts with the Standard Chartered Bank, adding:

“ They will ask you if you want to use HSBC bank. But say , “Ah, no, no, no. Bad experience, big fees and my partners will have an account in Standard Chartered” or can say maybe “Bank of Asia. No, Bank of China. Bank of China.” ”

86. Of the explanation to be proffered, if the issue arose, the judge said:[80]

“ Clearly, the defendant was making up something for Mr Papaleo to say which was not true.”

In the result, the judge concluded “I accept Mr Papaleo’s evidence of what he was told.”

Handover of the companies and bank accounts

87. As noted earlier, it was the prosecution case that the role proposed for Mr Papaleo was that he come to Hong Kong, acquire two companies and open related bank accounts in their names, after which he “would hand over control of the companies and the bank accounts to the defendant”, for which he would be paid €5000.[81]  The judge noted that the scheme was proposed to Mr Papaleo in the Goblin pub in Bratislava.[82]  Of the handover of control of the bank accounts to the appellant, the judge said that Mr Papaleo was to give to the defendant “….everything necessary to operate the bank accounts.” [83]  It was the nub of Mr Papaleo’s evidence that he was to be “the forefront” or “White horse” of the scheme in respect of the acquisition of the companies and the opening of the bank accounts.[84]  The appellant was to be the hidden beneficiary.[85]  Mr Papaleo denied the suggestion that the arrangement was that he was to be a director of the company on a temporary basis.  He said he was to be the owner.[86]  On the other hand, it was his testimony that once he had handed over control of the operation of the bank accounts his work was “finished”.  He was not to “direct or manage them.” [87]

88. The judge rejected the appellant’s testimony[88] that the scheme was that once the companies had been acquired in the name of Mr Papaleo and bank accounts opened in the names of the companies, control of the companies and the bank accounts would be transferred to Jozef Drlicka.  The judge determined:[89]

“ I find inherently improbable that if there was a legitimate business agreement between the defendant and Jozef Drlicka that Mr Papaleo would be required to go to Hong Kong to incorporate the two companies and open the bank accounts only to then transfer ownership to Jozef Drlicka, in particular considering the defendant had already arranged a business trip to Hong Kong.”

89. Having said that he had regard to all the evidence, the judge said that he was sure that the only inference to draw from the evidence that Mr Papaleo was asked to come to Hong Kong to acquire two named companies and open related bank accounts was so that:[90]

“ (1) the true holder and user of the bank accounts would be unknown; and

(2) the subsequent use of the bank accounts could not be traced to the defendant.”

90. In the result, the judge determined:[91]

“ …I am sure the only inference to draw is that the disguising of the true holder and user of the bank accounts was because the bank accounts would be used to launder proceeds of an indictable offence.”

91. Clearly, intimately linked to that determination was the finding the judge made immediately afterwards:[92]

“ I find inherently improbable that if the business of the companies and the use of the bank accounts was for legal business that Mr Papaleo would at some considerable cost have been required to come to Hong Kong to incorporate the companies and open the bank accounts, in particular considering that the defendant was not only in Hong Kong at the very same time he also had experience in Hong Kong of incorporating a company and opening a bank account for that company.”

92. Then, having noted his earlier findings that Mr Papaleo had been told “the business was illegal but not criminal”, the judge found that Mr Papaleo “knew the bank accounts would be used to launder proceeds of an indictable offence.” [93]

93. In finding that Mr Papaleo had “…reasonable grounds to believe that the bank account would be used to launder the proceeds of an indictable offence” the judge adverted to the evidence that he accepted that the appellant had been:[94]

“ …asked to go to Hong Kong to set up two companies and then open bank accounts for those companies for which he was to be paid a reward of €5,000 upon handing over control of the companies and the bank accounts to the defendant…”

Knowledge

94. We are satisfied that the judge was entitled to draw the inference that Mr Papaleo knew that the choses in action that it was intended be created in those bank accounts would be the proceeds of an indictable offence.  The appellant had told Mr Papaleo that the business to be conducted in the bank accounts to be opened in the names of the two companies which would be acquired was not legal.  The judge was entitled to have regard to that finding in the context of all the circumstantial evidence to which he made reference.  The inference was not only compelling but the only reasonable inference to draw.  As the judge noted, the “considerable cost” [95] incurred in the acquisition of the two companies and the two visits to Hong Kong from Europe required of Mr Papaleo, together with the reward of €5,000 to be paid to him, permitted the inference to be drawn that the “not legal” business was no mere minor infraction of the law but an indictable offence(s), albeit of an unknown nature.

95. Also, relevant to that issue was the evidence that, notwithstanding his enquiry, Mr Papaleo had never been provided with any explanation as to the provenance of the monies to be deposited in future into the bank accounts.  The appellant’s suggestion to him that he answer enquiries from the corporate services provider as to the nature of the businesses of the companies, namely “Say something that you will be er publisher or something like that.  But say publishing and consulting in marketing and everything” had a clear air of unreality or fiction.  Similarly, highly relevant was the judge’s acceptance of Mr Papaleo’s evidence that, at the request of the appellant he had made documents, namely confirmations of business, which spoke falsely of business activities.[96]

Reasonable grounds to believe

96. As noted earlier, although the judge had determined that the appellant knew that the choses in action that would be dealt with in the bank accounts were the proceeds of an indictable offence, nevertheless he went on to consider the second limb of mens rea of the offence.  In doing so, he cited [97] with approval passages from the judgments of this Court in HKSAR v Shing Siu Ming & Others [98] and inSeng Yuet Fong v HKSAR [99].  He said that in HKSAR v Pang Hung Fai this Court approved the meaning attributed to the phrase “having reasonable grounds to believe” in Shing Siu Ming.

