HKSAR v. HUI Rafael Junior also known as HUI SI-YAN RAFAEL AND OTHERS

CACC 444/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 444 OF 2014

(ON APPEAL FROM HCCC NO. 98 OF 2013)

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J U D G M E N T
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Hon Yeung VP :

1.  I have the advantage of reading the draft judgment of Lunn VP. I agree with his decisions and his reasoning. I just wish to add the following on Count 5.

2.  In March 2005 when the former Chief Executive of HKSAR (Mr Tung) announced his decision to resign from his office, there was a rumour that Mr Donald Tsang would succeed him and that Rafael Hui would be the new Chief Secretary.  The official announcement appointing Rafael Hui to be Chief Secretary was made on 30 June 2005.  As Chief Secretary, Rafael Hui was also a member of the Executive Council (the ExCo) of the HKSAR Government.

3.  Between 27 and 30 June 2005 (days and hours before the official announcement appointing Rafael Hui as Chief Secretary was made), Thomas Kwok paid Rafael Hui, through Thomas Chan and Francis Kwan, $8.5 million in a circuitous and devious route involving the use of an account of Villalta, a family company controlled by Thomas Chan.  On the prosecution evidence, those secret and unexplained payments were concealed and their purpose was not recorded in any company document.

4.  The prosecution further pointed out that since February 2003, SHKP had allowed Rafael Hui to occupy, free of charge, two flats at Leighton Hill effectively owed by SHKP and in June 2005, in anticipation of Rafael Hui’s appointment as Chief Secretary, a new tenancy agreement in respect of the Leighton Hill flats for 30 months at the monthly rent of $160,000 between SHKP and Rafael Hui was put in place.  The total rent payable under the new tenancy agreement was $4.8 million which was one of the sums paid to Rafael Hui via Thomas Chan.  The suggestion was that the $4.8 million payment was to ensure that Rafael Hui, whilst as Chief Secretary and entitled to an official residence which he, surprisingly, did not use, would continue to live at the Leighton Hill flats free of charge.

5.  The prosecution was unable to establish that Rafael Hui in fact had done any particular act that constituted a serious abuse of power, duty or responsibility exercisable by him as Chief Secretary to favour SHKP.  However the prosecution alleged that SHKP paid Rafael Hui very large sums of money for him to be or to remain favourably disposed to SHKP and pointed out that Rafael Hui was involved in very large scale and important projects that were worth billions of dollars.  Those projects included the Ma Wan Project and the WKCD Project of which SHKP had substantial interests.  The prosecution emphasized that Rafael Hui was personally involved, as Chief Secretary and the Chairman of the Steering Committee of the WKCD Project, in negotiating with SHKP on various matters relating to those projects and was therefore in a position to favour SHKP.  The prosecution contended that Count 5 was made out when it was agreed that Rafael Hui was paid $8.5 million in return for which he would be favourably disposed to his “paymaster”, even if it was not proved there was an agreement and it was intended that Rafael Hui would act in favour of SHKP.

6.  Thomas Kwok accepted that he had instructed Thomas Chan to pay $10.8 million to Rafael Hui and for that purpose he gave Thomas Chan two cheques for $4 million and $4.8 million on 20 and 28 June 2005 respectively.  There was no dispute that a cashier’s order for $10.8 million, drawn on an account of Villalta, was paid into Francis Kwan’s account and it was from that $10.8 million that the payments totaling $8.5 million were made to Rafael Hui by Francis Kwan.

7.  It was also accepted that Thomas Chan, having received $8.8 million from Thomas Kwok, had himself contributed $2 million to make up $10.8 million to pay Francis Kwan and that Francis Kwan had retained $2.3 million before he passed on $8.5 million to Rafael Hui.

8.  The defence suggested that in the latter half of 2003, Thomas Kwok, on behalf of SHKP, had agreed to engage Rafael Hui as a consultant for two years and that Rafael Hui would be paid $30 million.  It was suggested that the $10.8 million was the balance of consultant’s fees payable to Rafael Hui and that Francis Kwan retained $2.3 million because he had to make certain payments on behalf of Rafael Hui.  Thomas Kwok said Thomas Chan was not supposed to contribute to the payments and that the shortfall of $2 million was the result of an error on his part.

9.  The written consultancy agreement executed between SHKP and Rafael Hui covered a period of two years from 1 March 2004 with an annual consultancy fee of only $4.5 million, which was openly and properly accounted for.  The need for the extra payments to be made in a secret manner, according to the defence, was because Walter Kwok, Thomas Kwok’s elder brother and the then Managing Director of SHKP, did not approve the terms of the oral consultancy agreement reached between Rafael Hui and Thomas Kwok.

10.  The jury had clearly rejected the defence case and must have concluded that $8.5 million was paid to Rafael Hui because of his appointment as Chief Secretary and that in return for the payment Rafael Hui had agreed to be or to remain favourably disposed towards SHKP.  Before us no one sought to argue otherwise.

11.  The issue on Count 5 was whether Rafael Hui’s acceptance of $8.5 million from SHKP and agreement to be or to remain favourably disposed towards SHKP as Chief Secretary constituted a misconduct in public office when the payments were made a few days or a few hours before he took up office but nevertheless in relation to his office as Chief Secretary of HKSAR.  

12.  Ms Montgomery QC, on behalf of Thomas Kwok, contended at trial that to support a charge of misconduct in public office against Rafael Hui, the prosecution must allege and prove a specific act committed by Rafael Hui that would constitute a serious abuse of power, duty or responsibility exercisable by him in public office.  Before us, Ms Montgomery had made some concession, but nevertheless suggested that even if it might not be necessary or possible to prove a specific act by Rafael Hui in favour of SHKP constituting misconduct, there had to be an agreement that Rafael Hui would commit a breach of at least one identifiable type of duty (a generic breach of duty) although the occasion for the breach or the precise circumstances of it could not be identified in advance and was thus not particularized and unspecified in the charge.

13.  Ms Montgomery suggested that without identifying the specific or generic breach of duty, it would not be possible to gauge the seriousness of Rafael Hui’s acts (if any) to decide if such acts constituted misconduct in public office.  Ms Montgomery QC referred to Chan Tak Ming v HKSAR (2010) 13 HKCFAR 745 and emphasized that “trivial misconduct” will not support a charge of misconduct in public office.

14.  Mr Winter QC, for Thomas Chan, adopted a different position from that of Ms Montgomery. He did not suggest that the prosecution must allege and prove a specific or a generic breach of duty and accepted that “the allegation of conspiracy to commit misconduct in public office would be good in law as long as it alleged that R Hui had agreed that he, in return for the $8.5 million, would, if necessary, misconduct himself in public office.”

15.  Mr Winter nevertheless submitted that an act of misconduct was required for the substantive offence of misconduct in public office and an agreement to commit an act of misconduct was required for the conspiracy.  He suggested that a person’s disposition only concerned his state of mind and therefore “favourable disposition” per se could not constitute a “conduct” to support a charge of misconduct in public office.

16.  Mr Winter contended that the prosecution had presented its case on the basis that Rafael Hui would not act to show favour to SHKP at all and had agreed merely to be or to remain favourably disposed to SHKP (purely a state of mind) in return of the payment of $8.5 million.

17.  Mr Winter suggested that the prosecution had limited its case to the extent that “favourable disposition” meant mere friendly relations and did not include any suggestion that Rafael Hui would commit any act of misconduct in favour of SHKP.  He suggested that “being or remaining favourably disposed” but without any intention to act was insufficient to constitute the act of abuse of power required for the offence of “misconduct in public office”.  Mr Winter therefore argued that Thomas Chan could not have been convicted of a charge of conspiracy of misconduct in public office that did not involve as part of the agreement that Rafael Hui would commit an act of misconduct in favour of SHKP.

18.  Mr Winter had taken us to various parts of the trial to support his contention that it was the prosecution’s consistent stance that there was no need to prove any agreement or intention on the part of Rafael Hui to treat SHKP favorably as Chief Secretary of HKSAR in return for the payment of $8.5 million.  Mr Winter referred, in particular, to the following statements by Mr Perry QC, counsel for the prosecution, that he said supported his contention, namely:

“ The payments made to R Hui… were paid to him, and accepted by him, as general sweeteners in connection with his public office as Chief Secretary, to which, as was widely known, he was imminently to be appointed.

As Chief Secretary, R Hui would have an important role…and would be privy to highly confidential information…By making payments to R Hui, (SHKP) sought to gain, or retain, the favourable disposition of the person conducting this important public office: in other words, the payments were ‘keeping sweet’ transactions.

…

The essence of public office is loyalty to the public interest, independence and accountability.  However, the consequence of the making and accepting of the payments was that R Hui’s loyalties were divided, his ability to claim independence surrendered, and his position as a public officer compromised.  It was an abuse of the public’s trust, and an affront to the standing of the office of Chief Secretary.”

“The true nature of the Prosecution case here is not dependent upon the merits of R Hui’s decision making. The nature of the Prosecution case is that R Hui was tainted. He was SHKP’s man, sitting at the government table. Whilst Chief Secretary, he was in the pay of…, and that fact in itself compromised his position as public official… R Hui was hopelessly compromised, and anything he said, did, or decided is coloured by the fact that he was in the pay of people who were involved in sensitive discussions with the government.

…the misconduct and corruption in this case does not lie in the merits or otherwise of R Hui’s decisions, but in the fact that he was involved himself in matters affecting SHKP whilst he was secretly in the pay of…

This is not because R Hui took any particular decision or made any particular comment but simply because he accepted bribes. This is corruption or misconduct in its most tacit form… ”

“(the offence of misconduct in public office) is designed to deal with the very evil and vice that the receipt of funds by a public official creates, which is that no-one can trust the purity of his motives. That is the heart of the offence. It’s not a specific act of favour; it’s the fact that no-one any longer has any confidence in the purity of the official’s actions or his intentions.”

19.  Mr Winter also emphasized that when confronted with the suggestion by Thomas Chan’s solicitors “…the alleged corrupt payments were made to Rafael Hui in order that he be or to remain favourably disposed to…and not that Rafael Hui actually conferred any benefit upon them”, the prosecution responded by saying: “It has been recognised in the decided case-law, that if a public official is given an advantage as a general sweetener, it does not matter whether he did in fact show favour to the person from whom it was received.  The law proceeds on the realistic basis that given the secretive nature of misconduct and corruption, in circumstances such as are alleged in the present case, it would frequently be difficult, if not impossible, for the Prosecution to establish a causal connection between the payment…and the conduct of the official showing favour…”

20.  Mr Edwin Choy on behalf of Rafael Hui supported both Ms Montgomery and Mr Winter.  Mr Blanchflower SC on behalf of Francis Kwan also emphasized that misconduct in public office required, as an ingredient of the offence, a positive act of misconduct and that “being or remaining favourably disposed”, being the reflection of a state of mind, could not be the subject matter of a charge of misconduct in public office.  He suggested that the convictions on Count 5 were bad in law.

21.  Admittedly, the prosecution was unable to establish that Rafael Hui, in his capacity as Chief Secretary, had actually done anything improper and in breach of his official duties to favour SHKP.  However, I do not agree with the contentions that it was necessary for the prosecution to allege and prove a specific or generic breach of duty on the part of Rafael Hui as Chief Secretary in favour of SHKP before it could be established that he was guilty of misconduct in public office.

22.  Corrupted conduct of a public officer as senior as Chief Secretary would no doubt be committed secretly and insidiously.  It is naïve to think that such an officer would necessarily leave a trail for his corrupted conduct to be detected. Further the corrupted conduct could simply take the form of an approving nod or a knowing wink and it would not be possible in such cases to identify any specific or generic act of misconduct.  However, it did not mean that the failure to allege or prove such approving nod or knowing wink would mean that a charge of misconduct in public office could not be established when the officer in the position of Rafael Hui, having received very large sums of money, agreed to be or to remain favourably disposed towards his “paymaster” in his official capacity.

23.  The prosecution suggested to the jury that they could conclude that Rafael Hui, having received millions of dollars from SHKP, could render assistance to SHKP when it became necessary and convenient to do so, but at the same time had reiterated its position that it was not necessary to allege or prove any act of specific favour to SHKP as contended by the defence.  That, in my view, was a correct stance to take.

24.  It must be remembered that on the jury’s findings on Count 5, Rafael Hui was paid $8.5 million so that he would be or remain favourably disposed to SHKP in the course of or in relation to his public office as Chief Secretary of HKSAR.

25.  As Chief Secretary, Rafael Hui held an office of trust and confidence concerning the public.  He had taken an oath, as a principal officer to serve HKSAR “conscientiously, dutifully, in full accordance with the law, honestly and with integrity”.  As Chief Secretary and an ExCo member, Rafael Hui would have unlimited information on government policies and could have significant influence on every major government decisions affecting every business as well as every individual.

26.  It must also be remembered that, at all material times, HKSAR Government and SHKP had competing interests, particularly in relation to land development of which SHKP must have a keen interest, being one of only a few major property developers in Hong Kong.

27.  As Mr Perry QC, for the respondent, emphasized, the payments by SHKP to Rafael Hui of millions of dollars were made days and hours before Rafael Hui took up office as Chief Secretary when SHKP was involved in negotiation with the Government on major and important property developments of which Rafael Hui was personally involved.  It could have been very easy for Rafael Hui to assist SHKP in a suitable way when it was necessary and convenient to do so as any information on government policies and any “help” or potential “help” from Rafael Hui would be extremely valuable to SHKP.

28.  On the jury’s findings, SHKP paid Rafael Hui $8.5 million because Rafael Hui had agreed to be or to remain favourably disposed to SHKP.  It was in such a context that the seriousness of Rafael Hui’s conduct was to be assessed. Pill LF stated in AG’s Reference (No 3 of 2003) [2004] 2 Cr App R 23 at 383:

“ It will normally be necessary to consider the likely consequences of the breach in deciding whether the conduct falls so far below the standard of conduct to be expected of the officer as to constitute the offence. The conduct cannot be considered in a vacuum: the consequences likely to follow from it, viewed subjectively as in R v G [2004] 1 Cr App R 237, will often influence the decision as to whether the conduct amounted to an abuse of public’s trust in the officer. A default where the consequences are likely to be trivial may not possess the criminal quality required; a similar default where the damage to the public or members of the public is likely to be great may do so. …

The consequences of some conduct, such as corrupt conduct, may be obvious; the likely consequences of other conduct of public officers will be less clear but it is impossible to gauge the seriousness of defaulting conduct without considering the circumstances in which the conduct occurs and its likely consequences.  The whole should be considered in the context of the nature of the office and, as Sir Anthony Mason stated in Shum Kwok Sher, the responsibilities of the office and office holder.”

29.  What Pill LJ referred to was of course the often quoted passage of Sir Anthony Mason NPJ in HKSAR v Shum Kwok Sher (2002) 5 HKCFAR 381 at para 86 and adopted in Chan Tak Ming (supra), namely:

“ Whether it is serious misconduct in this context is to be determined having regard to the responsibilities of the office and the officeholder, the importance of the public objects which they serve and the nature and extent of the departure from those responsibilities.”

30.  It was the consistent stance of the prosecution that there was no need to allege or prove any specific act by Rafael Hui to favour SHKP and that his acceptance of very large sums of money for him to be or to remain favourably disposed towards SHKP would constitute a misconduct in public office.  However the prosecution did not concede that Rafael Hui would never act in favour of SHKP after receiving the payments of $8.5 million either. There was no conceivable reason for the prosecution to make such a concession.

31.  Mr Perry, on behalf of the prosecution, had clearly indicated that by agreeing to be or to remain favourably disposed towards SHKP after receiving $8.5 million, Rafael Hui, as Chief Secretary, could assist SHKP in suitable ways.  Mr Perry had in fact given many examples to the jury to show that Rafael Hui could have shown acts of favour towards SHKP and such acts of favour would be supportive of a general sweetener situation. There was certainly extensive evidence to show that Rafael Hui did have opportunities to favour SHKP in many different ways.

32.  In the course of the discussion as to how the judge should direct the jury, Mr Perry had the following dialogue with the judge:

“ His Lordship: Your point is subsumed in the principal question of ‘what is favourable disposition?’…If your case is, as you have I think all along made clear, and as I endorsed at the close of the prosecution case, that it is a case of favourable disposition, in which you do not have to prove a specific favour, then such favour as there is or that you can point to is merely an example or the result of the payment to keep (R Hui) sweet so that he would be favourably inclined or disposed towards SHKP.” (Day 105 page 3 lines 13 to 23)

“Mr Perry…It’s in paragraph 4 in which we make the point that your Lordship made at the outset. It is not necessary for any particular favour to be proved or identified. Nonetheless, the evidence may disclose, and the jury might conclude, that (R Hui) did in fact carry out one or more specific acts of favour towards SHKP…

The fact that there is evidence on which the jury could conclude that (R Hui) carried out one or more acts of specific favour does not raise any Brown issue. And the way to conceptualise the point is that the act of favour would itself embrace an allegation of favourable disposition, and is in no way inconsistent with it. So in other words, an allegation of favourable disposition could be proved by an act of specific favour, and it would not be the case that an act of specific favour would have to be proved…before they could conclude that there was a well-founded allegation of favourable disposition.” (Day 105 page 7 line 11 to page 8 line 11)

33.  In his final address to the jury, Mr Perry emphasized that:

“ In the very nature of misconduct and corruption of the sort alleged in this case, it is frequently impossible to link a bribe or a payment to the specific performance of any act. A bribe may be given for a purpose that may not be explicit. A bribe may be given for a purpose that cannot be discerned, on the fact of it, but which is readily apparent from the circumstances. Why else would you pay the man who was about to be Chief Secretary millions of dollars? Businessmen don’t do that. They’re not running a charity.” (Day 113 page 107 lines 2-12)

34.  In explaining the term “favourable disposition”, Mr Perry referred to SHKP “keeping (Rafael Hui) sweet”;“having (Rafael Hui) as eyes and ears in the government”; “having the warm glow of knowing at SHKP that you have a friend at the top of government”; “having bought a friend as Chief Secretary” and “as a general sign of good relations”.

35.  By “being kept sweet”, “being SHKP’s eyes and ears in the government”, “being SHK’s bought-friend at the top of government”, having received $8.5 million from SHKP, Rafael Hui had completely destroyed the duty of loyalty that he owed HKSAR Government and the people of Hong Kong as Chief Secretary.  His heart and his soul were with SHKP and he would feel obliged to favour SHKP when its interest conflicted with that of the people of Hong Kong.  Having been “bought” by SHKP, Rafael Hui was vulnerably to corrupt demands made by SHKP.  It is, in my view, difficult to think of a more serious misconduct in public office when Rafael Hui was Chief Secretary of HKSAR. 

36.  Count 5 alleged that Rafael Hui, Thomas Kwok, Thomas Chan and Francis Kwan had conspired, between 1 March 2005 and 30 June 2007, that Rafael Hui, whilst being Chief Secretary of HKSAR, would wilfully misconduct himself in the course of or in relation to his public office by being or remaining favourably disposed to SHKP in return for the payment of $8.5 million from Thomas Kwok, Thomas Chan and Francis Kwan.

37.  The judge directed the jury on the basis that there was no need to prove that the payments were made by SHKP to Rafael Hui in return for any specific identifiable favour which Rafael Hui was to perform or had performed.

38.  The judge emphasized that the acceptance of money by a public officer who agreed to be favourably disposed to the payer or another in a general way, rather than in a specific way was itself capable of amounting to misconduct in public office. The judge said:

“ The words ‘being or remaining favourably disposed to’ reflect the prosecution allegation that the payments made to (R Hui) were generally goodwill payments. In other words, they were sweeteners, payments made to sweeten a public official. The counts do not allege that the payments were made in return for any specific identifiable favour which (R Hui) was to perform or had performed. And the law does not require that any particular favour be specifically identified.

Indeed, in the context of paying any public official a sweetener, which you might think would necessarily involve subtlety and secrecy, it may be very difficult to show that any favour was in fact performed. A public official may have acted in exactly the same way, or objectively made the correct decision, or done the right thing, whether he was sweetened or not.

The reason the law does not require a particular favour be identified is, you may think, obvious. The acceptance of money by a public official in return for him in a general way, rather than in a specific way, being favourably disposed to the person or persons giving him the money, is itself capable of amounting to misconduct by virtue of the breach of duties and obligations he owes to the public as a public official.

The evil or the vice of these kinds of payments is that no-one could have confidence in the acts of a public official who, through the offer and acceptance of money, has been kept sweet by private interests.  And the confidence which the public are entitled to have in the fair and impartial performance of a public official’s duties and obligations is thereby eroded or destroyed…”

39.  Properly understood, the judge did not tell the jury that there was never any intention on the part of Rafael Hui to favour of SHKP after receiving the $8.5 million.  The judge was simply emphasizing that it was not necessary for the prosecution to allege and prove any specific act committed by Rafael Hui in favour of SHKP that constituted a serious abuse of power in his capacity as Chief Secretary of HKSAR.

40.  The reference to “sweeten a public official” by payment of money for Rafael Hui to be or to remain favourably disposed to SHKP in a general way was not inconsistent with the obvious meaning of “favourable disposition” or “favourably disposed”, namely that Rafael Hui could act in favour of SHKP.

41.  I am satisfied that the judge’s approach was a correct one.  Having regard to the responsibilities of Rafael Hui as Chief Secretary and the importance of the public objects which he served, the fact that Rafael Hui agreed to be or to remain favourably disposed to SHKP because SHKP had paid him very large sums of money was a gross departure from those responsibilities and was itself a serious misconduct in public office.

42.  It will be a sad day for Hong Kong if senior public officers, such as Rafael Hui, could accept large sums of money and agreed to be favourably disposed towards their “paymasters” in their public offices with impunity because the money or other advantages were paid before they assumed or after they left public office.

43.  Rafael Hui, having been entrusted with powers and duties for the public benefit, had abused them and had abused his official position by agreeing to be or to remain favourably disposed to SHKP because of the large sums of money paid to him.  Rafael Hui’s conduct was clearly an abuse of the public’s trust in him.  He had betrayed the loyalty of his office and what he did was calculated to injure the public interest so as to call for condemnation and punishment.  (See the judgments in Shum Kwok Sher (supra), R v Chapman and Others [2015] 2 Cr App R 10 and R v Dytham (1979) 69 Cr App R 387) Rafael Hui had misconducted himself in public office.

