HKSAR v. KO KIT AND ANOTHER

CACC 65/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 65 OF 2009

(ON APPEAL FROM DCCC NO. 127 of 2005)

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J U D G M E N T

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Hon Wright  J (giving the judgment of the Court):

1.  The applicants were convicted, the first applicant of two charges and the second applicant of one charge, after a lengthy trial in the District Court before Judge Yau. There was a third person also charged, who was cited as the first accused, one LU Dayong (Lu). The trial took place in two tranches. Between 22 October and 15 November 2007 there was an application for permanent stay of proceedings. The basis of the application was that the ICAC had breached the first applicant’s legal professional privilege, and that that conduct amounted to such an affront to the public conscience as to demand the proceedings be stayed. Each accused specifically indicated that he/she did not rely on the submission that it would be impossible to have a fair trial.

2.  The judge exercised his discretion in favour of the proceedings continuing and dismissed the application delivering his reasons for that ruling some five months later, on 3 April 2008. The applicants seek leave to appeal his exercise of that discretion.

3.  Lu was represented throughout that hearing but absconded prior to the commencement of the second part of the trial. The judge decided to continue with the trial in absentia with Lu unrepresented as he was satisfied that Lu had wilfully absented himself from the proceedings. Lu remains a fugitive. Whilst we see the utility of the decision, it undoubtedly contributed to the number of witnesses who were called and the length of the trial, which lasted from 10 June to 1 December 2008: the judge delivered his verdict on 21 January 2009.

4.  The first charge which was proffered against Lu and the first applicant, alleged a conspiracy between them, ZHENG Song-ming (Zheng) and PAN Shao-bin (Pan), during the period 1 December 2002 and 23 February 2004, for an agent, Lu, to accept advantages from Zheng and Pan as an inducement to or reward for or otherwise on account of his doing or having done an act in relation to his principal’s affairs or business, in this instance by causing or permitting Golden Leaf International Development (Hong Kong) Ltd (Golden Leaf) to become a purchaser of, and/or supplying to Golden Leaf, a brand of cigarettes known as Double Happiness and/or for supplying those cigarettes to Golden Leaf. The nature of the advantage was identified during the evidence as substantial cash payments.

5.  The second charge alleged a conspiracy between Lu, the first and second applicants and one LIN Jianding (Lin), during the period 1 November 2003 and 23 February 2004, to defraud Nanyang Brothers Tobacco Co Ltd (Nanyang), of which the first accused was chairman, which was particularised as (i) concealing from or failing to disclose to Nanyang that Lu had an interest in or control of Hang Chun Trade Development Ltd (Hang Chun) to which Nanyang would sell Double Happiness cigarettes and (ii) causing or permitting Nanyang to supply such cigarettes to Hang Chun knowing that they would be resold in the mainland of the People's Republic of China contrary to contracts between Nanyang and Hang Chun.

6.  There was a third charge which alleged a conspiracy between Lu and the first and second applicants relating to rewards allegedly received by Lu consequent upon the dealings between Nanyang and Hang Chun. The judge was not satisfied that the prosecution had established that offence and consequently acquitted all three accused persons.

The background

7.  The appeal falls into two distinct areas. Grounds 1 to 30 relate, in large measure albeit not exclusively, to criticisms of the way in which the judge drew inferences adverse to the applicants from the evidence before him. Grounds 31 to 39 relate to the exercise by the judge of his discretion not to permanently stay the proceedings: we propose to address this issue first.

8.  Despite the length of the proceedings and the volume of material produced, the background to the commission of the offences is comparatively straightforward.

9.  Nanyang was a wholly owned subsidiary of Shanghai Industrial Holdings Ltd in which Shanghai Industrial Investment (Holdings) Co Ltd held a majority of shares. Lu was a director and Deputy Chief Executive of Shanghai Industrial Investment (Holdings) Co Ltd and a shareholder in it; a director of Shanghai Industrial Holdings Ltd; and a director and the Chairman of the Board of Directors of Nanyang.

10.  Nanyang manufactured Double Happiness cigarettes in Hong Kong, primarily for sale outside of China. Small quantities were sold to duty-free shops in China and as ships’ stores: in addition, Nanyang was afforded, by the body which controls the importation of Chinese monopolised cigarettes into China, a quota of cigarettes which it was authorised to export to China, the packaging of those cigarettes being required to bear a specific endorsement. Exportation to or importation of other quantities of cigarettes to China was prohibited, as a consequence of which Nanyang included a stipulation in its agreements with its customers, which will resell its cigarettes outside of China, to the effect that the cigarettes purchased by them may not be resold in China.

11.  Nanyang appointed different bodies as distributors of Double Happiness cigarettes for various countries in south-east Asia. In order to become a sole agent a distributor was required to purchase a minimum quantity of cigarettes. In or about 2003 Lu introduced Golden Leaf and Hang Chun to Nanyang and approved them as distributors in Kampuchea and the Philippines.

12.  Pan, named in the first charge, represented Golden Leaf for the purposes of its appointment: he held 32% of the shares in Golden Leaf. The remaining 68% of the issued shares were held by Zheng..

13.  The first applicant represented Hang Chun for the purposes of its appointment as a distributor for Nanyang: she held 90% of the shares in Hang Chun which she had acquired from Lin. The second applicant transferred the remaining 10% of the shares in the company, which had been registered in his name, to his wife.

14.  Although there were a number of other entities, both natural and corporate, involved in the various transactions only Fortune Star Overseas Ltd (Fortune Star) needs to be mentioned for the purposes of this judgment. Zheng was the sole shareholder and director of that company whilst its bank account maintained with HSBC was under the effective control of the first applicant.

15.  In the passage of time cigarettes were sold by Nanyang to Golden Leaf and Hang Chun. That much, at least, is uncontroversial. However, the precise nature and extent of the dealings between Nanyang and the two companies; the purpose and consequences of payments made to or via third parties; shipping details; the relationships between certain individuals; and the interpretation to be placed upon various records and, in some instances, the absence of records, was disputed. All of these issues came into play, as the judge appreciated, in assessing what inferences it was permissible to draw in respect of each applicant.

16.  It was the prosecution's position that, in respect of Charge 1, amounts were paid to Lu as a consideration for the appointment of Golden Leaf as a distributor for Nanyang and the supply of cigarettes to it and that those amounts were "managed" by the first applicant for the benefit of Lu. The approach adopted by the defence was that there was insufficient evidence produced by the prosecution to prove beyond reasonable doubt, or to justify drawing the inference, that Lu had done anything to favour Golden Leaf by using his influence or position within Nanyang and, in particular in regard to the expert evidence adduced by the prosecution, that there were other viable inferences which properly could be drawn.

