HKSAR v. YEUNG KA SING, CARSON

CACC 101/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 101 OF 2014

(ON APPEAL FROM DCCC NO. 860/2011)

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REASONS FOR DECISION

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1. The applicant sought bail pending the hearing of his applications for leave to appeal against conviction and sentence, following his conviction on 28 February 2014, after trial by District Court Judge Douglas Yau on five charges of dealing with property known or believed to represent the proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455. The applicant was sentenced to a total of 6 years’ imprisonment on Charges 1 and 2, 5 years’ imprisonment on Charges 3 and 5 and 2 years’ imprisonment on Charge 4. All the sentences were ordered to be served concurrently. Accordingly, the total sentence imposed on the applicant was 6 years’ imprisonment. At the hearing I refused the application. Now, I give short reasons for that decision.

Amended Perfected Grounds of Appeal against Conviction

2. Those representing the applicant filed Amended Perfected Grounds of Appeal against Conviction on 26 November 2014, in substitution for the grounds filed hitherto.  Although no less than 12 grounds of appeal are stipulated, for the purposes of this application Mr Plowman SC relies on some only of those grounds of appeal.  By Ground 1A, it is submitted that each of the charges was duplicitous in accordance with the principles identified by this Court in HKSAR v Salim Dahdal [1], in particular that each of the charges alleged multiple receipts of monies into the respective bank accounts from unconnected persons over a period of six years.  By Ground 1, it was submitted that the judge had erred in applying a two-stage test to the consideration of whether or not the applicant had reasonable grounds to believe that the monies were the proceeds of an indictable offence, namely: [2]

“ The applicable test is the two stage test of making a finding on what facts were known to the defendant and then making a finding on whether knowing those facts, a reasonable right thinking member of the community would consider that there were reasonable grounds to believe that the money represented, wholly or in part, directly or indirectly, proceeds of an indictable offence.”

3. It was asserted that in light of the judgment of Spigelman NPJ, with whom all the other judges agreed, in Pang Hung Fai v HKSAR [3] that the test adopted by the judge was erroneous, and in consequence it was submitted that the applicant’s convictions are unsafe and unsatisfactory.  In particular, it was contended that the judge had failed to consider or make any findings as to whether the applicant himself had grounds to believe and wrongly applied the reasonableness test only to “facts” and not “grounds”.  Further, in doing so the judge impermissibly restricted the ambit of the “grounds” which the applicant had failed to consider or make findings as to the mental state of the applicant at the relevant time.

4. By Grounds 2A, 2 and 3 it was submitted that the singular fact that the bank accounts, that are the subject of Charges 1 to 5, had relatively similar opening and closing balances was not by itself a proper basis to make the pejorative finding that the accounts were used as a repository of funds and/or to find that “was one of the reasonable grounds to believe” [4] that the monies were the proceeds of an indictable offence.  In so finding, the judge failed to have regard to the broader context, in particular in the absence of any finding that the applicant was acting on behalf of others or as to the applicant’s intent or purpose in so acting.

The respondent’s submissions

5. The respondent opposed the grant of bail pending appeal.  Mr Anthony Chau submitted that the charges were not duplicitous, they concerned a continuing, single activity.  He suggested that the judgment of this Court in HKSAR v Salim was confined to its own unique facts.  In that case, the provenance of the monies deposited in the accounts was an e-mail fraud practised on many different, separate individuals.  However, the applicants neither knew of the nature of the deposits nor their source.  Their role was merely to open up bank accounts and hand them over to others for future use.  By contrast, the applicant in the instant case was found by the judge to have dealt with all the monies the subject of the charges in the five bank accounts.  Further, there were no victims and no predicate offence could be identified.  There was no unfairness to the applicant.  The applicant’s case, supported by his own testimony, was that the monies dealt with in the accounts had a legitimate provenance.

