LI DEFAN AND ANOTHER v. HKSAR

FACC No. 5 of 2001

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 5 OF 2001 (CRIMINAL)

(ON APPEAL FROM CACC NO. 520 OF 2000)

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J U D G M E N T

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Chief Justice Li :

1. I agree with the judgment of Lord Hoffmann NPJ.

Mr Justice Bokhary PJ :

2. I have had the advantage of reading in draft the judgment prepared by Lord Hoffmann NPJ, and I respectfully agree with him that these appeals should be dismissed. For my own part, I would be prepared to affirm these convictions on any view of the principles which have been debated in the course of the hearing before us and on which the supreme tribunals of Australia and Canada have not achieved unanimity. In the present case, we are concerned with a trial in the District Court and therefore trial by a judge alone. The appellants, as was their right, chose not to enter the witness-box. On my reading of the trial judge's reasons for verdict, the substance of his approach involved really no more than treating the prosecution's evidence as enjoying the advantage ? for it must be an advantage ? of not being undermined, contradicted or explained by any testimony from the appellants. That is unexceptionable on any view of the applicable principles.

3. Turning to trial by jury, I entirely agree with Lord Hoffmann NPJ that in most cases in which the accused does not go into the witness-box, it is undesirable that the judge should give the jury more than the standard Judicial Studies Board direction, which is this:

"The defendant does not have to give evidence. He is entitled to sit in the dock and require the prosecution to prove its case. You must not assume that he is guilty because he has not given evidence. The fact that he has not given evidence proves nothing, one way or the other. It does nothing to establish his guilt. On the other hand, it means that there is no evidence from the defendant to undermine, contradict or explain the evidence put before you by the prosecution."

Whether in one form of words or the other, those points must be got across to the jury. And there is something to be said for employing those very words.

4. Apart from its last sentence, everything in the standard direction is for the accused's protection. The last sentence goes towards dispelling any misconception that may otherwise arise that commonsense does not apply. And that last sentence is as far as it is normally appropriate to go in that regard. Only in rare and exceptional circumstances ought a trial judge to consider going further. If he decides to go further, he should do so with moderation and certainly not in such a way as to negate the protection which the standard direction is meant to give the accused. And once a trial judge ventures beyond the standard direction, he should bear in mind these words to be found in the passage which Lord Hoffmann NPJ quotes from the joint judgment of Mason CJ and Deane and Dawson JJ in Weissensteiner v. R (1993) 178 CLR 217 at p.228:

"Of course, an accused may have reasons not to give evidence other than that the evidence would not assist his or her case. The jury must bear this in mind in determining whether the prosecution case is strengthened by the failure of the accused to give evidence. Ordinarily it is appropriate for the trial judge to warn the jury accordingly."

Mr Justice Chan PJ :

5. I agree with the judgment of Lord Hoffmann NPJ.

Mr Justice Mortimer NPJ :

6. I agree with the judgment of Lord Hoffmann NPJ.

Lord Hoffmann NPJ :

7. After a trial in the District Court the first appellant Mr Li, who was then assistant general manager of the Bank of China, and the second appellant Mr Fan, a businessman, were convicted of bribery. The undisputed facts were as follows. During 1997 Mr Fan was negotiating a US$40 million loan from the Bank to finance a development project in Zhengzhou by Shing Hung Investments Ltd ("SHIL"), a company in which he was a shareholder and director. Mr Li was head of the Bank's Business Development Department ("BDD"). The BDD was responsible for evaluating loan applications and making recommendations to the appropriate Credit Committee of the Bank. On 8 September 1997 a loan agreement was signed but negotiations continued to fix a timetable for draw down. On 25 September Mr Fan wrote to Mr Li with his proposals for draw down and asked him to support them. On 6 October 1997, Mr Fan paid Mr Li HK$3,696,706 by two cheques drawn on Hong Kong International Development Company ("HKIDC"), a company of which he was sole proprietor. The loan was subsequently drawn down.