44.  I agree with the careful analysis of Lunn VP and I am also firmly of the view that by agreeing to be or to remain favourably disposed to SHKP as Chief Secretary after being paid millions of dollars by SHKP, Rafael Hui had committed a continuous act of favouritism towards SHKP that constituted misconduct in public office.  Such act of favouritism was “a course of conduct” referred to in section 159A of the Crimes Ordinance Cap 200 to support a charge of conspiracy.

Hon Lunn VP :

45.  On 19 December 2014, Hui Si-yan Rafael, Kwok Ping-kwong Thomas, Chan Kui-yuen Thomas and Kwan Hung-sang Francis were convicted after a trial of 131 days before Macrae JA, sitting as an additional judge of the Court of First Instance, and a jury of various counts on an Indictment consisting of eight counts.  A co-defendant, Kwok Ping-luen Raymond, was acquitted of all four counts, Counts 3, 4, 5 and 7, on which he stood trial.

46.  Rafael Huisoughtleavetoappealagainsthisconviction on each of the counts on which he was convicted.   Thomas Kwok, ThomasChan and Francis Kwan appealed against each of their respective convictions[1]. In addition, Thomas Chan appealed against the total sentence of 6 years’ imprisonment imposed on him following his convictionsonCount 5 (5 years’imprisonment), and Count 7 (5 years’ imprisonment, one year of which sentence was ordered to be served consecutively with a sentence of 5 years’ imprisonment imposed in respect of Count 5).[2] He took no objection to the fine of $500,000 imposed on him consequent upon those convictions or to the order that he be disqualified from being a director of a company for six years.

Rafael Hui

47.  Rafael Hui was charged with three offences of misconduct in public office, Counts 1, 6 and 8; three offences of conspiracy to commit misconduct in public office, Counts 2, 3 and 5; one offence of furnishing false information, Count 4; and one offence of conspiracy to offer an advantage to a public servant, Count 7. He was convicted of Counts 1, 5, 6, 7 and 8, and acquitted of Counts 2, 3 and 4.

Thomas Kwok

48.  Thomas Kwok was charged with two offences of conspiracy to commit misconduct in public office, Counts 2 and 5, and one offence of conspiracy to offer an advantage to a public servant, Count 7.  He was convicted of Count 5, and acquitted of Counts 2 and 7.

Thomas Chan

49.  Thomas Chan was charged with an offence of conspiracy to commit misconduct in public office, Count 5, and an offence of conspiracy to offer an advantage to a public servant, Count 7.  He was convicted of both counts.

Francis Kwan

50.  Francis Kwan was charged with an offence of conspiracy to commit misconduct in public office, Count 5, and an offence of conspiracy to offer an advantage to a public servant, Count 7.  He was convicted of both counts.

The Charges

Count 1

51.  Count 1 alleged that, between 7 June 2000 and 13 August 2003, Rafael Hui, as the Managing Director of Mandatory Provident Fund Schemes (“MPFS”) Authority, without reasonable excuse or justification, wilfully misconducted himself in relation to his public office, by failing to declare or disclose to the MPFS Authority, that he had accepted the rent-free use of Flats 20A and 20B, Tower 6 of the Leighton Hill (“the Leighton Hill flats”), the unsecured loans of $0.9 million (“the 1^st loan”) and $1.5 million (“the 2^nd loan”) from Honor Finance Company Ltd (“Honor Finance”), and his negotiations for a consultancy agreement with Sun Hung Kai Properties Limited (“SHKP”).[3]

Count 2

52.  Count 2 alleged that Rafael Hui and Thomas Kwok had conspired together, between 1 March 2005 and 30 June 2007, that Rafael Hui, whilst Chief Secretary of the HKSAR Government, without reasonable excuse or justification would wilfully misconduct himself in the course of or in relation to his public office, by being or remaining favourably disposed to SHKP in return for the payment of $5 million from Thomas Kwok.[4]

Count 3

53.  Count 3 alleged that Rafael Hui and Raymond Kwok had conspired together, between 1 March 2005 and 30 June 2007, that Rafael Hui, whilst Chief Secretary of HKSAR Government, without reasonable excuse or justification, would wilfully misconduct himself in the course of or in relation to his public office by being or remaining favourably disposed to SHKP in return for the payment of $4.125 million from SHKP.[5]

Count 4

54.  Count 4 alleged that Rafael Hui and Raymond Kwok furnished a false invoice, with a view to gain for themselves or another or with intent to cause loss to another, which purported to show that the payment of $4.125 million was in respect of Rafael Hui’s services for the period from April 2005 to February 2006.[6]

Charge 5

55.   Count 5 alleged that Rafael Hui, Thomas Kwok, Raymond  Kwok, Thomas Chan and Francis Kwan conspired together, between 1 March 2005 and 30 June 2007, that Rafael Hui, whilst Chief Secretary of HKSAR Government, without reasonable excuse or justification, would wilfully misconduct himself in the course of or in relation to his public office by being or remaining favourably disposed to SHKP in return for the sum of $8.5 million through a series of payments from Thomas Kwok, Raymond Kwok, Thomas Chan and Francis Kwan.[7]

Count 6

56.  Count 6 alleged that Rafael Hui, whilst Chief Secretary of the HKSAR Government, between 30 June 2005 and 30 June 2007, without reasonable excuse or justification, wilfully misconducted himself in public office by failing to declare or disclose to the Government of the HKSAR the provision to him of the annual extensions of a $3 million unsecured loan (“the 3^rd loan”) from Honor Finance.[8]

Count 7

57.  Count 7 alleged that Rafael Hui, Thomas Kwok, Raymond Kwok, Thomas Chan and Francis Kwan conspired together, between 30  June 2005 and 20 January 2009, without lawful authority or reasonable excuse, to offer an advantage, namely $11.182  million, to Rafael Hui as Chief Secretary of the HKSAR Government and then a Non-Official Member of the ExCo, as an inducement or reward for or otherwise on account of Rafael Hui performing or abstaining from performing or having performed or abstained from performing an act in his capacity as a public servant, namely being or remaining favourably disposed to SHKP.[9]

Count 8

58.  Count 8 alleged that, between 1 July 2007 and 20 January 2009, Rafael Hui, without reasonable excuse or justification, wilfully misconducted himself in public office as a Non-Official Member of the Executive Council, by failing to declare or disclose to the Government of the HKSAR his receipt of $11.182 million through a series of payments from Thomas Kwok, Raymond Kwok, Thomas Chan and Francis Kwan.[10]

Background

59.  Rafael Hui joined the Civil Service in 1970.[11]  In 1995, he became the Secretary for Financial Services of the HKSAR Government[12], which position he occupied until his resignation in 2000.  On 7 June 2000, he was appointed Managing Director of the MPFS Authority for a period of four years.  However, in September 2002[13], he tendered his resignation, with effect from 1 January 2003.  Nevertheless, his service was extended until 14 August 2003.  Although his last working day with the MPFS Authority was 30 June 2003, Rafael Hui remained an unpaid adviser of MPFS Authority and was still subject to the condition that “…you do not have any conflict of interest related to” the MPFS Authority.[14]

60.  In 2003, Rafael Hui began working as a consultant to SHKP and the three Kwok brothers, Thomas and Raymond together with their elder brother Walter Kwok, and continued doing so until June 2005.  Thomas and Raymond Kwok were Co-Chairmen and Managing Directors of SHKP, a major property developer in Hong Kong.  Thomas Chan was one of the executive directors of SHKP and Francis Kwan was a close friend of Rafael Hui.

A consultancy service agreement

61.  A written service agreement between Top Faith Enterprises Limited (“Top Faith”), a company controlled by Rafael Hui, and Sun Hung Kai Real Estate Agency Limited (“SHKR”) provided that Top Faith would provide “consultancy services and professional advice to SHKR” from 1 March 2004.[15]  The term of the agreement was stipulated to be two years, although provision was made that notice of termination could be given by not less than three months’ written notice.  The “annual consultancy fee” was stipulated to be $4.5 million.  Furthermore, SHKR undertook to provide a suitable office to Top Faith, bearing “rent, rates and management charges”.  No provision was made in respect of residential accommodation, a driver or a car.  Rafael Hui said that he had signed the agreement on behalf of Top Faith about the date stipulated as the commencement of the consultancy, although he had provided advice prior to that date.[16]  Thomas and Raymond Kwok signed the agreement on behalf of SHKR.[17]  Payments were made every several months by SHKR to Top Faith in respect of the latter’s invoices relating to consultancy services provided under the service agreement.[18]  Although the service agreement was terminated in March 2005, payment of the full $9 million due for the two-year period was made to Top Faith on the authorisation of Raymond Kwok.[19]

62.  On 30 June 2005, Rafael Hui was appointed Chief Secretary of the Government of the HKSAR, which position he occupied from 1 July 2005 until 30 June 2007.  As Chief Secretary, he was also a member of the Executive Council (“ExCo”).  At the determination of his employment as Chief Secretary, he was appointed a Non-Official Member of the ExCo from 1 July 2007 until 20 January 2009.

Loans to Rafael Hui

63.  Honor Finance was a wholly owned subsidiary of SHKP whose main business was the provisions of mortgage loans to purchasers of SHKP’s properties.  Only rarely would it grant loans to customers who were not purchasers of SHKP’s properties and equally rarely, would it grant unsecured loans other than to persons or entities referred to it by senior management of SHKP.[20]

1^st loan

64.  On 31 March 2000, with Raymond Kwok’s approval, Honor Finance granted Rafael Hui the 1^st loan, of $900,000, for the period of 38 months from 1 April 2000 at prime lending rate.  The 1^st loan was repaid in full, with interest, by 30 May 2003 as scheduled.[21]

2^nd loan

65.  On 18 December 2001, with Raymond Kwok’s approval, Honor Finance granted the 2^nd loan, of $1.5 million, to Rafael Hui.  The 2^nd loan was also repaid in full, with interest, by 2 January 2006.[22]

3^rd loan

66.  In May 2004, Rafael Hui caused Top Faith to obtain a loan of $3 million for a term of 12 months (“the 3^rd loan”), asserting that it was for his tax-planning purpose.  Although Rafael Hui acted as the guarantor, no collateral was provided.  The specified interest rate on overdue sums was 3% per month.  In fact, the interest was never paid, although demands were made from January 2008.  With Raymond Kwok’s approval, the 3^rd loan was extended each year until 2010.[23]

Leighton Hill Flats

67.  In September 2001, Rafael Hui’s wife was involved in discussions with a SHKP project manager about her proposals that two flats at Leighton Hill be joined together.[24]  On 19 December 2001, the Building Authority approved a plan to that effect submitted by SHK Engineering Co Limited.  One of those flats was owned by Meritech Limited, a Kwok family private company, and the other by Harsco, a SHKP subsidiary company.

68.  On 14 February 2003, Rafael Hui and his wife moved into the Leighton Hill flats, although the interior design work was only completed in around May 2003.  In March 2003, Rafael Hui wrote to the management company in charge of the Leighton Hill Development addressing problems with flushing water and air-conditioners in the flats.

69.  On 26 November 2003, two tenancy agreements in respect of the Leighton Hill flats were executed.  The agreements were for one year and stipulated monthly rental of $55,000, but were back-dated to commence on 1 April 2003.[25]

Provision of office accommodation

Room 1513, One IFC

70.  Top Faith occupied Room 1513, One IFC on 16 July 2003.  Rafael Hui used the premises as his office.  Although initially there was no formal tenancy agreement, a memorandum relating to Room 1513 dated 27 May 2004 resulted in the issue of a related debit note to be settled by Raymond Kwok and/or Thomas Kwok.  Raymond Kwok authorised the payment of the office expenses prior to 1 March 2004 to be paid by SHKR.[26]

Business dealings between SHKP and the MPFS Authority

71.  MPFS Authority rented substantial parts of One IFC Building, owned by IFC Development Limited, of which SHKP and Henderson Land were the principal shareholders.  Three leases, which were signed at different times, all expired on 31 March 2004.  Two of the leases were signed before Rafael Hui became Managing Director of MPFS Authority and one was signed by Rafael Hui on behalf of MPFS Authority, as its Managing Director.[27]

72.  At the end of 2002, FPD Savills was engaged to advise MPFS Authority on its long-term strategy.  It concluded that One IFC was the best location for its office premises in terms of rent, convenience, and having regard to the potential expenditure of relocation.  The Joint Committees of the MPFS Authority, of which Rafael Hui was a member, endorsed FPD Savills’ recommendation to renew its existing leases at One IFC for six years after their expiration on 31 March 2004.[28]

73.  Rafael Hui did not attend the meeting at which the renewal decision was made, but he had been circulated with the relevant papers and a voting slip.  He approved the renewal of the lease at One IFC, whilst Joseph Yam abstained because of a potential conflict arising from his position as Chief Executive of the HK Monetary Authority, which owned one of the other leasing options at Two IFC.[29]  Eventually, on 10 June 2003, Rafael Hui signed the letter of acceptance on behalf of MPFS Authority in respect of the renewal of the leases.[30]

$8.5 million payments to Rafael Hui

74.  On the afternoon of 30 June 2005, Rafael Hui took the oath of office as the Chief Secretary for the Administration of the Government of the HKSAR.  There was no dispute that in the period on and between 27 and 30 June 2005 eight payments to a total of $8.5 million were made to his Standard Chartered Bank account, either directly or on the direction of Francis Kwan.[31]  On 27 June 2005, Francis Kwan received a cashier’s order in the sum of $10.8 million from the account of Villalta, an account operated by Thomas Chan and his family.  The payments of $8.5 million made to Rafael Hui came from those monies.  Similarly, there was no dispute that the payments made to Rafael Hui came from and were made on the ultimate directions of Thomas Kwok.  By two cheques dated 20 June and 28 June 2005 Thomas Kwok paid $4 million and $4.8 million respectively to Thomas Chan.[32]

$11.182 million payment to Rafael Hui

75.  On and between 21 November and 12 December 2007 payments to a total of $10.182 million were made by Francis Kwan from his Hang Seng Bank account to the Standard Chartered Bank account of Rafael Hui.  In addition, on 21 November 2007 a payment of $1 million was made by Francis Kwan from his Hang Seng Bank account to the bank account of Top Faith Enterprises Limited, a company controlled by Rafael Hui.[33]

76.  On 9 November 2007, $12 million was remitted by Villalta, an account operated by Thomas Chan and his family, to the account of Wedingley Limited with DBS in Singapore.[34]  It was an admitted fact that Wedingley was a British Virgin Island company controlled by Mr  Tommy Kow.[35]  On 20 November 2007 US$1.543 million was remitted from that account of Wedingley to an account of Francis Kwan with DBS Bank in Hong Kong, where it was split into two time deposits.  Loans raised on the security of the deposits were the provenance of the payments to a total of $10.182 million by Francis Kwan to Rafael Hui or on and between 21 November and 12 December 2007.

77.  On 22 and 30 April 2008, Thomas Kwok paid two cheques to Thomas Chan for $5 million and $7 million respectively.  On 30 April 2008, Thomas Chan transferred $13 million to the account of Villalta.  On 7 November 2008, Thomas Kwok paid Thomas Chan $6 million.[36]

Business dealings between Government and SHKP

78.  Whilst Rafael Hui was Chief Secretary of HKSAR Government, there were substantial commercial negotiations between SHKP and the HKSAR Government, particularly in connection with the Ma Wan Park Project and the West Kowloon Cultural District (“WKCD”) Project, each of which was a very substantial property development project in which SHKP had a significant stake. Rafael Hui was the Chairman of the Steering Committee of the WKCD Project.

Disclosure of interest

MPFS Authority

79.  Members of the staff of the MPFS Authority were required to declare their investments on a regular basis and might be required to divest themselves of any investments, if the investment was considered to be in real or apparent conflict with their duties.[37]

80.  At no time did Rafael Hui disclose to the MPFS Authority his relationship with SHKP, including the fact that he had borrowed the 1^st and the 2^nd loans from Honor Finance or the fact that he had been occupying the two Leighton Hill flats without payment of rent since February 2003.

ExCo

81.  As an ExCo member, Rafael Hui was required to assist the Chief Executive in the formulation of policies under the Basic Law by giving him fair and impartial advice.  To avoid any conflict of interest, ExCo members had to make disclosures of interest.  On appointment, that was by way of an initial disclosure, which was reflected in the register of interest, which was accessible to the public.  It was a requirement that notification be given of any change of interest.  Any such disclosure of a change of interest was reflected in the register of interests.[38]

82.  Secondly, if an ExCo member had interests in respect of a specific topic to be discussed at any ExCo meeting, that member was required to give notification.  In such circumstances, the Chief Executive would determine if the member in question should participate at the meeting.  In the event that it was determined that he should not participate in the meeting, all relevant documents would also be withheld from the member in question.  These declarations were made in the course of ExCo business and they would not be accessible to the public.[39]

83.  Rafael Hui made no declaration or disclosure of interest arising from his relationship with SHKP when he served the Government of the HKSAR, either as Chief Secretary or, following the completion of that term of office, when he remained as a member of ExCo.  The only interests that Rafael Hui had declared were his ownership of a flat in Wanchai, his connection with the Hong Kong Jockey Club and that he was a prospective or existing civil service pensioner.[40]

The prosecution case

Count 1

84.  It was the prosecution case in respect of Count 1 that, whilst serving as the Managing Director of MPFS Authority and at a time when the MPFS Authority had substantial business dealings with SHKP, including negotiations for the leasing by MPFS Authority of substantial parts of One IFC of which SHKP had significant interests, Rafael Hui failed to disclose to the MPFS Authority the fact that he had private interests with SHKP, namely: (a) he had accepted the provision and rent-free use of the Leighton Hill flats; (b) he had accepted the 1^st and the 2^nd unsecured loans from Honor Finance, a wholly owned subsidiary of SHKP; and (c) he was negotiating for a consultancy agreement with SHKP.  That failure to disclose, constituted misconduct in public office.

Count 5

85.  The prosecution alleged in respect of Count 5 that the payments of a total of $8.5  million to Rafael Hui by Thomas Kwok, Thomas Chan and Francis Kwan in June 2005, shortly before Rafael Hui became Chief Secretary of HKSAR, were made pursuant to a conspiratorial agreement for Rafael Hui to misconduct himself in public office.  By the time the payments were made, it was known that Rafael Hui was to be appointed Chief Secretary.  It was the prosecution case that the payments to Rafael Hui were a ‘general sweetener’, made to secure Rafael Hui’s “favourable disposition”, as Chief Secretary of the HKSAR Government, towards SHKP and were in effect ‘bribes’.  The payments were not only secret and unexplained, but also elaborate lengths were taken to ensure that the payments were concealed and not recorded in any documents.  Further, the prosecution contended that Thomas Chan contributed his own monies to the payments and that Francis Kwan was rewarded for his part in the transactions.

Count 6

86.  The prosecution case in respect of Count 6 was that whilst he was Chief Secretary, during which time the Government of the HKSAR had substantial business dealings with SHKP, Rafael Hui failed to disclose that he had obtained annual extensions of an unsecured $3 million loan from SHKP’s subsidiary, Honor Finance.  Rafael Hui’s private interest gave rise to an obvious and serious conflict with his public duty, such that non-disclosure constituted misconduct in public office.

Count 7

87.  The prosecution’s case in respect of Count 7 was that whilst the $11.182 million paid to Rafael Hui and his company, Top Faith, between 21 November and 12 December 2007 by Francis Kwan came directly from Francis Kwan, who in turn received it from Thomas Chan, Thomas Kwok subsequently reimbursed Thomas Chan with two payments, one for $5 million on 22 April 2008 and one for $7 million on 30 April 2008.

88.  The prosecution alleged that the $11.182 million payment to Rafael Hui was a ‘general sweetener’, made to secure Rafael  Hui’s “favourable disposition”, as Chief Secretary of the HKSAR Government, towards SHKP and were in effect ‘bribes’ made in pursuant to a conspiracy with that object.  Again, the payment was not only secret and unexplained, but also the conspirators went to elaborate lengths to ensure that it was concealed, and its purpose was not recorded in any document.  Thomas Chan and Francis Kwan signed a sham investment agreement, the Longally agreement, to explain why the money came from Thomas Chan’s personal funds.

Count 8

89.  The subject matter of Count 8 was also the $11.182 million paid by Francis Kwan to Rafael Hui and Top Faith in November and December 2007.  The prosecution case was that Rafael Hui had misconducted himself as a Non-Official Member of the ExCo by failing to disclose to the HKSAR Government that he had received those payments.  That conduct by Rafael Hui was misconduct in public office.

The out-of-court statements of Rafael Hui

90.  In their case against Rafael Hui, in addition to all the other evidence, the prosecution relied upon parts of the out-of-court statements made by Rafael Hui to officers of ICAC.

91.  On 9 December 2009 arrangements were made with Rafael Hui for an ICAC officer to conduct an interview with him.  At that interview on 22 December 2009, without being cautioned Rafael Hui answered various questions put to him by officers of ICAC in relation to the Leighton Hill flats; the negotiation of the consultancy agreement; the renewal of the leases of the MPFS Authority at One IFC; and his receipt of $4.125 million consultancy fees before his appointment as Chief Secretary was announced. A draft statement reflecting the interview in narrative form was supplied to Rafael Hui, who returned it with handwritten amendments.

92.  On 13 January 2010, Rafael Hui signed a witness statement, which reflected the amendments proposed by Rafael Hui, confirming its accuracy.  He added further handwritten amendments to that statement.  He was not cautioned on either 22 December 2009 or 13 January 2010.[41]

93.  On 14 November 2011, Rafael Hui was interviewed again by ICAC officers.  The interview was conducted in the presence of his lawyer.  Having been cautioned before he was shown the statement he signed on 13 January 2010, he confirmed that the contents of the statement were true and he signed a declaration to the effect that the record of interview was accurate.[42]

94.  Rafael Hui said that it was at his suggestion that the settlement of the rent of the two Leighton Hill flats was held in abeyance pending final resolution of the consultancy package.  He had not done anything to favour SHKP when he was the Chief Secretary of HKSAR Government. There was no conflict of interest when he approved the renewal of the leases of One IFC by MPFS Authority, as he had not then reached an actual consultancy agreement with SHKP and that the decision to renew the leases was a joint decision of the entire Management Board of MPFS Authority.  Despite his early termination of the consultancy agreement, SHKP agreed to pay him the full fees payable for the entire two-year period.