97. Of the application of the law to the facts he found proved, the judge said:[100]

“ I am sure that being asked to go to Hong Kong to set up two companies and then open bank accounts for those companies for which he was to be paid a reward of €5,000 upon handing over control of the companies and the bank accounts to the defendant, Mr Papaleo had reasonable grounds to believe that the bank accounts would be used to launder proceeds of an indictable offence.”

98. Having made that determination, the judge went on to cite with approval a passage from the judgment of this Court in HKSAR v Wong Chor Wo & Another:[101]

“ In the normal course of events, if a man allows another person to use his bank accounts to deposit and withdraw funds, in the absence of evidence to the contrary, the inevitable inference will arise that the holder of the bank account has reasonable grounds to believe that the funds passing through the account represent the proceeds of an indictable offence.”

99. The passages cited by the judge from the judgments of this Court in HKSAR v Shing Siu Ming & Others and in HKSAR v Pang Hung Fai were disapproved of subsequently by the Court of Final Appeal in HKSAR v Pang Hung Fai [102].  On the other hand, the passage cited from the judgment of the Appeal Committee of the Court of Final Appeal inSeng Yuet Fong v HKSAR was cited with approval.

100. In his judgment, with which all the other judges agreed, Spigelman NPJ disapproved of the two-stage test articulated by this Court in HKSAR v Pang Hung Fai,noting that the approach derived  from the judgment inShing Siu Ming.[103]

101. Of the appropriate approach to the issue of mens rea in the offence, Spigelman NPJ said:[104]

“ …the better and, I add, less complicated test was propounded in the Appeal Committee of this Court in Seng Yuet Fong v HKSAR [1999] 2 HKC 833 at 836 E-F:

“To convict, the jury had to find that the accused had grounds for believing; and there was the additional requirement that the grounds must be reasonable: That is, that anyone looking at those grounds objectively would so believe.” ”

102. Having said that, if an alternative formulation of the words of the statute was required to assist the jury, “On most such occasions the Seng Yuet Fong formulation will be all that is required”, Spigelman NPJ said:[105]

“ However, another formulation may sometimes assist.  In s 25(1), the word “believe” is used in the sense of “know”.  The two mental elements in the subsection should be understood as if they read: “knew or ought to have known”.

103. In HKSAR v Yeung Ka Sing, Carson [106] the Court of Final Appeal said of the ambit of its judgment in HKSAR v Pang Hung Fai:[107]

“ …its central tenet is that one must look to the grounds as perceived by the defendant in deciding whether the mens rea requirements are proved.  It is on that basis that (i) the Shing Siu Ming approach was disapproved and various aspects of the earlier decisions put aside as “distractions”; (ii) the Court held that it was erroneous to exclude the defendant’s personal beliefs, perceptions or prejudices from the assessment of his mens rea; (iii) it was erroneous to adopt as the applicable standard the question whether, on the available grounds, the defendant “could”, as opposed to “would” reasonably have been led to the belief that the property consisted of the proceeds of crime; and (iv) a significant mens rea element reflecting a strong element of moral blame is attributed to the second limb of the offence under s 25(1), justifying the setting of the same maximum penalty under both the “knowing” and the “having reasonable grounds to believe” limbs.” 

104. Of the suggested alternative formulation, namely that the two mental elements in the subsection should be understood as if they read “knew or ought to have known”, the Court said:[108]

“ The Seng Yuet Fong formulation presents a truer reflection of the mens rea analysis and, as paragraph 55 states, will usually be all that is required.”

105. In light of the subsequent judgment of the Court of Final Appeal, the judge’s reliance on the law stated in the passages in the judgments of this Court in HKSAR v Shing Siu Ming & Others and in HKSAR v Pang Hung Fai, articulating the impugned two-stage approach to the element of mens rea in the commission of the offence, was a misdirection in law.

106. There is nothing in the judge’s short findings of fact that indicates whether or not in making his findings of fact he relied on the misdirections of law he gave himself, rather than the approved direction articulated in Seng Yuet Fong.  All the judge said was that he was sure that Mr Papaleo had such reasonable grounds to believe that the bank accounts would be used to launder proceeds of an indictable offence, given that he had been:

“ …asked to go to Hong Kong to set up two companies and then open bank accounts for those companies for which he was to be paid a reward of €5,000 upon handing over control of the companies and the bank accounts to the defendant.”

107. Relevant to the issue of mens rea in Mr Papaleo was his evidence that from the outset he had become involved in the scheme proposed by the appellant in order to investigate criminal activities.  Similarly, of relevance was the fact that, having acquired the two companies in the names stipulated by the appellant, Mr Papaleo had gone to considerable lengths to avoid opening up bank accounts in their names.  Moreover, he lied to the appellant in respect of his supposed difficulties in opening bank accounts[109]:

“ Mr Papaleo was surprised that the bank staff would accept everything from him and open the account. Not wishing to violate Hong Kong law Mr Papaleo therefore made an excuse to leave the bank saying he would contact them later. Mr Papaleo then met the defendant and lied to him that he had big problems opening a bank account giving excuses such as that the bank needed to do due diligence. Mr Papaleo made up that the bank required proof of business and that it would take three to four weeks to approve the opening of the account. The defendant then asked Mr Papaleo to visit more banks.”

108. Of his reasons for not opening bank accounts, the following interchange ensued in his testimony:[110]

“ Q. Did you open an account at that bank?

A. No.

Q. Why not?

A. Because the bank was available in line of principle to open me an account but I gave excuses to avoid to do it, I didn’t want to open any bank account to not violate Hong Kong law.

And then went to...

