HKSAR v. AGUILLON RUIZ JAIME AND ANOTHER

HCCC 365/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 365 OF 2016

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D E C I S I O N

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THE APPLICATION

1.  On 3 October 2017, I sentenced D1 and D2 to the respective terms of 8½ years and 10 years in respect of count 1 on the Amended Indictment, trafficking in a dangerous drug, to which they had pleaded guilty.  Afterwards, the prosecution applied for the disposal of exhibits which included a forfeiture application made under section 56(1) of the Dangerous Drugs Ordinance, Cap 134 (“the Ordinance”) in respect of the cash found in the premises (exhibits P28 to P38 : cash in the sum of HK$89,600 and USD244 stored inside a box found on the TV cabinet in the living room) and on the persons of D1 (exhibit P45 : cash HK$2,717) and D2 (exhibits P54-56 : a total of HK$7,400).

2.  Both Defendants opposed the application and the matter was adjourned to 4 October 2017.  During that hearing, the prosecution made submissions regarding the basis of the application which primarily included the fact that a relatively large amount of drugs and packaging paraphernalia were found in the small premises; the large amount of the cash seized; and the financial state of the Defendants.  In reply, both defence counsel submitted that a prima facie case to establish the necessary link between the offence and the money had not been made out.

3.  After considering the parties’ submissions and the material before me, I considered that there was a prima facie case for the forfeiture of the money as sought by the prosecution and I gave my brief reasons at the time.  In particular, I took into account that, in the course of mitigation, D1 was said to have succumbed to the drug deal because of financial pressure and that D2 was also said to have yielded to the deal as he was waiting for the transfer of money to him at the material time.  In my view, such illustrated that both Defendants were in need of money at the time of the offence.  As such, it was highly improbable, to say the least, that the money found in the premises and on their persons had come from their own savings or their own sources.  Instead, it does seem, prima facie, that the cash found was money which each of them received or possessed as the result or product of the drug offence.

4.  Following my preliminary ruling, both defence counsel said that they would need more time to prepare the case and to gather the necessary documents.  In the circumstances, I adjourned the hearing to 25 October 2017.  Both Defendants elected to give evidence at the resumed hearing and parties then made further submissions. At the end of the hearing, I reserved my decision which I now give.

THE PROVISIONS AND THE APPLICABLE PRINCIPLES

5.  Section 56(1) of the Ordinance reads,

“(1) A court may (whether or not any person has been convicted of such offence) order to be forfeited to the Government -

(a) any money or thing (other than premises, a ship exceeding 250 gross tons, an aircraft or a train) which has been used in the commission of or in connection with;

(b) any money or other property received or possessed by any person as the result or product of,

an offence under this Ordinance or a drug trafficking offence within the meaning of the Drug Trafficking (Recovery of Proceeds) Ordinance (Cap 405).”

6.  The relevant legal principles governing forfeiture applications are those laid down by the Court of Final Appeal in Wong Hon Sun v HKSAR (2009) 12 HKCFAR 877 and the Court of Appeal in HKSAR v Ngoma Juma Shabani [2015] 5 HKLRD 57.  In short, the party making the forfeiture application bears the burden of establishing, prima facie, that the seized article is liable to forfeiture, that is, whether there is a prima facie connection between the property and the commission of an offence under the relevant ordinance.  Once this is done, the onus will then be shifted to the party claiming the property back to satisfy the court on the balance of probabilities that the court’s discretion should be exercised to order the return of the property to him.

PRIMA FACIE CASE FOR FORFEITURE

7.  As outlined above, I found that, based on the material and information before me, including the Summary of Facts and the mitigation advanced, a prima facie case had been established by the prosecution to seek forfeiture of the properties.

D1’S EVIDENCE

8.  D1 said that he was a trader in clothes in Mexico.  He bought clothes in the Mainland and sent them to Mexico, sometimes to Colombia, for sale through his or his wife’s friends or through the shops there.  He told the court that a person had lent him the money at an interest so that he could buy and sell clothes and he kept on his business by re-investing the profits he got.  In this connection, a purported loan agreement dated 8 April 2015 in respect of a sum of COP40,000,000 (roughly HK$100,000), was produced.  D1 said that he had exchanged the cash into US currency and had brought the money to HK.  When he required HK currency, he would exchange some of the money and when he went to the Mainland, he would exchange the HK currency into CNY.  When he returned to HK from the Mainland, he would then exchange the money back to HK currency.