17.  In regard to Charge 2, the contention of the prosecution was that the first applicant was not the genuine proprietor or manager of Hang Chun but simply a front for Lu, it being agreed, expressly or tacitly, between the conspirators that Hang Chun would be used as part of a conduit through which cigarettes could be sold into mainland China contrary to restrictions contained in the distributor agreements between Nanyang and Hang Chun and that the conspirators agreed to conceal Lu’s interest in Hang Chun from Nanyang. The potential prejudice to Nanyang was said to be the risk of loss of the quota allocated to it to legitimately export cigarettes to mainland China. The position adopted by the defence was that the first applicant was indeed the genuine proprietor of Hang Chun and that no such conspiratorial agreements existed.

The application for stay of proceedings: Grounds 31 to 39

18.  The application made before the judge was not brought on the basis that a fair trial was impossible, for the applicants did not assert that to be so, but rather on the basis that intrusion by the ICAC into the legal professional privilege, which the judge found to have existed between a solicitor and the first applicant, constituted an intolerable abuse of the court process.

19.  The grant or refusal of stay on such a basis is consequent upon a judge exercising his discretion based upon the factual situation which he finds to have existed. We have been referred to a number of decisions, both in this and other jurisdictions, to which we shall later briefly turn, in which the principles have been applied: whilst those decisions are illustrative, the factual situation in the present matter is so fundamentally different from that which existed in any of the decisions to which we have been referred that it is helpful to return to basics.

20.  In HKSAR v LEE Ming Tee and another (2001) 4 HKCFAR 133 the Court of Final Appeal, per Ribeiro PJ, in affirming a court's jurisdiction to stay criminal proceedings, reasserted the following general principles:

“[p. 148I] That jurisdiction rests on the court’s inherent power to prevent abuse of its own process:...

In most such cases, the court only grants the stay because, notwithstanding the range of remedial measures available at the trial, a fair trial for the accused is found to be impossible and continuing the prosecution would amount to an abuse of process....

[p. 149J] A second line of stay cases, also relied on in the present appeal, proceeds on a different basis. These are the rare cases where the court is prepared to grant a permanent stay even though a fair trial undoubtedly remains possible. The leading authority is the decision of the House of Lords in R v Horseferry Road Magistrates Court, ex parte Bennett  [1994] 1 AC 42 where, although the fairness of the trial was not in question, the Court granted a stay because the circumstances involved an abuse of power which so offended the Courts’ sense of justice and propriety that the entire prosecution was tainted as an abuse of process.

[p. 150B] While the jurisdiction on this dual basis clearly exists, it is only most sparingly exercised:...

There are cogent reasons why in principle and in practice such stays are highly exceptional.

In the first place, it is only in very unusual circumstances that a court can properly be satisfied that a fair trial is "impossible". The "fairness" achievable is judged in practical and not absolute terms....

More importantly the court's primary endeavour is to ensure that a fair trial takes place, employing the law’s available resources, and not to abort it on the ground that fairness cannot be attained, save as a last resort....

[p. 151D] Secondly, in cases where a fair trial remains possible even though official misconduct may be involved in bringing the prosecution, the court does not exercise the jurisdiction to stay proceedings as a means of disciplining the police or prosecuting authorities....

The public interest lies in the guilt or innocence of the accused being fairly and openly determined at trial. For this to be displaced, powerful reasons must exist for concluding that such a trial, although fair, would nonetheless constitute an intolerable abuse of the court’s process. The instances where such an argument has any prospects of success must necessarily be very rare.”

21.  The order of the trial judge that the proceedings be permanently stayed was set aside by the Court of Final Appeal and the matter remitted for trial before a different judge. In the event, the judge in the second trial also granted a permanent stay which decision, similarly, was challenged on appeal.

22.  In HKSAR v LEE Ming Tee and Securities and Futures Commission (2003) 6HKCFAR 336 the Court of Final Appeal once again set aside the order for permanent stay, Sir Anthony Mason NPJ saying, in a judgment with which all members of the Court concurred:

"182. ... It was not a case in which the respondent could not get a fair trial. Therefore if the case was to attract a stay, it had to come within the principle stated by Lord Steyn in R v Latif [1996] 1 WLR 104 at p. 112 G-H:

In this case the issue is whether, despite the fact that a fair trial is possible, the judge ought to have stayed the criminal proceedings on broader considerations of the integrity of the criminal justice system. The law is settled. Weighing countervailing considerations of policy and justice, it is for the judge in the exercise of his discretion to decide whether there has been an abuse of process, which amounts to an affront to the public conscience and requires the criminal proceedings to be stayed:...

183. ... There may be many instances of an abuse of process which amount to an affront to the public conscience with severe consequences for public confidence in the administration of justice.

184. Although the question is debatable, the better view is that an abuse of process does not exist independently of, and antecedently to, the exercise of a judicial discretion. The judicial decision that there is an abuse of process which requires the grant of the stay is itself the result of the exercise of a judicial discretion. It is for the judge to weigh countervailing considerations of policy and justice and then, in the exercise of the discretion, decide whether there is an abuse of process which requires a stay."

23.  The circumstances in which an appellate court will interfere with the exercise of a judicial discretion are well established to be circumscribed. Sir Anthony Mason summarised it in these terms:

"68. …It must appear that the exercise of discretion was based upon a misunderstanding of the law or of the evidence or upon evidentially unsupported inferences that particular facts existed or did not exist. Alternatively, it must appear that the exercise of discretion miscarried because it was based upon an irrelevant consideration or it failed to take into account a relevant consideration or it was plainly wrong in the sense that it was so unreasonable that it must have proceeded from some undisclosed error of principle or erroneous application of the principle."

24.  Consequently it is necessary to look at the factual matrix against which the judge exercised his discretion. The judge accepted the evidence of the ICAC officers as to how events unfolded: they had the opportunity of referring to a log maintained in the monitoring room. No criticism is made of his accepting that evidence and there is no real dispute as to the events which occurred.

25.  Following a complaint being made to the ICAC an investigation had been commenced by October 2003 into the activities of Lu, the applicants and Hang Chun. A female ICAC officer calling herself Jenny Lam took up employment in Hang Chun in the hope of uncovering information of use in the investigation. She made little headway, apparently because she was excluded from conversations. A decision was made, following advice from the Department of Justice, to install audiovisual listening devices in Hang Chun's premises. On 3 January 2004 one such device was installed in the first applicant’s office. At the end of that month two further ICAC officers obtained employment with Hang Chun. On 17 February 2004 a second device was installed.

26.  Data captured by the devices was recorded on tapes by machines which were pre-programmed to record three tapes each day. These machines were located in an observation room near to Hang Chun's premises. ICAC officers were present in that room. Although it appears that the recording machines could have been switched off by anyone present in the room, the evidence was that officers who would be present there were given explicit instructions not to do so as it was feared that this might adversely affect the integrity of the recordings if they were to be used in the course of a trial.