8. Neither appellant gave evidence at the trial. But both had been interviewed at length by the ICAC and videos of the interviews were shown at the trial. The trial judge (District Judge Day) treated the whole of the interviews as evidence both for and against the accused. They contained the only explanations of why Mr Fan should have paid Mr Li HK$3,696,706. It appears that the money represented the profit on a share speculation by SHIL and HKIDC, which had applied for allocations of shares in a company called CATIC Shenzhen ("CATIC") when it was floated on the Hong Kong Stock Exchange on 29 September 1997 and sold the shares on the first day of trading. Mr Fan had paid the purchase price out of money belonging to HKIDC.

9. Mr Li told the ICAC that he had recommended the CATIC shares to Mr Fan. But the purchase was opposed by other directors of SHIL and Mr Fan had come back to him and asked him to take the shares off his hands. Mr Li could not himself pay the purchase price but offered a certificate of deposit in his wife's name as security against any losses which SHIL or HKIDC might suffer. In return, he acquired the right to any profit.

10. Mr Fan told a story in some respects similar and in others different. He claimed that the CATIC purchase was his own idea and that he had paid for the shares with his own money. The other SHIL directors nevertheless objected and he asked Mr Li whether he could withdraw the application. Mr Li said that this was not possible but offered a guarantee against loss (supported by his wife's certificate of deposit) in exchange for any profit. Mr Fan agreed.

11. The judge rejected both explanations. He regarded them as riddled with improbabilities. He said that the evidence of bribery was overwhelming. He then added:

"I refer to LAM Tsz-Wah v. The Queen [1984] HKLR 54, 63, where the Court of Appeal said "... since the applicant chose not to go into the witness box to explain the circumstances ... he cannot complain if a proper inference is drawn, and if it is drawn more readily in view of his election.""

12. For these reasons he found the appellants guilty as charged. He also convicted Mr Fan on a separate charge of offering a bribe of HK$10,000 (in the form of a lai see packet for Chinese New Year) to another employee of the Bank who was also involved in the SHIL loan.

13. Mr Fan and Mr Li both appealed unsuccessfully to the Court of Appeal and now appeal to this Court. The only ground of appeal is that the judge erred in law in saying that he could more readily draw inferences against the accused because they had not given evidence. The appellants say that such reasoning infringes their right to silence.

14. Most of the authorities on the effect of the failure of the accused to give evidence concern the comments which a judge should or may make in his summing up to the jury. In the present case, the judge's comment recorded part of his process of reasoning as a tribunal of fact. I shall first consider the practice in jury trials and come later to the adaptations which need to be made when the trial is by judge alone.

15. Jurors usually know that the accused is competent to give evidence and there is a danger that without some instruction on the point they may treat failure to answer the charge in the witness box as a confession of guilt. It has therefore been the practice for many years, both in England and Hong Kong, to warn the jury not to do so. The terms of a standard direction to this effect are derived from the judgment of Parker CJ in R v. Bathurst [1968] 2 QB 99, 107 and the form presently recommended by the Hong Kong Judicial Studies Board is as follows:

"The defendant does not have to give evidence. He is entitled to sit in the dock and require the prosecution to prove its case. You must not assume that he is guilty because he has not given evidence. The fact that he has not given evidence proves nothing, one way or the other. It does nothing to establish his guilt. On the other hand, it means that there is no evidence from the defendant to undermine, contradict, or explain the evidence put before you by the prosecution."

The substance of such a direction should, as the English Court of Appeal said in R v. Martinez-Tobon [1994] 1 WLR 388, 397, be given in every case in which the accused does not give evidence. The essential elements are that the accused is not obliged to testify and that a failure to do so should not be treated as an admission of guilt.

16. It has however been recognized, since first the accused was allowed to give evidence in England and other common law jurisdictions, that there are sometimes cases in which the prosecution case on a particular issue may be strengthened by the failure of the accused to put forward any contradiction or explanation in circumstances in which he could be expected to know the truth and be willing, if innocent, to testify under oath: see R v. Rhodes [1899] 1 QB 77, 83 and R v. Kops (1893) 14 LR (NSW) 150 and [1894] AC 650. The absence of a denial or explanation by the accused is still not treated as an independent admission but may in particular circumstances give the prosecution evidence greater probative force than it would gain from being merely uncontradicted.