6. Whilst it was accepted that the judge had adopted the ‘two-stage’ test in approaching the construction of the phrase “having reasonable grounds to believe”, nevertheless it was contended that his analysis of the evidence and his findings revealed that he had regard to the necessity of considering whether or not in dealing with the monies the applicant did so “having reasonable grounds to believe” that they were the proceeds on an indictable offence. It was submitted that in considering the applicant’s evidence the judge had regard to his asserted beliefs and perceptions, but rejected that evidence as lies.

7. It was submitted that the judge’s determination that the relatively similar opening and closing balances in the bank accounts the subject of the five charges led to the conclusion that the accounts were used as repository for funds was not a conclusion reached on consideration of that sole or singular fact.  Rather, as was evidenced in his Reasons for Verdict the judge had regard to multiple considerations: for example, in respect of Charge 1 the nature of the deposits, including substantial deposits and withdrawals in cash; that there was no cash generating business to explain those deposits; the deposits of cash cheques drawn on SJM, a casino operator, in the context of his determination that those monies were not the applicant’s gambling winnings.[5]

The grant of bail pending appeal

8. In the circumstances of this case, the appropriate test to determine whether or not to grant the applicant bail pending the hearing of his applications for leave is whether prima facie there is a likelihood of success.

Duplicity

9. Although the applicant was represented throughout by leading counsel, Mr Graham Harriso SC, no application was made at or before the trial that the charges were duplicitous in nature.  Indeed, it was not argued in the original grounds of appeal, settled by Mr M K Wong SC that was the case.  This ground of appeal emerged in grounds of appeal settled by Mr Plowman, only after the handing down of the judgment in HKSAR v Salim [6].  As was acknowledged in the written submissions filed on behalf of the applicant, the prosecution written Opening made it clear that the sums of money stipulated in the Particulars of Offence of each of the bank accounts referred to the aggregate deposits in that bank account in the stipulated period of the commission of the offence.  Similarly, it was made clear that the provenance of the monies was varied: some came from named third parties;[7] others came from securities firms [8]; $62,450,000 came from cash cheques issued by a casino [9]; almost all of the 437 cash deposits of $97,518,367 came from unknown parties [10].  The aggregate amount of deposits and withdrawals from each of the accounts was stipulated in the Prosecution’s Opening and comment made that the opening and closing balances were almost identical, in other words that deposits and withdrawals almost matched in each of the years 2001-2007.[11]

10. The trial having been conducted on that basis, it is now submitted that each deposit ought to have been the subject of a separate charge.  Alternatively, it was submitted that, at the very least, dealings in relation to a group of deposits of the same nature ought to have been charged together but separately from deposits of another nature.

11. It was submitted that the consequence to the applicant of the trial having been conducted on duplicitous charges was that it gave rise to unfairness: the applicant was “unable to be certain what he had to do to meet the charges”.

12. Other than making that all embracing contention the alleged unfairness was not particularised.  The parties, the defence in particular, having permitted the trial to proceed on the charges as particularised, in my judgment the crucial issue is whether or not unfairness did result to the defence in the conduct of the case.  For current purposes, approaching the matter on the assumption that the charges were duplicitous, the issue is: what is the consequence to the safety of the convictions?  Was the trial unfair?

13. In considering those issues, there is one obvious difference between trial by jury and trial by judge alone.  In the former case a verdict of ‘Guilty’ is delivered with that word alone, without explanation.  However, in this case the judge condescended to great detail in his analysis and explanation of the various component parts of the charges, identifying that which he found proved or not proved.  No doubt, it was for that reason that the defence was able to submit to the judge in mitigation that the aggregate amount of monies with which the applicant had dealt, in respect of which he had reasonable grounds to believe were the proceeds of an indictable offence, was only $449,012,331, not the approximately $721 million that was the aggregate of the deposits in the five bank accounts.[12]  It is clear that the applicant’s testimony was structured to provide an explanation of a legitimate provenance of all the various deposits in the accounts.  Cross-examination was conducted on the opposite basis.