27.  The officers were there, in part, to provide protection for the three ICAC officers employed in Hang Chun: also to monitor, in real time, the events occurring in the first applicant's office, maintaining a written record of a gist of those events; further, to review tapes that had been recorded.

28.  The applicants were arrested on 23 February 2004. The decision was made to continue the surveillance over the first applicant's office subsequent to their release on bail: this was said to be, in part, to ensure the continuing safety of the three ICAC colleagues employed in Hang Chun; in part, to endeavour to identify further places from which it may be possible to collect further evidence; in part, to counter any suggestion of entrapment. Whatever the validity of any of those claimed purposes, that is the decision that was made.

29.  Thereafter those officers deployed in the observation room were told, by Chief Investigator Simon Ho on the instructions of Principal Investigator Kenny Tso, that "if... they saw anything special which may involve the defendants seeking legal advice or if there are other special matters, they should report to their superior." It appears that this instruction was given at some stage between 23 and 27 February 2004.

30.  An arrangement was made between the ICAC and the first applicant that, on the morning of 27 February 2004, a restraint order as contemplated by the Prevention of Bribery Ordinance would be served on her at the Hang Chun premises. At 10.12 that morning the first applicant was monitored by Cecil Tse, the officer who was in the monitoring room monitoring events in the first applicant's office in real time and maintaining a written log, making a telephone call to a person whom she addressed as "solicitor Lee”. There was a subsequent telephone call at 10.38 received by the first applicant from someone whom she addressed as "solicitor Lee" during which she provided the address of her office.

31.  Shortly thereafter a solicitor with the family name of Lee arrived at Hang Chung's premises and a conversation between the first applicant and Mr Lee was recorded between 10.40 a.m. and 10.45 a.m.. That conversation took place in the first applicant's office. The first applicant and Mr Lee then left her office and went into a conference room where the restraint order was served. At 10.52 a.m. the first applicant and Mr Lee returned to her office where a further conversation between them, which lasted until 11.00 a.m., was monitored and recorded. It is the recording of these 13 minutes of conversation, the way in which the ICAC responded to the arrival and presence of Mr Lee and the subsequent handling by the ICAC of the recorded data that gave rise to the application.

32.  The first applicant and Mr Lee communicated with one another in a mixture of Putonghua, predominantly, and Cantonese. At approximately 10.40 a.m. Cecil Tse reported the arrival of Mr Lee to his immediate superior, Bill Ng, who was also present in the monitoring room: Ng was present to review the previous days recordings. Tse’s command of Putonghua, according to his evidence, was limited whilst  Ng’s was almost non-existent.

33.  In this connection the judge accepted the evidence of the ICAC officers in the monitoring room that they were unaware, first, of the arrangement by other ICAC officers to serve the restraint order and, secondly, that the solicitor who arrived was the same solicitor who had visited the first applicant a number of times after her arrest while she was in ICAC custody. Ng testified that prior to the report to him by Tse, he had no idea that a lawyer might be going to the first applicant's office. He instructed Tse to wait to see what would happen because he did not know whether the arrival of the lawyer was related to their case, telling Tse to pay attention to what they said.

34.  Ng stood behind Tse watching what was happening in the first applicant's office. After two or three minutes, when he appreciated the nature of the conversation, he contacted his superior, Simon Ho. Ng testified that he had telephoned Simon Ho at 10.45 a.m. not because he regarded the conversation between the first applicant and Mr Lee as being privileged but, rather, because he felt that the situation constituted a "special matter" which he had been instructed to report: despite his limited command of Putonghua he understood that they were discussing payment of legal fees.

35.  It was Ng’s testimony that Simon Ho told him that he would obtain immediate instructions from Kenny Tso but that Simon Ho gave him no specific instructions as to what he, and others in the monitoring room, should do pending those instructions. Tse testified that, as he had received no instructions to the contrary, he simply had continued to monitor activities in the first applicant's office and to make notes. Simon Ho telephoned Ng some 10 to 15 minutes after their initial call with instructions from Kenny Tso that all of the ICAC officers should leave the monitoring room. By the time Ng received this instruction the conversation between the first applicant and Mr Lee had already concluded. Notwithstanding that, all ICAC officers left the monitoring room by 11.15. At a later meeting at the offices of the ICAC the decision was taken that the surveillance be discontinued. That occurred the same afternoon. The recording of the meeting between the first applicant and Mr Lee bore a reference HC/OP/164, which we shall adopt.

36.  Kenny Tso instructed that HC/OP/164 was to be secured and not listened to by anyone without his consent. In November 2004 Kenny Tso watched the recording which covered the part of the meeting prior to the service of the restraint order: he testified that he was unaware of the recording of the continuation of the meeting after the service of the restraint order. In February 2005 the case was taken over by a new officer, Eric Leung: Simon Ho informed Leung of the fact that access to HC/OP/164 was restricted as it contained a recording of the meeting between the first applicant and a solicitor.

37.  A large number of tapes had been recorded throughout the operation. Tapes other than those which the prosecution intended to use at the trial, were included in a schedule of unused material: HC/OP/164 was included in the schedule although there was no indication of its content. In July 2005 Lu’s solicitors asked for and received a copy of all recordings, including HC/OP/164.

38.  In November 2005 Kenny Tso caused a transcript of the recording of that part of the meeting prior to service of the restraint order to be made and translated into English, which was shown to counsel at the Department of Justice for the purposes of obtaining advice. At this stage Kenny Tso remained unaware of the existence of the recording of the part of the meeting subsequent to the service of the restraint order.

39.  In April/May 2007, whilst preparing for the trial, Kenny Tso gave permission to Leung to watch HC/OP/164. Leung informed Kenny Tso about the presence of the recording of the second part of the meeting: Kenny Tso then watched that portion of the recording himself and, again, arranged for the content to be transcribed and translated in order to obtain further advice from the Department of Justice. His testimony was to the effect that he anticipated that the recording of the conversation would be an issue which would be pursued by the accused at trial.

40.  During May 2007 all three accused were told of the recording of the meeting between the first applicant and Mr Lee when a statement by Cecil Tse was served on them.

41.  In July 2007 the first applicant requested copies of various items of unused material, including HC/OP/164. This was apparently the only tape requested by her.

42.  The essence of the applicants’ arguments in regard to this aspect of the appeal is to be found in paragraphs 34 and 35 of their skeleton argument as follows:

"34.  The facts in this case... show a series of separate acts of deliberate intrusion into the legal professional privilege of [the first applicant]. This was reflected in the judge's findings in relation to the time after the ICAC realised that a privileged meeting was taking place. The judge failed however to have any regard to the fact that the ICAC had not put in place an effective means of preventing the capture of privileged material before recording, despite the fact that after the arrest the risk of the defendants seeking legal advice was obviously increased. Instead there was merely an instruction to notify a superior, which report would then be sent up the chain of command before any decision could be taken. This effectively meant that once the primary listening officer became aware of the privileged nature of the material he was recording, there followed a significant delay before he could be told what to do about it, in which time the recording would continue and the material deliberately be captured.