17. It appears that in the period between the passing of the Criminal Evidence Act 1898 (which made the accused a competent witness) and the Second World War, judges commented freely on the failure of the accused to give evidence: see R v. Sparrow [1973] 1 WLR 488, 494. The trend since then has been to show much more restraint. This has been part of a general improvement in the fairness and balance of the summing up (see R v. Bentley [2001] 1 Cr App R 307) but is also the result of two more specific insights. The first is a recognition that there may be reasons why the accused has not given evidence which are unknown to the judge. The second is the constitutional and human rights dimension; the importance of not undermining the principle that the accused is not a compellable witness by comments which may give the impression that failure to testify is an admission of guilt. This aspect of the matter was stressed by Devlin J in his celebrated summing up in the case of Dr John Bodkin Adams: see Sybille Bedford, The Best We Can Do (Collins, 1958), at p.249.

18. Even in cases in which the judge feels confident that there is no reason why the accused, if innocent, should not have put forward an explanation or contradiction on oath, there are dangers in any comment which goes beyond the standard direction. This is because the line between treating failure to give evidence as an admission and treating it as lending additional strength to the prosecution case on a particular issue is a fine one and the distinction may not be easy for the jury to understand. Nevertheless, the reasoning itself is permissible and there is an unbroken line of authority in England and Hong Kong which recognizes that there may be occasions when the judge may properly consider it his duty to draw it to the attention of the jury that such reasoning is open to them.

19. The English practice, before the change in the law made by s. 35 of the Criminal Justice and Public Order Act 1994, was settled by the case of R v. Martinez-Tobon [1994] 1 WLR 388, to which I have referred. After saying that the substance of the standard direction should always be given, Lord Taylor of Gosforth CJ went on to say:

(3) Provided those essentials are complied with, the judge may think it appropriate to make a stronger comment where the defence case involves alleged facts which (a) are at variance with the prosecution evidence or additional to it and exculpatory, and (b) must, if true, be within the knowledge of the defendant.

(4) The nature and strength of such comment must be a matter for the discretion of the judge and will depend upon the circumstances of the individual case. However, it must not be such as to contradict or nullify the essentials of the conventional direction."

The Hong Kong practice is similar and the Judicial Studies Board specimen direction which I have quoted refers in a footnote to the guidance given in Martinez-Tobon [1994] 1 WLR 388. A recent example of a case in which the Court of Appeal held that the judge was justified in making a "stronger comment" was HKSAR v. Launder (CACC 147/2000, unreported) which had certain resemblances to the present case. The accused was a director of a bank charged with accepting bribes. He had received very large sums from a customer of the bank. The only explanation he gave for these payments was in oral extra-judicial statements to witnesses made years before the trial and not supported by documents. He did not give or call evidence. Lugar-Mawson J gave the jury the standard direction near the beginning of his summing up and then, when he came to the question of what inferences could be drawn as to why the payments to the accused had been made, said (CA judgment p.38):

"You may agree with me - you are not obliged to - but you may agree with me that on a matter perhaps as fundamental as this it is surprising that Mr Launder did not want to give you his explanation. These are matters that are particularly within his knowledge. If there are any accounts or records, he is the one who kept them or had his secretary keep them, and he is the one who must know where they are.

Without his explanation, you may find - you are certainly not obliged to - but you may find that you are the more ready to draw the inferences that the prosecution ... ask you to draw from the evidence."

The Court of Appeal held that the judge was entitled to make these comments. They said that on the particular facts of the case, "the applicant's failure to give evidence was ... a circumstance which had a bearing on the probative value of the evidence." (CA judgment p.41). The appropriateness of the comments was not raised before this Court, which quashed the conviction on a different point. But the decision of the Court of Appeal on this point seems to me correct.

20. Mr Macrae SC, in his excellent argument on behalf of the appellants in this case, challenged the proposition that there could be any circumstances in which the failure of the accused to give evidence could be regarded as giving the prosecution case more probative force than it would have had from the mere fact that it stood uncontradicted. He put forward this argument both as a matter of constitutional principle and on authority.

21. The constitutional argument relied upon Article 11(2)(g) of the Hong Kong Bill of Rights, which provides that in the determination of a criminal charge against him, everyone shall be entitled "not to be compelled to testify against himself or to confess guilt." He also invoked what was said to be the wider principle that the accused has a right of silence. He said that if failure to testify could be regarded as actually strengthening the prosecution case rather than merely leaving it unanswered, the accused would be indirectly compelled to testify.