14. As was acknowledged by counsel for the applicant, the judge did examine and make findings in respect of different payments by different third parties.  So, for example, the judge found that there was nothing to suggest that the applicant was not telling the truth that the payments to him from Abba Chan were related to his investment in movies and repayment of loans.[13]  Similarly, he found that he could not be certain whether or not the applicant had made a profit of about $15 million on the Wealthy Villas project.[14]  Furthermore, he accepted that the applicant had purchased 280 million shares in Kanstar from Mr Chim Pui Chung and made a payment of $28 million to him through a casino in Macau.[15]

15. On the other hand, for example, he rejected the applicant’s testimony that he had made an investment of $20 million in Neptune Club and $26.4 million for the purchase of 20% of Lin Cheuk Fung’s shareholding in stock code 070.[16]  Further, the judge rejected the applicant’s explanation that those monies were repaid through companies and individuals known to Lin Cheuk Fung and Cheung Chi Tai.[17]  Similarly, he rejected the applicant’s testimony that the payments of over $62 million in cheques drawn on SJM’s bank account were his gambling winnings.[18]  The judge said that the reason that third parties made cash deposits to the bank account subject of the charges was unexplained.  He rejected the applicant’s explanation that he had used cash to settle urgent margin calls with brokers, finding that one of the reasons he done so was because “he knew that cash transactions are more difficult to be traced”.[19]  Finally, the judge found that the applicant had not told the whole truth about the Gold Wo share transactions.[20]  He found the irresistible inference to be drawn from the absence of documentation reflecting the transaction to be that the parties did not want Ms Yu’s involvement to be known.[21]

Reasonable grounds to believe

The Law

16. It is clear that in stating that the ‘applicable test’, identified earlier, was the ‘two-stage’ test, set out at paragraph 3, the judge employed an approach which the Court of Final Appeal has since determined to be erroneous.  Of course, as pointed out by counsel, the judge in the instant case was also the trial judge in Pang Hung Fai.

17. Of the approach of this Court in its judgments in Pang Hung Fai v HKSAR, Spigelman NPJ said:[22]

“ There are four aspects of the approach derived from Shing Siu Ming which distract the decision maker – whether a judge or jury – from the terminology of the offence.

First, the test replaces the statutory word “grounds” with the word “facts”. The latter term is narrower. While all “facts” may be “grounds”, not all “grounds” are “facts”. Accordingly, the range of relevant circumstances is restricted.

Secondly, the introduction of a distinction between “objective” and “subjective” elements diverts attention away from the purpose of the statutory words to create the mental element of a criminal offence, as an alternative to a state of “knowledge”.

Thirdly, the personification of the “objective” element, in terms of a “reasonable person” or “right-thinking member of the community”, is a distinction that diverts attention away from the fact that it is the accused, rather than an abstract legal concept of a person, who must ‘have’ reasonable grounds for the requisite ‘belief’.

Fourthly, the language of “first step” and “second step”, in whatever order, directs the decision maker – whether judge or jury – as to how s/he or they must think. This is something which an appellate court should rarely do, if at all. Furthermore, these “steps” combine the two distractions referred to in the second and third points.

As I have said above, the statutory words “reasonable grounds” are perfectly understandable. There is no need for an abstract personification for purposes of their application. Similarly, these words can be applied directly and do not need further characterisation as “objective”.

Furthermore, by the use of the word “having”, the decision-maker’s attention is directed expressly, by the terms of the section, to the grounds available to the accused. There is no need to further characterise this element as “subjective”. Indeed, such language is apt to create confusion, particularly in a jury so instructed, as to why the mental element of the offence, created by the entire clause, is only in one part “subjective”.

18. Of the phrase “having reasonable grounds to believe”, Siegelman NPJ observed:[23]

“ This is not a complicated formulation. The words are readily understandable.”

19. Of the appropriate direction to be given to a jury, Spigelman NPJ said:[24]

“ Although it is usually undesirable to substitute the words of a statute with an equivalent formulation, it is sometimes appropriate to do so, for purposes of clarification. For example, when an alternative formulation may assist a jury in its deliberations. On most such occasions, the Seng Yuet Fong formulation will be all that is required."