35.   The decisions thereafter taken by the officers

·    to continue with the recording and logging of the meeting once it should have been apparent that the solicitor was on his way following calls between [the first applicant] and solicitor Lee

·    to continue when it was plain that the solicitor had arrived

·    to continue when it became apparent he was giving legal advice

·    to listen to the material captured when at least the primary officers knew it contains legal advice

·    to transcribe it on two occasions in order to seek legal advice

·    to translate the transcriptions

·    to certify the translations

·    to serve the tape on parties

all warrant separate consideration. At each of these stages the ICAC could have prevented or limited the damage but yet took deliberate action to worsen the breach..."

43.  None of the decisions to which the judge was referred and upon which the applicants place reliance in these proceedings bears any real factual resemblance to the facts the judge found proved. In the English decision of R v Sutherland (unreported, 29 January 2002, Newman J) the police had introduced recording equipment into the exercise yard of two police stations, places which were known by the police to be used for the purposes of consultations between persons in custody and their solicitors, "... so that any privileged conversations taking place between a solicitor and one or more of the suspects held at the police station would be intercepted and recorded.". In Sutherland Newman J observed at §19:

"The suspects were there to be interviewed by the police, and it is obvious the solicitors were there to advise them in connection with their arrests and the interviews."

and at §21:

"... the senior investigating officer... and at least one other officer... deliberately and intentionally set out to intercept privileged conversations taking place in the exercise yard."

44.  In two subsequent investigations from which prosecutions resulted a similar tactic was employed in one of the two police stations involved in Sutherland. In R v Sentence (unreported, 1 April 2004, Judge Heath) the proceedings were stayed by the judge at first instance, he having made factual findings on all fours with Sutherland, concluding:

 "I am driven by all the evidence in this case to the clear conclusion on the balance of probabilities that there was a planned and deliberate capture of privileged conversation between a solicitor and his client. This is not a case of a chapter of accidents or comedy of errors.".

45.  In R v Grant [2005] EWCA Crim 1089, [2006] QB 60 the trial judge refused to stay the proceedings which were factually on all fours with Sutherland and Sentence. Grant was convicted. He appealed. The Court of Appeal allowed the appeal, finding that the proceedings should have been stayed as an abuse of the process of the court, saying at §57:

"We are quite clear that the deliberate interference with a detained suspect’s right to the confidence of privileged communications with his solicitor, such as we have found was done here, seriously undermines the rule of law and justifies a stay on grounds of abuse of process, notwithstanding the absence of prejudice consisting in evidence gathered by the Crown as the fruit of police officers’ unlawful conduct.".

46.  The two Hong Kong decisions to which we were referred were Secretary for Justice v SHUM Chiu and Others [2008] 1HKLRD 155 and HKSAR v WONG Hung Kei & Anor [2010] 4 HKC 118. They arise from a single incident which was summarised by Stock VP in WONG Hung Kei in these terms:

“14.  The abuse of process in this case was said to be constituted by the fact that on 16 November 2002 officers of the ICAC tape-recorded a conversation at Amaroni’s Restaurant in Festival Walk, a well-known shopping mall in Kowloon, and by the fact that on 21 November 2002, ICAC officers listened to the recording of that conversation.

15.   The conversation at the restaurant took place between an alleged co-conspirator, Tang (PW1 at trial), D3 and two solicitors from the firm of  Haldanes, namely, Mr Fung and Mr Booth.  It was argued that before the meeting took place the ICAC knew or ought to have known that this was to be a conversation covered by legal professional privilege and that, in any event, they clearly knew after the meeting but before they listened to the recording that the conversation was covered by that privilege but that the decisions to monitor and to listen were made in reckless disregard of the right to confidentiality.  Tang also listened to the recording, after which he made a full statement to the ICAC which contained several material changes to statements earlier made.”

47.  Apparent in the facts upon which all of these decisions rest is that in every instance the investigating authority was aware in advance of the fact that the recordings would occur in circumstances in which it was or ought to have been perfectly apparent that, in Sutherland and Grant, there would be the privileged conversations and, in SHUM Chiu and WONG Hung Kei, the overwhelming likelihood was that the conversation would be privileged, yet, possessed of that knowledge, the decision to record the conversations was still made. The decision that was made was to record a particular class of conversations, those between a suspected person and his legal representative: in the English cases a collection of conversations between different persons and their solicitors; in the Hong Kong cases, one very specific conversation.

48.  In deciding whether conduct goes sufficiently far as to amount to such an affront to the public conscience as to require that a court follow the exceptional course of granting a stay of proceedings, the motive or intent of the law enforcement agency concerned, it seems to us, must be a relevant and important consideration for the court. The recurrent theme throughout the cases to which we have been referred is the abhorrence felt by the court towards the calculated and cynical conduct of the various law enforcement agencies which set out with the settled intention of recording privileged communications.

49.  We do not resile from any of the principles enunciated in those various decisions, recognising the sanctity of the sanctuary provided by legal professional privilege in its role as a cornerstone of the judicial system. But facts are applied to principles and the factual situation is radically different in this matter.

50.  Striking factual differences include:

·    the ICAC had obtained specific advice from the Department of Justice before commencing the long-term monitoring operation, whereas no such advice had been obtained in WONG Hung Ki;

·    the monitoring of the privileged conversation was very much a by-product of an established and lengthy surveillance, whereas in WONG Hung Ki as well as the English cases it was the sole purpose of the monitoring activity;

·    although unknown to the ICAC officers present in the monitoring room, the first applicant had consulted with Mr Lee on a number of previous occasions subsequent to her arrest without any suggestion of impropriety on the part of the ICAC, which may be thought to be indicative of a lack of mala fides;

·    specific instructions had been given to the monitoring officers as to the course to follow if they saw anything which may involve the suspects seeking legal advice or if there were other “special matters”, whereas in WONG Hung Ki there were no precautionary instructions;

·    the officers in the monitoring room acted in accordance with those instructions expeditiously;

·    there was, because of the orders given to them, perceived by the officers in the monitoring room an effective restriction on stopping the recording without orders from superior officers, whereas there was no evidence of any restriction on recording in WONG Hung Ki;

·    active steps were then taken immediately to cease recording and the entire monitoring operation was closed down a matters of hours later, whereas in WONG Hung Ki  the recording was conducted deliberately in order to catch a conversation when there was strong cause to suspect solicitors were going to be present giving advice, the recording was continued when it was well known that solicitors were in fact present discussing the case at hand and, in particular, the recording was listened to when it was known that the record conversation had been privileged;

