HKSAR v. CHENG TAK-WAI

CACC 513/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 513 OF 2001

(ON APPEAL FROM DCCC 1152 OF 2000)

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J U D G M E N T

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Hon Mayo VP (giving the judgment of the Court):

1. The applicant was convicted of a conspiracy to defraud after a trial in the District Court before Deputy Judge Mackintosh. He was ordered to undertake a community service order for 200 hours and pay $100,000.00 towards the costs of the prosecution.

2. The application to seek leave to appeal against the sentence imposed is being made a few weeks out of time. The explanation given for this is not satisfactory. The applicant claims that he thought that the prosecution would not seek to enforce the costs order. It is only this part of the order against which he wishes to appeal.

3. While the explanation given for not applying timeously is not satisfactory we consider that it is right to weigh the merits of the application before making a decision as to whether to grant leave to apply out of time.

4. The conspiracy in question was quite a serious one. The applicant was an assistant purchasing manager of Hung Fung Engineering Limited. This company had entered into a contract with China State Construction Engineering Corporation to supply and install stainless steel cladding on the external walls of a commercial complex at Tsuen Wan.

5. It was specified that the thickness of the cladding should be 2 mm. In fact the cladding provided was 1.5 mm.

6. The applicant had been aware of this. It appears however to have been accepted by the Judge that the applicant had not initiated this deception. Other colleagues in his company, including the superior officer he worked to, were aware of the situation and he had not considered it to be necessary for him to expose the position. Also there was no question of his obtaining any monetary advantage.

7. The general principles applicable to orders being made for a defendant to defray all or part of the costs of the prosecution are laid down in section 15 of the Costs in Criminal Cases Ordinance, Cap. 492. They are as follows:

"15. General principles

In any criminal proceedings-

(a) the costs that may be awarded by virtue of an order shall not be punitive but shall be such sums as appear to a court or a judge reasonably sufficient to compensate any party to the proceedings for any expenses properly incurred by him in the course of those proceedings, including any proceedings preliminary or incidental thereto;

(b) a court or a judge may have regard to any assessment laid before it or him for their assistance by any party to the proceedings of the amount of costs properly so incurred by any such party;

(c) an order as to costs shall be such as a court or a judge considers just and reasonable;

(d) the amount to be paid in pursuance of an order as to costs shall, unless an order for taxation is made under section 20, be specified in that order;

(e) the question of whether or not an order as to costs ought to be made in respect of any expenses properly incurred by any party to the proceedings in the course of the proceedings, including any proceedings preliminary or incidental thereto, may be adjourned until the end of those proceedings;

(f) a court or a judge may take into account any other order as to costs which has been made in respect of those proceedings."

8. So far as the present application is concerned there are two aspects of this section which need to be considered. The first is that the order should not be punitive and the second is that the order must be just and reasonable.

9. The underlying principles to be adopted in determining whether such an order should be made were considered by Chan CJHC (as he then was) in HKSAR v Chan Kwok-wah [1999] 1 HKC 697.

10. In the headnote to the case it is stated:

"(2) The Costs in Criminal Cases Ordinance (Cap. 492) did not specify the circumstances under which a magistrate might order a defendant to pay the costs of the prosecution. Not every defendant who was convicted was required to pay costs. This had always been the approach adopted by the court. A defendant was presumed innocent until he was found guilty. It was the duty of the prosecution to tender evidence and prove beyond reasonable doubt that a defendant was guilty. This was the fundamental constitutional right which each defendant enjoyed. The defendant would be deprived of this fundamental right indirectly if he was penalized on costs because he did not plead guilty and resulted in the prosecution tendering evidence to prove the case, or because he raised a defence that was not accepted by the court. R v Chan Chor [1968] HKLR 540 considered (at 701I, 702C).

(3) In applying the Costs in Criminal Cases Ordinance, a magistrate had to consider whether there were any special circumstances which caused the prosecution to incur extra expenses, including the behaviour of the defendant throughout the trial, like being deliberately difficult to the prosecution witnesses, intentionally delaying the case, or insisting on the prosecution proving unimportant or undeniable facts. The magistrate also had to consider the financial condition of the defendant before deciding whether to impose a costs order. R v Chan Chor [1968] HKLR 540 considered (at 702D-E).

(4) Although an unrepresented and verbose defendant might cause the prosecutor or the court to think that he was being deliberately difficult, the court should not further penalise him for his behaviour, particularly when he was exercising the fundamental constitutional right granted to him (at 702E-F)."

11. What emerges from this is the necessity for it to be established that there is some feature of the trial indicating that as a consequence of the way in which the defendant conducted his defence unnecessary or additional expenditure has had to be incurred by the prosecution or that the defendant has wilfully wasted the court's time.

12. There is nothing in the Judge's Reasons for Verdict to indicate that this was the case so far as this trial was concerned.

13. At paragraph 11 of his Reasons for Sentence the Judge says:

"11. You have heard me mention the issue of costs already in the course of counsels' submissions. The costs of bringing this case to court have, on any view, been substantial. It is not just the question of a trial, it is the question of the fact that you have committed the offences which has led to the necessary investigations and the necessary legal proceedings. You have not done anything to keep those costs down by exercising your right to a trial. You are perfectly entitled to that. But it seems to me that in the circumstances of the case some contribution to the substantial public costs, which exceed $1 million overall, should be made by each of you. I emphasise to you that this is not part of any penalty because it is merely compensatory, merely compensating the government for some of the costs. And the order which must be one that I consider to be just and reasonable in all the circumstances. It is an order that creates a civil debt by you to the government which the government can enforce as it sees fit."

14. Notwithstanding the Judge's view that an order for the payment of the prosecution's costs was not part of the punishment imposed upon the applicant, it is difficult to avoid coming to the conclusion that that was exactly what it was.

15. The Judge has not pointed to any misconduct of the applicant in the way in which the defence was conducted.

16. It would also appear that the Judge has not sufficiently weighed and considered all of the factors which need to be considered by virtue of section 15 of the Ordinance.

17. We have in mind particularly section 15(c) which requires that the order be just and reasonable.

18. The Judge did not undertake any investigation or inquiry to ascertain the financial ability of the applicant to discharge the order.

19. We have had the benefit of reading an affirmation which the applicant has affirmed which provides evidence that the applicant is in a parlous financial position. This has to an extent been brought about as a consequence of his losing his job as a result of the offence and having to obtain employment at a much lower remuneration than was hitherto the case.

20. His situation is further complicated by the fact that he has experienced difficulties with his marriage as his wife has commenced divorce proceedings against him.

21. There would appear to be no reason to doubt the veracity of the statements made by the applicant.

22. Having regard to all of this and more particularly the punitive nature of the order made we consider that the interests of justice require us to grant the applicant leave to make his application out of time.

23. We also consider that the costs order was wrong in principle in all the circumstances of this case.

24. Accordingly, treating the application as the appeal we order that the appeal be allowed to the extent that the order that the applicant pay $100,000.00 towards the prosecution's costs be discharged.