The Defence Case

95.  Rafael Hui, Thomas Kwok and Thomas Chan gave evidence in the defence case.

Rafael Hui’s case

Voir Dire

96.  It was submitted on behalf of Rafael Hui, following the receipt of evidence from witnesses called by the prosecution only, that the witness statement he signed on 13 January 2010 should not be admitted as evidence, as he had not been cautioned when he gave the answers to the questions put to him by officers of ICAC.

General issue

97.  Rafael Hui said he had known Francis Kwan since they were young[43] and had sought advice from him on an informal basis.  In particular, he had done so in the financial crisis in 1998.  Because of his frequent travelling, he used Francis Kwan to buy foreign currencies at better exchange rate.[44]

98.  He met the Kwok brothers in the late 1980s. He was closer to Thomas Kwok than Walter Kwok.  He was not very familiar with Thomas Chan before he started working for SHKP.  He came to know of the friction between Walter Kwok and the other members of the Kwok family and Thomas Chan.[45]

99.  Having graduated from Hong Kong University, Rafael Hui joined the civil service of the Hong Kong Government in 1970.[46]  In 1995, he became the Secretary for Financial Services.[47]  In 2000, he decided to leave the civil service to try his hand in the private sector.  He became the Managing Director of the MPFS Authority[48], as a stepping stone to the private sector.  However, the MPFS Authority did not provide him with quarters.

Loans

100.  Rafael Hui said that he had incurred substantial debts due to his personal expenses.  He had taken out the 1^st and the 2^nd loans in 2000 and 2001, after discussions with Raymond Kwok.  He took out the 1^st loan in 2000 when he was Secretary for Financial Services, but there was no requirement for him to disclose or report the loan.[49]  When he took out the 2^nd loan, he was managing director of the MPFS Authority and he had cash-flow problems.  He said he did not consider it necessary to disclose or report the loans and he did not feel obliged to favour anybody after receiving those loans.[50]

101.  As early as April 2004, he had made it clear to Mr Au of Honor Finance that it was likely that he would ask for extension or rollover of the $3 million loan for a long period, even though it was supposed to be repaid in 12 months.  He had paid the interest each month since July 2004.[51]

102.  After leaving the civil service in 2000, Rafael Hui remained in government quarters by virtue of his wife’s employment as a civil servant.  However, as she was also retiring in 2003, they gave thought to where to live after her retirement.  He raised the issue with Thomas Kwok, who suggested that they rent the Leighton Hill flats at $50,000 to $60,000 per month per unit.[52]

The Leighton Hill flats

103.  In 2001, when Thomas Kwok heard that Rafael Hui intended leaving the MPFS Authority, he asked Rafael Hui if he would be interested in working for them.[53]  There were discussions, but no decision was made before Rafael Hui left the MPFS Authority in 2003.  Rafael Hui was concerned about the provision of quarters and Thomas Kwok had agreed to allow him to occupy the Leighton Hill flats, although when he moved in, the terms of the consultancy had not been finalized.  He understood that the matter would be resolved once the terms of the consultancy agreement were finalized.[54]  One possibility was that he would pay back the rent to SHKP out of an inclusive consultancy and the other was that the Kwok brothers would pay the rental as part of his remuneration.[55]

104.  Negotiations for the consultancy continued in late 2002 and early 2003, at which time he had received other offers of employment from PCCW and Town Gas.  He turned down those offers because Thomas Kwok assured him that a consultancy agreement with SHKP could be finalized.[56]  Thomas Kwok offered to pay him $15  million a year, in addition to providing living quarters, reimbursing the expenses incurred by the office and providing a driver and a car.[57] The remuneration of $15  million was about the same as that offered by PCCW.

Office accommodation: One IFC

105.  Rafael Hui said that he had arranged to occupy an office on 15^th floor of One IFC as he was about to leave the MPFS Authority.  Thomas Kwok wanted him to start working for him after his period of leave with MPFS Authority had expired.  As a first step, he needed an office.[58]  Thomas Kwok suggested that he start working before the formal signing of the consultancy agreement and that the arrangements with regard to quarters would be resolved later, adding that if SHKP would not agree to the payment of the entire $15 million, he would take care of the balance personally.[59]  He accepted the arrangement on that basis.[60]

106.  Rafael Hui asserted there was no conflict of interest when he voted on 13 May 2003 for the recommendation to renew the lease of the MPFS Authority premises at One IFC.  There was no reason not to adopt the clear recommendation of the Administration and Finance Committee.[61]  Also, he was still in the process of negotiating the terms of the consultancy.  If negotiations failed, he would have to pay the arrears of rent for the Leighton Hill flats.[62]

Initial payment of $3 million for services to SHKP

107.  Rafael Hui said that he started giving advice to the Kwok brothers in August 2003.[63]  However, not having received any payment for his services, he raised the issue with Thomas Kwok, who suggested the payment of an initial sum of money in advance of resolution of the terms of the consultancy agreement.  As a result, he was paid a cheque for $3 million in around November 2003.[64]

The Service Agreement: 1 March 2004

108.  The Service Agreement, which set out the terms of the provision of consultancy services and advice, was signed around 1 March 2004.  Contrary to what Raymond Kwok had told him, his remuneration under that written agreement was only $4.5 million a year and there was no reference to the provision of a secretary, a car or a driver.[65]  Nevertheless, Rafael Hui said he signed it as he understood that Thomas Kwok was going to make up the balance of monies due to him.  Pursuant to that arrangement, Thomas Kwok had already paid him $3 million.  Raymond Kwok told him that the Kwok brothers would be responsible for the rental payment on his quarters.[66]

109.  In the absence of any further payment after the payment of $3  million in October 2003, Rafael Hui raised the matter again with Thomas Kwok in late 2004, who paid him another cheque for $3 million in November 2004.[67]

Advice

110.  Rafael Hui said he had given advice to Raymond Kwok on a number of matters, but he was only involved in the Ma Wan Park Project on one occasion in connection with the facilities, performance and entertainment in the park.  Later, he was told that he was not required to work on the project.  He did not give any advice in relation to the residential development at Ma Wan and he was not asked to lobby the Government in connection with the transport facilities to and from Ma Wan Island.[68]

111.  The only advice he gave Thomas and Raymond Kwok in connection with the WKCD Project was against forming a joint venture with Cheung Kong Holdings to bid for its development, but his advice was not accepted.  He was not consulted when SHKP and Cheung Kong made a joint bid for the project.  He refused to lobby for SHKP in respect of the Hung Hom Bay project.  On his advice to Thomas Kwok, SHKP dropped the proposal.  That was against SHKP’s interest.  He did not help SHKP to obtain any favour from the Government.

Termination of the Service Agreement

112.  In April 2005, Rafael Hui accepted the invitation of Mr  Donald Tsang to become the Chief Secretary for two years.[69] He said that he thought that if he received the whole of the monies owed under the consultancy agreement with SHKP, he would be able to manage financially.  Having informed Thomas and Raymond Kwok of his decision to terminate the consultancy agreement, he received from Thomas Kwok the payment of $5 million, the subject of Count 2.[70]

113.  As there was still a large sum of money owed to him under the consultancy agreement, he discussed the matter with Thomas and Raymond Kwok.  Raymond Kwok said that he would think about Thomas Kwok’s suggestion of paying Rafael Hui for all of the uncompleted consultancy period, on the basis that his performance of the consultancy had been good.  One or two days later, Raymond Kwok told Rafael Hui that he was still considering Thomas Kwok’s proposal.  Then, Thomas Kwok asked him to issue an invoice for fees in respect of the 11 months of the consultancy period.[71]  As a result, he had issued an invoice to SHKP for $375,000 per month in respect of each of the 11 months in the period April 2005 to February 2006, inclusive, to a total of $4.125 million.

114.  Rafael Hui said that he was entitled to $30 million under the consultancy agreement, namely $15 million per year.  By May 2005, he had been paid $6  million, in two tranches of $3 million, plus about $9 million, $4.125 million for the uncompleted period of the consultancy and $5 million from Thomas Kwok in early April 2005.  The balance due to him was $10  million.  Taking into consideration his expenses for a secretary, his driver and a car which was on hire purchase, and after deducting the rent for the Leighton Hill flats for the four months before he started working for SHKP, he was owed a total of about $10.8 million.[72]

Payments of $8.5 million to Rafael Hui: June 2005

115.  Rafael Hui said that, since his appointment as Chief Secretary was imminent, he pressed Thomas Kwok for the payment of the outstanding sums.[73]  Thomas Kwok told him that in view of certain problems which had arisen within the Kwok family, mainly caused by Walter Kwok, the payment to him would have to be made via a complex and indirect route to be arranged by Thomas Chan.[74]  On the suggestion of Thomas Kwok that he ask a friend to contact Thomas Chan, Rafael  Hui asked Francis Kwan to help.[75]  In response to Francis Kwan’s enquiry as to why his assistance was required, Rafael Hui said simply that is what he had been asked to do.  Francis Kwan agreed to contact Thomas Chan.[76]  For his part, Rafael Hui confirmed Thomas Chan’s enquiry by telephone that the amount due was $10.8 million.  Rafael Hui acknowledged that he had received payment into his bank account of only $8.5  million.  He explained that the outstanding balance of $2.3 million had been retained by Francis Kwan at his request.  He wished Francis Kwan to be in funds to buy him foreign exchange when requested to do so.[77]

Payment of $11.182 million to Rafael Hui: November/December 2007

116.  In November-December 2007, Francis Kwan told him that someone from Beijing, whose identity he could not disclose, had contacted him and told him that there was a sum of money for the benefit of Rafael Hui, which would be paid to Francis Kwan, as he had an account in the Mainland.[78]

117.  Of the payment of $11.182 million he then received from Francis Kwan, Rafael Hui said that he thought the money came from Mr Liao Hui, the Director of the Hong Kong and Macau Affairs Office of the Central Government.  He said he had met Mr  Liao on several occasions, including one in March 2007, and Mr Liao indicated that he would like him to stay on as Chief Secretary for a few more years.  When he said it would not be possible, given his expensive lifestyle, Mr Liao said he would think of a way to help.[79]

118.  Rafael Hui said that in early 2008 he met Mr Liao.  Mr Liao said, “Now I’ve helped you, stop spending so much.”  Because of what Mr  Liao said, Rafael Hui said that he believed the $11.182 million came from Mr Liao and, as the money came from the Mainland and had nothing to do with his public duty, he saw no conflict in accepting the money, nor did he see any need to declare his receipt of it.  Only at trial had he become aware of the flow of the funds as alleged by the prosecution.[80]

Thomas Kwok’s case

119.  In his evidence, Thomas Kwok gave a detailed account of his up-bringing and his religious faith.[81]  He said that after having been kidnapped in 1997, his elder brother, Walter Kwok, suffered from post-traumatic stress disorder and became very difficult to deal with.[82]

120.  Thomas Kwok met Rafael Hui in 1987 and they became friends.[83] The idea of employing Rafael Hui as a consultant came up in around 2001, as it was thought that he could give advice on political and economic issues.[84]  Despite prolonged discussions, no agreement had been reached.  In August 2003, Walter Kwok refused to endorse the decision to engage Rafael Hui, even thought he had been working for them unofficially.[85]

121.  Thomas Kwok said he had asked Rafael Hui to reject offers from other corporations and he agreed to pay him $15 million a year, in addition to providing him with residential quarters and an office.[86]  However, in light of Walter Kwok’s attitude, he did not disclose to him or to their mother the agreement he had reached with Rafael Hui.

122.  Thomas Kwok acknowledged that that the written consultancy agreement executed in March 2004 not only stipulated that Rafael Hui’s remuneration was only $4.5 million a year but also made no provision for residential accommodation.[87]  He had no idea why the remuneration was stipulated to be $4.5 million, although Raymond Kwok had said it was similar to a previous consultancy agreement.[88]  The written agreement did not reflect the oral agreement that he had made with Rafael Hui.  However, he did not consider making a separate written agreement to reflect that oral agreement.[89]

123.  Originally, the three Kwok brothers had agreed to provide Rafael Hui with two Leighton Hill flats, the rent for which was to be paid by King Yip.[90]  However, subsequently on 20 April 2004 Walter Kwok changed his mind and determined that King Yip would pay for one of the flats only.  As a result, he and Raymond Kwok agreed to pay for the remaining flat between them.[91]

124.  Thomas Kwok confirmed that when the MPFS Authority signed the lease on One IFC on 10 June 2003, Rafael Hui was already occupying the Leighton Hill flats without paying rent and that steps were being taken to provide Rafael Hui with an office at One IFC.[92]  Thomas Kwok said that Rafael Hui did not proffer any advice on the Ma Wan or the WKCD Projects.

125.  In mid-March 2005, Rafael Hui told him and Raymond Kwok of his decision to resign from the consultancy, explaining that he had to assist Donald Tsang in his election campaign to become Chief Executive.[93] Since Rafael Hui had worked for SHKP for two years, having begun to do so at the beginning of July 2003, under their agreement he was entitled to a payment of $30 million in total.  After deducting the two payments of $3 million and the $9 million paid under the written consultancy agreement, the balance owed to Rafael Hui would be $15 million.[94]  At the end of May 2005, after he had paid Rafael Hui $5 million, and after some calculations, $10.8 million was determined to be owing to Rafael Hui.[95]

126.  By that time, it was known that Rafael Hui would be appointed Chief Secretary and any payment to him would be a sensitive matter.  So, on 18 or 19 June 2005 he spoke to Thomas Chan and informed him of the oral agreement that he had with Rafael Hui, explaining that he did not want to pay the remaining monies due to Rafael Hui directly, because he did not want the matter to become disclosed to Walter Kwok and his mother.  He asked Thomas Chan to settle the balance due to Rafael Hui directly, saying that he would reimburse him subsequently by two or three separate payments.  He expected those instructions to be carried out and he knew nothing of the involvement of either Villalta or Francis Kwan in the payment of monies to Rafael Hui.[96]

127.  For his part, Thomas Kwok said that he had paid Thomas Chan two cheques, respectively in the amounts of $4 million and $4.8 million.  He had forgotten about the remaining $2 million, making up the total payment of $10.8 million.[97]

Payments to Thomas Chan in 2008

128.  Thomas Kwok then explained that the payments of a total of $18 million made to Thomas Chan in 2008 had nothing to do with Rafael Hui.  The payment of $5 million in April 2008 was the payment of a bonus to Thomas Chan for 2008.  The payment of $7 million by cheque dated 28 April 2008 was a mark of appreciation for Thomas Chan’s loyalty and to compensate him for the way in which Walter Kwok treated him.  The payment of $6 million in late 2008 was a bonus to Thomas Chan paid in advance for the year 2008-2009.[98]

129.  Thomas Kowk said that none of the payments made to Rafael Hui were bribes, nor did Rafael Hui do any favours to SHKP whilst he was in government.[99]

Thomas Chan’s case

130.  Thomas Chan testified that he started working for SHKP in 1973 and had come to know the Kwok brothers well.[100]  He was responsible for the delivery of the $600 million ransom paid for Walter Kwok’s release in 1997.  Since then Walter Kwok had become very suspicious of everyone.  His relationship, and that of the Kwok brothers, with Walter Kwok had deteriorated between 2003 and 2007.  In 2008, Walter Kwok was removed from the board of directors of SHKP, inter alia, after he made serious accusations against Thomas Chan.[101]

131.  At a meeting with Thomas Kwok on 19 or 20 June 2005 he was told that Donald Tsang was to be appointed the Chief Executive and it was expected that Rafael Hui would be appointed Chief Secretary.  As a result, Thomas Kwok told him that it was necessary to make arrangements for the payment of the balance of monies owing to Rafael  Hui under a private consultancy agreement he had with Rafael Hui.[102]  Thomas Kwok told him that he owed Rafael Hui $10 million and instructed him to issue a cheque to Rafael Hui directly on his behalf.  He said that he would reimburse him by way of three cheques.  Thomas Kwok said that he did not want Walter Kwok or his mother to know about it.  Having told him to call Rafael Hui, he gave him a cheque for $4 million.[103]

132.  When he contacted Rafael Hui as requested by Thomas Kwok, the latter informed him that the amount owed to him was $10.8 million and suggested that in making the payment Thomas Chan should deal with Francis Kwan directly.  He said that he would ask Francis Kwan to call him.  In due course, he received a telephone call from Francis Kwan, whom he told that he would make out of cheque for $10.8 million.[104]

133.  Subsequently, Thomas Chan told his daughter to prepare a cashier’s order for $10.8 million, which he then gave to Francis Kwan on 24 or 25 of June 2005.[105]  He did not know how Francis Kwan dealt with the monies.  He said Thomas Kwok only paid him two cheques, one for $4 million and one for $4.8 million on 20 and 28 June 2005 respectively.  As a result, Thomas Kwok still owed him the remaining $2 million.

134.  Thomas Chan said the cheque for $4.8 million dated 28 June 2005 paid to him by Thomas Kwok had no connection with the total of $4.8 million payable by Rafael Hui as rent due in the 30 month period for the two Leighton Hills flats.  At the direction of Walter Kwok, he had signed the tenancy agreements for those flats, with the market rate fixed as the rent.  The fact that the two sets of figures matched was purely a coincidence.[106]

The Longally agreement: the payment of $12 million

135.  Thomas Chan said that in mid-August 2007 he became interested in a natural healthcare product called ‘AlcholOut’ which was being marketed by Francis Kwan.  Subsequently, on 8 November 2007, he signed the Investment Management Agreement with Francis Kwan on behalf of Longally, by which the latter agreed to provide $12 million as an initial capital investment for the former to manage.  On 9 November 2007 he caused Villalta to pay Wedingley.  That was his investment in ‘AlcholOut’ under the Longally agreement.  He said he had no idea that any of the $12 million that he had invested was the provenance of a total of $11.182 million paid to the bank account of Rafael Hui and that of his company Top Faith on and between 21 November and 12 December 2007.[107]  Thomas Chan said that Francis Kwan had misappropriated his money.  However, on the advice of his lawyer, he did nothing to recover the money after his arrest.

136.  Thomas Chan said that the payments of $5 million in April 2008 and $6 million in November 2008 to him by Thomas Kwok were his bonuses for the tax year 2008/2009.  The $7 million payment to him in April 2008, was an extra payment by Thomas Kwok to compensate him for the trouble caused to him by the Kwok family.  Those payments had nothing to do with the payments to Francis Kwan or the payments to Rafael Hui.

The case of Francis Kwan

137.  Francis Kwan did not give evidence on the general issue.  It was suggested that, as far as he was concerned, the transfer of money stipulated in Count 5 was for a legitimate purpose.  Rafael Hui had told him that the money he received on his behalf was the balance of consultancy fees.

138.  In respect of Count 7, Francis Kwan’s case was that the payments did not come from or involve SHKP and were unconnected with any corrupt motive.  Francis Kwan accepted that he had received US$1.54 million from Thomas Chan and he had paid $11.182 million to Rafael Hui, but argued that he did not pay the money to Rafael Hui on behalf of Thomas Chan.  He said Thomas Chan paid him the money under an investment agreement.  His case was that he had received a similar sum of money from people in Beijing, who had requested him to pass the money to Rafael Hui in order to ease his financial problem.  He had merely used the money provided to him by Thomas Chan to make the payment to Rafael Hui requested by the people in Beijing.

Grounds of Appeal against Conviction

Rafael Hui

139.  No fewer than eight grounds of appeal against conviction were advanced in the written grounds of appeal against conviction by Mr Edwin Choy.  However, in advance of the hearing he informed the Court that he abandoned grounds 3, 5 and 6 and did not seek to advance any further submissions in relation ground 8.

140.  In common with all the other appellants, Mr   Choy contended (ground 4) that the offence alleged in Count 5 was unknown to the law.  For his part, he relied on the submissions advanced on behalf of Thomas Kwok, Thomas Chan and Francis Kwan.

Ground 1

141.  By ground 1, it was submitted that the judge erred in admitting into evidence Rafael Hui’s Record of Interview with the ICAC, conducted on 22 December 2009 and signed on 13 January 2010.

Ground 2

142.  By ground 2, it was submitted that, in the course of the trial, the judge had erred in allowing the prosecution to cross-examine Rafael Hui and then rely on unproven allegations to the effect that Rafael Hui had colluded with the other defendants to obstruct the ICAC investigation by disclosing to them confidential information he had obtained from the ICAC.  Such allegations damaged Rafael Hui’s credibility, rendering the trial unfair to him.

Ground 7

143.  By ground 7, it was submitted that, in light of the acquittals of Thomas Kwok and Raymond Kwok on Count 7, the convictions of Rafael Hui, Thomas Chan and Francis Kwan on that count were “perverse and inconsistent verdicts”.  It was contended that it was the prosecution case throughout that Thomas Chan and Francis Kwan acted as conduits only in paying an advantage to Rafael Hui at the behest of and on behalf of Thomas Kwok and Raymond Kwok.  In acquitting Thomas Kwok and Raymond Kwok of Count 7, the jury rejected the prosecution case that Thomas Kwok and Raymond Kwok provided the monies to be paid to Rafael Hui as an advantage.

Ground 8

144.  By ground 8, it was contended that Rafael Hui’s conviction on Count 8 was contingent on his conviction on Count 7, which conviction was unsafe.

Thomas Kwok

Ground 1: Count 5

145.  By ground 1, Ms Montgomery, QC submitted that the offence particularised in Count 5 was unknown to the law of Hong Kong. Misconduct in public office required there to be an act of misconduct by a public officer.  It cannot be committed by a public officer merely being or remaining of a certain state of mind.  Conspiracy to commit misconduct required an agreement that the public officer will misconduct himself in a manner that is identifiably of a sufficiently serious nature to give rise to the offence.