·    instructions were given by Kenny Tso for the security of the recording as well as restriction of access to it, whereas in WONG Hung Ki no such steps were taken and the recording was traversed with a civilian witness, partially forming the basis of an amended statement by him;

·    the listening to and transcription/translation of the recording occurred, so the judge found, over a year after the incident and in the course of preparation for trial in contradistinction to WONG Hung Ki in which the listening was essentially in the hope of finding further evidence of the criminality under investigation as well as possible perversion of the course of justice;

·    when Kenny Tso initially listened to the recording he did so in the belief that there was only one passage of conversation which related to a discussion concerning legal fees and thus was not privileged, whereas in WONG Hung Ki this court, differently constituted,  was able to go so far as to describe the listening to the tape as being a “cavalier approach” to the rights of the accused;

·    other than for the manner in which the judge dealt with the issue of service of the recording on Lu there is no substantial criticism made of his fact-finding process, which stands in contrast to WONG Hung Ki in which the judge’s fact-finding approach was, in the Court’s view, unsatisfactory there being an absence of findings where such were obviously required, whereas in this matter the judge’s approach was analytical and detailed;  and

·    the judge’s findings on credibility of the ICAC officers is unimpeachable, whereas in WONG Hung Ki no finding of credibility was made in circumstances which, as is clear from the judgment, cried out for such an assessment particularly in view of the fact that the credibility of the ICAC officers was vigorously challenged and that the testimony given by them was, in many significant respects, inherently incredible and demonstrably unreliable.

51.  This court recognised in WONG Hung Ki  that the ICAC fell into error in two respects: first, by covertly recording the privileged conversation; secondly, and as a separate and distinct intrusion into legal professional privilege, by the way in which it subsequently handled that recording, by listening to it. The applicants have addressed their submissions to us in similar format. As a matter of convenience we shall consider this matter in two categories - the recording and log maintenance on 27 February 2004 and the subsequent handling of the recording - although it is necessary to have regard to the conduct of the ICAC as a whole rather than piecemeal.

Events on 27 February 2004

52.  There had been ongoing monitoring of everything happening in the first applicant's office on a daily basis, 12 hours a day, for almost eight weeks from 3 January to 27 February 2004, which generated some 167 audio/video recordings. Out of more than 660 hours of recordings, the conversation between the first applicant and Mr Lee lasted for not more than 13 minutes. We do not imply, by that, that a determinative feature in matters of this nature is the duration of the intrusion into legal professional privilege: it is not. It does, however, put into perspective the extent of the intrusion in the context of the overall operation and is a further, dramatic, illustration of the difference between the present factual situation and that in the cases upon which so much of the applicants’ contentions rest.

53.  The judge made a specific finding "... that the ICAC acted in good faith in carrying out the covert surveillance in which the meeting was recorded.". He found "It is common sense that it would not be common for lawyers to visit their clients at their offices for the purpose of giving legal advice..." and that the chances of recording "... conversations protected by LPP was naturally slim" in the light of the fact that the recording device was placed in the first applicant's commercial premises. He found that although the accused had been arrested by this time, "... the ICAC still did not envisage any conversation which would be protected under LPP to take place in the office.".

54.  He was talking, in our view, in general terms when making these observations for he then went on to deal with the specific issue of the ICAC officers present in the monitoring room appreciating, from the monitoring itself, that a solicitor would visit the first applicant. We, of course, are not parties to just what it was the officers heard of the first applicant’s side of the two telephone conversations as the first applicant has declined to waive privilege but, from what little is before us, it does seem that it would have been obvious to the officers that a visit from a solicitor was imminent.

55.  The judge took the view, and it was an approach that was open to him, that there was "... no indication what purpose the visit was for" and that even when the conversation between first applicant and Mr Lee prior to the service of the restraint order commenced "... it was still not known that they(sic) would be legal consultation" - by which we understand him to mean a privileged communication. It will be recalled that the judge accepted the evidence that the ICAC officers present in the monitoring room were unaware that Mr Lee had consulted with the first applicant whilst she had been in custody subsequent to her arrest. He also accepted the evidence of Ng who had testified that, because the conversation appeared to have been about the payment of legal fees, he, Ng, did not regard the initial conversation as being privileged.

56.  The fact that subsequent to the arrest of the accused persons but prior to the visit by the solicitor Mr Lee, Kenny Tso, effectively the most senior ICAC officer directly involved in this investigation, issued the express order concerning the necessity for monitoring officers to report to their superior "... anything special which may involve the defendants seeking legal advice or... other special matters..." demonstrates proper appreciation on the part of the ICAC of the perils of recording privileged conversations and militates against the suggestion that the ICAC set out with the express purpose of capturing privileged conversations as occurred in the decisions to which we have been referred.

57.  It seems to us, therefore, that it cannot be said that Kenny Tso acted, or consequently that events occurred, in ignorance of the law of privilege. There is a real, and obvious, distinction to be drawn between, on the one hand, the person who asserts that he did not know that legal professional privilege should not be infringed or was ignorant even of the existence of legal professional privilege or did not know what it covers and, on the other hand, one who appreciates each of those factors but, even so, acts incompetently.

58.  Moreover, in the context of this case Kenny Tso’s instruction also provides a cogent explanation for Ng’s initial decision to wait to see what eventuated. It is plain that such appreciation supports the judge’s view that the ICAC was not acting mala fide in effecting the recording.

59.  Although the judge described Ng’s decision to wait to see what eventuated as "prudent" it is one which in our view, with the benefit of the clarity of vision afforded by hindsight, was, at the least, unfortunate albeit understandable in terms of his rank and the express instructions received from his superiors.

60.  Of course the applicants say that the very terms of the instruction given by Kenny Tso demonstrates the absence of an effective system being in place so as to avoid accidental recording of privileged communications. Whilst perfection is a laudable aspiration, the reality of the situation in this matter is that a clear instruction was given demonstrating recognition of the necessity to avoid recording privileged communications but which relied upon the making of a decision by other than those involved in the actual recording process. That decision was made and communicated within 15 minutes of the initial alarm being sounded by Ng: we do not think it realistic to regard that as being an undue delay.

61.  As to the delay occasioned by the necessity of those in the monitoring room obtaining instructions from a superior officer, it was Kenny Tso’s evidence, firstly, that the order had been given that no one was to switch off the recording machines in order to maintain the integrity of the recordings in case they be needed in evidence and, secondly, that he felt it unfair to place on a junior officer the onus of deciding whether or not to abandon recording. The judge obviously was satisfied by these reasons.

62.  Criticism of the form of the instruction may well be valid as may deprecation of the consequences of following that instruction: it is not axiomatic, however, that such inadequacies as may have been demonstrated result in an affront to the notional public conscience such as to warrant a stay of the proceedings.