20. Earlier, he had said of that formulation:[25]

“ ….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.” ”

21. As Spigelman NPJ noted subsequently:[26]

“ …it is the accused who must be shown to ‘have reasonable grounds to believe’. ”

22. Spigleman NPJ went on to reject this Court’s determination in Pang Hung Fai that “a test of ‘could believe’ was applicable to section 25(1), rather than a test of ‘would believe’ ” [27].  He went on to say:[28]

“  By the imposition of the same penalty, the mental element of the “reasonable grounds” alternative is regarded as being at the same level of moral obloquy as actual knowledge.  A test that propounds a relationship between the existence of “grounds” and a state of ‘belief’ in terms of possibility does not do that.  Only a test which states that those “grounds” would lead to the ‘belief’ does so.”

23. Spigelman NPJ noted that the latter was the test that the judge applied in his consideration of the evidence[29].

24. Spigelman NPJ went on to reject the determination of this Court in Pang Hung Fai that “the personal beliefs, perceptions or prejudices of the applicant are removed from the assessment process” in the consideration of all the relevant evidence to be taken into account in determining whether or not there were reasonable grounds for the requisite belief:[30]

“  I can see no reason why, when applying the words of the statutory formulation, what McWalters J called: “the personal beliefs, perceptions and prejudices” of the accused should be entirely omitted from consideration.”

25. On the other hand, he went on to say that did not mean that those matters were “entitled to weight, let alone determinative weight.” [31]  He went on to add:[32]

“  When assessing the whole of the evidence, the judge or jury can give such weight to the accused’s belief, perception or prejudice as s/he believes is warranted.  No doubt, in many cases, that decision maker will entirely discount such evidence of the accused.  Nevertheless, they are “grounds” which stand or fall by the test of reasonableness.”

26. Having regard to those determinations, Spigelman NPJ went on to consider whether or not in his Reasons for Verdict the judge had regard to the applicant’s evidence as to his perceptions and beliefs, finding that: 

“ The trial judge did take into account mental processes of the Appellant, but rejected his evidence in relevant respects and drew contrary inferences.” [33]

Nevertheless, he went on to conclude:[34]

“ It is not clear to me what role the findings of fact about the mental state of the Appellant played in the ultimate conclusion.”

27. In the result, Spigelman NPJ determined that the range of grounds to which the judge had regard was impermissibly restricted and the appeal should be allowed.[35]

The judge’s findings

28. As noted earlier, whilst the judge made multiple findings in his Reasons for Verdict that the applicant was lying in his testimony he also made findings in which he accepted the truth of the applicant’s account.  On occasions, having made a finding adverse to the applicant nevertheless the judge went on to consider the belief or perception that the applicant asserted in testimony that he had in respect of particular transactions.  The contention made on behalf of the applicant that the judge did not make findings “in relation to the applicant’s state of mind, let alone applying “the standard of reasonableness” to that state of mind” is simply not made out.

29. For example, having determined that the applicant was not “telling the whole truth about his dealings with Lin Cheuk Fung and Cheung Chi Tai, as well as those who made those deposits into his and his father’s account supposedly on behalf of Lin Cheuk Fung’s behalf ” [36] and, in particular, having stating that he disbelieved the applicant’s evidence that he had asked Lin and those that make the deposits about why they made the deposits[37], the judge considered specifically the issue of the reasonableness of the applicant’s asserted belief:[38]

“ I find further that, even if it is accepted that the defendant was telling the truth about how the payments were return for his investment in Neptune Club or in Stock Code 070, and even if he was telling the truth about how he himself did not consider there was any problem with the payments being made by the staff members or companies connected to Lin Cheuk Fung instead of by Lin’s company or Lin himself, given that the defendant was dealing with a boss of a casino in Macau, any right thinking member of the community would consider such method of payment to be reasonable ground to believe that those money represented proceeds of an indictable offence.

I further find that even if the individuals were depositing money for Lin, in the case of the supposed investment in Stock Code 070, any right thinking person would pause and wonder why that was the case.  The deposits were not small amounts and why would the majority shareholder of a listed company be repaying investment returns in the listed company by way of personal checks drawn on his staff member’s personal account?  Or on a company with the staff member as directors or shareholders?  I find that the same right thinking person would immediately have decided that there were reasonable grounds to believe that the money so deposited into the defendant’s and his father’s bank account represented wholly or in part, directly or indirectly proceeds of an indictable offence.”  [Italics added.]

