HKSAR v. YAM CHIM KWAN

FAMC No 57 of 2012

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 57 OF 2012 (CRIMINAL)

(ON APPLICATION FOR LEAVE TO APPEAL FROM CACC NO 17 OF 2011)

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REASONS FOR DETERMINATION

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Mr Justice Tang PJ:

1.  The applicant was convicted after trial of five counts of money laundering contrary to s 25(1) and (3) of the Organized and Serious Crimes OrdinanceCap455. Her appeal to the Court of Appeal was dismissed on 21 August 2012.    On 18 January 2013, the Court of Appeal refused to certify that any point of law of great and general importance was involved.  The applicant now applied to us for an extension of time to apply for leave to appeal.  It is said that an extension of time is necessary because her assets have been frozen and it took time for her to obtain release of her funds for legal fees.   The prosecution has rightly accepted that if leave to appeal was merited, it should not be refused because of the delay.

2.  We turn to the charges.  The first count concerned cash of about $28 million, $11 million of which was found in a safe at the applicant’shome, the remainder was found in two bank safe deposit boxes registered in the name of her cohabitee, Mr Chan Thao Phoumy.  The other four counts concerned deposits and withdrawals in different bank accounts registered in the name of the applicant.

3.  The applicant gave evidence at trial.  According to her, she came to Hong Kong in 1982 from the Mainland and became a sex-worker in 1983.  She saved her income which included money and valuable gifts for about 20 years. Since about 1993 she has cohabited with Chan and they have a daughter.  Together with Chan she made money from investments in the Mainland and invested in properties in Hong Kong as well.  She paid no tax because she thought income from her earnings as a sex-worker and from investments outside Hong Kong was not taxable. Her evidence was rejected by the learnedtrial judge.

4.  Leave to appeal to this Court is sought on the grounds that:

(1)  this case engaged threepoints of law of great and general importance; and

(2)   substantial and grave injustice has been done to her.

5.  The three points of law of great and general importance are:

“First point of law (The first, fourth and fifth charges only)

In a trial for an offence alleging the ‘dealing with property having reasonable grounds to believe that it represents the proceeds of an indictable offence’ (the ‘said offence’) from ‘a day unknown’, where prosecution evidence permits the possibility that the indictable offence required in the mens rea could have occurred before the commencement of the enacted offence, can a conviction be consistent with section 2(5) of the Organized and Serious Crimes Ordinance?

Second pointof law (All charges)

In a trial for the said offence, where prosecution evidence permits the possibility that conduct allegedly constituting the indictable offence required in the mens rea could have occurred outside Hong Kong which may not amount to an offence either there or in Hong Kong, can a conviction be consistent with section 25(4) of the Organized and Serious Crimes Ordinance?

Third point of law (All charges)

On the basis that the statutory requirement of ‘having reasonable grounds to believe’ under section 25(1) of Organized and Serious Crimes Ordinance permits the possibility of concurrent incriminating and innocent beliefs,

(1) whether the possibility of innocent beliefs would amount to a reasonable doubt as to guilt; and if so,

(2) whether the presumption of innocence would be infringed if the accused is convicted despite the prosecution’s failure to negate such possibility of innocent beliefs; and if so, and

(3)   whether such ‘reasonable grounds’ would be sufficient in law to negate the possibility of innocent beliefs they have generated? In particular when the ‘reasonable grounds’ do not include evidence of the criminal origin the property?”

6.  The Court of Appeal refused to certify any of these questions and said none of these points of law were raised at trial or in the Court of Appeal. 

7.  Mr Robert Lee SC, for the applicant, told us that underlying these points of law and fundamental to them is his submission that in order to establish that a defendant has “reasonable grounds to believe” the prosecution must prove that the defendant has reasonable grounds to believe that the property was the proceeds of a specific indictable offence.  Whilst Mr Lee  accepted that Oei Hengky Wiryo v HKSAR(No2)(2007) 10 HKCFAR 98  is authority that on the proper construction of s25(1) Cap455, the prosecution did not have to prove as the actus reus of the offence that the property  represented the proceeds of an indictable offence, he submitted that  HKSARv Wong Ping Shui & Another(2001) 4 HKCFAR 29 showed that the prosecution has to prove that the property is the proceeds of a specific indictable offence in order to establish the requisite mens rea.  The following passages in the judgment of Ribeiro PJ are relevant to Mr Lee’s submission:

“Section 24 therefore defines the actus reus of the offence as the handling of goods which are ‘stolen’ goods. It goes on to define the mens reus as the dishonest knowledge or belief that the goods are stolen. The quality or status of the goods being stolen is therefore an element in both the actus reus and the mens rea.

By contrast, section 25(1) of Cap. 455 does not define the actus reus as dealing with the proceeds of an indictable offence.  It defines it as dealing with ‘property’ which the defendant knows or has reasonable grounds to believe represents the proceeds of an indictable offence.  The quality of the goods being such proceeds is therefore an element in the mens rea and not the actus reus.” 

8.  Mr Lee relied in particular on the last sentence.  We believe he hastaken Wong Ping Shui out of context.  His lordship was there comparing s25(1) Cap 455 withs24(1) (handling stolen goods) of the Theft Ordinance, and the submission that:

“…by parity of reasoning, s 25(1) must be construed to require the property dealt with be shown actually to be the proceeds of an indictable offence.”

Wong Ping Shui does not support Mr Lee’s submission.  His submission, if correct, would completely undermine s25(1) as this later passage at p32C shows:

“Quite apart from these points of construction, it is wholly implausible that the legislature could have intended proof of money laundering offences to require proof of the underlying criminal offences that generated the money being sanitised. There is the obvious likelihood that such activities would be clocked in secrecy and that they may well have taken place in one or more foreign jurisdictions.”

9.  In our view, this submission of Mr Lee is untenable.  Moreover, only in a truly exception case would we allow points of such importance to be raised for the first time in the Court of Final Appeal.   Flywin Co Ltd v Strong and Associates Ltd (2002) 5 HKCFAR 356.  This is not such a case.  Mr Lee submitted that the point was taken in the Court of Appealbut that was not the view of the Court of Appeal.

10.  Since Mr Lee accepted that all other points of law covered by the questions are subsidiary to his submission on mens rea it is unnecessary to consider them separately. Upon analysis it is quite clear they depend on Mr Lee’s submission on what is required to be proved to establish mens rea.  Moreover, they are indisputably new points. 

11.  We turn to the grave and substantial injustice ground.  It is said the learned judge was wrong in rejecting the applicant’s evidence that the property under her control were derived from income and savings from the sex trade and investment in the Mainland. It is also said that the learned judge was wrong to have rejected her evidence in the absence of expert evidence on the income pattern of a sex-worker or from Mainland investments.  Mr Lee also submitted thatthe evidence could only properly support the conclusion that the property has an unknown origin, but not a criminal origin.  This is another way of saying that the prosecution has to prove the property was proceeds of a proven indictable offence. 

12.  There’s nothing in this ground.

13.  For the above reasons we dismissed the application.