63.  The judge found at §86 of his ruling:

"Judging from the way the ICAC officers conducted themselves it is accepted by the court that they had no intention to intrude into the LPP of D2. The meeting between D2 and the solicitor was, in the view of the court, recorded inadvertently and unintentionally and without any bad faith or mala fide on the part of the ICAC."

64.  It is clear from the context in which the judge was addressing this issue that he was referring to the recording being inadvertent and unintentional in the sense that the primary, if not sole, purpose of the recording was not to record conversations which obviously would be privileged.

65.  This is made apparent by his subsequent finding in regard to the maintenance of the written log by Cecil Tse during the course of the meeting between the first applicant and Mr Lee which the judge found "... no doubt constituted a deliberate intrusion on the LPP of D2.”. Cecil Tse maintained that log, that being his allotted task and the reason for his presence there, during a period when he had been instructed by his immediate superior present in the room to wait to see what happened, his immediate superior himself awaiting further instructions from more senior officers. The judge took the view, and it is one which was open to him on the evidence before him, that in maintaining the log the ICAC acted without bad faith.

The subsequent handling of the recording

66.  The judge found that the manner in which the ICAC subsequently dealt with the recording constituted a “…deliberate breach of the LPP of D2”. He held that “The inevitable result was to allow more people to have access to the meeting.” but, noting that Kenny Tso had given orders that access to the recording was to be permitted only subject to his authority, went on to conclude that, §95:

"This clearly showed that the ICAC did not have intention to intensify intrusion into the LPP of D2 and all these were only done as part of the procedure of discovery in preparation of the case for trial. This also showed that the ICAC had not tried to conceal the monitoring and recording of the meeting and was dealing with the matter in a transparent and fair manner."

going on to hold, once again, that the ICAC had acted in good faith.

67.  The applicants submit that even where a law enforcement agency has acted in good faith, that fact alone cannot reduce to a level of acceptability an action that otherwise would be an affront to the public conscience. The better way of expressing that proposition is that a finding that such an agency acted mala fide will be a material factor in favour of stay, whilst the absence of any such a finding or a finding that the agency acted in good faith will be a material factor in assessing whether the agency’s conduct is such as to justify the exceptional course of staying the proceedings.

68.  The applicants’ submission overlooks the observation of Sir Anthony Mason in HKSAR v LEE Ming Tee and Securities and Futures Commission at §182:

“It is generally recognised that only in exceptional circumstances will a stay be granted when a fair trial as possible. An indication of what this means is conveyed by L’Heureux-Dubé J’s observations in R v O’Connor (1996) 130 DLR (4^th) 235 at p. 277B-C:

... a stay of proceedings is only appropriate "in the clearest cases", where the prejudice to the accused's right to make full answer and defence cannot be remedied or where irreparable prejudice would be caused to the integrity of the judicial system if the prosecution were continued.

In the absence of finding of "bad faith", this standard will rarely, if ever be satisfied in a case where a fair trial is still possible. Even if there be a finding of "bad faith", that finding would not necessarily conclude the matter.” [Emphasis supplied]

(applied in SHUM Chiu at §43)

69.  It is self-evident that there was a breakdown in communication between the officers in the monitoring room and Kenny Tso. It is singular that this situation pertained for some three years as it was not until comparatively late in the day that Kenny Tso even became aware of the recording of the conversation which took place subsequent to the service of the restraint order. It is appropriate to keep in mind that in regard to the earlier conversation, Ng did not report to Kenny Tso because he was of the view that what had been heard that far was subject to privilege - to the contrary, his evidence was that he believed it was not privileged as it related only to payment of legal fees but that it constituted an unusual event that should be reported.

70.  Kenny Tso testified that he anticipated that, unsurprisingly, the recording of the conversation would be a matter which would arise at trial. It was for this reason, at least in part, that he felt it necessary to obtain advice from the Department of Justice and, in order to facilitate the obtaining of that advice, he arranged for the recordings of the conversation to be transcribed and those transcriptions to be translated into English: given that the conversations apparently were conducted in a mixture of Putonghua and Cantonese, in order for any advice to be meaningful that was a course which we would take to be almost inevitably necessary to be followed.

71.  We agree with the criticism that it would have been preferable for Kenny Tso to have made enquiries of his subordinates - if for no purpose other than to refresh his memory - before deciding on what course of action to take to obtain advice. Indeed, many of the criticisms levelled at the way in which events unfolded are well founded but, in themselves, are not illustrative of conduct that demanded a stay of proceedings.

72.  In our view, although the transcription of the recording and obtaining legal advice inevitably would disseminate the content of the conversation, we are satisfied that, in acting as they did, the officers of the ICAC were not acting maliciously or with any intent to worsen the position of the accused: to the contrary - the recording was a matter which, on any realistic view, would be a contentious issue at trial and it was sensible of the ICAC to obtain advice as to how to address the issue. It may be that there were other methods open to them to obtain that advice, but we agree, in the circumstances of this particular matter, with the judge's finding that officers of the ICAC had acted as they did in good faith.

73.  A matter which assumed prominent position in the submissions made before us on behalf of the applicants was the fact that the ICAC had forwarded to Lu’s solicitors a copy of each of the recordings, including HC/OP/164, when they had requested copies of all of the recordings reflected in the unused material. This was characterised before us as "about the worst" breach conceivable of the first applicant’s legal professional privilege: it attracted castigation of the judge for his failure to deal with it in detail in the course of his ruling.

74.  With respect, if it were as heinous an action in the context of this case as it was painted in the hearing before us, it is hard to understand, first, why it attracted so little attention in the submissions to the judge and, secondly, in the written submissions for this appeal: we note that at §57 of those written submissions, which identifies the specific failings on the part of the judge’s fact-finding exercise about which complaint is made, it does not attract any mention.

75.  The judge demonstrated himself to be aware of the complaint and then dealt with the issue in this manner: he noted at §42(d) of his ruling that it was not in dispute that the ICAC had served the recording, transcript and translation on Lu and prosecuting counsel; at §94 he recognised that that was done on the order of Kenny Tso and that "the inevitable result was to allow more people to have access to the meeting"; and indicated at §113 that "The court has analysed all the acts of the ICAC which were in breach of the LPP of [the first applicant] and has come to the conclusion...".

76.  Once the existence of the recording, but without disclosing details of its contents, was included in the list of unused materials it may be thought almost inevitable that the three accused persons would have sought copies of the recordings and thus access to the offending section of HC/OP/164. It is pertinent to bear in mind that Kenny Tso’s evidence, which the judge accepted, was that at the time HC/OP/164 was released to Lu’s solicitors he, Kenny Tso, believed it only to contain a discussion relating to the payment of legal fees. For the ICAC to have omitted the tape from the list of unused materials would have been unconscionable.