30. In the same context the judge noted of the applicant’s testimony that:[39]

“ ..when he was told that the return from his $20 million investment in Neptune club was to be paid to him by various people who were staff member of Neptune or Lin, he felt reassured and never doubted the propriety of the money so received.”

31. Of that, the judge said:[40]

“ It is my finding that the defendant is not telling the truth about whether he did ask Lin or those who made the deposits about why they were making the deposits. I also find that, even if the defendant did ask and was told that the money was clean and it was fine for the defendant to accept, a right thinking member of the community would immediately question the truth of the explanations, because if the investment was with Lin in Neptune Club, the boss of the VIP room, why would the money be coming back from all those individuals and entities who are connected to Lin. Given the circumstances of the so called $20 million investment in Neptune Club, a right thinking person would have reasonable grounds to believe that the money so paid represented wholly or in part, directly or indirectly proceeds from an indictable offence.” [Italics added.]

32. Of the applicant’s testimony that his investment in stock 070 and the subsequent sale of those shares back to Lin and Cheung was undocumented, other than evidenced by cash cheques deposited into the bank accounts of the applicant and his father, the judge determined that the transactions were conducted in that way so that “dealings could be concealed”.[41]  Of those circumstances he found:

“ The relevance of this concealment for present purpose is that, for the right thinking member of the community, knowing what the defendant knew, that is to say, a $26.4 million investment in a listed company without the use of any documents with the bosses of a VIP room in a casino in Macau, the subsequent selling back of the shares to those 2 people and the payment of the sales proceeds from that sales by different people who just appeared to have some connection with the VIP room owned by the 2 people, that right thinking member of the community must have reasonable grounds to believe that the money involved in the transactions must represent, wholly or in part, directly or indirectly proceeds of an indictable offence.”

33. Nevertheless, the judge went on to consider the applicant’s testimony as to his belief:[42]

“ The defendant’s evidence is that at the time of the checks being paid to him, he did inquire with Cheung Chi Tai why the checks were drawn in the name of various people and companies and the defendant was reassured and felt that there was no problem with receiving the money from those people in relation to the money that was supposed to be paid to him by Neptune Club.

……………….

Furthermore, the material time to consider was when the money was being deposited into the defendant’s bank account.  It is for the court to consider whether a right thinking member of the community, even after being told that it was okay to receive the money would still consider that there was reasonable grounds to believe that the money represented proceeds from an indictable offence.”

34. In giving his verdict on the specific charges, the judge adverted to the matters that he had addressed in detail earlier in his Reasons for Verdict addressing matters in sequence:

(i)what was known to the applicant;

(ii)  whether or not a right thinking member of the community would consider the movement of those funds and all the surrounding circumstances, reasonable grounds to believe that the monies were in whole or in part the proceeds of an indictable offence; and

(iii)  whether or not the applicant had reasonable grounds to so believe.

35. So, for example in addressing Charge 1, the judge said:[43]

“ The 406 deposits included the above discussed 10 cash checks from SJM totalling $62,450,000 and the $37,529,524 from Hooray Securities which was the money from the above discussed sale of Gold Wo Shares that the defendant had sold through Yu Xiao Mei.

There are 9 bank transfers for a total of $7,450,000 from account E to account A.

The named depositors of money into account A included Au Yeung Kai Chor, Cheung Chi Tai, WinCon, Asian Time, LuckyTex, So Wai Chi, Tang Wai Yi, being the individuals or companies that the defendant claimed to have been repaying money as return and share capital for his and his father’s investments in Neptune Club or stock code 070. The defendant’s evidence in relation to these entities have been dealt with above.