9.  According to D1, the money seized, including cash HK$2,717 found on his person which he kept for his personal expenses and cash HK$89,600 as well as USD244 which were found inside the box, all belonged to the person who had lent him the money and it was the remainder of the loan.

10.  Further, D1 pointed to his movement records and said that he had been to the Mainland in February, April, June and August 2015 to buy clothing items for his business.  When asked how much money he had spent on each of his trips to the Mainland in buying the goods, D1 replied that it ranged from RMB40,000 to RMB60,000.  In other words, for the four trips involved, he had spent about RMB160,000 on the goods.  D1, however, said that this money included the profits from the previous sales which were sent back to him by Western Union.  According to D1, the last time he got the money from Western Union was around 15 to 18 October 2015 when he received HK$25,000 from Mexico.

11.  Under cross-examination and when asked why the purported loan agreement bore the date of 8 April 2015 and was said to have been signed on that day by both D1 and the lender when D1 was actually in HK, D1 claimed that he had left the agreement prepared and ready for authentication before he came to HK.  That was why it bore the date of 8 April 2015.

12.  In respect of the financial pressure D1 had at the time of the offence as related to the court by his counsel, Mr Sherry, D1 explained that it was not that he had no money at all.

D2’S EVIDENCE

13.  D2 told the court that he was trading in clothes in Colombia before he came to HK.  The way he conducted his business was by way of buying and storing the clothes at home and selling them to his clients, the co-ops and the retailers. D2 claimed that he was earning about USD2,500 to USD3,000 on average.  He also said that his common law wife worked at the Citibank and earned about USD900 to USD1,000 per month.  D2 told the court that as his wife worked in the bank, she could get a preferential exchange rate.  Therefore, he had given her about COP6,000,000 to exchange to US currency and he then brought USD2,000 for his trip to HK.  In this connection, D2 had produced to the court a document dated 20 August 2015 which was said to have evidenced the exchange.

14.  As to his trip to HK, D2 said he had planned to go to the Mainland to source goods for his business.  However, after his arrival in HK, he then met a woman and slept at her place for 25 nights.  When the woman returned to her country, D2 then moved to live in D1’s premises in early October 2015 rent-free.

15.  As to the money involved, D2 told the court that he had brought with him about USD1,500 and USD1,700 to Hong Kong which he then exchanged to HK currency after arrival.  D2 said he had minimal expenses while in HK and he accepted under cross-examination that according to what he said, he had only spent about HK$4,600 during his stay in HK for almost 2 months.

16.  D2 said that at the time of the offence, he was waiting for money to be sent to him.  When asked by the court how much he was expecting to be sent, he said it was about USD30,000 to USD35,000 but when he was cross-examined, he then said the money was not to be sent to him but was to be given to his wife.  It was a loan from his aunt but it did not materialize.  In this connection, D2 referred to a document in which his aunt purportedly confirmed that she had failed to get a loan from a bank and she therefore could not send the money to D2 for the business.

17.  In respect of the money found on his person, D2 said that it was the remainder of the money which he had brought from Colombia and it had nothing to do with the drug offence.  D2 claimed that he had not been promised any reward for taking part in the drug deal.  

18.  Under cross-examination and when asked why he had given different amounts of how much US dollars he had brought to HK, D2 replied that the differences were small and he had spent a few days in Mexico before coming to HK.

CONSIDERATION

19.  Having considered the evidence adduced and the material put before me in the course of these proceedings, including the Summary of Facts and the matters urged upon me in mitigation, I completely reject both D1’s and D2’s claims that the money in question was money which they had obtained in the manner they each described.

20.  Although both asserted that the cash found was the remainder of the money they had brought to HK (in the case of D1, it was both money left from the loan and the profits he recovered from his sale of clothes), their claims are not believable at all.

21.  Firstly, in respect of the purported loan agreement produced by D1, it bore the date of 8 April 2015 and it was said to have been signed by the lender and D1 on that same day.  However, D1 was in HK at that time and he clearly could not have done so.  There are serious doubts, to say the least, about the authenticity of the document and I am not prepared to take that into consideration.

22.  Having considered the totality of D1’s evidence and all the material before me, I reject that the cash found on his person and the cash kept inside the box was money remaining from the alleged loan and/or from his profits.  I note that the bulk of the money was in HK currency, not US currency.  Moreover, in the course of mitigation, Mr Sherry had told the court that D1 was under financial pressure at the time and he therefore agreed to store the drugs for a reward of HK$2,000.  If D1 had brought a total of about HK$100,000 to HK and had had with him a total of about HK$90,000 for his use at the time of his arrest, it would have been wholly unreasonable for him to take the risk and to accept an offer of HK$2,000 for the suggested storage of the drugs.  If D1 had that money, it would also be wholly unreasonable for D1 to describe himself as under financial pressure so much so that he had to yield to accepting the drug deal.