77.  In our view, given the plethora of criticisms which were made during the submissions to the judge and the unexceptionable importance which this particular complaint assumed amongst those criticisms, the manner in which he dealt with this further error was adequate in the circumstances. Just as whether or not to exercise discretion in favour of a stay is a fact sensitive issue, so is the amount which a judge may reasonably be expected to say about any given aspect of a case.

78.  In Sutherland Newman J suggested, at §86:

“So this ruling is not misunderstood, I should like to emphasise that nothing I have said is to be taken as covering the case of inadvertent and unintentional acquisition of privileged material in the course of a properly authorised covert surveillance. The mischief in such cases, the wrong in such cases, if it occurs, will be cured by the adoption of conduct which is completely transparent.

A senior officer should be immediately informed of the state which has occurred the defence solicitor should be immediately informed of the fact that it has occurred, of the details and the circumstances, and all the contents of the material which has been obtained. As necessary, any officer who has become aware of the material, who is in the enquiry, could, if the circumstances so require, being moved from that enquiry forthwith. Prompt, transparent action will obviate the difficulties. That, of course, is to be contrasted with this case.” 

79.  It suffices to say that we accept that those suggestions were a far cry from what occurred in the instant matter. There was not what could be called "completely transparent" conduct in the proactive sense, although the evidence before the judge suggests that, conversely, there was no deliberate attempt at concealment of the fact of the recording by the ICAC.

80.  In summary, in each of the other cases to which we referred by counsel for the applicants there were what may be described appropriately as acts of commission on the part of the investigating authorities to intercept the privileged communications. In this matter, there was an error or were errors of omission on the part of the ICAC: we do not say that in such instances a stay would never be justified but in this instance, applying the principles enunciated in the LEE Ming Tee decisions, we are far from persuaded that the judge erred in exercising his discretion in the manner in which he did.

The general grounds: Grounds 1 to 4, 6 to 8, 10 to 22 and 25 to 30

81.  Ground 5, which related to the precise nature of the relationship between Lu and the first applicant, is said to have been abandoned for the reasons set out at §40 of the skeleton argument. In contradiction, we note that in the introductory passages in the applicants’ skeleton argument, §16, it is submitted that this was "... quite an important finding... which should have seriously undermined the prosecution's case...".

82.  Despite the fact that the judge felt it necessary to spend a substantial period of time determining the issue of whether Lu and the first applicant were lovers or merely very close friends the reality of the situation, as he then went on to conclude, is that whether it was simply a very close friendship - which was not disputed - or a physically intimate relationship simply made no difference at the end of the day to the way in which she did or would have been able to conduct herself.

83.  Ground 9 was also abandoned by the applicants whilst they chose "no longer to pursue" Grounds 23 and 24. To her credit, Ms Draycott confined herself to further addressing only limited aspects of the wide range of remaining items during her oral submissions.

84.  The complaints made in the extraordinary number, 26, of remaining grounds of appeal in fact between them encompass four substantive grounds. It would have been appropriate for the applicants to have set out those four grounds in the Re-Amended Perfected Grounds of Appeal and then, if they wished, to have itemised and identified the evidential basis for those grounds in their written submissions. Instead, we have been faced with argument contained in the Re-Amended Perfected Grounds of Appeal which was then repeated with additional and, in some instances, conflicting, detail in the written submissions. In effect, the applicants are simply seeking to rerun before this Court on appeal the submissions which were made to the trial judge. This is a singularly inappropriate method of presenting the grounds of appeal which increases the burden imposed on this court.

85.  Because of the true nature of the complaints advanced, we do not regard it as necessary to traverse each item separately. By and large they rely upon a trawl through the transcript seeking out detail which the applicants then pray in aid. This, of course, was an exercise which it was appropriate to conduct before the judge: very detailed closing submissions were made to him resulting in his being fully aware of the issues which he was required to determine and the submissions made by each party - including the counter "theories" advanced by the applicants through cross-examination.

86.  Suffice it to say that we have given careful consideration to the arguments advanced in respect of each of the 26 items; have resorted to the transcript wherever it has been necessary; have subjected the judge’s Reasons for Verdict to scrutiny in regard to each of the complaints made.

87.  Be that as it may, the grounds of appeal are, in effect, four: that the judge erred, first, by drawing inferences adverse to the applicants which were unsupported by the evidence before him; second, that he wrongly rejected defence contentions; third, by failing to indicate to a satisfactory extent that he had evaluated the evidence properly, or at all; and, four, there were instances where he misunderstood the evidence.

The drawing of inferences and rejection of defence contentions

88.  These two aspects are completely interwoven in the submissions before us and may conveniently be considered together: given the general tenor of the submissions, one or both apply to all 26 remaining items - specifically it is submitted that the judge drew erroneous inferences in respect of items 1, 2, 4, 7, 8, 10, 11, 17, 18, 20, 21, 22, 26, 27, 29 and 30 and wrongly rejected defence contentions in respect of items 3, 6, 9, 13, 14 and 15.

89.  The judge was fully alive to the fact that the evidence against the applicants was entirely circumstantial, as is commonly the case in a charge alleging a conspiracy. The principles that apply to the drawing of an inference from primary facts which a tribunal of fact finds proved are too well known to require repetition here. It is abundantly clear from the judge’s Reasons for Verdict that he was properly aware of what was required of him in this regard.

90.  It is pertinent to bear in mind that each applicant exercised his or her right not to testify in the defence case. The defence advanced at trial, by way of cross-examination or submission, a number of contentions each of which was a hypothesis designed to persuade the judge that there were alternative possibilities flowing from the evidence or absence of particular aspects of evidence. Those contentions were recycled in the skeleton argument.

91.  The major hypothesis advanced by the applicants was described, even in the skeleton submissions for this appeal, as a "theory" relating to the expert opinion of the forensic accountant called by the prosecution, Mr. Lees. It remained simply that, a theory, which the judge found, understandably in our view, unattractive unsupported as it was, and uncontroverted as was the prosecution case, by any evidence.

92.  The judge accepted Mr. Lees as an expert witness and relied upon his testimony. It is a mischaracterisation for the applicants to categorise Mr. Lee's evidence as a "theory": it was expert opinion based upon extensive research and analysis by him with conclusions supported by reason.

93.  We have considered each of the inferences to which the applicants have pointed as being incorrectly drawn. In our judgment each was an inference which the judge was entitled to draw from the evidence before him.