22. In putting forward this submission, Mr Macrae had powerful support from the majority judgment of the Supreme Court of Canada in R v. Noble (1997) 114 CCC (3d) 385, which gave such a construction to provisions in the Canadian Charter of Rights and Freedoms very similar to those in the Hong Kong Bill of Rights Ordinance. But I am bound to say that, with great respect for the late Sopinka J, who gave the majority judgment, I did not find the reasoning convincing. I do not think that comments of the kind with which we are concerned can be said to "compel" the accused to give evidence. The knowledge that such comments may be made is certainly an incentive to give evidence but then, as Gleeson CJ pointed out in his dissenting judgment in Azzopardi and Davis (2001) 119 A Crim R 8, 12, there may be many such incentives apart from the possibility of comment. I prefer the reasoning of Lord Diplock in Haw Tua Tau v. Public Prosecutor [1982] AC 136, 154-155, dealing with a similar argument in relation to Singapore legislation which expressly provided that if an accused did not give evidence, the court "in determining whether the accused is guilty of the offence charged, may draw such inferences from the refusal as appear proper." Lord Diplock said that the only inferences which would be proper were those which could properly be drawn in a system in which the accused was not a compellable witness, that is to say, the kind of inferences with which we are presently concerned. In those circumstances there might be a strong inducement to give evidence but there was no compulsion. "Inducement there is and always has been since the accused first became a competent witness on his own behalf; compulsion there is not" (p.155F).

23. As for the argument based upon a more general right of silence, this seems to me to involve a circularity. As Gaudron A-CJ, Gummow, Kirby and Hayne JJ said in RPS v. The Queen (2000) 199 CLR 620, 630:

"That expression is a useful shorthand description of a number of different rules that apply in the criminal law (R v Director of Serious Fraud Office, ex parte Smith [1993] AC 1, 30-31). But referring, without more, to the 'right to silence' is not always a safe basis for reasoning to a conclusion in a particular case; the use of the expression 'right to silence' may obscure the particular rule or principle that is being applied."

In other words, the right to silence is a generic label for a number of rules having the common characteristic that an individual is in certain circumstances not to be compelled to give information. But what those circumstances are and what would count as being compelled for the purpose of a particular rule cannot be deduced from the label. It seems to me that in R v. Noble Sopinka J deduced from the bare expression "right to silence" that it entailed there being no adverse consequences from a decision not to give evidence and so concluded that drawing adverse inferences would infringe the right to silence.

24. On authority, Mr Macrae said that the Hong Kong cases had gone wrong by misinterpreting what Lord Devlin had said in the Privy Council in The Queen v. Sharmpal Singh [1962] AC 188, 198. This was an appeal from East Africa in which the accused, charged with manslaughter by strangling his wife, did not give evidence. Lord Devlin said:

"This is the sort of case in which a not incredible explanation given by the accused in the witness box might have created a reasonable doubt. But there is no explanation; and the prisoner's silence is emphasised by his consequent conduct. How did he come to squeeze his wife's throat? When the prisoner, who is given the right to answer this question, chooses not to do so, the court must not be deterred by the incompleteness of the tale from drawing the inferences that properly flow from the evidence it has got nor dissuaded from reaching a firm conclusion by speculation upon what the accused might have said if he had testified."

25. These remarks were followed in Hong Kong by the Full Court in Sung Shui Sing v. The Queen [1962] HKLR 587, 592, in which Hogan CJ said:

"No accused is under any compulsion to give evidence on his own behalf or, in any but the most exceptional circumstances, to shoulder the onus of proving his innocence; but, where the prosecution have established facts from which a tribunal might reasonably infer a fraudulent intent, it does not lie in his mouth to complain if such an inference is made and if this inference is reached more readily because of his decision not to afford to the tribunal the benefit of his version of his intentions."

This case was the source of the passage in Lam Tsz-Wah v. The Queen [1984] HKLR 54, 63 to which the judge in the present case referred.

26. Mr Macrae submitted that the court in Sung Shui Sing's case had gone further than was justified by Sharmpal Singh. Lord Devlin had said only that the court could draw the inferences that "properly flow" from the evidence it had. It did not say that it could draw them more readily because the accused had not given evidence. I do not accept this. If that were all Lord Devlin had meant, it would have been a fairly pointless thing to say. He must have meant that on the particular facts of the case, the absence of explanation by the accused gave additional probative force to the case for the prosecution.