23.  In short, the only conclusion is that D1 was actually in dire financial situation at the time of the offence and the cash found was not money brought to HK by him, nor any profits from his business as asserted.

24.  In respect of D2’s claim that the cash found was the remainder of the money he brought to HK, I, too, reject it.

25.  The document which purportedly evidenced the exchange to USD2,000 made by the lady who was said to be D2’s common law wife does not assist D2 because even if there was such a purchase of USD by the lady named, I reject the claim that the money had then been given to D2 for him to bring to HK.  This sum of USD2,000 only represented about 2/3 of the alleged monthly income of D2.  If the money had been given to D2 by his wife before his departure, it would have meant that for this long trip to HK and for the purpose of buying goods from the Mainland, D2 was not even able to get himself any larger sum for this business trip.  Also, I note that D2 kept changing his version about how much he had brought to HK and when asked further, he then said he had spent a few days in Mexico before arriving in HK.

26.  Further, while D2 had, through his counsel Mr Tracy, claimed during the mitigation that he was waiting for money to be sent to him and he had then succumbed to the drug deal, he later changed this and said that the money would not be sent to him in HK.

27.  In short, I find that this bringing of about USD2,000 to HK and this waiting for money to be sent for his business is untrue.  One would have thought that if the purpose of D2’s trip was to source goods from the Mainland and if he was able to earn a handsome amount in Colombia, he would certainly have brought with him more money for the alleged business and would have gone straight to the Mainland rather than idling around in HK for almost 2 months.

28.  Having considered the totality of D2’s evidence and all the material before me, I reject his assertion that the money seized was the remainder of the money he had brought with him to HK.

29.  Let me now turn to the Summary of Facts.  The agreed facts, particularly paragraphs 7 and 8, clearly showed that the premises in which D1 and D2 were arrested did not only have the drugs in question but also the packaging paraphernalia, including the scales, the metal rod, the metal cylinder, the metal discs, and the empty bottles.

30.  Although Mr Sherry argued that there was no allegation from the prosecution that D1 was, at the time when he was arrested, actually selling the drugs in question and that D1 had only admitted having stored the drugs for someone, it is trite that the court is not obliged to accept what was asserted by the defendant.  In HKSAR v Ngoma Juma Shabani [2015] 5 HKLRD 57, Macrae JA observed at 68 that,

“That evidence and information before the court was more than sufficient to ground an inference that the sizeable amount of USD4,500 on his person was, at the very least, used in connection with an offence under the Ordinance. The fact that he had made an assertion to Customs Officers when interviewed that the money was related to his mobile telephone business did not prevent such an inference being drawn, any more than it obliged the court to accept the truth of the assertion. …”

31.  In the present case, these are of importance : the small size of the premises, the different packaging paraphernalia, the openness in which some of the drugs and the empty bottles were placed, the huge amount of the drugs sized, as well as the fact that some of the drugs were found inside the bags and some were inside the bottles.  Such, together with the admission from both defendants that no one else stayed in the premises, leads to the irresistible inference that the drugs were not merely being stored in the premises as asserted by D1 but were actually packaged in the premises.

32.  Therefore, although neither of them was seen packaging or dealing with the drugs at the time of the police entry, the only conclusion on the facts of this case must be that it was they who had so packaged the drugs in the premises and they were, at the time of the arrest, having joint control of the drugs for the purpose of trafficking.

33.  In other words, I reject D1’s claim that he had only been given HK$2,000 for storing the drugs. I also reject D2’s claim that he had not been promised, nor had received, any reward for the part he took in the offence.  Having considered all the relevant circumstances, including that both defendants were foreigners in HK who were subject to working restrictions, the fact that the bulk of the money found was in HK currency, and that both were having financial difficulties at the time, I find that the cash sought by the prosecution to be forfeited was the reward each of them received or money possessed by each of them as a result or product of the drug offence.

CONCLUSION

34.  I order that exhibits P28 to P38, P45, and P54 to P56, that is, the cash found inside the paper box on the TV cabinet in the living room as well as the cash found on the persons of D1 and D2 are to be forfeited.