Q. So that it’s you who choose not to open an account?

A. Yes, obviously.”  [Italics added.]

109. Of course, that begged the question of what violation of law of Hong Kong concerned Mr Papaleo.  Although Mr Papaleo was not asked which violation of which law was a matter of concern to him, in context it is clear that he had in mind that the whole purpose of the scheme was that the bank accounts which he was asked to open would be used to deal with monies the provenance of which was a business which he was told was not legal.  Obviously, as the judge found, having regard to all the circumstances Mr Papaleo had reasonable grounds to believe they were the proceeds of an indictable offence.  In his evidence, Mr Papaleo did not suggest that he had any other beliefs.  There was no other contrary evidence.  We are satisfied that the judge’s citation of passages from the judgments of this Court which were subsequently disapproved by the Court of Final Appeal was not relevant to the judge’s findings.  So, in the result, the misdirection was not material.

110. As noted earlier, the reference that the judge made to the passage in the judgment of this Court in HKSAR v Wong Chor Wo & Another was made only after that determination.  The judge did not stipulate its particular, or indeed any, relevance.

111. In HKSAR v Wong Chor Wo, the co-appellant Wong Chung Ping, a paternal cousin of the 1^st appellant, had been convicted of two charges of dealing with property known or believed to represent the proceeds of an indictable offence.  Charge 18 related to monies deposited by two cheques, to a total of $4 million, into the bank account CK Trading Company (“CKTC”), of which Wong Chung King was the sole proprietor.  Charge 19 related to 5 cheques, to a total of $16.8 million, deposited into Wong Chung Ping’s personal bank account.  All of the cheques were signed by the 1^st appellant and drawn on the account of Walmark Enterprises Company Limited, a wholly-owned subsidiary of Wealthmark International Holdings Limited, a public company.  The 1^st appellant was convicted of theft of those monies.  All of the monies were withdrawn subsequently from the account of CKTC and the personal account of Wong Chung Ping by cheques signed by Wong Chung Ping.  The 1^st appellant had cheque books for both accounts in his physical possession.

112. There was no dispute that during the relevant period there were other substantial transactions in the accounts of CKTC and the personal account of Wong Chung Ping, respectively $12.7 million and $20.6 million.  Those transactions were not the subject of any charges.

113. It was in that context that, in considering the appeal of Wong Chung Ping in respect of the two charges of money laundering, this Court made the statement as to the inferences ordinarily to be drawn if a man allows another person to use his bank accounts.  However, it is to be noted that the Court went on to acknowledge that an innocent explanation may also arise.[111]

114. In the judgment of this Court in HKSAR v Salim Majed [112], which the Court of Final Appeal considered at the same time as the appeal in Yeung Ka Sing, Carson, this Court rejected the submission made on behalf of the respondent that the judgment of the Court in HKSAR v Wong Chor Wo & Another was authority for the proposition that “the lending by an account holder of the use of his account to a third party constitutes, by itself, a dealing with property” for the purposes of the offence of money laundering.” [113] However, the Court went on to observe:[114]

“ That a person lends the use of their account to another is clearly a very important primary fact from which inferences may be drawn, both as to the account holder’s joint participation with the third party in any subsequent criminal use of the account and as to his state of mind in respect of the transactions involved in that subsequent use. However, what inferences can be drawn, and what inferences should be drawn will always be a fact sensitive matter which will vary from case to case.”

115. There is no reason whatsoever to think that the judge had similarly misinterpreted the observation by this Court as to the drawing of inferences in circumstances where an account holder permits another person to deposit and withdraw funds from his bank accounts.  As this Court pointed out in Salim Majed, and as is obvious, “…what inferences should be drawn will always be a fact sensitive matter which will vary from case to case.”

116. Of course, in the instant case there was no question of the appellant inciting Mr Papaleo to allow him to use his existing bank accounts to deposit and withdraw funds.  The appellant’s request of Mr Papaleo was that he open two corporate bank accounts in the name of the two companies, which the appellant had requested he acquire and for which the appellant had paid, as he had the expenses of Mr Papaleo. Clearly, it was to be inferred that it was intended Mr Papaleo was to become the authorised signatory of those bank accounts.  Then, for the payment of €5,000, he was to hand over the levers of control of those bank accounts to the appellant.

117. As noted earlier, it was to that evidence that the judge referred in determining that Mr Papaleo “had reasonable grounds to believe that the bank account would be used to launder proceeds of an indictable offence.” [115]  That evidence was highly relevant to the issue that the judge was determining.

118. The judge concluded:[116]

“ The defendant having instructed Mr Papaleo to set up the companies and open the bank accounts for which the defendant would pay Mr Papaleo €5,000 upon control of the companies and bank accounts being handed over to him, I am satisfied so I am sure that the defendant incited Mr Papaleo to deal with property intending Mr Papaleo to act as incited with Mr Papaleo knowing or having reasonable grounds to believe that the monies to pass through the accounts, in whole or in part, directly or indirectly represented the proceeds of an indictable offence.” [Italics added.]

Dealing

119. Section 2 of OSCO provides an inclusive definition of “dealing”:

“  “dealing”, in relation to property referred to in section 15(1) or 25, includes-

(a)  receiving or acquiring the property;

(b)  concealingordisguisingthe property (whetherbyconcealingordisguisingits nature, source, location, disposition, movement or ownership or any rights with respect to it or otherwise);

(c)  disposing of or converting the property;

(d)  bringing into or removing from Hong Kong the property;

(e)  using the property to borrow money, or as security (whether by way of charge, mortgage or pledge or otherwise);”

120. In the judgment of the Court of Final Appeal in HKSAR v Yeung Ka Sing, Carsonit was noted of money laundering that it:[117]

“ …has been described as “the process of disguising the origins of property which has been acquired through criminal conduct.” [118] Concealment and disguise are of its essence.”