I find that the defendant was aware of all the transactions in relation to account A. I find that the defendant himself knew that dealings in cash transactions would be more difficult to trace than those by way of checks. I find that there were no cash generating business that would generate the kind of cash that was deposited into account A. I find that the overall almost identical amount of deposits and withdrawals in the account shows that the account had been used as a repository of funds. I find that for the reasons already given above, the deposits from SJM were not the defendant’s gambling winnings. I find that the dealings in the Gold Wo shares, for reasons given above was arranged so as to conceal the involvement of Ms. Yu Xiao Mei. These are all facts known to the defendant at the material times.

I find that a right thinking member of the community when looking at the movement of funds in account A and all the surrounding circumstances mentioned above would have reasonable grounds to believe that the money being dealt with through the account represented wholly or in part, directly or indirectly proceeds of an indictable offence.  I therefore find that the defendant had reasonable grounds also to so believe and I convict him of charge 1 accordingly.”

36. The judge employed the same structure in addressing his verdicts for the other charges.[44]

37. Those representing the applicant have indicated in a letter to the court dated 15 December 2014 that they wish to have included in the Appeal Bundle the transcript of the applicant’s testimony, so that the court would be in a position “to consider the evidence of the Applicant at trial and the underlying circumstances surrounding the impugned transactions in the present case and the way in which the trial judge dealt with that evidence.” Given that the transcript encompasses about 1,000 pages it may be that will be a task of some length.  However, for current purposes no attempt has been made to identify the applicant’s beliefs and perceptions said to be relevant to the issue of the applicant “having reasonable grounds to believe” that the judge did not consider and reject and/or determine nevertheless to provide him with reasonable grounds to believe.

The bank accounts: a repository of funds

38. For the purposes of this application the court was provided with the expert reports admitted into evidence of Mr Sutton, who gave evidence as an expert accountant for the prosecution, but not with the transcript of his evidence.  In addition, the court was provided with five witness statements of Sgt Johnny Kwan, who provided schedules and tables of his analysis of movements in the impugned accounts, including the five bank accounts the subject of the five charges.

39. Although it appears that Mr Sutton did not define specifically the meaning of the term “repository” in his reports, it appears that he used it to describe the receipt of monies into an account followed by their movement out of the account.  In one table headed ‘Transaction in and out on the same day with the same amount’ he described 24 such transactions in four of the accounts, to a value of $17.42 million in the period 2001-2007.[45]  Of those circumstances, he expressed the opinion that the accounts had been used “as a repository for funds”.  In his Summary of that report, he said of that description that the “funds were transferred out in a very short period of time.” [46] In his second report, having noted that Mr Pulverenti, an expert accountant whose report had been used on behalf of the applicant in other proceedings, observed that  deposits into one of the bank accounts “were usually transferred out of the account within several days”, Mr Sutton expressed the opinion that “the pattern of the deposits and withdrawals suggests, in the absence of other explanation, that Account C was a repository of funds and as such bares (sic) a hallmark of money laundering.” [47]  The court was not taken to any material in which Mr Sutton expressed the view that relatively similar opening and closing balances was an “indication that the accounts had been used as a repository of funds.” [48]

40. The prosecution opening contained the following assertion:[49]

“ The 5 bank accounts were used as a repository for funds and funds deposited were transferred out in a very short period of time. Almost identical amounts were deposited to each bank account and withdrawn from each bank account during each year between 2001 and 2007.”

41. Annex 7 to the statement of Sgt Johnny Kwan dated 12 October 2012 provides in table form information, inter alia, of the aggregate deposits and withdrawals of monies into and from the five impugned bank accounts in each of the years 2001-2007.  All of the aggregate deposits and withdrawals of monies in each of the accounts for all the period are very similar in amounts.

42. In making his observation in his Reasons for Verdict that “each of the five accounts has opening and closing balances that are relatively similar” the judge did not stipulate any period of time nor did he identify the material on which he relied.[50] Sgt Johnny Kwan’s analysis described the aggregate deposits and withdrawals in the various accounts on a calendar year basis, individually and collectively, and individually and collectively and for the overall period 2001-2007.  It did not set out an opening or closing balance.  Whilst deposits and withdrawals in individual accounts, and in the aggregate of all five accounts for a particular year, varied very significantly on occasions [51] the aggregate amount deposited in individual accounts in the whole period and the aggregate amount deposited in all of the accounts for the whole period were very similar.  On its face, no significance appears to attach to the fact that the snapshot of opening and closing balances was taken at the beginning and end of a calendar year.  Certainly, none was suggested.