146.  Further, she contended that section  159A of the Crimes Ordinance, Cap. 200 required the prosecution to prove, in an offence of conspiracy to commit misconduct in public office, that Rafael Hui and at least one other party to the agreement :

(i) intended and agreed that Rafael Hui would carry out a specific act in abuse of power of a sufficiently serious nature while in public office;

(ii) alternatively, as a minimum, intended and agreed that Rafael Hui would in future, whilst in public office, when the opportunity arose, commit at least one identifiable act that would amount to a serious abuse of power.

147.  In consequence, it was submitted that the judge erred in :

(i) failing to dismiss Count 5 at the close of the prosecution case;

(ii) allowingtheprosecutiontoopenthecaseon misconduct: on the basis of ‘being or remaining favourably disposed’; that the payments made by Thomas Kwok to Rafael Hui, before he entered public office, could be characterized as ‘bribes’; that the Prevention of Bribery Ordinance, Cap. 200 did not apply merely for technical reasons;

(iii) permitting the prosecution to close the case on the basis that it did not have to allege or prove that the conspirators intended and agreed that the public officer should commit any specific or identified act of misconduct.

Ground 2

148.  By ground 2, Ms Montgomery submitted that there were multiple misdirections and non-directions in the judge’s summing up.

(1) The judge had failed to give the jury directions that the prosecution was required to prove that :

(i) it was intended and agreed that Rafael Hui would carry out a specific act in abuse of power of a sufficiently serious nature while in public office;

(ii) alternatively, as a minimum, it was intended and agreed that Rafael Hui would in future, whilst in public office and when the opportunity arose, commit at least one identifiable act that would amount to a serious abuse of power.

(2) The judge erred in directing the jury that the merits of Rafael Hui’s decisions or conduct during his tenure as Chief Secretary were irrelevant.

(3) The judge had failed to summarise the evidence supporting the defence case that Rafael Hui had not committed any act of favour in breach of duty in respect of Thomas Kwok, Raymond Kwok and Thomas Chan or SHKP.  He failed to explain the relevance of such evidence to Thomas Kwok’s case that he never agreed or intended that Rafael Hui commit an act of misconduct.  In giving what was described as a “notebook summary”, the judge failed to summarise and explain the significance of the evidence relevant to this issue, in particular Thomas Kwok’s good character.

(4) The judge erred in directing the jury that it could convict on Count 5, even if no act of favour was identified as being intended or agreed or was in fact performed.  

(5) The judge erred in directing the jury that acceptance of money by a public official in return for him in a general way being favourably disposed to the person giving him money was itself capable of amounting to misconduct, without directing the jury as to any of the factual circumstances in which this would not amount to misconduct.

(6) The judge erred in directing the jury that payments made by Thomas Kwok to Rafael Hui before he entered public office could be characterised as ‘bribes’ and failing to direct the jury that, to be satisfied that the offence of misconduct in public office was committed in those circumstances, they had to be satisfied that the ingredients of the offence provided by the Prevention of Bribery Ordinance was proved.

(7) The judge erred in failing to direct the jury that it was necessary, but not sufficient, for the prosecution to prove that any misconduct particularised was a breach of duty.

(8) The judge erred in failing to direct the jury of the need to assess the seriousness of any misconduct particularised, the high threshold required and on the approach to that issue.  It was insufficient for the judge to refer to an abuse of the public’s trust in Rafael Hui as the holder of a public office.

(9) The judge failed to direct the jury that it had to assess the seriousness of any misconduct from the point of view of the facts known to each co-conspirator.  Further, that proof was required that each defendant agreed and knew the facts and circumstances relevant to the assessment of seriousness.

Thomas Chan

Ground 1: Count 5

149.  By ground 1, Mr Winter submitted that Count 5 alleged an offence unknown to the law of Hong Kong.  Misconduct in public office required there to be an act of misconduct such that it cannot be committed by a public officer merely being or remaining of a certain state of mind. A conspiracy to commit misconduct in public office required an agreement that the public officer will, should it become necessary, actually misconduct himself.

150.  By directing the jury that the mere acceptance of monies whilst remaining favourably disposed towards the named persons was capable of amounting to the offence of misconduct in public office, the learned trial judge materially misdirected the jury.  Being or remaining favourably disposed to someone is not an act.  Rather, it is a state of mind. It is not possible to commit misconduct in public office, or to conspire to do so, only by maintaining a certain state of mind.

151.  At the close of the prosecution case, the judge erred in refusing to order the prosecution to amend the indictment, so as to particularise in Count 5 that the subject matter of the alleged conspiracy involved the intention to commit an act of misconduct in public office, should such act become necessary or, alternatively, to quash the Count.

Ground 5: Count 7

152.  By ground 5, it was submitted that Thomas Chan’s conviction on Count 7 was of an alternative offence not particularised or left to the jury or defended by Thomas Chan.  Although the Particulars of Offence of Count 7 averred a conspiracy between the conspirators to offer an advantage to Rafael Hui through a series of payments from Thomas Kwok, Raymond Kwok, ThomasChan and Francis Kwan, the prosecution had further particularised the allegation.  As a result, an agreement was alleged in which the identity of the payer of the payment, and his money, was a key element.  In this conspiracy Thomas Chan was a loyal facilitator of Thomas Kwok and/or Raymond Kwok’s payment and a conduit for the passing of the money, so as to hide their involvement in the provenance of the payment.  Proof of the case against Thomas Chan required proof of the involvement of one or both Thomas Kwok and Raymond Kwok.

Francis Kwan

Ground 2: Count 5

153.  By ground 2, Mr Blanchflower SC, submitted on behalf of Francis Kwan that the judge erred in finding a case to answer for the Francis Kwan on Count 5.  The conspiracy which was alleged was not misconduct recognised in law, because no specific act was identified and agreed upon by the conspirators that would, if carried out, constitute a serious abuse of power, duty or responsibility, exercisable by Rafael Hui.  Being or remaining favourably disposed to, is a state of mind, which could not constitute misconduct in law.  The judge erred in applying the principle of “general sweeteners” identified in offences committed contrary to the Prevention of Bribery Ordinance to a count of conspiracy for a public officer to wilfully misconduct himself in public office.

Ground 3

154.  By ground 3, it was submitted, in the alternative, that the judge erred in directing the jury that: the prosecution was not required to identify, specify or prove any particular act of abuse of power; that proof that the defendants agreed and intended that Rafael Hui carry out the misconduct when “being or remaining favourably disposed ” was itself sufficient to constitute a specific act in abuse of power required for the offence.  Mr Blanchflower adopted and supported Ms Montgomery’s submissions in respect of Count 5.

Ground 4 : Count 7

155.  By ground 4, it was submitted simply that Francis Kwan’s convictions on Counts 5 and 7 were unsafe and/or unsatisfactory.  If the Court found that Count 5 averred no offence known to law, then the safety of Francis Kwan’s conviction on Count 7 would be affected.  The prosecution had presented the conduct the subject of Count 7 as a continuation of the conduct the subject of Count 5 and invited the jury to have regard to the evidence led in respect of Count 5 in drawing inferences adverse to Francis Kwan in respect of Count  7.  Mr Blanchflower adopted and supported Mr  Winter’s submissions in respect of Count 7.

A consideration of the submissions

Count 5

156.  It is convenient first of all to consider the submissions made on behalf of all of the defendants as to the validity in law of the offence particularised in Count 5, the judge’s related rulings and his directions to the jury in his summing up.

157.  First of all, it is clear that in convicting Rafael Hui and Thomas Kwok of Count 5 the jury rejected their evidence that the payments of a total of $8.5 million to Rafael Hui were legitimate payments arising out of their undocumented oral agreement, by which Rafael Hui was recompensed in addition to the payments made pursuant to the written service agreement by which, through Top Faith, he provided consultancy services and advice to SHKP.

No case to answer: ruling

158.  In ruling that there was a case to answer on all the counts faced by all the defendants, the judge addressed specifically submissions of law made, or adopted, by all of them in respect of the counts which alleged a conspiracy to commit misconduct in public office.  Those counts included Count 5, on which all the defendants stood trial. In doing so, the judge addressed two issues, first the validity of the counts as particularised and secondly, whether or not there had been a shift in the prosecution case from that opened to the jury :[108]

“ I will, however, say something briefly about the submissions which I have heard in relation to the law, in particular concerning those counts which allege a conspiracy to commit misconduct in public office by D1 being or remaining favourably disposed to SHKP Ltd, particularly since it is suggested that the prosecution have shifted their position from alleging that D1 was paid to be the “eyes and ears” of SHKP Ltd, suggesting that he showed favour in some way to the company, to being paid general sweeteners for doing nothing more than his normal duty, which could not in law be misconduct in public office.

I do not accept that the particulars disclose no offence known to law, and nor do I accept that these counts are bad in law.  Furthermore, I do not accept the suggestion that there has been a shift in the prosecution case from an allegation in opening that D1 was paid to be the “eyes and ears” of D2 and D3, to an alternative allegation by the close of the prosecution case, that suggestion having been found wanting, that the payments were general sweeteners from D2 and D3.

The words “being or remaining favourably disposed to SHKP Ltd” are used in counts 2, 3 and 5, as well as in count 7.

In his opening address to the jury, Mr Perry for the prosecution cited these very words in the indictment on a number of occasions when explaining the prosecution allegations.  He also used the phrase “favourable disposition” or “goodwill” in relation to the payments allegedly made to D1.

The words “sweetener” or “sweeten” or the phrase “to keep him sweet” were then used by Mr Perry to explain how it was, according to the prosecution, that D1’s favourable disposition was to be obtained and/or maintained.[references.]

The prosecution have therefore always put their case on this basis.  Nobody can conceivably be taken by any surprise or realistically claim to be misled or wrongfooted.

The prosecution contend, and it might be said to be a matter of common sense, that if one is in receipt of a substantial general sweetener in this context, it will be so that one will be favourably disposed to the giver.  That is precisely what Mr Perry said in terms [reference]:

“As I said yesterday, these payments were in effect what’s sometimes called by lawyers ‘sweeteners’. If you’re a public official and you get a sweetener, it’s to show favourable disposition, goodwill. ‘You give me money; I’ll show you goodwill’.”

[Reference] Mr Perry put the matter in opening in these terms:

“But, ladies and gentlemen, as you know, the prosecution case is that the payments made to the 1^st defendant were sweeteners, bribes, and he was being paid to be the inside man, SHKP’s inside man, in government.”

Another way of saying that D1 was SHKP’s inside man in government is that he was to be their “eyes and ears”.

That is, in fact, how Mr Perry put the matter [reference] in relation to the payment in count 2:

“But the prosecution case is that in simple terms, it was paid by the 2^nd defendant to the 1^st defendant for one reason and one reason only: because it was known that the 1^st defendant was going to be appointed to the position of Chief Secretary, and he was to be SHKP’s representative in government, the eyes and ears of SHKP. In other words, it was a bribe, to show favour to the 2^nd defendant and his company.”

The final reference to SHKP having a man on the inside of government as their “eyes and ears” was [reference].   That was in the context of Mr Perry telling the jury that they were not concerned with the merits of any particular decision that D1 took.

I do not, with respect, see that there has been any shift in the prosecution’s position.”

159.  Of the legitimacy and validity of the position taken by the prosecution, the judge concluded :[109]

“ Their position, as it was explained to the jury, and as I have just referred, is that it is not necessary for the prosecution to prove that D1 was in fact favourable to SHKP Ltd.  Their case is that D1was paid sweeteners so that he would be or remain favourably disposed to SHKP Ltd.  He thereby became their man in government, regardless of whether he did in fact use his eyes and ears, or do anything favourable to SHKP Ltd.  That, as I understand it, has always been their position, and I see no shift in position that would warrant my intervention at this stage upon a submission of “no case to answer”.

It is a legitimate way of putting the prosecution case in law, and I find a case to answer on the evidence in relation to those counts.

That is my ruling.”  [Italics added.]

Directions to the jury: the judge’s ruling

160.  At the conclusion of all the evidence in the case, the judge received written and oral submissions from all counsel as to the directions to be given to the jury in the summing up.  One of the issues canvassed was the direction to be given to the jury in respect of the offences of conspiracy to commit misconduct in public office.  In his written submissions in respect of the counts of misconduct in public office, Mr Perry stated that, “In relation to favourable disposition, the prosecution adopt the submissions it advanced in the legal argument at the close of the prosecution case.”[110]  In her written submissions, Ms Montgomery submitted that :[111]

“ Any direction must identify the acts or omissions amounting to misconduct that are said to have been the specific subject of agreement. If there is more than one act or omission, the jury should be directed that agreement on that particular act (or omission) must be proved to the satisfaction of each and every member of the jury (subject to the majority direction). The prosecution should identify the acts or omissions it contends are proved.”

161.  In the result, the judge ruled :[112]

“ In relation to the direction as to the meaning of “favourable disposition”, I agree with and intend to adopt the essence of the formulation set out in paragraph 1 of the prosecution’s supplementary note dated 29 October 2014, although I shall use my own words, and I am not limiting my explanation of the reasons which lie behind the offence to those set out at (v) of paragraph 1.

It follows that no Kevin Brown point arises, and I do not intend to further burden the jury with a wholly unnecessary and confusing direction.

Any suggestion that D1 did favour SHKP is merely an example or illustration of D1’s favourable disposition as a result of the payments he received.  The jury will be directed in relation to the relevant counts that they must find beyond reasonable doubt that the agreement was that D1 should be, or remain, favourably disposed towards SHKP as particularised.”

162.  The formulation provided in the prosecution Supplementary Note, described as incorporating the approach of the Court of Appeal in Attorney-General v Chung Fat Ming[113], was to the following effect :[114]

“ (i) The agreement charged in counts 2, 3 and 5 is an agreement that D1 would misconduct himself in public office. The misconduct in question is for D1, as Chief Secretary, being or remaining favourably disposed to SHKP (and/or the relevant Defendants) in return for money.

(ii) The agreement charged in Count 7…

(iii) And so in each case, it is alleged that the payment in question was on account of D1, as a public official, being or remaining favourably disposed towards SHKP (or the Defendants).

(iv) The words “being or remaining favourably disposed” reflect the prosecution allegation that the payments made to D1 were general goodwill payments: they were general sweeteners. The counts do not charge that the payments were made in return for a specific favour D1 was to perform, or had performed. And the law does not require that any particular favour be identified.

(v) The reason for this is perhaps obvious.  It is because the acceptance of money by a public official in return for him, in a general way, being favourably disposed to the person giving him the money, is itself capable of amounting to misconduct, or a breach of the obligations he owes to the public as public official.  The evil of these kinds of payments is that no one will have confidence in the acts of a public official who, through the offer and acceptance of money, has been kept sweet by private interests.  The confidence which the public are entitled to have in the impartial performance of their duty by public officials is eroded.”

Summing Up

Misconduct in public office

163.  In his directions to the jury, the judge said :[115]

“ Misconduct in public office is committed where:

(1) A public official;

(2) In the course of or in relation to his public office;

(3) Wilfully misconducts himself by act or omission;

(4) Without reasonable excuse or justification;

(5) Where such misconduct is serious, not trivial, having regard to the responsibilities of the office and the officeholder, the importance of the public objects which they serve and the nature and extent of the departure from those responsibilities.”

164.  The judge repeated that direction verbatim and then explained it in the context of Counts 1 and 6.  In doing so, the judge amplified and explained the five individual elements.  In the context of Count 1, which alleged misconduct in public office by Rafael Hui alone, he said :[116]

“ The real issues for your determination will be the third, fourth and fifth ingredients, elements, or requirements.

The third issue or requirement is whether D1, as a public official, and in the course of and in relation to his public office, wilfully misconducted himself, either by an act, in other words doing something, or by an omission, in other words not doing something. “Wilfully” in this context means deliberately, rather than by accident or inadvertence or oversight, in the sense that D1 either knew his conduct was unlawful and he deliberately disregarded -- I am sorry, or that he deliberately disregarded the risk that his conduct was unlawful when he did the act or omitted to do the act.

The fourth issue is whether what he did was without reasonable excuse or justification. I cannot improve on those words. It is for you to decide whether the prosecution have proved that what Rafael Hui did or omitted to do, as you find it to be, was done or omitted without reasonable excuse or justification.

The fifth element of the offence is this, that what he did or omitted to do has to be serious and not trivial, and you judge whether it is serious enough to warrant his conviction for the offence, all other elements being proved so that you are sure, by considering Rafael Hui’s responsibilities as well as the responsibilities of his office as managing director of the MPFA at that time, the importance of the public objects which he, as managing director of the MPFA, served, and the nature and extent of his departure from those responsibilities.”

Counts 2, 3 and 5

Conspiracy to commit misconduct in public office

165.  Then, the judge moved on to consider Counts 2, 3 and 5, noting that they alleged conspiracies for Rafael Hui to commit misconduct in public office.  He said :[117]

“ To put it simply, each of these three counts, 2, 3 and 5, allege a conspiracy between the conspirators who are named, for D1 to deliberately and seriously misconduct himself as Chief Secretary, without reasonable excuse or justification, by being or remaining favourably disposed towards SHKP’s interests in return for bribes.”

166.  In respect of the allegation of conspiracy, the judge said :[118]

“ Before you can convict either or any of the defendants of the offence alleged in Counts 2, 3 or 5, you must be sure, firstly, that there was in fact an agreement between two or more persons for D1 to commit the offence of misconduct in public office.

…

  And secondly, that the defendant whose case you are considering was a party to that agreement in the sense that (a) he agreed with one or more of the other persons referred to in the count, that the offence should be committed; and (b) at the time of agreeing to this, he intended that they should carry it out.”

167.  Having reminded the jury of the five elements in the offence of misconduct in public office that he had identified earlier, the judge said :[119]

“ Members of the jury, I have already explained those five elements to you and I do not intend to go through them again.”

Clearly, that was a reference to the directions that he had given the jury earlier in the context of Count 1, in particular in respect of what he suggested were the real issues arising in the third, fourth and fifth elements of the offence.  Also, included in the judge’s reference was what more he had to say in the context of Count 6 about the necessity of the misconduct being serious, not trivial.[120]

168.  Then, the judge continued :[121]

“ The act of wilful misconduct alleged by the prosecution in these three counts, Counts 2, 3 and 5, and this is the third requirement the prosecution must prove, is that D1, as Chief Secretary, would be or remain favourably disposed to SHKP’s interests in return for certain specified payments. Although the particulars of each count do not mention the word, the prosecution say that these payments were, in effect, bribes.

……..

So, members of the jury, what does “being or remaining favourably disposed to SHKP Limited and/or its subsidiaries or associated companies and/or named conspirators” mean? What does it mean?

The words “being or remaining favourably disposed to” reflect the prosecution allegation that the payments made to D1 were general goodwill payments. In other words, they were sweeteners, payments made to sweeten a public official. The counts do not allege that the payments were made in return for any specific identifiable favour which D1 was to perform or had performed. And the law does not require that any particular favour be specifically identified.

Indeed, in the context of paying any public official a sweetener, which you might think would necessarily involve subtlety and secrecy, it may be very difficult to show that any favour was in fact performed. A public official may have acted in exactly the same way, or objectively made the correct decision, or done the right thing, whether he was sweetened or not.

The reason the law does not require a particular favour to be identified is, you may think, obvious. The acceptance of money by a public official in return for him in a general way, rather than in a specific way, being favourably disposed to the person or persons giving him the money, is itself capable of amounting to misconduct by virtue of the breach of the duties and obligations he owes to the public as a public official.

The evil or the vice of these kinds of payments is that no‑one could have confidence in the acts of a public official who, through the offer and acceptance of money, has been kept sweet by private interests.  And the confidence which the public are entitled to have in the fair and impartial performance of a public official’s duties and obligations is thereby eroded or destroyed.”  [Italics added.]

169.  In the context of Count 7, a count of conspiracy to offer an advantage to a public servant, contrary to sections 4(1)(a) and 12 of the Prevention of Bribery Ordinance and sections 159A and 159C of the Crimes Ordinance, in which in the Particulars of Offence the impugned act was stipulated as “being or remaining favourably disposed to” SHKP, the judge said :[122]

“ I have already explained to you as well what “being or remaining favourably disposed to” means when I was discussing Counts 2, 3 and 5.  The meaning is the same.

  So, the question for you is whether you are sure the offer of the advantage, in other words the payment, was made in one of those ways so as to achieve the objective of D1 being or remaining favourably disposed to the entities named.

  The fourth ingredient requires you to ask yourselves whether the act to be performed by D1 was in his capacity as a public servant.  In other words, was the act of being or remaining favourably disposed to SHKP or the entities named in the count something that D1 was to do or perform in his capacity as Chief Secretary and as a non-official member of the Executive Council?

  The fifth ingredient requires that you be sure that the act of being or remaining favourably disposed to SHKP and/or its various entities was something that was identifiable within the scope and range of D1’s public duty.”

170.  Clearly, in directing the jury as to the ingredients of the offence alleged in Count 7, the judge was required to address, inter-alia, the specific provisions of the Ordinance.  In doing so, he went on to say :[123]

“ May I just explain what I mean here? There will be cases where a specific act by a public servant can be linked to a particular payment, perhaps as an inducement or later as a reward, for performing that act, for example, the granting by a public servant of a government contract to a contractor who has made him, or later makes him, a sizeable payment. There will be other cases where nothing more can be shown than an unexplained and, on the face of it, inexplicable, payment to a public servant and where no act or failure to act can be proved to have been done by that public servant in relation to the giver of the payment.

Now, in the realm, or in the area, of bribery and corruption, it might sometimes be very difficult to show that a public servant has done anything favourable or indeed that he has refrained from doing anything unfavourable in return for a payment. He may have performed his normal duty, or indeed made a correct decision, or done the right thing. Yet, he has received a substantial payment.

What you must therefore be sure about, where no specific act of favouritism can be shown, is that being or remaining favourably disposed to SHKP’s interests as a result of the payment was something which he, D1, was able to do because it fell within the range or scope of the public duties of that particular public servant, rather than something he was not able to do because it fell outside the range or scope of the public duties of that particular public servant, or fell within his private capacity.”  [Italics added.]

171.  As Mr Perry acknowledged in his written submissions, the issue that arises in respect of Count 5 is :[124]

“ whether, for the purposes of the offence of misconduct in public office, a public servant does an ‘act’ in his capacity as such by being or remaining favourably disposed in return for a payment.”