121. Of the definition of “dealing”, the Court said:[119]

“  Most of the forms of “dealing” set out in the definition in s 2 of the Ordinance involve conduct that would normally consist of an individual act.  That is so in the case of paras (a), (c) and (d) of the definition. Whether it is so in the case of para (e) is less clear.  However, para (b) uses language that is capable of covering a continuing process.  A person may conceal property over a period of time; perhaps a long period.  The individual acts identified in paras (a), (c) and (d) could be undertaken as part of a process of concealing the relevant property.”

122. Having noted, in its consideration of the issue of duplicity, that in the case of Yeung Ka Sing, Carson and of Salim Majed, which appeals the Court heard together, the prosecution relied on paragraph (a) of the definition, in particular that each deposit into the respective bank accounts was an act of receiving, rather than concealment, the Court said of the aspect of concealment:[120]

“ It provided part of the connection which made the individual deposits acts of a similar nature which could fairly be regarded as forming part of the same transaction or criminal enterprise.

A bank account itself may be an aspect of connection between amounts deposited to the credited account.”

123. As noted earlier, the prosecution case in the instant case was that the applicant had incited Mr Papaleo to deal in the proceeds of an indictable offence by concealing the identity of the person in control of it, by virtue of control of the bank accounts, and its ownership.[121]

124. In the context of his finding that Mr Papaleo had been told by the appellant that the business was not legal [122] but, nevertheless he had been asked by the appellant to go to Hong Kong acquire two companies, open related bank accounts and then handover control of the bank accounts to the appellant [123], the judge determined:[124]

“ I am sure that opening bank accounts on behalf of someone else facilitates money laundering by disguising the actual holder and user of the bank accounts and thereby the true owner of the monies which would be passing through the accounts. I am satisfied so I am sure that by asking Mr Papaleo to incorporate the two companies and open the company bank accounts, the control of which were to be given to the defendant, the defendant incited Mr Papaleo to deal with property.”

125. Mr Egan took issue with whether or not the offence is made out in those circumstances, namely if the role of Mr Papaleo was to cease after he had handed over the levers of control of the bank accounts to the appellant.  In particular, if Mr Papaleo had no role in the movement of monies in the bank account.

126. The latter fact is simply not made out on the evidence.  As noted earlier, the judge rejected the appellant’s evidence that the scheme agreed with Mr Papaleo was:[125]

“ that Mr Papaleo would be required to go to Hong Kong to incorporate the two companies and open the bank accounts only to then transfer ownership to Jozef Drlicka…”

127. Rather, as the judge determined, control but not ownership of the bank accounts was to be handed over to the appellant:[126]

“ after incorporating the companies and opening the bank accounts the control of the companies and the bank accounts would be given to the defendant;”

128. Clearly, Mr Papaleo was to remain the ‘front’ of the two companies, of which he was the sole director and company secretary, and in which it was intended that he be the director authorised to operate the bank accounts and be the signatory.  As such, the appellant intended that Mr Papaleo deal with the movement of funds in the bank accounts in the individual acts stipulated in the definition.  Those acts were to be part and parcel of the concealment.  Further, Mr Papaleo knew that.

Improper motive: the need for a warning

129. Although Mr Egan submitted that the judge erred in failing to give himself a warning to proceed with caution before accepting the evidence of Mr Papaleo, no such specific submission was made by Mr Ross, counsel for the appellant at trial, to the judge.  On the other hand, in his written submissions Mr Ross did contend that Mr Papaleo was a “wholly unreliable and discreditable witness.” [127]  He enumerated seven aspects of that evidence in support of that submission.[128] In conclusion, he characterised the witness as “…a person who wishes to be a famous journalist, or, at least famous, at any cost.  He is prepared to lie in order to advance himself.” [129]

130. The judge summarised the evidence of Mr Papaleo at considerable length, the transcript of which encompasses 13 pages of the Reasons for Verdict,[130] noting that he had been subjected to “a probing cross examination conducted over three days”.[131]  In his consideration of the evidence, the judge said that he had “carefully considered all the evidence and the written and oral submissions of Mr Wong [132] and Mr Ross.” [133]  In doing so, the judge addressed in terms all seven of the sub-paragraphs of paragraph 9 of the written submissions of Mr Ross, as well as addressing other paragraphs of those submissions and the oral submissions of Mr Ross.

131. The judge acknowledged in terms that it was submitted by Mr Ross that Mr Papaleo “was a person who wishes to be a famous journalist and is prepared to lie in order to advance himself.” [134]  Of the issue raised by paragraph 9(1), of whether or not Jozef Drlicka had ever come to Hong Kong, the judge acknowledged that it was an Admitted Fact that the Immigration Department had no record of his movement into/out of Hong Kong in the material period [135].  That contradicted Mr Papaleo’s assertion to the contrary.  However, the judge went on to note that the assertion “was not based on personal knowledge of Mr Papaleo”. In the result, the judge said “this contradiction does not cause me to doubt his evidence.” [136]

132. Of the submission made in paragraph 9(2) that the evidence that Mr Papaleo retained the originals of the company documentation of the two companies he had acquired was inconsistent with the assertion that the appellant wished to have control of the companies, the judge said that he accepted Mr Papaleo’s explanation that he needed the originals to seek to open bank accounts, or at least to pretend to the appellant that was what he was doing.[137]

133. The judge addressed the submission made in paragraph 9(3) that Mr Papaleo’s evidence was incredible that he did not know that in the Goblin pub meeting Jozef Drlicka had accused them of being a fraudster, “podvodnik” in Slovakian, because he did not know that meaning of the Slovakian word.  The allegation was that he had a false press card.  The judge said that he accepted Mr Papaleo’s evidence of his lack of understanding of the word.[138]