Failure to demonstrate that he had evaluated the evidence adequately or at all

94.  This ground relates particularly to items 7, 8, 9, 11, 15, 16, 17 and 28.

95.  The authorities are clear. There is a duty on a trier of fact sitting alone to furnish adequate reasons for arriving at a particular decision or finding but what will constitute adequate reasons in any given instance will be case-specific. (See, e.g., Oriental Daily Publisher Ltd v Commissioner for Television and Entertainment Licensing Authority [1997-1998] 1 HKCFAR 279 at 290J; HKSAR v POON Chun Kit [2007] 4 HKLRD 12; HKSAR v CHING Kun Kin CACC192/2008 at §22; HKSAR v TAM Yuen Chuen CACC116/2008 at §374)

96.  The trial proper lasted for some five and a half months. 108 persons were called to testify. 430 documentary exhibits were admitted in evidence in the prosecution case, many of them multi-paged, and 30 by the defence. The judge’s Reasons for Verdict comprised 520 paragraphs spread over 169 pages of typescript.

97.  In our view, the judge properly identified the issues which he was required to decide; properly identified the most salient aspects of the evidence relating to those issues; adequately set out his essential approach to his findings of fact. We accept that it would have been possible for him to have written more, indeed much more, than he did. He expressed himself clearly and, given the mountain of evidence which faced, with commendable brevity. His analysis showed an exhaustive grasp of the evidence. We agree with Ms Draycott when she said that “The judge took great pains with the Reasons for Verdict”. The findings of fact which he made were supported by cogent reasoning.

98.  The complaint is made that in some instances the judge failed to mention specific aspects of the evidence. We accept that to be so in this instance. Where a single judge sits alone it will not be assumed, of necessity, on appeal that because a particular matter was not mentioned by a judge he did not take it into account in arriving at his decision. Whether the failure to mention a matter indicates a failure to take into account and whether the failure to take it into account, if there is such a failure, are material matters will always be fact and context sensitive questions. None of the matters to which we have been referred in respect of this complaint has caused us consider.

Misunderstanding of the evidence

99.   This is asserted, or implied, by the applicants in a number of instances but specifically in respect of items 11, 14, 15 and 17.

100.  We have considered the specific matters referred to by the applicants but are satisfied that the essence of these complaints is to be found in the applicants’ disagreement with the judge's conclusions rather than any misunderstanding on the part of the evidence of the judge. There is no merit in any of these submissions.

Other matters

101.  There are a number of further discrete matters to which we propose to refer, albeit briefly. That we do not refer to all the submissions before us is because we regard it as unnecessary to do so, not because we have not taken them into account.

102.  Reliance was placed upon the delay between the conclusion of the distributor agreement with Golden Leaf and the commencement of the payments which the prosecution asserted to be advantages: the agreement had been concluded some nine months before traceable payments commenced which apparently coincided with the supply of a category of Double Happiness cigarettes known as “BM” to Golden Leaf. It was submitted that the fact of that delay should have cast doubt upon whether the payments were linked to the granting of the distributorship. That was a matter that was before the judge and of which he would have been well aware when he was deliberating.

103.  However, the fundamental flaw in the submission is that it is based upon the assumption that the prosecution relied solely upon those payments, flowing from the supply of “BM” cigarettes, as representing advantages for Lu. As it apparent from its opening, in which it indicated that it would “…concentrate primarily on the BM shipments…”, this was not so: it simply took the stance that these were readily traceable amounts from which it was possible to draw the requisite inferences.

104.  In respect of item 9 it was pointed out that only one of the sub-purchasers of Double Happiness had been charged commission. This led, after traversing a number of calculations, to the submission that the result did not make commercial sense. The duty of the judge was to decide whether the evidence put before him established the criminal liability of each accused, not to speculate on why individual transactions differed in comparison with others. The judge clearly was alive to the fact that different sub-purchasers were treated differently from one another. It was also clear to him that the evidence, especially in the sense of records and details of transactions, did not purport to be complete or exhaustive in every respect. In our judgment, in the context of this trial he was not required to attempt to rationalise the wisdom of individual commercial transactions.

105.  The prosecution relied upon a number of recordings of conversations. Those were of variable quality, as were the transcriptions and translations of them. Evidence concerning these difficulties was before the judge. In a number of instances he found it necessary to arrive at this own decisions as to just what the recording revealed. We were urged to approach the contents of the recordings with circumspection in instances where the judge had not specifically made a finding as to the content of a recording.

106.  We accept that caveat. There was an attempt before us to extend the challenge to one particular recording which had not been challenged before the judge. This challenge related to whether a reference in the transcript (Exh. P10-(7B)) to a “Philippines company’s cheque book” in fact contained a reference to “Philippines”. This was a matter which it had been open to the applicants to challenge before the judge. They forbore from doing so despite there being lengthy and detailed challenges to other aspects of the recordings.  The judge was entitled to rely on the entry as it stood.

107.  We accept, too, that the judge erred when, at §428 of his Reasons for Verdict he took the conversation to be that the first applicant had told the second applicant to tell Lin that two containers of cigarettes were for sale in Guangdong and the rest for sale in Fujian. In fact what the transcript of the conversation showed was that the first applicant had told the second applicant that she had told this to “Ah Ding”. Plainly from the evidence “Ah Ding” was Lin. The point simply is this: it matters not who conveyed the information to Lin – the first or second applicant – as the conversation would not have taken place unless they were both party to the transactions to which it related. The judge was correct in the conclusion he reached.

108.  Then, contained in the applicants’ written submissions was a criticism of the judge for refusing to sever the trial of Lu on the one hand and the applicants on the other. It was suggested that "The consequence was that the prosecution was able to present against D2 in Charge 1 much evidence that incriminated [Lu] and her as being a co-conspirators, but in respect of which only [Lu] could have offered an explanation.". That is an unwarranted observation and one which ignores the application of the co-conspirators rule.

109.  We note the assertion by the applicants in paragraph 71 of their written submissions, which relates to item 12, which asserts that the judge "... was obviously prejudiced..." by the evidence that $2,500,000 in cash had been found in the first applicant’s safe deposit box. A dispassionate reading of what the judge said about this issue shows it to be perfectly clear that he was commenting on the significance of the first applicant keeping $2,500,000 in cash lying around - a commonsense observation which, in our view, he was fully entitled to make - and her involvement with the company Fortune Star. That is particularly so when one bears in mind that the first applicant had effective control of the bank account of Fortune Star; that $2,500,000 had been withdrawn from the account by way of encashment of five cheques; that the second applicant had arranged access to her safety deposit box within, in respect of four of those encashments, an hour and, in respect of the fifth, within the next day.

Conclusion

110.  This was a trial which underscored the importance of a judge considering the evidence before him not only item by item but also ultimately by stepping back and looking at its overall effect.

111.  Once that was done, and in the absence of any evidential basis for the various hypotheses advanced on behalf of the accused, it is clear that the judge arrived at the only conclusion available to him. The applications are refused.

112.  We would add that, in particular, the charts prepared by the prosecution were of real assistance to us and, we would think, to the judge: preparation of charts of that nature is to be encouraged in all similar matters.