43. In his examination of the individual charges, the judge referred specifically to the difference between the aggregate of the deposits and withdrawals into and from each account in the overall period, 2001-2007.[52]  In respect of each charge the judge found that the “overall almost identical amount of deposits and withdrawals in the account shows that the account was being used as a repository of funds”.[53]  In respect of Charges 4 and 5, the judge reached that determination in conjunction with having regard to other factors.[54]

44. In his general findings at paragraph 630, the judge found that:[55]

“ ..any reasonable person seeing how huge amount of money had gone through the accounts the way they had over the years would find the fact that in each of the account the ending balance always almost matches the opening balance extremely strange.. ”

He judge concluded that:

“ ..was one of the reasonable grounds to believe that the funds that had been dealt with by the defendant in the account over the years represented wholly or in part, directly or indirectly proceeds of an indictable offence.”

45. In respect of those general findings, the judge did not elaborate on his reference to the movement of huge amount of monies through the various accounts in “the way they had over the years”.  Nevertheless, clearly highly relevant to that observation was the evidence of Mr Sutton in respect of the nature of the movement of monies in some of the accounts: for example, the deposits and withdrawal of cash; the transfer of monies between the various accounts; the withdrawals that matched in aggregate the 24 deposits, all of which matched respective deposits and withdrawals occurred on the same day; or that monies deposited in to those accounts were transferred out of the account within “a very short period” or “a few days”.

46. In dealing with each charge, the judge did make reference to the nature of the deposits and withdrawals in the respective accounts.  So, for example in respect of Charge 1 the judge noted that cash deposits and withdrawals were respectively about $27 million and $55 million in the period 2001-2007.  Furthermore, he noted that a total of over $62 million had been deposited in the account by 10 cash cheques drawn on SJM and over $37 million from Hooray Securities and respect from the sale of Gold Wo shares.[56]  Also, he noted the transfer of monies to the account from another of the five accounts.

47. Of course, although the judge identified three separate components of the activity in the accounts, namely: first, huge amounts of money; secondly, the way they went through the accounts; and thirdly, the resulting almost matching opening and closing balances, that conduct was interlinked.  The use of the accounts as a repository for funds, or conduit in the movement of monies, not surprisingly resulted in matching opening and closing balances.

48. Earlier in his Reasons for Verdict the judge had noted that the prosecution had identified specifically the 24 transactions as bearing the hallmark of money laundering:[57]

“ 22 of those transactions involved deposits or withdrawals in cash, with the majority of the transactions being with securities companies. It is the prosecution case that these transactions prove the bank accounts were being used as a repository for funds and as such would be reasonable grounds for the right-thinking member of community to leave the money involved represented proceeds of an indictable offence.”

49. It is to be noted that the judge prefaced his general findings at paragraph 630 of the Reasons for Verdict by noting that although there were five separate charges he said that “They do not stand entirely isolated from each other”.  Further, he said:[58]

“ I must also take into consideration the fact that the defendant was a signatory of all five accounts and therefore have control over their usage.”

It follows that the context in which his general findings at paragraph 630 are to be understood is by having regard to his specific findings in respect of individual charges.

Conclusion

50. Although the various grounds of appeal advanced in support of the application for bail pending appeal are arguable, in my judgment the applicant failed to establish to the requisite standard a prima facie likelihood of success in his application and I refused the application.

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

[2] Reasons for Verdict, paragraph 552.

[3] Pang Hung Fai v HKSAR [2014] 6 HKC 487.

[4] Reasons for Verdict, paragraph 630.

[5] Reasons for Verdict, paragraphs 631-5.

[6] HKSAR v Salim Dahdal (Judgment: 14 November 2014).

[7] Prosecution Opening, paragraph 18.