134. Next, the judge addressed the submission made in paragraph 9(4) and made orally by Mr Ross that, because of his alcohol and drug habits, Mr Papaleo was “neither a credible nor reliable witness.” [139]  The judge accepted Mr Papaleo’s evidence “that he never took drugs.” [140]  Further, the judge noted that Mr Papaleo accepted that he drank alcohol and had done so in the Goblin pub, in Hong Kong and that he got drunk in the Italian Embassy in Slovakia.[141]  Of his evidence that he had washed his mouth out with whisky every morning before meeting the appellant, the judge said that he accepted that he did so only in his role of pretending to be a corrupt journalist with serious drug and alcohol abuse problems.  He found that the fact that he consumed alcohol “does not cause me to doubt his evidence.” [142]

135. Also, the judge addressed the submission made in paragraph 9(5) that Mr Papaleo’s evidence was incredible that the appellant had asked him to prepare business documents which contained false information to present to the banks in order to open bank accounts, given that there was no reference to that event in any of Mr Papaleo’s seven witness statements.[143]  The judge noted that Mr Papaleo testified that he had “surely told the police”, but he accepted that assertion was not to be found in the witness statements.  He explained that he had checked the witness statements to ensure that there was nothing false in them but, the statements could not cover every “single specific fact of the story”, asserting that the issue was a minor offence and he had highlighted more important matters.[144]

136. The judge did not accept that falsifying documents was “a minor matter.”  Nevertheless, he said “having considered all the evidence I accept the explanation given by Mr Papaleo for this omission.”  He concluded by saying that “it did not cause me to doubt his evidence.” [145]

137. Next, the judge addressed the submission made in paragraph 9(6) that Mr Papaleo had exaggerated his evidence about the aggressive behaviour of a person he saw initially in the public gallery and then in the lavatory.[146]  The judge rejected the submission and found that it was proper of Mr Papaleo to raise the matter with the Court.  Not surprisingly, he determined that it did not cause him to doubt Mr Papaleo’s “credibility or reliability.” [147]

138. Finally, the judge addressed the submission made in paragraph 9(7) that Mr Papaleo’s evidence, that the offence of money laundering was hiding the source of the beneficiary of a transaction, betrayed a misunderstanding about the nature of the offence.  The judge found that “the fact that Mr Papaleo may have got the definition of money laundering wrong” did not cause him to doubt his reliability.[148]

139. In addressing paragraph 6 of the written submissions, namely that there was no support on the audio track of the video recording A, of the meeting in the Goblin pub, for Mr Papaleo’s evidence that the appellant had told that the business was “not legal”, the judge noted that whilst there was reference to “financial operation, tax, offshore companies and just business” because of the background noise those words “simply cannot be heard.”  In consequence, the judge determined that “no reliance can be therefore placed on this part of the video.” [149]

140. Nevertheless, the judge noted that in video recording C the appellant said of the business “It’s no guns”.  The judge said that supported Mr Papaleo’s evidence that was what he was told by the appellant and he accepted his evidence that the appellant told him that the business was not legal.[150]

141. In addressing paragraph 8 of the written submissions, namely that there was no reference on the audio track of the video recordings of a statement that Mr Papaleo was to hand over control of the bank accounts, the judge acknowledged that to be the case.[151]  On the other hand, the judge noted that it was Mr Papaleo’s explanation that he had been told that prior to the meeting by Jozef Drlicka, which was why he had tried to elicit other information.  The judge said that he accepted that explanation, which did not cause him to doubt his evidence.[152]

142. Of Mr Ross’s oral submission that Mr Papaleo’s evidence was unreliable because he had made subsequent corrections to earlier testimony, the judge noted that it happened twice.[153]  First, he said that Acorn, the corporate services provider, had introduced him to a bank on 17 May 2013.  He thought that was Hang Seng Bank, but he was not sure.  On the following day of his testimony he corrected the date to 16 May 2013.  Then, he corrected the name of the bank, saying it was the Standard Chartered Bank and that an appointment had been made for 18 May.  As might have been expected, the judge found that it was not surprising that the witness corrected dates and names of events which occurred almost one year earlier, which change did not cause him to doubt his testimony.[154]

143. As is made abundantly clear from the passages of the Reasons for Verdict, to which reference has been made, the judge was fully aware of the nature of the allegations made against Mr Papaleo. It is perfectly clear that he approached his evidence carefully, as indeed he said he did.  He examined the various written and oral submissions exhaustively and, having heard and seen the witness testify over many days, was entitled to accept his evidence in the various respects in which he did so.  With respect to Mr Egan, there is no merit whatsoever in this ground of appeal.

Conclusion

144. For the reasons we have set out, we are satisfied that the appeal against conviction must be refused.

The appeal against sentence

Mitigation

145. In mitigation Mr Ross said that the appellant was a university educated, 36-year-old Slovakian, who was a freelance journalist and a businessman.  Further, he had no criminal convictions.

146. Then, he referred the judge to the judgment of this Court in HKSAR v Boma [155].  In particular, he drew the judge’s attention to paragraph 40(2) in which Stock VP, in the judgment of this Court, identified some of the “significant features”, which may be involved in the commission of the offence of money laundering, which had been identified in the judgments of this Court.[156]  Mr Ross dealt with each of the features identified in turn.

147. Mr Ross said that no predicate offence had been identified.  He accepted that the judge had found that the appellant intended to commit the offence, rather than being reckless.  With some reluctance, he accepted that the international element in the commission of the offence was the fact that the appellant was a Slovakian who had come from there to Hong Kong to commit the offence, rather than the appellant’s assertion to Mr Papaleo of the use of offshore bank accounts in the scheme.  Of the element of sophistication and the degree of planning in the commission of the offence, he suggested that the opening of bank accounts to be used by another was “a standard kind of planning”.  He said that regard to whether or not there was one or multiple transactions and the length of time over which the offence was committed was irrelevant.  Similarly, regard to whether the defendant continued to launder funds, after he had discovered that they were the proceeds of an indictable offence, was irrelevant.