27. Mr Macrae also relied upon passages in the three recent cases in the High Court of Australia: Weissensteiner v. The Queen (1993) 178 CLR 217; RPS v. The Queen (2000) 199 CLR 620 and Azzopardi and Davis (2001) 119 A Crim R 8. The outcome of these cases was tartly summarized by Meagher JA in R v. Chun Hing Law [2001] NSWCCA 291 as being that "on the current state of the authorities, a trial judge in his summing-up to the jury would be well advised never to refer to the silence of the accused, much less give directions on the topic." Without any disrespect for the scholarly contributions of others, I must say that the judgments I have found most illuminating are those of Mason CJ and Deane and Dawson JJ in Weissensteiner and the judgment of Gleeson CJ in Azzopardi. The former judgment in particular seems to me to state the position with such clarity and authority that I hope I may be forgiven for citing at some length from pp.227-229:

"... it has never really been doubted that when a party to litigation fails to accept an opportunity to place before the court evidence of facts within his or her knowledge which, if they exist at all, would explain or contradict the evidence against that party, the court may more readily accept that evidence. It is not just because uncontradicted evidence is easier or safer to accept than contradicted evidence. That is almost a truism. It is because doubts about the reliability of witnesses or about the inferences to be drawn from the evidence may be more readily discounted in the absence of contradictory evidence from a party who might be expected to give or call it. In particular, in a criminal trial, hypotheses consistent with innocence may cease to be rational or reasonable in the absence of evidence to support them when that evidence, if it exists at all, must be within the knowledge of the accused.

Of course, an accused may have reasons not to give evidence other than that the evidence would not assist his or her case. The jury must bear this in mind in determining whether the prosecution case is strengthened by the failure of the accused to give evidence. Ordinarily it is appropriate for the trial judge to warn the jury accordingly.

Not every case calls for explanation or contradiction in the form of evidence from the accused. There may be no facts peculiarly within the accused's knowledge. Even if there are facts peculiarly within the accused's knowledge the deficiencies in the prosecution case may be sufficient to account for the accused remaining silent and relying upon the burden of proof cast upon the prosecution. Much depends upon the circumstances of the particular case and a jury should not be invited to take into account the failure of the accused to give evidence unless that failure is clearly capable of assisting them in the evaluation of the evidence before them.

... There is a distinction, no doubt a fine one, between drawing an inference of guilt merely from silence and drawing an inference otherwise available more safely simply because the accused has not supported any hypothesis which is consistent with innocence from facts which the jury perceives to be within his or her knowledge. In determining whether the prosecution has satisfied the standard of proof to the requisite degree, it is relevant to assess the prosecution case on the footing that the accused has not offered evidence of any hypothesis or explanation which is consistent with innocence.

The failure of the accused to give evidence is not of itself evidence. It is not an admission of guilt by conduct. It cannot be, because it is the exercise of a right which the accused has to put the prosecution to its proof ... But when an accused elects to remain silent at trial, the silence cannot amount to an implied admission. The accused is entitled to take that course and it is not evidence of either guilt or innocence. That is why silence on the part of the accused at his or her trial cannot fill in any gaps in the prosecution case; it cannot be used as a make-weight. It is only when the failure of the accused to give evidence is a circumstance which may bear upon the probative value of the evidence which has been given and which the jury is required to consider, that they may take it into account, and they may take it into account only for the purpose of evaluating that evidence. The fact that the accused's failure to give evidence may have this consequence is something which, no doubt, an accused should consider in determining whether to exercise the right to silence ... But it is not to deny the right; it is merely to recognize that the jury cannot, and cannot be required to, shut their eyes to the consequences of exercising the right."

28. This in my opinion also represents the law of Hong Kong. I should say, for the sake of completeness (although I do not think that the point arises), that in my opinion there is no basis for the distinction between cases in which there are additional facts within the peculiar knowledge of the accused and cases in which the facts are within the knowledge of the accused, which was adopted by the majority in Azzopardi. The processes of reasoning cannot be confined within such a straitjacket.