[8] Prosecution Opening, paragraph 24.

[9] Prosecution Opening, paragraph 17.

[10] Prosecution Opening, paragraph 21.

[11] Prosecution Opening, paragraph 26.

[12] Reasons for Sentence; page 138, paragraph 21.

[13] Reasons for Verdict, paragraph 612.

[14] Reasons for Verdict, paragraph 611.

[15] Reasons for Verdict, paragraph 615.

[16] Reasons for Verdict, paragraph 600.

[17] Reasons for Verdict, paragraph 589.

[18] Reasons for Verdict, paragraph 582.

[19] Reasons for Verdict, paragraph 607.

[20] Reasons for Verdict, paragraph 571.

[21] Reasons for Verdict, paragraph 575.

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

[23] Pang Hung Fai v HKSAR, paragraph 30.

[24] Pang Hung Fai v HKSAR, paragraph 55.

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

[26] Pang Hung Fai v HKSAR, paragraph 82.

[27] Pang Hung Fai v HKSAR, paragraph 69.

[28] Pang Hung Fai v HKSAR, paragraph 77.

[29] Pang Hung Fai v HKSAR, paragraph 78.

[30] Pang Hung Fai v HKSAR, paragraph 83

[31] Pang Hung Fai v HKSAR, paragraph 83.

[32] Pang Hung Fai v HKSAR, paragraph 85.

[33] Pang Hung Fai v HKSAR, paragraph 93.

[34] Pang Hung Fai v HKSAR, paragraph 95.

[35] Pang Hung Fai v HKSAR, paragraph 107.

[36] Reasons for Verdict, paragraph 589.

[37] Reasons for Verdict, paragraph 593.

[38] Reasons for Verdict, paragraphs 590-1.

[39] Reasons for Verdict, paragraph 592.

[40] Reasons for Verdict, paragraph 593.

[41] Reasons for Verdict, paragraph 595.

[42] Reason for Verdict, paragraphs 597 and 599.

[43] Reasons for Verdict, paragraphs 632-6.

[44] Charge 2 - Reasons for Verdict, paragraph 642;

  Charge 3 - Reasons for Verdict, paragraph 647;

  Charge 4 - Reasons for Verdict, paragraphs 651 and 657; and

  Charge 5 - Reasons for Verdict, paragraph 669.

[45] Appeal Bundle; pages 186-7, Mr Sutton’s first report, paragrahs 5.3.2-5.3.4

[46] Appeal Bundle; page 191, Mr Sutton’s first report, paragraph 6.2 (iii).

[47] Appeal Bundle; page 398, Mr Sutton's second report, paragraphs 4.2.3-4.2.4.

[48] Reasons for Verdict, paragraph 630.

[49] Appeal Bundle; page 13.

[50] Reasons for Verdict, paragraph 630.

[51] Sgt Johnny Kwan's report 12 October 2012; Annex 7, page 1534: for example, Account A; 2004-deposits I$37,439,990: withdrawal s $11,331,489,

[52] Reasons for Verdict: Charge 1 a difference of $97,000 on aggregate deposits and withdrawals of about $347 million (paragraph 631); Charge 2 a difference of $67,000 on aggregate deposits and withdrawals of about $254 million (paragraph 637); Charge 3 a difference of $2,926 on aggregate deposits and withdrawals of about $31 million (paragraph 643); Charge 4 a difference of $136,720 on aggregate deposits and withdrawals of about $6.5 million (paragraph 652); and Charge 5 a difference of $90,599 on an aggregate of deposits and withdrawals of about $81 million (paragraphs 658 and 659).

[53] Reasons for Verdict; Charge 1, paragraph 635; Charge 2, paragraph 642; and Charge 3, paragraph 647.

[54] Reasons for Verdict; Charge 4, paragraph 657; and Charge 5, paragraph 669.

[55] Reasons for Verdict, paragraph 630.

[56] Reasons for Verdict, paragraphs 631-632.

[57] Reasons for Verdict, paragraph 15.

[58] Reasons for Verdict, paragraph 629.