148. Mr Ross accepted that factor 8, namely the role of the offender and the acts performed was relevant.  He accepted that the judge had found that the appellant:[157]

“ …was the person who arranged for Mr Papaleo to come to Hong Kong and accompany him to the company processing, the company Acorn, and also arranged for him to visit the banks for the purpose of getting a bank account.”

149. Finally, he submitted that it was not known what amount of funds would be moved in the bank accounts.  He said that the appellant had testified that the reference to €1 million, as being the amount of money that could move in the accounts, made by the appellant to Mr Papaleo was a lie.  It was made up so that Mr Papaleo could provide the bank with some figure, if requested.

Reasons for sentence

150. In sentencing the appellant, the judge said “Full details of the offence are set out in my verdict”.  Of the fact that the appellant had no previous criminal convictions in Hong Kong, he said that was of “little weight where you are a visitor to Hong Kong who commits serious crime.” [158]  He said that money laundering was “a serious offence for which deterrent sentences are required.”  He noted that Mr Ross had “specifically referred me to 8 factors set out in paragraph 40(2) of the judgment in Boma.”  The judge then enumerated “significant factors”, which had been identified as relevant to determining the culpability of a defendant.  In addition to Boma, he referred to the judgments of this Court in Secretary for Justice v Jerome Yuval Arnold Herzberg [159] and HKSAR v Hsu Yu Yi. [160]

151. Of the significant factors, relevant to determining the culpability of a defendant, the judge said that they included:

“ …the nature of the offence that generated the laundered money and the extent to which the offence assisted the crime or hindered its detection; whether the defendant had knowledge of that underlying offence or has turned a blind eye to the source of the money; whether there was an international element to the commission of the offence; the degree of sophistication of the offence and the level of the defendant’s participation, including the length of time the offence lasted and the benefit he derived from the offence; and the amount of money involved.”

152. Next, the judge turned to identify the significant factors relevant to determining the culpability of the appellant.  He said:

“ The opening of bank accounts for someone else facilitates the laundering of money by disguising the true owner of the money passing through the bank accounts. This makes difficult the detection of crime and at the same time undermines the integrity of the banking system. This is even more so in a case where both the person who opens the account and the true holder of the account are not Hong Kong residents.”

153. Then, having said that he took into account “…the international dimension and your role in inciting Mr Papaleo”, the judge sentenced the appellant to 4 years’ imprisonment.

A consideration of the submissions

154. It is quite clear from an examination of the “significant factors” relevant to “determining the culpability of a defendant”, which the judge ennumerated as having been identified, that the judge cited in large measure factors stipulated in the judgment of this Court in Boma.  The judge’s reference to the “nature” of the predicate offence was clearly a reference to paragraph 40(1) and (2)(a) of the judgment.  There was no dispute that the nature of the predicate offence was not known.  Similarly, references to knowledge of or the turning of a blind eye to the predicate offence was not relevant to a consideration of the culpability of the appellant.  By contrast, the references to an international element and the degree of sophistication of the commission of the offence were relevant to the appellant.  The offence being one of incitement only, it not having come to fruition, the references to the length of time the offence lasted, the amount of money involved and the benefit to the appellant were not relevant.

155. With respect to Mr Egan, there is no merit in his submission that there the judge was enumerating factors he found relevant to and proved against the appellant.  Clearly, he was not doing so.

156. By contrast, the judge’s reference to the fact that the opening of bank accounts in the name of a person other than the person who is to control the bank account disguises the true owner and facilitates money-laundering was fully justified.  Similarly, he was entitled to determine that the fact that both the appellant and Mr Papaleo were not Hong Kong residents added to the difficulty of unravelling the truth.

157. Most important in the factors relevant to the determination of the culpability of the appellant was the judge’s reference to “the international dimension and your role in inciting Mr Papaleo”.  The fact that the appellant, a citizen of Slovakia, came to Hong Kong to commit the offence was a serious factor of aggravation in the commission of the offence.  He abused the hospitality of Hong Kong and he sought to put at risk its reputation as an international financial centre.  That reputation is of significant importance to Hong Kong and the welfare of its people.

158. In sentencing the appellant, the judge did not elaborate on the question of the appellant’s role.  There was no need for him to do so, given that he had described his findings in that respect at length and in great detail in his Reasons for Verdict.

159. It is clear that the appellant occupied the central role in the offence of inciting Mr Papaleo.  He was persistent in the directions that he gave Mr Papaleo to seek to achieve the objects of the scheme.  He did so in a period of more than a month.  During that time he travelled to Hong Kong twice and caused and paid for Mr Papaleo to do likewise.  The appellant provided Mr Papaleo not only with the names of the two companies to be acquired but also with the name and telephone contact details of the corporate services provider, the names of the banks to be contacted and the bank to avoid.  He acted as a back-stage, puppet master of Mr Papaleo, whilst the latter occupied centre stage.

160. In face of Mr Papaleo’s untrue assertion to him that the banks required proof of business, the appellant instructed Mr Papaleo “…how to falsify the documents”.[161]  As a result, Mr Papaleo prepared four or five letters from companies who did not know of him, asserting falsely that they had “…business transactions with him.” [162]  The appellant provided for the expenses of travel and the disbursements for the acquisition of the companies and promised Mr Papaleo a payment of €5,000 on successful handover of the bank accounts opened in the name of the two companies.  The judge was entitled to have regard to the time, trouble and expense to which the appellant had gone in his incitement of Mr Papaleo, as some measure of the proposed use of the two bank accounts by the appellant, once the levers of control of the two bank accounts had been handed to him.