172.  For her part, Ms Montgomery took issue with the submission that the offence was made out without proof of “any agreed or intended act(s)” in public office.  A “warm glow” emanating from the fact of the public servant being or remaining favourably disposed was not sufficient for the offence to be made out.  Mr Winter submitted that proof was required that the conspirators had agreed and intended that Rafael Hui “act (if necessary) so as wilfully to commit serious misconduct”.  Merely remaining favourably disposed was insufficient to constitute the offence.

The Authorities

173.  The Court of Final Appeal has considered the offence of misconduct in public office in no fewer than five cases in the period 2002 to 2013.  In doing so, the Court has addressed the history, ambit and elements of the offence in detail.

174.  In Shum Kwok Sher v HKSAR[125], the Court of Final Appeal rejected a challenge that the offence was too vague and uncertain to comply with the Basic Law and the International Covenant on Civil and Political Rights.  The appellant, the Chief Property Manager of the Government Property Agency had been convicted of four charges of misconduct in public office in dishonestly causing and permitting a party to wrongfully pre-qualify as a tenderer for government contracts (Charge 1); the wrongful award to a party of a management contract (Charges 2 and 3); and dishonestly acting partially in favour of parties thereby causing and permitting them to be awarded contracts (Charge 4).

175.  In his judgment, with which all the other judges agreed, Mason NPJ reviewed the history of the offence, noting that, “comment has been made from time to time that the offence is not easy to define.” [126] Of the difficulty of defining the offence, he said that arose because of, “…the range of misconduct by officials which may fall within the reach of the offence.”  He cited with approval the observation of PD Finn[127] that the “kernel” of the offence lay in circumstances where :[128]

“ …an officer, having been entrusted with powers and duties for the public benefit, has in some way abused them, or has abused his official position.”

176.  Of the ambit of the offence, Sir Anthony Mason NPJ went on to say :[129]

“ Abuse of such powers and duties may take various forms, ranging from fraudulent conduct, through nonfeasance of a duty, misfeasance in the performance of a duty or exercise of a power with a dishonest, corrupt or malicious motive, acting in excess of power or authority with a similar motive, to oppression. In all these instances the conduct complained of by the public officer takes place in or in relation to, or under colour of exercising, the office.”

177.  Of the requisite mental element, Mason NPJ said :[130]

“ In the case of nonfeasance, non-performance of a duty arising by virtue of the office or the employment, all that is required is wilful intent, accompanied by absence of reasonable excuse or justification. Mere inadvertence is not enough…..outside the area of non-performance of a duty, an additional element is generally, if not always required, to establish misconduct which is culpable for the purposes of the offence. In such cases, in the absence of breach of duty, the element of wilful intent will not be enough in itself to stamp the conduct as culpable misconduct. A dishonest or corrupt motive will be necessary as in situations where the officer is exercising a power or discretion with a view to conferring a benefit or advantage on himself, a relative or friend. A malicious motive will be necessary where the officer exercises a power or discretion with a view to harming another. And a corrupt, dishonest or malicious motive will be required where an officer acts in excess of power. ”

178.  In the result, Mason NPJ concluded :

“ In my view, the elements of the offence of misconduct in public office are:

(1) A public official;

(2) who in the course of or in relation to his public office;

(3) wilfully and intentionally;

(4) culpably misconducts himself.

A public official culpably misconducts himself if he wilfully and intentionally neglects or fails to perform a duty to which he is subject by virtue of his office or employment without reasonable excuse or justification.  A public official also culpably misconducts himself if, with an improper motive, he wilfully and intentionally exercises a power or discretion which he has by virtue of his office or employment without reasonable excuse or justification. Subject to two qualifications, this statement of the elements of the offence accords with the respondent’s submission.”

179.  The qualifications were first, the element identified at (3) and, secondly that, “…the misconduct complained of must be serious misconduct.”  Of that, he said :[131]

“ Whether it is serious misconduct in this context is to be determined having regard to the responsibilities of the office and the officeholder, the importance of the public objects which they serve and the nature and extent of the departure from those responsibilities.”

180.  In Sin Kam Wah v HKSAR[132], the Court of Final Appeal reconsidered the elements of the offence in light of the judgment of the Court of Appeal of England and Wales in Re A-G’s Reference (No 3 of 2003)[133], in which the Court of Appeal had regard to the judgments in Shum Kwok Sher and the decision of the House of Lords in R v G & Another.[134]

181.  In Sin Kam Wah, the 1^st appellant had been convicted of three charges of misconduct in public office, in accepting from the 2^nd appellant on three separate dates the sexual services of women, over whom he knew the 2^nd appellant exercised control and direction for the purpose of their prostitution.  The Particulars of Offence of Charge 1, which were identical to those given in respect of Charges 2 and 3 save as to date and the reference to the number of women, were :[135]

“ SIN Kam-wah, being a public officer, namely a Senior Superintendent of the Hong Kong Police Force, on the 2nd day of March 2001, in Hong Kong, in the course of or in relation to his public office, willfully and intentionally culpably misconducted himself by accepting from LAM Chuen-ip the sexual services, free of any charge, of two women over whom he knew the said LAM Chuen-ip was exercising control, direction or influence for the purpose of or with a view to those said women’s prostitution.”

182.  The 1^st appellant was a Senior Superintendent of the Hong Kong Police who was attached to the Organized Crime and Triad Bureau at the time of the commission of the first two charges and to the Narcotics Bureau of the Hong Kong Police at the time of the commission of the third charge.

183.  In his judgment, with whom all the other judges agreed, Mason NPJ said that the trial judge, District Court Judge Saunders, found that the prosecution had established all the elements of the offence, in particular that the 1^st appellant had accepted from the 2^nd appellant the favours, which were of substantial value, in relation to his office as a policeman.  However, he noted that in addition the judge had found that the sexual services were provided as a general “sweetener”.  The judge had found :[136]

“ This case raises elements of corruption. The 1st Accused, as a Senior Superintendent in OCTB, was in command of one of the departments of the Police Force tasked to investigate the very offences in which he has taken part. Vice offences, involving as they do organised crime and triads, are without doubt part of the ambit of OCTB. By accepting the advantages of free sexual services 1st Accused allowed the 2nd Accused to ingratiate herself to him. The 1st Accused thereby exposed himself to the risk that in return for that free sexual service he may at some time in the future be asked to intervene in matters relating to the 2nd Accused or the clubs. It is the clearest of cases of ‘keeping sweet’ corruption where advantages are given to someone in authority, without asking for a quid pro quo at the time the advantage is given, but building a store of goodwill to provide a basis for future corrupt demands.”

184.  Mason NPJ went on to note that the Court of Appeal[137] had upheld the 1^st appellant’s conviction “on the ground that he was guilty of misconduct in public office by accepting a “general sweetener” - what the trial judge described as “keeping sweet” corruption.” [138]  Of that, he said that it was submitted on the behalf of the 1^st appellant that the convictions could not be sustained on the basis of a general sweetener, “…because that basis of misconduct had neither been particularized nor opened to the trial judge”.[139]

185.  Having regard to the judgment in Re A-G’s Reference (No 3 of 2003), his Lordship said [140] :

“ I would re-formulate the elements of the offence, as stated in Shum Kwok Sher v HKSAR at 409, as follows. The offence is committed where:

(1) a public official;

(2) in the course of or in relation to his public office;

(3) wilfully misconducts himself; by act or omission, for example, by wilfully neglecting or failing to perform his duty;

(4) without reasonable excuse or justification; and

(5) where such misconduct is serious, not trivial, having regard to the responsibilities of the office and the officeholder, the importance of the public objects which they serve and the nature and extent of the departure from those responsibilities.

The misconduct must be deliberate rather than accidental in the sense that the official either knew that his conduct was unlawful or wilfully disregarded the risk that his conduct was unlawful.  Wilful misconduct which is without reasonable excuse or justification is culpable.”

186.  Of the argument that the conduct complained of was not, “…in the course of or in relation to the 1^st appellant’s public office and was neither culpable nor serious”, his Lordship said :[141]

“ To constitute the offence of misconduct in public office, wilful misconduct which has a relevant relationship with the defendant’s public office is enough. Thus, misconduct otherwise than in the performance of the defendant’s public duties may nevertheless have such a relationship with his public office as to bring that office into disrepute, in circumstances where the misconduct is both culpable and serious and not trivial. In the present case, if the charges as particularized are made out, there can be no doubt that the misconduct had the necessary relationship with the 1^st appellant’s public office and that it was culpable and serious because it involved his participation in the acceptance of free sexual services with the knowledge that they were provided by prostitutes over whom the 2nd appellant exercised control, direction or influence, that being a serious criminal offence.”

187.  Of the judge’s determination that, in all the circumstances, the favours provided to the 1^st appellant fell to be regarded as a “general sweetener”, his Lordship said :[142]

“ …misconduct based on the acceptance of a “general sweetener” was neither particularized nor opened to the trial judge. Nonetheless, at the trial, no objection appears to have been taken to this way of presenting the prosecution case. In any event, the trial judge found that there was wilful misconduct on the 1st appellant’s part by accepting sexual services from women over whom he knew the 2nd appellant was exercising control, direction or influence. The convictions can be sustained on the basis of this finding, without relying on the “general sweetener” basis for conviction.”

188.  Notwithstanding that determination, his Lordship went on to say :[143]

“ I should make it clear, however, that acceptance of a “general sweetener” by a public officer can, in appropriate circumstances, amount to misconduct in public office.”

189.  Whilst it is clear that the statement was obiter dictum, it is equally clear that in context it was a highly relevant considered statement.  Both the judge and the Court of Appeal had found that the offence was made out on that basis.

190.  In his judgment in the Court of Final Appeal, with which all the other judges including Mason NPJ agreed, in Chan Tak Ming v HKSAR Bokhary PJ said of the reformulation of the offence articulated in the judgment of Mason NPJ :[144]

“ That is the law, and nothing should be introduced to confuse it.”

191.  In HKSAR v Wong Lin Kay[145]the Court of Final Appeal was concerned with an appeal arising from the quashing of the respondent’s conviction for misconduct in public office by McMahon J in an appeal from the Magistracy.  The respondent was employed as a government driver in the Agriculture, Fisheries and Conservation Department in Shatin.  The charge of misconduct in public office arose from the respondent’s failure to inform the Department of his disqualification from driving and from his continued driving on roads in the course of his duties for the Department.  At issue was whether that misconduct fell within the offence of misconduct in public office.

192.  In his judgment, with which all the other judges agreed, in rejecting the arguments advanced in behalf of the appellant, Ribeiro PJ said :[146]

“ The offence does not arise merely on the basis of some wrongdoing occurring within the confines of the employer/employee relationship even where the employer is a government or public body. It requires misconduct by a public officer in relation to powers and duties exercisable by him for the public benefit.”

193.  Of the correct approach to the resolution of that issue, his Lordship went on to say :[147]

“ One must examine what, if any, powers, discretions or duties have been entrusted to the defendant in his official position for the public benefit, asking how, if at all, the misconduct alleged involves an abuse of those powers in any of the ways identified in Shum Kwok Sher.”

194.  Having said that the requirement that there was an abuse of office was of “pivotal importance”, his Lordship said that, “to regard the essence of the offence in this way is consistent with the earlier authorities”.  Of R v Bembridge, he said :[148]

“ Lord Mansfield described the offence as one involving a man who had accepted “an office of trust concerning the public” and who was answerable “for misbehaviour in his office”, thus focusing on the accused’s violation of the trust placed in him for the benefit of the public by abusing it or misbehaving in some way in relation to his office.”

195.  His Lordship went on to note that in R v Whitaker[149], in rejecting the argument that a colonel in command of a regiment, the Yorkshire Light Infantry, who had received payments from a caterer to recommend them as tenant of the regiment’s canteen was not a public officer, Lawrence J said, in the judgment of the Court of Appeal, “A public officer is an officer who discharges any duty in the discharge of which the public are interested.”

196.  Similarly, he noted that, in describing the elements of the offence of misconduct in public office, Pill LJ said in the judgment of the Court of Appeal of England and Wales in Re A-G’s Reference (No 3 of 2003) that it was required that the misconduct be, “(3) to such a degree as to amount to an abuse of the public’s trust in the office holder”.

197.  In his judgment, having said that the offence could be committed only by a public official, Lord Millet NPJ said :[150]

“ It can therefore be committed only by persons who are invested with powers, duties, responsibilities or discretions which they are obliged to exercise or discharge for the benefit of the general public. Such persons may or may not be employed by the government; they may or may not be paid. They may be high officers of state or lowly employees; the offence may be committed as well by a police or customs officer as by a government minister. The common element is that the accused must have abused some power, duty or responsibility entrusted to or invested in him or her and exercisable in the public interest.”

198.  In the result, in dismissing the appeal, their Lordships decided that the respondent did not, “occupy a public office entrusting him with powers and discretions to be exercised in public benefit”. He was a truck driver.

Seriousness of the misconduct

199.  In HKSAR v Ho Hung Kwan Michael [151], the Court of Final Appeal allowed the appeal of a doctor who had been convicted of misconduct in public office for having prescribed and obtained medicine for his six-year-old son and his parents, albeit that they had not attended the consultations that he had booked and paid for on their behalf.  His parents were in Australia and his son was attending kindergarten.  In his judgment, with which all the other judges agreed, Chan ACJ, said of the object of the offence :[152]

“ It is clear from a review of the authorities that this offence is aimed at punishing an abuse by a public officer of the power and duty entrusted to him for the public benefit or of his official position.”

200.  In addressing the submissions made on behalf of the appellant that his conduct was not sufficiently serious to amount to the offence of misconduct in public office, Chan ACJ noted that Pill LJ in the judgment of the Court of Appeal of England and Wales in Re A-G’s Reference (No 3 of 2003) had said that in considering that issue, in addition to the factors enumerated by Mason NPJ in Shum Kwok Sher to which regard was to be had, also consideration was given to “the seriousness of the consequences”.  Of that, he said :[153]

“ In cases where corruption, dishonesty or other illegal practices are involved, it is not necessary to specifically consider the consequences of the misconduct in deciding whether it is serious enough as to constitute the offence of misconduct in public office. The misconduct speaks for itself: the seriousness of the consequences of such corrupt, dishonest or illegal practices will be obvious.” [Italics added.]

201.  It is to be noted that in his judgment, Pill LJ made an observation to similar effect :[154]

“ …the consequences of some conduct, such as corrupt conduct, may be obvious;”

202.  Chan ACJ went on to say that in other cases a consideration of the consequences of the misconduct was relevant in determining whether or not the misconduct was serious enough to merit criminal sanction.  Having regard to the consideration, Chan ACJ concluded :[155]

“ I do not think the appellant’s conduct was, in the words of Pill LJ in AG’s Reference (No. 3 of 2003), a departure which was “so far below acceptable standards as to amount to an abuse of the public’s trust in the office holder.” ”

203.  In the Attorney General v Chung Fat Ming[156], the Court of Appeal allowed the Attorney General’s appeal by way of case stated in respect of the magistrate’s acquittal of the respondent of a charge of soliciting an advantage, contrary to section 4(2)(a) of the Prevention of Bribery Ordinance, Cap 201.[157] In reaching that conclusion, both McMullin J and Leonard J, as McMullin JA and Leonard JA were then, delivered judgments.  The respondent was a postman who had extended the traditional Lunar New Year greeting, “Kung Hei Fat Choy”, to the maid employed by the resident of a home on his delivery route as he delivered mail to the home.  The question of law at issue was whether, in proof of the offence, it was sufficient to prove that the respondent, “while acting in his capacity as a Crown servant solicited an advantage or whether there must be proof of a specific act in contemplation of one or other or both of the parties involved in return for which the advantages sought.”[158]

204.  In his judgment, McMullin J identified the distinction being drawn as :

“ …. between the advantage which is seen to be solicited or accepted as a “quid pro quo” for some particular act or abstention identifiable as to place and time on the one hand and, on the other, an advantage solicited or accepted as a general earnest of good relations - the “keeping sweet” situation.”

205.  In his consideration of the ambit of the phrase in section 4(2), “…as an inducement to or award for or otherwise on account of ”, McMullin J said :[159]

“ … the third expression in the formula seems to me to provide most exactly for the “keeping sweet” situation in its most tenuous and insidious form. Whereas “inducement” and “reward” are terms apt to cover situations where positive breach of duty can be proved, directly or by necessary inference, there will be cases in which nothing more can be shown then an unexplained, and prima facie inexplicable, gratification linked with the incumbency of a particular office although no malfeasance or nonfeasance can be proved. In that case the solicitation or gratification may reasonably be said to be “on account of ” the performance by the official of “an act” within the capacity as a public servant even where that act is nothing more than the performance by him of his normal duty. I understand the phrase: “an act” to be a generic denotation of any and all acts which may fall within the scope of such duties and not to be limited to the showing of some specific act within that range.” [Italics added.]

206.  Subsequently, McMullin J returned to a consideration of the ambit of the circumstances encompassed by section 4(2). Having said that it covered circumstances in which there was an express, promise or acknowledgment, or where that could be inferred, of a particular act or abstention favouring the person solicited in return for a particular advantage, or even in circumstances of less particularity, he said that it was also applicable :[160]

“ …where the circumstances are too neutral to disclose anything more than a solicitation by an official, or a gift or promise to an official, where a nexus of common interest exists between the parties, known to both and arising from any possible performance of an act within the scope of that official’s public duty.  This latter case is the “keeping sweet” situation at its most tacit and ambiguous and perhaps at its most typical.”

207.  In his consideration of the object of the provision, his Lordship said, “…it is not only actual and blatant corruption in office, but also the possibility and even the appearance of it, which is aimed at.” [161] Addressing the matter more generally, he said :[162]

“ What a public servant is entitled to in return for the performance of his duty is his official wage with whatever allowances and perquisites that may include - and nothing more. It is corrupt to accept a gift for carrying out one’s public duty even if one intends to carry it out properly; even if one has carried it out properly. The evil of so doing is that the other party, and any other person who may be aware of the transaction, will not know or will not believe in the purity of one’s intention to perform one’s duty properly whether gratified or not. By any such act the confidence which private citizens ought to be able to repose in the impartial performance of their duty by public officials is eroded. It is salutary to remember that the great Chancellor Bacon, expelled from office and confined - though briefly - to the Tower for taking bribes, maintained throughout that he had never permitted his conduct in office to be influenced by such gifts and yet he pleaded guilty to bribery and did not attempt to defend the practice although it is recorded that in several instances he actually had given judgment against persons from whom he had received such gifts. It may be asked: where, in this latter case is the “quid pro quo” ? It is true that the notion is attenuated but nevertheless I think that it can be said to persist if only in the form of a warm glow in the mind of the giver, or solicitee, occasioned by the feeling, justified or not, that he has won a friend in office.” [Italics added.]

208.  In his judgment, in answering the question posed, Leonard J said :[163]

“ To this first part of it namely “whether .. it is sufficient to prove .. that a public servant while acting in his capacity as a Crown servant solicited an advantage” I would answer that proof of that is not enough.  There must be (a) proof of a solicitation of an advantage by a public servant and (b) proof that that solicitation was on account of performance of an “act”; (c) proof that the “act” was to be performed in his capacity as a public servant; (d) while the “act” need not be “particularized” it must be “discernible” as within his public capacity as distinct from his private capacity; (e) he must know of these factors.  I would regard being or remaining favourably disposed to the person solicited as sufficient to amount to an “act” within the meaning of the section and it is for that reason that I say the act does not have to be particularised.

    To the second part of the question “whether there must be proof of a specific act in contemplation of one or other or both of the parties involved in return for which the advantage is sought” I would answer “No”.” [Italics added.]

209.  In The Queen v Paul Kiang[164]this Court refused the applicant leave to appeal against his conviction of five charges of accepting the advantage contrary to section 9(1)(b) of the Prevention of Bribery Ordinance.[165]  In the judgment of the Court, McDougall JA, as McDougall VP was then, noted that the trial judge had found in respect of the payments made to the applicant that there was no evidence of any particular favour, but that he had determined “…it is sufficient that the payments were merely general goodwill payments, ‘sweeteners’ as they were described by Silke VP in Tsou.”

210.  In The Queen v Tsou Shing Hing, the statement of McMullin J in his judgment in Attorney General v Chung Fat Ming to the effect that the offence contrary to the similarly worded section 4(2)(b) was made out by a payment in “a ‘keeping sweet’ situation where money is solicited or accepted as a general earnest of good relations” was cited with approval.[166]  For his part, McDougall JA endorsed that approval citing the judgment of McMullin J in extenso at pages 484-5.[167]

211.  It is readily apparent that the judgments of McMullin J and Leonard J were the immediate provenance of phrases used not only in the summing up but also in the Particulars of Offence in Count 5 itself.  In the latter case, it was averred that the defendants conspired together for Rafael Hui to misconduct himself in the course of or in relation to his public office as Chief Secretary “by being or remaining favourably disposed” to SHKP.  As noted earlier, in explaining that phrase to the jury in the context of Counts 2, 3 and 5 the judge said that, “the words…. reflect the prosecution allegation that the payments made to D1 were general goodwill payments.  In other words, they were sweeteners, payments made to sweeten a public official.” [168]

212.  In his submissions, Mr Perry readily acknowledged that Count 5 did not allege an offence against the Prevention of Bribery Ordinance.  Nevertheless, he submitted that the judgments in Chung Fat Ming provided an invaluable insight into abuses of office by corruption and the policy of the law.  He contended that it was the common law to which McMullin J had resorted in making references to the case of Chancellor Bacon who, notwithstanding that he had shown positive disfavour to persons from whom he had received payments, pleaded guilty to bribery.  He submitted that, for the same reasons as articulated in the construction of the statutory offence, the offence of misconduct in public office is made out where a public officer is favourably disposed in return for a payment.  He submitted that the application of the Chung Fat Ming analysis of favourable disposition was expressly approved, in the context of the offence of misconduct in public office, by Mason  NPJ’s statement in his judgment in Sin Kam Wah that, “acceptance of a ‘general sweetener’ by a public officer can, in appropriate circumstances, amount to misconduct in public office”.