29. In summary, therefore, I consider that in most cases in which the accused does not give evidence it is undesirable that the judge should give the jury more than the standard Judicial Studies Board direction. There is unquestionably power in an appropriate case to comment that the jury may - but need not - consider that the prosecution case on a particular issue relevant to guilt is strengthened by the absence of the accused from the witness box. But the cases in which such comment is permissible and, even if permissible, necessary, will be exceptional. Although it is impossible to generalize and every case must depend upon its own facts, the kind of case in which the judge may feel that the jury needs additional comment is that in which the criteria stated in Martinez-Tabon are satisfied and, in addition, the defence is relying by way of answer upon some extra-judicial statement proved by the prosecution which the accused has not supported in evidence. In R v. Duncan (1981) 73 Cr App R 359, 365 Lord Lane CJ said (in a passage approved by the House of Lords in R v. Sharp [1988] 1 WLR 7):

"Where a 'mixed' statement is under consideration by the jury in a case where the defendant has not given evidence, it seems to us that the simplest, and, therefore, the method most likely to produce a just result, is for the jury to be told that the whole statement, both the incriminating parts and the excuses or explanations, must be considered by them in deciding where the truth lies ... [W]here appropriate, as it usually will be, the judge may, and should, point out that the incriminating parts are likely to be true (otherwise why say them?), whereas the excuses do not have the same weight. Nor is there any reason why, again where appropriate, the judge should not comment in relation to the exculpatory remarks upon the election of the accused not to give evidence."

Such comment should of course identify the issue to which the accused's election may be relevant.

30. The next question is the extent to which this practice has to be modified in a trial by judge alone. The need for the standard direction and for considerable caution in inviting the jury to regard the accused's failure to testify as in any way relevant to the determination of guilt arises from a concern that the jury may overstep the limits of permissible reasoning and treat failure to testify as an admission of guilt. There is far less need for concern when the tribunal of fact is a professional judge. It is unnecessary for him to give himself directions on these points. In HKSAR v. Kwok Chi Wah [1999] 1 HKLRD 481, 486, Mortimer V-P said:

"Where the judge is a professional judge sitting alone ... it can be assumed, unless there are indications to the contrary, that the judge is well aware of the elements of the offence charged ..."

31. It my opinion it should equally be accepted that unless there are indications to the contrary, the judge is aware that the accused is not obliged to give evidence and that failure to give evidence is not an admission of guilt. If, therefore, the judge appears to have, or says he has, used the failure of the accused to give evidence as an element in the reasoning by which he arrived at a finding of guilt, the only question is whether on the particular facts of the case such reasoning was legitimate. As Lord Diplock remarked in Haw Tua Tau v. Public Prosecutor [1982] AC 136, it is hard to say more than that this is a matter of common sense.

32. In the present case, the prosecution was obliged to prove that the admitted payment by Mr Fan to Mr Li was an 'advantage' offered or accepted, as the case may be, to or by Mr Li "as an inducement or reward" for "doing or forbearing to do, or having done or forborne to do, any act in relation to" the affairs or business of the Bank of China or "showing or forbearing to show, or having shown or forborn to show, favour or disfavour to any person" in relation to such affairs or business, contrary to s.9(1)(a) and 9(2)(a) of the Prevention of Bribery Ordinance, Cap. 201. The prosecution had no direct evidence as to why the money had been paid. None of their witnesses was able to prove that Mr Li had done anything unusual in relation to the SHIL loan. But the prosecution relied upon the fact that the parties appeared to have an exclusively business relationship, arising out of Mr Li's employment by the Bank of China, that he was in a position to ensure that the loan application did not progress as smoothly as it did and the common observation that people do not usually pay large sums of money to business acquaintances without expecting something in return. They invited the inference that the payment was an inducement or reward, if not for doing something specially favourable to Mr Fan, then at least for forbearing to do anything unfavourable. This evidence plainly called for some explanation of why the money had been paid and the appellants, in offering explanations to ICAC, were well aware of this. In the circumstances I consider that the judge, having rejected those explanations as a pack of lies, was perfectly entitled to regard the failure of the accused to give any explanation on oath as strengthening the inference to be drawn from the prosecution case.

33. I would dismiss the appeals.

Chief Justice Li :

34. The Court unanimously dismisses the appeals.