Conclusion

161. In the result, we are satisfied that the sentence of 4 years’ imprisonment imposed on the applicant was entirely appropriate. Accordingly, the appeal against sentence is dismissed.

[1] Reasons for Verdict, paragraphs 3-5. 

[2] Reasons for Verdict, paragraph 15.

[3] Reasons for Verdict, paragraph 16.

[4] Reasons for Verdict, paragraph 171.

[5] Reasons for Verdict, paragraph 172.

[6] Reasons for Verdict, paragraph 174.

[7] Reasons for Verdict, paragraph 199.

[8] Reasons for Verdict, paragraph 200.

[9] Reasons for Verdict, paragraph 201.

[10] Video C- 14 May 2013.

[11] Reasons for Verdict, paragraph 206.

[12] Reasons for Verdict, paragraph 201.

[13] Reasons for Verdict, paragraph 264.

[14] Reasons for Verdict, paragraphs 265-6.

[15] Reasons for Verdict, paragraph 270.

[16] Reasons for Verdict, paragraphs 271-2.

[17] HKSAR v Shing Siu Ming & Others [1999] 2 HKC 818.

[18] HKSAR v Pang Hung Fai(CACC 34/2012; unreported, 31 May 2013) .

[19] Seng Yuet Fong v HKSAR [1999] 2 HKC 833.

[20] Reasons for Verdict, paragraph 276.

[21] HKSAR v Wong Chor Wo & Another (CACC 314/2006; unreported, 16 June 2008 at paragraph 108.)

[22] Reasons for Verdict, paragraph 278.

[23] Secretary for Justice v Jerome Yuval Arnold Herzberg [2010] 1 HKLRD 502.

[24] HKSAR v Boma [2012] 2 HKLRD 33. 

[25] R v Beck [1992] 1 All ER 807, at 813 a and h.

[26] R v Shepherd [1919] 2 KB 125, at 126; R v McDonough (1962) 47 Cr App R 37, at 38; R v Fitzmaurice [1983] 1 All ER 189, at 194.

[27] DPP v Armstrong [2000] Crim L.R. 379, at 380.

[28] HKSAR v Jaribaka Jurai (CACC 321/2014; unreported, 28 November 2015 at paragraph 28).

[29] Appeal Bundle; page 7, paragraph 14-the prosecution opening.

[30] Appeal Bundle; page 112; paragraph 27.

[31] Reasons for Verdict, paragraph 13.

[32] Reasons for Verdict, paragraph 268.

[33] HKSAR v Huynh Bat Muoi (CACC 28/2000; unreported, 14 June 2001 at paragraph 50) .

[34] Reasons for Verdict, paragraph 278.

[35] Reasons for Verdict, paragraph 264.

[36] R v Shepherd [1919] 2 KB 125.

[37] R v Shepherd, page 126.

[38] R v McDonough (1962) 47 Cr App R 37.

[39] R v McDonough, page 40.

[40] Director of Public Prosecutions v Nock[1978] 2 All ER 654.

[41] Director of Public Prosecutions v Nock, page 663 b-c.

[42] R v Fitzmaurice [1983] 1 All ER 189.

[43] R v Fitzmaurice, page 193 f-g.

[44] R v Fitzmaurice, page 194 c-e.

[45] R v Fitzmaurice, page 194 f-h.

[46] Director of Public Prosecutions v Armstrong[2000] Crim LR 379 [Transcript: 5 November 1999, WL 1019606].

[47] R v Shaw [1994] Crim LR 365.

[48] R v Curr[1968] 2 QB 944.

[49] Director of Public Prosecutions v Armstrong;Transcript page 2.

[50] Director of Public Prosecutions v Armstrong; Transcript page 2.

[51] Director of Public Prosecutions v Armstrong; Transcript page 3.

[52] Director of Public Prosecutions v Armstrong;Transcript pages 3 and 4.

[53] Director of Public Prosecutions v Armstrong; Transcript page 4.

[54] Director of Public Prosecutions v Armstrong; Transcript page 4.

[55] R v Curr[1968] 2 QB 944.

[56] Family Allowances Act, 1945, s.9:

“  If any person…

(b) obtains or receives any sum on account of an allowance, either as in that person's own right or as on behalf of another, knowing that it was not properly payable, or not properly received by him or her, that person shall be liable…[ two penalty].”

[57] R v Curr, page 953 C.

[58] R v Curr, page 953 E-F.

[59] R v Curr, pages 954 G - 955 A.

[60] R v Curr, page 955 F.

[61] Director of Public Prosecutions v Armstrong;Transcript page 4.

[62] Director of Public Prosecutions v Armstrong;Transcript page 4.

[63] Reasons for Verdict, paragraph 15.

[64] Reasons for Verdict, paragraph 16.

[65] Reasons for Verdict, paragraph 89.

[66] Reasons for Verdict, paragraph 104. Counter # 50 of the second video recording.

[67] Reasons for Verdict, paragraph 118.

[68] Reasons for Verdict, paragraph 127.

[69] Reasons for Verdict, paragraph 221.

[70] Reasons for Verdict, paragraph 222.

[71] Reasons for Verdict, paragraph 207.

[72] Reasons for Verdict, paragraph 205.

[73] Reasons for Verdict, paragraph 206.

[74] Reasons for Verdict, paragraph 211.

[75] Reasons for Verdict, paragraph 87.

[76] Appeal Bundle, page 465 I-J.

[77] Reasons for Verdict, paragraph 106.

[78] Reasons for Verdict, paragraph 213.