213.  For her part, Ms Montgomery submitted that not only was Mason NPJ’s statement in Sin Kam Wah obiter but also that he was not approving the application of the analysis in Chung Fat Ming to the law of misconduct, otherwise he would have said that the acceptance of a general sweetener by a public officer would in all circumstances amount to misconduct in public office.  He did not do so.  He declined to accept the reasoning of the judge and the Court of Appeal that the offence was made out against the appellant on the basis of a general sweetener. For his part, Mr Winter invited the Court to note that the payment received in Sin Kam Wah was a payment to a public official in office.  Plainly, in the appropriate circumstances, that could amount to the offence of misconduct in public office.  The statement of Mason NPJ was no authority for the proposition that a payment made prior to appointment to public office could amount to misconduct, where no act of wilful and serious misconduct was performed or intended.

214.  Although the statement of Mason NPJ was clearly obiter dictum the context in which it was made is of importance. In declining to accept the basis on which the judge and the Court of Appeal had found the offences made out, namely that of payment of a general sweetener, his Lordship did so on the specific basis that misconduct on that basis, “was neither particularized nor opened to the trial judge”.  That the charges were not particularised on the basis of a general sweetener, namely favourable disposition arising from a payment is clear from the Particulars of Offence of Charge 1, set out earlier.  Notwithstanding that fact and the fact that the case was not opened by the prosecution on that basis, as Mason NPJ observed, nevertheless, “no objection appears to have been taken to this way of presenting the prosecution case”.  Not surprisingly, in those circumstances, in sustaining the convictions, his Lordship relied on the judge’s findings of wilful misconduct by the 1^st appellant in accepting sexual services from women over whom he knew the 2^nd appellant was exercising control, direction or influence.  That finding resonated directly with the Particulars of Offence.  So, it was in those circumstances that he came to make his statement that, “…acceptance of a ‘general sweetener’ by a public officer can, in appropriate circumstances, amount to misconduct in public office.”  I am satisfied that it has application in the circumstances the subject of Count 5.

215.  As noted earlier, the judge and the Court of Appeal in Sin Kam Wah respectively found and sustained the conviction of the 1^st appellant on the basis of his receipt of a ‘general sweetener’.  The judge articulated the nature of that finding with some particularity :[169]

“ It is the clearest of cases of ‘keeping sweet’ corruption where advantages are given to someone in authority, without asking for a quid pro quo at the time the advantage is given, but building a store of goodwill to provide a basis for future corrupt demands.”

216.  In the judgment of the Court of Appeal, Ma CJHC said :[170]

“ The inference here (which was never undermined) was that these forms of entertainment were provided to the 1^st Applicant as some sort of ‘sweetener’ to him. The 2nd applicant had interests in several establishments which indulged in activities which, to put at its lowest, were extremely dubious from a legal point of view.”

217.  It is to be noted that, as Mr Perry pointed out, although Chung Fat Ming was not referred to in the judgment of Mason NPJ, nevertheless it was on the List of Authorities provided to the Court.  I am satisfied that no particular significance, over and above the obvious fact that whether or not an offence is made out is to be judged by the particular individual circumstances of obtaining in each case, is to be attached to the caveat that Mason NPJ entered in qualifying his statement by the phrase “in the appropriate circumstances”.

218.  Mr Winter’s submission that the offence required proof that the conspirators had agreed and intended that in being or remaining favourably disposed to SHKP, in return for the payment of the monies, Rafael Hui would act, if necessary, so as wilfully to commit serious misconduct is at first blush an attractive submission.  It gives substance to the phrase “favourably disposed”.  What is the point or purpose of a payment to a person to be favourably disposed to the payer, or those associated with him, unless, if necessary and possible, he will act/will not act in their favour?

219.  In his oral submissions, Mr Perry contended that, whilst an agreement between the conspirators to that effect fell within the averment of Rafael Hui being or remaining favourably disposed to SHKP, it was not a requirement in proof of the offence:[171]

“ The prosecution case did not involve any novelty or extension of the offence because it was concerned with the core concept, abuse of power, bad faith and betrayal. In a general sweetener situation, proof of the offence does not depend upon proof of any actual favour or agreeing to act in any specified way because being or remaining favourably disposed is the act in wilful betrayal of the office…”

220.  Subsequently, he elaborated and explained the position taken by the prosecution:

“ LUNN VP: … Mr Perry, you say that in terms of a general sweetener, there is no need to prove a specific act was done nor is there a need to prove that it was agreed to do a specific act.

MR PERRY: My Lord, it’s sufficient for securing general -- that the public official was being or remaining favourably disposed towards the payer of the bribe.

LUNN VP: Does that mean that it was agreed that he would do or not do an act within his ambit of his powers to favour the person giving him the money?

MR PERRY: Not necessarily, my Lord, because what -- the favourable disposition is the destruction of the duty of loyalty which the official owes, and that is what all that the offence requires.

LUNN VP: No, not specific act...

MR PERRY: Or an agreement...

LUNN VP: ...an agreement to do any act.

MR PERRY: Yes.

LUNN VP: “If it comes along, if it’s possible, I will do it or not do it to favour you.” Is that what favourable disposition means?

MR PERRY: It includes that, my Lord, yes.

YEUNG VP: It includes that.

MR PERRY: Yes, yes, because this is the Li Defan point, Lord Hoffmann’s point, and it was the point I was making to the jury in this case: why would you pay the Chief Secretary millions of dollars? It was the point I was making in my closing speech about “They are not a charity. Why would you be doing this?” But the law recognises, because of its abhorrence of corruption, that the real vice in relation to bribes is the destruction of loyalty and it is the fact that the public official is beholden to two masters: one, the public service; two, his paymasters….

LUNN VP: But before you move on, let me press the point. You answered my question by saying that favourable disposition includes an agreement to do or not do an act within the powers to favour the person. But by that, do you mean that it’s not a requirement in proof of the offence?

MR PERRY: It’s not a requirement, my Lord.

MR PERRY: And, my Lord, because once you have the receipt of bribes and you have the public official who is favourably disposed to an interest to which he should not be favourably disposed because it is totally incompatible with his office, that is the abuse of office. That is the abuse. That is the core concept of the offence.

And we will see in the authorities that included within abuse of office is conduct which brings the office into disrepute.”  [Italics added.]

221.  Mr Perry submitted that although Rafael Hui received the payments prior to his appointment as Chief Secretary, the payments were received in relation to his office, so that whilst in office he would remain favourably disposed to SHKP.  Of that he said, “…being favourably disposed, that is the act of betrayal because…. every day Mr Hui was Chief Secretary, he was favourably disposed to Sun Hung Kai and (he) betrayed the loyalty of his office.”  He went on to say, “…it is not simply a mens rea requirement.  It is the act of betrayal.  It is the betrayal of your office.”[172]

222.  Of misconduct in public office by way of corruption, Mr Perry submitted :

“ … the difficulty with corruption is that very often, there isn’t any express or even implied demand at the time the keeping‑sweet payment is made. That is the nature of corruption, and that is why misconduct in office is designed to address the abuse that takes place by the acceptance of the keeping-sweet payment without any need to prove quid pro quo where the public official is favourably disposed to the giver of the payment because that is the classic abuse.”

223.  That was very much the position in Sin Kam Wah.  There was no express or even implied demand at the time that the sexual services of prostitutes were provided to the Senior Superintendent of Police.  But, those services were provided to him, “..as some sort of sweetener”.[173]  Further, “…to be kept sweet by a person like the 2^nd applicant was significant.”[174]  Finally, the advantages were given, “without asking for a quid pro quo…but building a store of goodwill to provide a basis for future corrupt demands”.[175]

224.  The concern of the law in such situations was expressed pithily in the judgment of McMullin J in Cheung Fat Ming :[176]

“ By any such act the confidence which private citizens ought to be able to repose in the impartial performance of their duty by public officials is eroded.”

225.  In his judgment in Li Defan v HKSAR Lord Hoffman NPJ, in the context of an offence of bribery of a bank manager by a customer, adverted to the difficulty to link the payment of money to a specific act performed/abstained from by the recipient :[177]

“ 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…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.”

226.  I am satisfied that, consonant with the concept of corruption by a payment as a ‘general sweetener’, it was not necessary for the prosecution to aver or prove that the conspirators agreed or intended that Rafael Hui would commit a specific act of serious misconduct or that he would commit a breach of one identifiable type of duty, such as would constitute serious misconduct, as contended for by Ms Montgomery.  The offence of conspiracy to commit misconduct in public office is made out on proof that the conspirators intended and agreed that in return for the payment the recipient would be and remain favourably disposed to the payer.  That is that he had been sweetened; his goodwill had been bought.  That is the abuse of the office.  Thereby, he was vulnerable to corrupt demands.  It was not necessary in proof of the offence that it be averred or proved that it was agreed and intended by the conspirators that Rafael Hui, if necessary, would act/not act in favour of SHKP.

The timing of the payments

227.  Given that Count 5 averred a conspiracy to commit misconduct in public office, the fact that the payments to Rafael Hui were made prior to his appointment to the office of Chief Secretary is irrelevant.  The crux of the offence was an agreement between the conspirators, which they intended to carry out, for Rafael Hui to wilfully misconduct himself in public office by being or remaining favourably disposed to SHKP in return for payment of $8.5 million.

The seriousness of the offence

228.  There is no dispute that the payments to a total of $8.5 million were made by Thomas Kwok, a director of a large public property company, to Rafael Hui at a time when it was known that he was about to be appointed to Chief Secretary of the Hong Kong HKSAR.  The factors relevant to a determination of whether or not the misconduct was serious so that it fell within the ambit of the offence are those identified in the judgment of Mason NPJ in Shum Kwok Sher to which reference was made earlier, namely :[178]

“ … the responsibilities of the office and the officeholder, the importance of the public objects which they serve and the nature and extent of the departure from those responsibilities.”

229.  In the context of misconduct in public office by way of corruption, in particular having regard to the responsibilities of the Chief Secretary and the public interest in the objectives of that office and officeholder, the statements of Chan ACJ and Pill LJ cited earlier are apposite, “The misconduct speaks for itself: the seriousness of the consequences of such corrupt, dishonest or illegal practices will be obvious.” [179]

Thomas Kwok : ground 2

230.  In her written submission Ms Montgomery addressed the complaints enumerated in the nine sub-paragraphs of ground 2, which she submitted were the judge’s misdirections and non-directions to the jury, under no fewer than 13 headings.  She identified more than 25 directions that she submitted the judge “should have”, “ought to have” or “it was necessary” to have given the jury, but failed to do so.  Many of those complaints are subsumed in the arguments advanced in support of ground 1, which have been addressed earlier.  Of the other matters, Ms Montgomery made no submissions to the judge before the summing up and no complaint during or after the summing up.  Now, I address the remaining and overlapping matters.

Bribes

231.  Objection was taken by Ms Montgomery to the judge’s suggestion to the jury in his summing up in respect of Count 5 that one of the central issue for them to decide in respect of the eight payments to Rafael Hui in June 2005 was :[180]

“ … whether they were bribes, as the prosecution allege, or whether they may have had a legitimate purpose as being the balance of the consultancy arrangement, as the defence suggest.” [Italics added.]

232.  Ms Montgomery complained that in those circumstances the judge had failed to direct the jury that, insofar as events of misconduct in public office was alleged to have been committed by the acceptance of money, the jury had to be satisfied of proof of the relevant ingredients of the Prevention of Bribery Ordinance as articulated in his directions in respect of Count 7.

233.  Also, she objected that the prosecution had been allowed to open its case on the basis that the payments were bribes.  In his opening, Mr Perry said :[181]

“ …the prosecution case is that the payments made to the 1^st defendant were sweeteners, bribes, and he was being paid to be the inside man, SHKP’s inside man, in government.”

234.  Further, she complained that Mr Perry had told the jury that, it was merely for technical reasons that the Prevention of Bribery Ordinance did not apply.  In fact, Mr Perry said, in the context of addressing Count 7 :[182]

“ The distinction between this count and count 5, which is “Conspiracy to commit misconduct in public office”, is that in count 5, if you’ll remember, the 1st defendant was not yet a public official.  So it was a conspiracy to commit misconduct in the future.  And for technical reasons, because he wasn’t a public official, the Bribery Ordinance wouldn’t apply.  But by the time of 2007, he was a member of ExCo.  So the Bribery Ordinance does apply.”

235.  In giving the jury directions in respect of Counts 2, 3 and 5, the judge said :[183]

“ To put it simply, each of these three counts, 2, 3 and 5, allege a conspiracy between the conspirators who are named, for D1 to deliberately and seriously misconduct himself as Chief Secretary, without reasonable excuse or justification, by being or remaining favourably disposed towards SHKP’s interests in return for bribes.” [Italics added.]

236.  Then, the judge said of the Particulars of Offence of those counts :[184]

“ Although the particulars of each count do not mention the word, the prosecution say that these payments were, in effect, bribes.”

237.  Next, in the context of his directions in respect of Count 2, the judge said :

“ …you will have to go through the five elements of the offence of misconduct in public office I earlier gave you. And that will engage you in an examination of the reason for the payment which the prosecution say is a bribe and the defence say is not a bribe or has not been proved to be a bribe.”

238.  Finally, in his short summary of the closing speeches, the judge reminded the jury that Mr Perry had suggested in his closing speech :[185]

“ Then there is the theme of secrecy, concealment and disguise, which Mr Perry submits are the hallmarks or badges of bribery. In particular, of course, he stressed the complex and intricate way in which the payments were made; in similar ways, using the same companies and parties in 2005 as in 2007/2008.”

239.  In his closing speech, Mr Perry said :[186]

“ It’s for you to decide, for example, whether the payments made to Rafael Hui in 2005 and 2007 were bribes, as the prosecution say, paid in return for his favourable disposition towards the other defendants and SHKP. That’s an issue you have to decide. Or, you have to decide whether they were made innocently, as the defendants claim.”

240.  Subsequently, Mr Perry asserted specifically that the payments made to Rafael Hui, which were the subject of Count 5, were “bribes”.[187]

241.  Although various counsel acting for other defendants raised with the judge issues arising out of Mr Perry’s closing speech, Ms Montgomery did not raise any objection, let alone the objection now canvassed with this Court.[188]

242.  Indeed, in her own closing speech Ms Montgomery also made repeated references to the issue of whether or not the payments made by Thomas Kwok that were the subject of Count 5 were bribes or legitimate payments :[189]

“ He told you that it was him …. that paid the 10.8 million in June 2005. And not just that. He says that he paid 3 million to Rafael Hui in October 2003, and 3 million to Rafael Hui in November 2004. And he’s explained that those were not bribes. They are the sums he had agreed to pay under a verbal agreement, an agreement that he had made with Rafael Hui in the autumn of 2003 in relation to the consultancy. And he paid the money because Rafael Hui worked for that money.” [Italics added.]

243.  Although the judge’s summing up extended over six days and although, at the very outset, he had described the central issue arising in respect of Count 5 as being whether or not the jury accepted payments were bribes or that they may have had a legitimate purpose no objection was taken by Ms Montgomery.

244.   I am satisfied that the jury would have understood that it was not the prosecution case that the payment the subject of Count 5 was an advantage within the provisions of the Prevention of Bribery Ordinance.  It was not.  No one suggested it was.  The jury had been told in the opening speech why the payment was not, namely because Rafael Hui was not a public officer at the time of the receipt of payment.  They would have understood that the use of the term ‘bribe’, by both Mr Perry and the judge, merely reflected the prosecution case that the payment was a ‘sweetener’ payment of which, in the context of the Particulars stipulated in Count 5, was illegal, in contrast to the defence case that payment was legitimate.  This ground of appeal has no merit ought not to have been advanced.

Specific acts/non-acts of misconduct by Rafael Hui

245.  Although the judge directed the jury, correctly as I have determined, that “…the law does not require that any particular favour be specifically identified”, he did not direct them that the absence of proof of specific acts/non-acts of misconduct by Rafael Hui was irrelevant.  Indeed, he reminded the jury that Ms Montgomery submitted that not only was there no evidence of any favours or information being given by Rafael Hui to SHKP but also there was evidence that in fact he had acted against their interests, so that “…she argues that if you cannot be sure that D1 did anything to benefit SHKP, you cannot be sure that he was bribed.” [190]  On the judge’s directions, consideration of the related evidence was relevant to, but not determining of, the issue.

246.  Earlier in his summing up the judge had reminded the jury of the evidence of witnesses of the absence of any untoward assistance to SHKP in their dealings with government in major projects when Rafael Hui was Chief Secretary.  He said that in relation to the WKCD project, Mr Mike Wong Chik Wing, an executive director and a member of the executive committee of SHKP, had been taken through related correspondence :[191]

“ …to demonstrate that at no stage during correspondence or discussions with government in 2005 and 2006 did SHKP receive any inside information from D1 or anyone else. Nor, so far as he was aware, was D1 involved in any of those discussions.”

247.  Similarly, the judge adverted to the evidence of Mr Arsene Yiu Kai Cheuk, then an assistant secretary in the Housing, Planning and Works Bureau of new parameters for the WKCD project introduced following a steering committee meeting of 21 July 2005, of which Rafael Hui was Chairman.  Having reminded the jury that it was his evidence that “…the new parameters were very strict” the judge went on to remind the jury :[192]

“ When asked whether it was D1’s idea to introduce the new parameters, which he accepted did not benefit the developers - namely the setting of the plot ratio at 1.81 and the 20 per cent limit on residential accommodation, the 50 per cent carve-out proposal, and the 30 billion upfront trust payment - the witness said it was a collective decision by the government. However, since the Chief Secretary was chairman of the steering committee, it could be said that he took the lead in forming its opinion.”

248.  Also, the judge referred to the evidence of Mr Spencer Lu, the SHKP project manager for the Ma Wa project, of the circumstances in which SHKP had been forced to suspend work on the construction of Ma Wan Park.  The judge said that :[193]

“ The witness and the company were shocked when the Lands Department, by letter of 27 July 2005, which is at D2’s bundle, page 1007, said that they did not agree to the plan approved by the Town Planning Board in March 2003.

       On 6 September 2005, the construction of Ma Wan Park was suspended because SHKP was worried that if the work continued, it would become a waste of money.  SHKP further wrote to the government in September for a reply to their August letter, but they still did not get a reply.”

249.  The judge went on to remind the jury of the circumstances in which the work was resumed and of the loss to SHKP :[194]

“ The government finally wrote to SHKP on 6 December 2005, that letter is at D2’s bundle, page 1025, to say that the 2003 plan, as approved by the Town Planning Board, was acceptable. The Director of Lands acknowledged the fact that the construction had been suspended, but insisted that no claim for construction costs thrown away would be borne by the government.

 The witness explained that SHKP faced two risks when they decided to suspend construction of the park, namely the inability to complete the construction on time, and money wasted by the suspension.  The actual loss occasioned by the suspension was less than originally forecast, but still amounted to $1.34 million.”

Seriousness of misconduct/reasonable excuse or justification

250.  As noted earlier the judge had given the jury repeated directions as to the five ingredients in the offence of misconduct in public office.  Of the requirement that misconduct “is serious, not trivial” he said repeatedly, and in the context of Count 5, that was to be determined :

“ …having regard to the responsibilities of the office and the officeholder, the importance of the public objects which they serve, and the nature and extent of the departure from those responsibilities.”

251.  Having said that he had already explained the five elements earlier, the judge said, “They are the same legal ingredients or elements, whether the offence is a single substantive offence…or..an allegation of conspiracy.”  In explaining the element of seriousness, in the context of Count 6, the judge had identified the issue as being whether Rafael Hui, as Chief Secretary, had :[195]

“ placed himself in a serious conflict of interest where his duties and responsibilities as a public officer were hopelessly compromised”.

252.  Ms Montgomery submitted that the judge had failed to give the jury assistance “in determining how seriousness was to be assessed and that the threshold of seriousness was a high one.”  Further, she complained that the judge had failed to give the jury adequate directions in respect of the issue of whether or not Rafael Hui had a reasonable excuse for his conduct, even as alleged by the prosecution.

253.  I am satisfied that there is considerable force in Mr Perry’s reply to the argument in respect of the issue of the seriousness of the misconduct.  The context of the allegation was of importance.  First, in having regard to the specific matters to which their attention was directed the jury was dealing with the Chief Secretary and the provenance of the very substantial impugned payments was a director of a substantial publicly listed property developer.  The responsibilities of the office, his responsibilities and the importance of the public objectives were obvious.  Secondly, the matter put at issue in the defence case was the legitimacy or illegitimacy of the payments, not the degree of harm to the public interest.  That consideration was also highly relevant to the issue of reasonable excuse in Rafael Hui.  In that context, using the Particulars of Offence stipulated in Count 2 as an example applicable to Counts 3 and 5, the judge noted that it was alleged that the objective of the conspiracy, was for Rafael Hui:

“ .. while the holder of a public office, namely Chief Secretary, to wilfully misconduct himself in the course of or in relation to that public office without reasonable excuse or justification, by being more remaining favourably disposed to SHKP.. in return for a payment of $...”

254.  Having reminded the jury that they were required to be satisfied that a particular defendant was a party to the conspiracy alleged, the judge said:

“ and in doing so, you will have to go through the five elements of the offence of misconduct in public office I earlier gave you. And that will engage you in an examination of the reasons for the payment which the prosecution says is a bribe and which the defence says is not a bribe or has not been proved to be a bribe.”

255.  There is no merit in these grounds of appeal.

The relevance of the character direction in respect of issues arising between Rafael Hui and Thomas Kwok

256.  Ms Montgomery submitted that the judge ought to have directed the jury that they ought to be cautious in accepting the evidence of Rafael Hui that Thomas Kwok suggested use of Francis Kwan in making payment to Rafael Hui in June 2005.  Rafael Hui had admitted acts of tax fraud in relation to money that he had received from SHKP/Thomas Kwok in 2003/4 and in respect of the payments made in June 2005.  Ms Montgomery’s complaint is not one that she made to the judge before, during or after the summing up.  It was not a suggestion thatshemadetothejuryinherclosingspeech.  Insubmissionsprior to the commencement of speeches, Mr Perry suggested, and the judge agreed, that a full character direction be given for Rafael Hui, Thomas Kwok, Thomas Chan and Francis Kwan.[196]

257.  In directing the jury in respect of the character of the defendants, the judge said :[197]

“ You have heard that each defendant is a man of good character, not just in the sense that he has no previous convictions recorded against him, but that each has demonstrated in a positive way, and in different ways, that they are upright, hardworking members of the community.”