 [79] Reasons for Verdict, paragraph 104.

[80] Reasons for Verdict, paragraph 213.

[81] Reasons for Verdict, paragraph 12.

[82] Reasons for Verdict, paragraph 88.

[83] Reasons for Verdict, paragraph 88.

[84] Appeal Bundle, page 146 O. “A. Basically they would have -- I must have used my name in order to constitute a legal entity which was not subject to my control, but to his control.”

[85] Appeal Bundle, page 385 S - 386 E.

[86] Appeal Bundle, page 416 H.

[87] Appeal Bundle, page 416 C-E.

[88] Reasons for Verdict, paragraph 172.

[89] Reasons for Verdict, paragraph 174.

[90] Reasons for Verdict, paragraph 265.

[91] Reasons for Verdict, paragraph 266.

[92] Reasons for Verdict, paragraph 267.

[93] Reasons for Verdict, paragraph 272.

[94] Reasons for Verdict, paragraph 276.

[95] Reasons for Verdict, paragraph 267.

[96] Appeal Bundle, page 431 E-P.

[97] Reasons for Verdict, paragraphs 273-4.

[98] HKSAR v Shing Siu Ming & Others

“This phrase, we are satisfied, contains subjective and objective elements.  In our view it requires proof that there were grounds that a commonsense, right-thinking member of the community would consider were sufficient to lead a person to believe that the person being assisted was a drug trafficker or had benefited therefrom.  This is the objective element.  It must also be proved that those grounds were known to the defendant.  That is the subjective element.”

[99]  Seng Yuet Fong v HKSAR

“To convict, the jury had to find that the accused had grounds for believing; and there was the additional requirement that the grounds must be reasonable: That is, that anyone looking at those grounds objectively would so believe.”

[100] Reasons for Verdict, paragraph 276.

[101] HKSAR v Wong Chor Wo & Another, paragraph 108.

[102] HKSAR v Pang Hung Fai(2014) 17 HKCFAR 778.

[103] HKSAR v Pang Hung Fai, paragraphs 44-50.

[104] HKSAR v Pang Hung Fai, paragraph 52.

[105] HKSAR v Pang Hung Fai, paragraph 56.

[106] HKSAR v Yeung Ka Sing, Carson (FACC 1, 5 and 6/2015; unreported, 11 July 2016) .

[107] HKSAR v Yeung Ka Sing, Carson,paragraph 126.

[108] HKSAR v Yeung Ka Sing, Carson, paragraph 128.

[109] Reasons for Verdict, paragraph 111.

[110] Appeal Bundle, page 302 P-T.

[111] HKSAR v Wong Chor Wo & Another,paragraph 112.

[112] HKSAR v Salim Maje (CACC 184/2013; unreported, 14 November 2014) .

[113] HKSAR v Salim Majed, paragraph 107.

[114] HKSAR v Salim Majed, paragraph 108.

[115] Reasons for Verdict, paragraph 276.

[116] Reasons for Verdict, paragraph 278.

[117] HKSAR v Yeung Ka Sing, Carson, paragraph 149.

[118] J Ulph, Commercial Fraud: Civil Liability, Human Rights, and Money Laundering (2006) OUP at p 124.

[119] HKSAR v Yeung Ka Sing, Carson, paragraph 155.

[120] HKSAR v Yeung Ka Sing, Carson, paragraphs 158-9.

[121] Reasons for Verdict, paragraph 13.

[122] Reasons for Verdict, paragraph 207.

[123] Reasons for Verdict, paragraph 264(f).

[124] Reasons for Verdict, paragraph 270.

[125] Reasons for Verdict, paragraph 174.

[126] Reasons for Verdict, paragraph 264(h).

[127] Appeal Bundle; page 127, paragraph 9.

[128] Appeal Bundle; pages 127-8, paragraph 9 (1) to (7).

[129] Appeal Bundle; page 128, paragraph 10.

[130] Reasons for Verdict, paragraphs 82-131.

[131] Reasons for Verdict, paragraph 264.

[132] Mr Derek Wong, Senior Public Prosecutor.

[133] Reasons for Verdict, paragraph 173.

[134] Reasons for Verdict, paragraph 230.

[135] Appeal Bundle, page 10.

[136] Reasons for Verdict, paragraph 249.

[137] Reasons for Verdict, paragraph 16.

[138] Reasons for Verdict, paragraph 242.

[139] Reasons for Verdict, paragraphs 250-7.

[140] Reasons for Verdict, paragraph 257.

[141] Reasons for Verdict, paragraph 251.

[142] Reasons for Verdict, paragraphs 252-3.

[143] Reasons for Verdict, paragraph 217.

[144] Reasons for Verdict, paragraphs 220-1.

[145] Reasons for Verdict, paragraph 222.

[146] Reasons for Verdict, paragraphs 258-9.

[147] Reasons for Verdict, paragraph 261.

[148] Reasons for Verdict, paragraph 263.

[149] Reasons for Verdict, paragraph 204.

[150] Reasons the Verdict, paragraph 207.

[151] Reasons for Verdict, paragraph 209.

[152] Reasons for Verdict, paragraph 211.

[153] Reasons for Verdict, paragraph 223.

[154] Reasons for Verdict, paragraph 226.

[155] HKSAR v Boma[2012] 2 HKLRD 33.

[156] Appeal Bundle, pages 136 A - 138 A.

[157] Appeal Bundle, page 137 M-O.

[158] Appeal Bundle, page 101 P.

[159] Secretary for Justice v Jerome Yuval Arnold Herzberg [2010] 1 HKLRD 502.

[160] HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545.

[161] Reasons for Verdict, paragraph 264 (r).

[162] Reasons for Verdict, paragraph 264 (s).