258.  Then, having described the evidence relevant to each of the defendants, which gave rise to the direction, the judge gave the jury the standard Specimen Direction[198] in respect of credibility and propensity.  Rafael Hui and Thomas Kwok had given evidence.  The judge went on to direct the jury that the weight that they afforded that consideration for each defendant was a matter for them, having regard to “…everything you have heard about the defendant”.  Nevertheless, he concluded by suggesting to the jury, “…you may think each is entitled to ask you to give considerable weight to his good character when deciding whether the prosecution has satisfied you of its respective guilt”.[199]

259.  Subsequently, the judge did remind the jury of the misconduct admitted by Rafael Hui in relation to the payments he had received from SHKP/Thomas Kwok.  Of the payments made to Rafael Hui in April and June 2005, in his evidence in chief Rafael Hui had “accepted he had decided to conceal the $5 million and $10.8 million from the government.” [200]  Further, in cross-examination by Mr Perry, Rafael Hui, “…agreed that he had lied to tax authorities before becoming Chief Secretary, and he also accepted that he did not tell the whole truth in his press conference about his relationship with SHKP and the Kwok Bros.” [201]  Of the latter event, in which he had made a statement that he had not received as much $10 million a year from SHKP, the judge said that Rafael Hui “accepted that this statement had been untrue.” [202]

260.  Clearly, the evidence concerning Rafael Hui to which the judge referred fell to be regarded as coming within the judge’s direction to the jury to have regard to everything they had heard about a defendant in determining the weight to be afforded to the good character of Rafael Hui in assessing his credibility.  In all the circumstances, no further direction was required.

The scheme of the summing up

261.  It is obvious, and I so acknowledge, that the task of summing up to the jury at the end of a 130 day trial on an indictment containing eight counts against five defendants was a very daunting task for the judge.  In the event, his summing up took six days.  In those circumstances, Mr Perry is correct to say that the judge is to be afforded a wide discretion as to how he went about that task.

262.  At the outset, the judge identified the central issues arising in respect of Count 5 as being whether the payments had a legitimate purpose or were bribes.[203]  He was correct to do so.  Having addressed the central issues arising in the other counts on the indictment, the judge proceeded to give lengthy legal directions.  Then, he set about summarising the “prominent features of the evidence” [204] adduced at trial in both the prosecution and the defence cases.  He did so in the chronological sequence in which it had been led.  In doing so, the story behind the case emerged in a readily understandable fashion.  No doubt, that was not pure serendipity, but reflected a conscious determination by the prosecution to lead its evidence through a specific sequence of witnesses addressing particular chapters of evidence, so that the story unfolded in an understandable manner.  On occasions, the judge interjected an additional direction of law.  So, for example he gave the jury the standard direction in respect of out-of-court statements, inconsistent with evidence, when that arose for the first time in the context of a particular witness.[205]

263.  As noted earlier, in dealing with the cross-examination of prosecution witnesses, the judge reminded the jury of the nub of the points made in favour of the individual defendant or the defence generally.  Similarly, he identified the points made and the issues taken in cross-examination of defendants by fellow defendants.  He reminded the jury of Rafael Hui’s evidence in respect of the June 2005 payments, that at a meeting Thomas Kwok had told him that, because of Kwok family problems, payment would be made by a complex and indirect route in respect of which he would ask Thomas Chan to make arrangements.  Further, that Thomas Kwok suggested that Rafael Hui arrange a friend to contact Thomas Chan in that regard[206]. The judge said of the related cross-examination of Rafael Hui :[207]

“ It was further put to Mr Hui that the conversation regarding the payment of the final amount through an indirect and complex route did not take place at all, but the witness disagreed. The witness also disputed that he had only come to know of Thomas Chan’s involvement when he later called to confirm the amount. He insisted that Thomas Kwok had initially named Thomas Chan when they had the conversation on how the final payment was to be settled.”

264.  Subsequently, the judge reminded the jury at considerable length of the evidence on Thomas Kwok[208], concluding his case by reference to his two character witnesses.  In doing so, he said that Thomas Kwok’s evidence had been that Rafael Hui had been offered remuneration of $15 million per year, quarters in Leighton Hill and an office to provide his services to SHKP.[209]  He did not know why a remuneration of $4.5 million was stipulated in the written consultancy agreement dated March 2004.[210] Nevertheless, Thomas Kwok was liable to pay the balance of the remuneration due to Rafael Hui, which payments he caused to be made to Rafael Hui in June 2005.  Of Thomas Kwok’s evidence in that respect, the judge said :[211]

“ He next spoke to D1 about their verbal agreement at the end of May. D1 impressed upon him the need for the payment to be made by the end of June. By that stage, $10 million was owing. The witness did not agree that the two men had sat down - that is he and Rafael Hui - had sat down and made a calculation of $10.8 million owing to D1. He said he would not have done it like that; he would simply have trusted Rafael Hui with the figure. Nor did he agree that he had told Rafael Hui that there would have to be an intricate and complex payment, or that he had suggested to D1 that he should use a third party.”

265.  Of Thomas Kwok’s evidence in respect of the arrangements made for payment, the judge said :[212]

“ He asked D4 to call Rafael Hui and confirm the exact amount. He asked if D4 could settle the sum directly with D1, and he would reimburse him by way of two or three payments, since he did not want the accounts staff to see that such a large payment was being made to Thomas Chan. He expected that Thomas Chan would simply issue a cheque to Rafael Hui for the full amount, which Thomas Chan later informed him was $10.8 million. He did not know about Villalta or Francis Kwan, whom he had only met on a couple of occasions in the 1990s - I should say, about their involvement in the payments.”

266.  Finally, at the conclusion of his summing up the judge reminded the jury of the different arguments advanced in their respective speeches by the prosecution and all of the defendants.  He said that Ms Montgomery had submitted that the evidence was, “..consistent with a verbal agreement being made between Thomas Kwok and Rafael Hui, which ended up being worth $30 million over a two-year period.”  Secondly, that the payments in April and June 2005 were part of the $30 million.  Those payments were no different from the two earlier payments of $3 million and the payment of $5 million in April 2005.  Thomas Kwok could not have known that Rafael Hui would not declare the payment as taxable.  Thirdly, there was, “…no evidence at all of any favours or information being given by D1 to the Kwok brothers or SHKP either as Chief Secretary or as a non-official member of ExCo.”  It was suggested that, in fact, he acted against their interests. So, the jury could not be sure, “that he was bribed.” [213]

267.  Of the absence of evidence of any favours or information given by Rafael Hui to SHKP whilst in the service of government, as noted earlier, the judge reminded the jury of the evidence to that effect, not only of Rafael Hui and Thomas Kwok[214] but also of the prosecution witnesses.[215]  In fact, the judge dealt at some length with the evidence of Thomas Kwok, which spoke to the fact that Rafael Hui had not shown favour to SHKP in relation to both the Ma Wan and WKCD projects.[216]

Conclusion

268.  With respect, there is no substance in any of the above grounds or in any of the other miscellaneous submissions advanced by Ms Montgomery in support of ground 2.

Rafael Hui : ground 1

The judge’s ruling admitting into evidence of the out-of-court statement

269.  At trial, the judge conducted a voir dire to determine the admissibility of the signed statement of Rafael Hui dated 13 January 2010.  He received evidence over a period of four days from two ICAC officers who were present at an interview of Rafael Hui on 22 December 2009, from which had been prepared the statement signed by Rafael Hui on 13 January 2010, at which they were also present.  No evidence was called in the defence case.  There was no dispute that the interview of 22 December 2009 had been pre-arranged with Rafael Hui, at the request of Mr Ricky Yu in a telephone conversation, on 9 December 2009.

270.  At the conclusion of a lengthy ruling in which he considered the evidence in considerable detail, the judge determined :[217]

“ I find beyond reasonable doubt that the witness statement of D1 dated 13 January 2010 was a voluntary statement. Furthermore, I decline to exercise my discretion to exclude it.”

271.  At the outset of his ruling, the judge identified the objection taken to the admissibility of the statement, namely :[218]

“ …whether D1 ought to have been cautioned before his interview with ICAC officers on 22 December 2009, which interview elicited the responses later included in the witness statement signed by D1 on 13 January 2010.”

272.  The judge noted that it was submitted on behalf of Rafael Hui that :

“ …there was a flagrant and deliberate failure on the part of ICAC to caution his client when the ICAC had long regarded, and had sufficient reason to regard D1 as a suspect.”

273.  In his review of the background leading to the ICAC officers’ interview of Rafael Hui, the judge noted that ICAC enquiries had been initiated as a result of an anonymous complaint, filed through a firm of solicitors on 18 July 2008.  Of the complaint, the judge said :[219]

“ …it was alleged inter alia that D1 had occupied rent-free, at a time when he was both managing director of the Mandatory Provident Fund Schemes Authority (“MPFA”) and later a non-official member of the Executive Council, two identified adjoining units at The Leighton Hill in Happy Valley which belonged to two companies associated with Sun Hung Kai Properties Ltd (“SHK”). It was alleged that not only had D1 accepted an advantage as a public servant but he had breached various provisions of the Code of Conduct of the MPFA including the acceptance of advantages and the avoidance of conflicts of interest.”

274.  As the judge noted, there followed a second letter of complaint filed by a different firm of solicitors on 10 October 2008. Of the resulting enquiries, the judge said :[220]

“ …by the time of the interview with D1 in December 2009, various staff members of SHK and MPFA had made witness statements which had established certain matters supporting the essential framework of the complaint. These included the fact that, in early 2003, the administrative committee of MPFA, of which D1 was a member, was considering various options for the leasing of premises; that D1 had voted for a proposal to renew the lease for MFPA’s premises at One IFC; that One IFC was partly owned by SHK; that D1 had begun occupying the units at the Leighton Hill, which were connected with SHK, from March 2003 onwards; and that D1 did not pay any rent for the units from April 2003 to June 2005.”

275.  The judge noted that, in consequence, Mr Choy submitted that, given that the ICAC now had signed witness statements :

“ confirming D1’s rent-free occupation of domestic premises linked to SHK at a time when he was a public official having dealings with SHK, there was in their possession…sufficient evidence which would have afforded reasonable grounds for suspecting that he had committed an offence (or offences) so as to warrant his cautioning under Rule II of the rules and directions for the Questioning of Suspects and the Taking of Statements.”

276.  In addition, as the judge noted, Mr Choy relied on the undisputed evidence that officers of ICAC had repeatedly applied for search warrants on the basis that there was, “reasonable cause to believe that offences under section 4 of the Prevention of Bribery Ordinance might have been committed by (D1) and unidentified member(s) of SHK.” [221]  In fact, two Informations, affirmed by ICAC Officer Mr Lam Cheung Ching, dated 18 March and 13 August 2009, filed in the Magistracy in support of applications for the issue of a search warrant(s) were placed before the judge.[222]

277.  However, the judge went on to note that, viewing the matter through the eyes of the ICAC officers at that time, matters were “rather more complex and less clear cut.”  He observed :[223]

“ The Service Agreement signed between D1 on behalf of Top Faith Enterprises Limited (“Top Faith”) and D2 on behalf of Sun Hung Kai Real Estate Agency Limited on 1 March 2004…. made no mention of rental payments in respect of the two Leighton Hill units or any other quarters being provided as part of the agreement. However, on 14 July 2009, Messrs Mayer Brown JSM (“JSM”) forwarded to the ICAC a copy of a letter of the same date from JSM to the Secretary for Justice attaching two documents:

(i) a signed statement of Madam Kwong Siu-hing, the Chairman of SHK, who has also been described as the matriarch of the Kwok family, dated 11 July 2009, and

(ii) a Joint Opinion from two Senior Counsel and a junior counsel dated 13 July 2009.

One of the matters which these documents essentially sought to explain was that the management of SHK were at first unable to agree on the question of whether the two Leighton Hill units should be provided to D1 as part of the arrangements under the consultancy agreement. It was not until 2004 that the matter was finally resolved. It was asserted that while Top Faith was under a legal liability to pay the rent for both units as from 2003, it was eventually resolved in 2004 to waive rent, by which time D1 was no longer a “public servant”. Accordingly, no offence was committed.”

278.  The JSM letter addressed the circumstances in which Rafael Hui had occupied the two Leighton Hill flats and noted that, on his retirement from the MPF Authority in 2003, Rafael Hui was, “free to take up alternative employment or consultancy work after leaving his public service post in the authority and did not require permission…” [224]  Then, it was asserted that it was in those circumstances that :

“ …negotiations were commenced between the Company and the Family Group on the one hand and Mr Hui on the other with a view…to appointing the latter as a consultant to the Company and the Family Group following his departure from the Authority. The Company and the Family Group were prepared to engage Mr Hui as a consultant on competitive terms including the possibility of the provision of residential accommodation.”

279.  Having noted that shortly before his departure from the Authority, through his company Top Quality Enterprises Limited, Rafael Hui had entered into two tenancy agreements in respect of two flats at Leighton Hill owned by a company within the Family Group and a company which was a private subsidiary of the company, the letter went on to assert :[225]

“ Prior to Mr Hui’s departure from the Authority, there was no agreement, undertaking or promise that the payment of the rental under the two Tenancy Agreements would be waived by the Family Group or the Company. On the contrary, the terms of each Tenancy Agreement are clear that Top Quality lay under a legal liability to pay the same.

Negotiations over the terms of Mr Hui’s proposed consultancy continued unresolved until long after Mr Hui left the Authority and were not concluded till 2004.  The terms of Mr Hui’s consultancy as eventually settled included the provision of the Two Apartments as his quarters.  A question which had hitherto long remained unresolved was whether the rent payable by Top Quality under the Tenancy Agreement should be waived.”

280.  The letter went on to address the resolution of that outstanding issue :[226]

“ It was only in 2004 that this matter was resolved among the management when it was agreed that:-

(1) the rental for Flat 20A, being the apartment owned by the Family Group, would be waived;

(2) the rental for Flat 20B, being the apartment owned by the Company, would be paid by the Family Group.”

281.  Having noted that ICAC had explained that, “…it is investigating into an allegation of corruption concerning leasing matters of the Two Apartments in which offences under sections 4 and 8 of the Prevention of Bribery Ordinance …may have been committed”, the letter went on to assert :[227]

“ From the legal research and analysis conducted by Leading Counsel as borne out in Leading Counsel’s opinion above referred to, we take the view that the facts and materials reveal the commission of no criminal offence, let alone any offence under either sections 4 or 8 of the Ordinance.”

282.  The 28 page Joint Opinion of leading Counsel, Mr Daniel Fung SC and Mr Johnny Mok SC, attached to JSM letter, had indeed concluded :[228]

“ By reason of the matters aforesaid, none of the elements of an offence under sections 4(1) or 8 of the Ordinance or any other provision of the statue have been made out on the evidence. In addition, there clearly exists a reasonable excuse for the conduct of the Company and the Family Group for the reasons above set out.”

283.  For her part, in her brief witness statement, Madam Kwong,the matriarch of the Kwok family, asserted :[229]

“ Later I learnt that the negotiation with Mr Hui was successful. After leaving the MPF authority, Mr Hui became our consultant and he used two flats in Leighton Hill, which were owned by us, as his quarters. Before that, we did not have any rent free agreements with Mr Hui.”

284.  The judge noted that Thomas Kwok had provided ICAC with a written statement on 29 October 2009 [230], of which the judge said that he confirmed :[231]

“ …that the two Leighton Hill units were provided to D1 as “consultant’s quarters” but that they were “totally unrelated to the IFC lease renewal which was a completely separate matter.” ”

285.  In his statement, Thomas Kwok stated that :

“ 6. Mr Hui did become the consultant of both SHKP and the King Yip group after he left the MPFSA and the two Leighton Hill flats were accordingly provided to him as consultant’s quarters.

…

10. The two flats were provided to Mr Hui as consultant’s quarters and were totally unrelated to the IFC lease renewal which was a completely separate matter.”

286.  As the judge noted, Mr Ricky Yu said of the assertion in the JSM letter of 14 July 2008 of the link between Rafael Hui’s occupation of the two Leighton Hill flats and his employment as a consultant that, “it was not until D2’s statement was provided that confirmation of the connection was obtained from one of the actual signatories to the agreement.” [232]  Of the reasons advanced in their testimony by Mr Ricky Yu and by Ms Hazel Law, for not cautioning Rafael Hui before interviewing him on 22 December 2009 and inviting him to sign the resulting witness statement on 13 January 2010, the judge noted that Mr Ricky Yu explained :[233]

“ … at that time, we were dealing with a very serious allegation. The persons being complained of were the ex-Chief Secretary, the number 2 person in the Hong Kong SAR, and also Sun Hung Kai, a major developer in Hong Kong. We had received various representations, and we had also interviewed the Kwok Brothers, who had made representation on the matter. As a fair and just law enforcement agent, I thought we ought to offer (D1) an opportunity to give comments or representations on the investigation.”

287.  The judge went on to say that it was “clear that both officers… were acutely conscious of the fact that they were going to be asking questions of an extremely prominent citizen.”  Further, both of them said that they believed/were inclined to believe what Rafael Hui had said in the interview.  Ms Hazel Law said that, they “were not anxious to check the information that he provided to us.”  The judge said of their reaction after the interview that “..it is more consistent with the state of mind falling short of the requirement stipulated in Rule II prior to the interview.” [234]  [Italics added.]

288.  Of the array of material available to the officers as a result of their investigations and enquiries, the judge said :[235]

“ ICAC had received an anonymous complaint, the essential framework of which had been confirmed by statements from both MPFA and SHK. However, they also had in their possession a copy of a consultancy agreement, which on the face of it showed a bona fide business relationship as from March 2004 and which was being strenuously contended, as from July 2009, by SHK, its legal advisers, two Senior Counsel and the equally prominent signatory to the agreement itself, namely D2, to be a perfectly proper business arrangement unconnected with D1’s position as a public officer. At the same time, it was also being asserted that the decision to waive any rental payments was related to the consultancy arrangement but was made later when D1 was no longer a public officer.”

289.  In the result, the judge determined :[236]

“ I find as a fact that at the time Ricky Yu and Hazel Law decided to interview D1 and up to the time the resulting statement was signed, they did not themselves believe that the evidence (and information) in their possession was sufficient to afford reasonable grounds for suspecting that he had committed an offence, so as to warrant a caution being administered under Rule II.” [Italics added.]

290.  Notwithstanding that finding, the judge went on to determine that if, on an objective basis, the administration of a caution was required then, notwithstanding a genuinely held subjective belief to the contrary, an officer was required to administer the caution.[237]  Applying an objective standard to the issue in question, the judge determined :[238]

“ Furthermore, I do not consider for the reasons I have given that such evidence (and information) as they had in their possession during the same time frame, including the evidence (and information) which had been supplied by SHK, various lawyers and D2 himself in relation to the consultancy agreement, afforded reasonable grounds on an objective basis for suspecting that D1 had committed an offence so as to warrant a caution being administered. Accordingly, I do not consider that D1 should have been cautioned either at the commencement of the interview on 22 December 2009, or up to his signing the statement on 13 January 2010.”

291.  Lest he be wrong in that determination, the judge said that he went on to consider the issue of the exercise of his discretion :[239]

“ If I am wrong on the question of whether all of the evidence (and information) in ICAC possession (both in support of and against the assertions contained in the anonymous complaint) was sufficient to afford reasonable grounds to suspect D1 of committing an offence when objectively viewed, and that the requirement for a caution had been triggered, whatever Ricky Yu and Hazel Law subjectively thought, I would not have exercised my discretion to exclude the evidence by virtue of the breach of Rule II.”

292.  The judge was correct to go on to observe that, on the one hand, whilst a failure to caution an interviewee who ought to have been cautioned is a “potent factor” in favour of exclusion of the interview, on the other hand, “exclusion is not invariable or automatic.” [240]  In that context, he went on to have regard to the issue of whether the statement was a full and accurate record of the interview of 22 December 2009, in particular Rafael Hui’s role in amending the statement.  The judge noted that a draft of the statement had been provided to Rafael Hui and that he had responded with proposed amendments, which had been adopted in the production of the version of the statement that he signed on 13 January 2010.  Also, the judge noted :[241]

“ When he came up to ICAC offices to sign the revised statement on 13 January, he made yet further amendments before appending his signature to the document.”

293.  In the result, the judge determined :

“ I am therefore entirely satisfied that there is an accurate and reliable record of the interview, incorporating whatever amendments D1 wished to make, before he confirmed that record with his signature three weeks later.”

294.  Subsequently, returning to the same issue, he said :[242]

“ I am quite sure that the record of interview which D1 amended and eventually signed on 13 January 2010 accurately reflected what he wanted to say. He had three weeks to think about what he had said and yet was still prepared to make further amendments to this statement on the day he signed the statement.”

295.  In the event, the judge concluded :[243]

“ I find beyond reasonable doubt that the witness statement ofD1dated13January2010wasavoluntary statement. Furthermore, I decline to exercise my discretion to exclude it.”

296.  In his submissions, Mr Choy took issue with the distinction that the judge drew between the state of mind contemplated in respect of an application for a search warrant and that relevant to the requirement to administer a caution to an interviewee.  Having adverted to section 17(1) of the Prevention of Bribery Ordinance, which makes provision for an application for the issue of a warrant, and to Rule II on the other hand, which states “…as soon as (an investigating officer) has evidence which would afford reasonable grounds for suspecting that a person has committed an offence” he shall caution the person before putting any questions or further questions relating to the offence, the judge said :[244]

“ It seems to me that the state of mind contemplated by the application for a search warrant is less than the state of mind required for the administering of a caution. They are not perhaps far apart: but they are nevertheless different.”

297.  The judge went on to observe :[245]

“ I note interestingly that in both applications for search warrants which have been placed before me (Exh’s VDD1 and VDD2), the affirming officer declared:

“There is reasonable cause to believe that offences under Section 4 of the POBO might have been committed by (D1) and unidentified member(s) of SHK.” (emphasis supplied)

He did not affirm that he had evidence which would afford reasonable grounds for suspecting that D1 and others had committed an offence, even accepting one should give a liberal interpretation to the word “evidence”.”

298.  Such significance as might have been attached to the judge’s findings as to the state of mind required in the two separate circumstances was rendered nugatory by his subsequent determination :[246]

“ But even if there were no appreciable or valid distinction between the state of mind which applies for a search warrant and the state of mind at which the administering of a caution is triggered, the fact is that the applications for the search warrants came before D2’s statement of 28 October 2009 was received. That statement, in conjunction with the earlier representations from SHK, Senior Counsel and JSM clearly affected the way Ricky Yu, in particular, looked at the allegation, even though the initial suspicion may have subsisted.” [Italics added.]

Conclusion

299.  With respect to the judge, on a consideration of all the evidence advanced before the judge, he was entitled to determine that the statement was voluntarily made by Rafael Hui and that there were no circumstances in which it was appropriate to exercise his discretion to exclude the evidence.  There is no merit in this ground of appeal.

Ground 2: the prosecution reliance on unfounded/unproved allegations of improper contact by Rafael Hui with other defendants

(i) collusion between Rafael Hui and Francis Kwan

300.  Mr Choy pointed to the prosecution reliance in its closing speech on the fact that the document created by Francis Kwan, known as the Part A and B document, which described payments made to Rafael Hui in June 2005 omitted to deal with a payment of $150,000 made by him to Rafael Hui in cash on 28 June 2005.  There was no dispute that the document was created after Rafael Hui had been interviewed under caution by ICAC on1 February 2012, in which interview he had been questioned about all the other payments made by Francis Kwan to Rafael Hui in June 2005, save for the $150,000 payment.  At that time, the ICAC were unaware of the payment of $150,000.

301.  In his closing speech, Mr Perry said :[247]

“ And we know that one of the payments that was made to Rafael Hui in 2005 was a cash payment of $150,000. And if you look at the total amount under the part A, it’s not 8.5 million; it’s 8.350. So it doesn’t include the cash.

Now, the prosecution invite for your consideration this point. It is very unlikely that Francis Kwan would have forgotten, as he’d walked from his bank in Electric Road in North Point, to Rafael Hui’s Standard Chartered Bank on the King’s Road in North Point, that he had in his pocket two cashier’s orders for $400,000 and $250,000, and $150,000 in cash. So in his pocket, he had an amount equivalent to $800,000, as he walked through North Point. Not something you’re likely to forget. How many people have ever done that in their life?

But the cash sum is not included in this document. And the reason why the prosecution say it’s not included in that document is obvious. Because if we go to ……..an interview with Mr Hui that took place on 1 February 2012…..

The significance of this point is that on 1 February 2012, so about six or seven weeks before Mr Kwan’s arrest, the figure being put to Mr Hui that we see in this interview in relation to the 2005 payments was 8.350, the very figure that we see on the part A and part B document.”

302.  Of that fact, Mr Perry went on to suggest :[248]

“ And the prosecution say that what was going on, clearly, was that Mr Hui and Mr Kwan were in communication at around this time, and Mr Hui was clearly saying to Mr Kwan, “They haven’t discovered the cash.  They haven’t discovered the $150,000 in cash.”  So when Mr Kwan is putting together this document to mislead, he omits the cash payment, because why tell the ICAC about a payment of which they’re ignorant?”

303.  However, Mr Perry went on to remind the jury :[249]

“ Now, it’s fair and right I should tell you this. In the course of his evidence, Rafael Hui said to you - this is what he said to you. He said he had never discussed this investigation with any one of the other defendants.”

304.  Nevertheless, Mr Perry went on to invite the jury to conclude that there had been discussions between them and to suggest the purpose of such discussions :[250]

“ Now, members of the jury, you know how people behave in the real world.  You know if there’s an investigation and you are being investigated, and there’s someone else who’s also being investigated, it would be the most natural thing in the world to discuss that.  Who wouldn’t?  You’re bound to be anxious yourself if you’re under investigation, and why wouldn’t you speak to a friend of yours for many, many years?  Well, when I asked Mr Hui about that, he said this: “Ah, the ICAC investigation was confidential.”  Well, it wasn’t confidential to Mr Francis Kwan, because he’d been his driver on 24 November.  And in any event, even if it was confidential, why not speak to the people who can shed light on it, and on Mr Hui’s account, can explain how it was he came to have this money innocently? 

The prosecution say it would have been an obvious, an obvious talking point among the defendants.  The prosecution say it would have been obvious for the simple reason they had something to hide and were trying to keep it concealed.”

305.  Although Mr Perry referred to Rafael Hui’s explanation for the fact that he did not discuss the matter with Francis Kwan, namely that the ICAC investigation was confidential, as emerging in his cross-examination of Rafael Hui, in fact Rafael Hui had denied first of all talking about the matter with Francis Kwan when the subject matter was raised with him in evidence-in-chief.  The following interchange ensued between Mr Choy and Rafael Hui :[251]

“ Q. Now, as to the amount he passed on to you, $8.5 million, do you recall that when the ICAC was investigating into this matter, in one of the interviews they interviewed you personally, they referred to a different total sum of money, namely $8.35 million?

…….

Q. If we look at the date and time recorded as the commencement time for this interview, it was on 1 February 2012 …….

Q. …….Question 30, the interviewer said: “According to [their] investigation, during June 2005 you accepted from Mr Francis Kwan several sum totalling [HK$8.35 million].  Can you explain your relationship with Mr Kwan and the reasons for and details of acceptance of such sums?”

A. Yes.

Q. So you were informed by way of this question that the ICAC at that time was looking at payment from Mr Francis Kwan to you, totalling HK$8.35 million?

A. Correct.

Q. After this interview, did you talk to Mr Francis Kwan about the fact that ICAC was investigating into payments from him to you in June 2005 totalling $8.35 million?

A. No, I did not.

Q. Could we have the B5 bundle in front of us and could we turn to page B-478.

A. Yes.

Q. Mr Hui, you understand now that this page and the following page, B-479, these two pages were found by the ICAC when they were investigating Mr Francis Kwan?

A. Yes.

Q. Now, if we look at part A of page B-478, we can see that Mr Kwan was apparently doing some calculations.

A. Yes.

Q. And between items 2 and 6, he described certain matters as loans.

A. Yes.

Q. And he did some calculations as to the total amount of these loans, and it came to an amount of HK$8.35 million.

A. Yes.

Q. Did he seek to discuss with you anything concerning this document?

A. Absolutely not.

Q. Did he ask you or did he talk to you as to why these items, items 2 to 6, would be described as loans?

A. No.”

306.  In cross-examination by Mr Perry, Rafael Hui confirmed that Francis Kwan had acted as his driver on 24 November 2011, the day that officers of ICAC searched and seized exhibits from Rafael Hui’s home and office.  Accepting that Francis Kwan was not only a long-standing friend but also knew about the payment of $8.5 million to him in June 2005, nevertheless Rafael Hui denied that he had discussed those payments with Francis Kwan.  He explained :[252]

“ Because the ICAC investigation was something sensitive and confidential, I only told him that there was an ICAC investigation, and that’s it. I only told him that there was an ICAC investigation, and that’s it.”

307.  Similarly, he testified in cross-examination that, although Francis Kwan had contacted him following an interview of him by officers of ICAC on 13 December 2011 and informed Rafael Hui that they were investigating the payments that he had made to Rafael Hui in June 2005 and in November 2007, he had simply said “Well, you see what a follow-up investigation of the ICAC will be.  I cannot talk to you.”  Again, he said that was because the “ICAC investigation had to be kept confidential.” [253]  Having been reminded that the questions put to him in respect of the June 2005 payments in his record of interview of 1 February 2012 were in respect of a total of $8.35 million, Rafael Hui acknowledged that he knew that, in stipulating that total, the payment of $150,000 in cash to him from Mr Francis Kwan had been omitted.[254]

308.  Of the Part A and Part B document[255] seized by officers of ICAC in a search of Francis Kwan’s premises on 19 March 2012, Rafael Hui acknowledged that the payments to him stipulated there of $8.35 million in June 2005 were not loans nor did they have their provenance in ‘Liquid investment proceeds’, as described on the document.[256]  He agreed that on its face the document was “wrong and misleading”.  However, he denied that between his interview, on 1 February 2012, and 19 March 2012 he had been in contact with Francis Kwan.

Summing up

309.  Insofar as the judge dealt with the subject in his summing up, he summarised the effect of Rafael Hui’s evidence-in-chief :[257]

“ The witness was referred to his own record of interview, dated 1 February 2012, where at Question 30 on page 92 of bundle L, L-92, he was asked about payments from D5 totalling $8.35 million. The witness said that he did not talk to D5 about the amount after this interview. The witness was further referred to bundle B5 at page 478, containing a list of what are described as loans and certain figures totalling, under part A, $8.35 million. The witness said D5 had never discussed with him anything concerning this document, nor was he told why items 2 to 6 would be described as loans.”

310.  In reminding the jury of what counsel had said in their closing speeches, the judge said that he did so only in respect of the “salient features of their speeches”, reminding them that what they, “make of the evidence to which the arguments of counsel were addressed was what counts.” [258]  In doing so, he did not refer to the suggestion made by the prosecution of collusion between Rafael Hui and Francis Kwan which, it was to be inferred, was connected to the creation of the Part A document, which addressed a total of $8.35 million only, rather than the actual total of monies paid to Rafael Hui in June 2005, namely $8.5 million.

311.  There is no dispute that there was no objection to the line of cross-examination described earlier of Rafael Hui by Mr Perry.  That is not surprising, given that the subject matter had been addressed first of all in evidence in chief.  Similarly, no objection was expressed to the manner in which Mr Perry dealt with the matter in his closing speech.

Conclusion

312.  Clearly, the fact that the Part A document addressed a total of payments in June 2005 of $8.35 million only, which payments were described as loans, was striking given that was the very same amount, not the actual total of $8.5 million, about which Rafael Hui was questioned on 1 February 2012.  That was circumstantial evidence, from which an inference could be drawn that the information had passed between Rafael Hui and Francis Kwan and also a permissible line of questioning to the same effect of Rafael Hui. Indeed, given that, in evidence-in-chief, Rafael Hui denied any discussion with Francis Kwan about the matter, it was incumbent on the prosecution to challenge the denial, if it wished to invite the jury to draw an inference of the contrary.  Resolution of the issue was clearly a matter for the jury.

(ii) collusion between the defendants

313.  Mr Choy also pointed to the suggestions made in the closing speech of the prosecution that there was collusion between the defendants which had led to Francis Kwan causing the uplift of time deposits prematurely on 27 March 2009, following on the search and seizure conducted by officers of ICAC of the premises SHKP on 19 March 2009.  The two time deposits of US$1,043,000 and US$500,000 respectively in the DBS accounts of Francis Kwan had their provenance in a remittance of US$1,543,000 from Villalta to Wedingley on 9 November 2007.  The two time deposits were used as security to raise loans, which in turn funded the payment of $11.182 million to the benefit of Rafael Hui in the period 21 November to 12 December 2007 (Count 7).  In turn, the two time deposits were used to repay the loans on 27 March 2009.[259] The premature uplifting of the two deposits caused Francis Kwan to forego US$18,000 in interest payments.  In his speech, Mr Perry said :[260]

“ the prosecution make the point that the conspirators must have been in contact during the course of the ICAC investigation. That’s apparent from the breaking of the time deposits. If you think about it -- just test Francis Kwan, the case that Thomas Chan is making against Francis Kwan. Francis Kwan has misappropriated Thomas Chan’s 12 million. There’s a search of SHKP. And immediately he breaks the time deposits. Well, why would he do that if he’d misappropriated Thomas Chan's 12 million? He wouldn’t need to. It wouldn’t make any sense. As far as he’s concerned, there would be no link in his mind with any search of SHKP, and the payment made to him personally by Mr Thomas Chan. It only makes sense if it’s linked to the bribes. Now, why would he be told of the search, Mr Francis Kwan? And why would he break the time deposits? Surely if he’d misappropriated Mr Thomas Chan’s money, he’d want to accumulate the interest. But this is just one instance of where the prosecution say the conspirators were trying to put the ICAC off the scent.”

314.  In cross-examination on the issue, Rafael Hui agreed that it looked as though something had happened in the week prior to the uplift to cause Francis Kwan to break the time deposits and lose US$18,000.  It having been pointed out to him that on 19 March 2009, “…the ICAC had for the first-time conducted search and seizure investigations at SHKP”, the following dialogue ensued :[261]

“ Q. Do you think by any chance the two events might be related?

A. I can’t see any.

Q. You can’t see any relationship at all?

A. No, I can’t see any.

Q. You were aware of the ICAC search and seizure at Sun Hung Kai, weren’t you?

A. At that time, no.

Q. Well, you were in contact with Mr Thomas Kwok over this period, weren’t you?

A. Yes.

Q. And you were in contact with Mr Raymond Kwok over this period, weren’t you?

A. Yes.

Q. And you were in contact with Mr Thomas Chan over this period, weren’t you?

A. I do not recall. Regarding Thomas Chan, I do not recall clearly.

Q. And the ICAC searching and seizing material from Sun Hung Kai would be a very, significant event, wouldn’t it?

A. Agreed.

Q. And if there were people in Sun Hung Kai who were concerned about it, and about covering their tracks, they’d have to make sure that they told those involved, wouldn’t they?

A. Yes.

Q. And that’s what was going on, wasn’t it? You and Mr Kwan, and Mr Thomas Kwok and Mr Raymond Kwok and Mr Francis Kwan are covering the tracks of these payments. That’s what’s going on, isn’t it?

A. Disagree.

Q. ….. Just to finish on that particular point, did your good friend Mr Kwan ever tell you that he’d broken some time deposits and lost US$18,000?

A. No.”

The summing up

315.  In the summing up, the judge reminded the jury of Rafael Hui’s evidence adduced in cross-examination as to the circumstances in which the time deposits in the account of Francis Kwan had been uplifted :[262]

“ He agreed that, as a matter of sequence in the week before the instruction was sent to Ms Sheris Lai to break the time deposits, an instruction which had cost D5 about US$18,000 in lost interest, the ICAC had, on 19 March 2009, conducted a search-and-seizure investigation at SHKP. However, he said he was not aware of that operation, although he agreed he was in contact with Thomas Kwok and Raymond Kwok during this period. D5 did not tell him that he had broken any time deposits and lost $18,000, although he thought that in 2009, D5 was in need of money. Mr Hui said he had made two loans to him, in 2008 and 2010 respectively, neither of which had been repaid.”

316.  Once again, it is to be noted that no objection was taken by Mr Choy to the line of cross-examination of Rafael Hui or to the closing speech of the prosecution in this regard.  Again, that is not surprising since the juxtaposition of the two events gave rise to a legitimate invitation to the jury to draw an inference that they were connected.  Whether or not the jury was so persuaded was a matter for them.  But, clearly it was a matter that the prosecution was entitled to canvass with the witness and to suggest to the jury.  Fairly, as reflected in the summing up, the prosecution had elicited from Rafael Hui the fact that in March 2009 Francis Kwan was in need of money, and that in 2008 and 2010 he had borrowed money from Rafael Hui.  That evidence permitted another different inference to be drawn as to the motive behind uplifting the time deposits.  No doubt, that is why the judge had not even bothered to remind the jury of the inference that the prosecution invited them to draw in its closing speech.

Conclusion

317.  I am satisfied that there is no merit in this ground of appeal.

Thomas Chan: Count 7

318.  As Mr Winter pointed out, Count 7 on the amended indictment had its genesis in Charge 8 of the charges first brought in the Magistracy against the defendants.  It alleged a conspiracy between Rafael Hui, Thomas Chan and Francis Kwan to offer an advantage to Rafael Hui, “namely HK$11.182 million through a series of payments from Thomas CHAN and Francis KWAN” as an inducement to or reward for or otherwise and on account of Rafael Hui performing or abstaining from performing acts in his capacity as a public servant, “namely being or remaining favourably disposed to Thomas CHAN and/or his interests or others.” [263]  In due course, those allegations against those defendants were reflected in Count 7 on the indictment, albeit that now it was alleged that the object was that of Rafael Hui, “being or remaining favourably disposed to Sun Hung Kai Properties Limited and/or its subsidiaries or associated companies, and/or Thomas CHAN.” [264]

319.  At the application of the prosecution an amended indictment was filed with the Court, including an amended Count 7.[265]  Now, it was alleged that all five defendants were parties to the conspiracy to offer Rafael Hui an advantage, “namely HK$11.182 million through a series of payments from Thomas KWOK, Raymond KWOK, Thomas CHAN and Francis KWAN” as an inducement to or reward for or otherwise and on account of Rafael Hui performing or abstaining from performing acts in his capacity as a public servant, “namely being or remaining favourably disposed to Sun Hung Kai Properties Limited and/or its subsidiaries or associated companies, and/or Thomas KWOK, and/or Raymond KWOK, and/or Thomas CHAN.”

320.  In advance of its application to amend the indictment, the prosecution identified its case in respect of Count 7 in its ‘Case Summary’, dated 31 October 2013.  Of Thomas Chan’s role, the prosecution asserted that he “facilitated the payment” of monies to Rafael Hui and that he was “involved in channelling the funds via a complex route”.[266]  However, it was contended that, “the overwhelming inference is that Thomas Chan was not acting on his own account.” [267]  Further, that “the inference to be drawn is that Thomas Chan, in transferring funds to Francis Kwan for onward transmission to Rafael Hui, was not acting on his own account, but, as he had in June 2005, was acting on instructions, and that the funds transmitted were exceeded by payments received by Thomas Chan from or on the authorisation of Thomas Kwok.” [268]

321.  In the written submissions, dated 13 January 2014, advanced by the prosecution in support of the application to amend the indictment, it was contended in respect of Count 7 that :[269]

“ In advancing money to D1 (via D5) on account of D1’s favourable disposition, the inference to be drawn is that D4 was not acting on his own account….The inference is that in 2007, D4 was acting as one of the Executive Directors of SHKP and, in particular, on behalf of the two individuals who controlled SHKP’s dealings with D1, namely D2 and D3.”

322.  Of the provenance of the payments made to Rafael Hui, it was contended that :[270]

“ In D2’s case, the evidence establishes that, as in 2005, he in effect part funded the payments to D1 from his own personal funds…this involved D2 paying D4 several months after the payments had been made to D1. On 28 April 2008, D2 paid D4 HK$7 million from his personal funds, by way of cheque….

The fact that D4 was not acting on his own account, but was acting on behalf of D2/SHKP, supports the prosecution case against D3…. the business relationship between D1 and SHKP was negotiated and managed by D1 on one side, and by D2 and D3 acting together on the other..”

323.  On 13 February 2014, the judge ruled in favour of the prosecution’s application to amend Count 7 and the amended indictment, incorrectly dated 15 March 2013, was filed with the Court.[271]

The prosecution opening speech

324.  In opening his case to the jury, Mr Perry said of the various payments made to Rafael Hui, including the $11.125 million the subject of Count 7, that “.. by making the payments to the 1^st defendant, the 2^nd defendant sought to gain his favourable disposition or goodwill…Although the 2^nd defendant was involved in making the payments to the 1^st defendant, he did so in such a way as to keep his own involvement concealed and disguised …” [272]

325.  Of the role of Thomas Chan in the payments made to Rafael Hui, including that the subject of Count 7, Mr Perry said, “the money was routed by D4…who paid it on to the 1^st defendant.  By using the 4^th defendant, the loyal SHKP executive,.. the second and third defendants were able to melt into the background.  The payments were coming, on the face of it, from D4 to D1.” [273] Mr Perry went on to say :[274]

“ The prosecution case in relation to the 4th defendant is that he was being used as a go-between by his big bosses at SHKP. Because if you’re the big boss at SHKP, you want to be as far away from this arrangement as possible. That is why we have this labyrinthine complexity, this very great complexity.

…

So the prosecution case in relation to this is the starting point is really this.  D4 would not be doing this on his own account.  D4 is not going to be paying all this money through the 5th defendant to the 1st defendant.  He’s going to be doing it for the people he has worked for over 40 years now, to whom he is loyal, and who is trusted by them.  And it looks like the $12 million he pays out is covered by the $12 million that he gets later.”

326.  In his submissions to the judge that Thomas Chan had no case to answer in respect of Count 7, Mr Winter advanced the same argument that he has advanced in this Court.  He submitted :[275]

“ We say the minimum requirement evidentially for count 7 is that the prosecution prove that the money sent to D1 came from at least one or both of Ds 2 and 3. That is the plain allegation that’s been made. And the possibility that it might have come alternatively from D4 has been positively disavowed in the passage I quote at the top of page 9, from Day 18 of the opening.

We respectfully submit that not only could no jury be sure that the money came from Ds 2 and 3, the reverse is the case, that they could only be sure that it did not. It came from Villalta. It was paid under a professionally drafted management agreement, which agreement has not been proved to be a sham, and which we submit prima facie is genuine.

So the case completely depends on there being evidence that the 12 million was reimbursed to D4 by at least one of Ds 2 and 3. Otherwise, it’s not this conspiracy -- something completely different which has been positively disavowed.

There’s no evidence that it came from D3. There’s no evidence that it came from D2 prior to the transfer from Villalta in November 2007, or at any time proximate thereafter.

So the prosecution’s entire case depends on the   allegation that the $7 million paid on 28 April 2008, five and a half months later, is a reimbursement of that sum.  Well, we submit no jury could think that to be a reimbursement, for a number of reasons.”

327.  In his reply, Mr Winter reiterated his contention that, “…the case depends on the moneys having been paid by D2 or D3.”  He asserted, “The question is you haven’t proved it’s paid by D2 and 3.” [276]

328.  In the course of cross-examination by Mr Perry, in the context of the history of the changes to the prosecution case in respect of the payment the subject of Count 7, Thomas Chan asked whether it was being alleged that he had paid that bribe, “with my own money.”  After the intervention of counsel and a discussion between counsel and the judge, Mr Perry described the changing circumstances and identified its case in front of the jury, “…the prosecution did not know about all of the payments when the first allegation…was made…the prosecution had, however, at that time not linked the payments of 7 million and 5 million paid to Mr Chan in April to the allegations in relation to the 2007 payments.  Once that analysis was performed, the allegation was revised so as to allege that Mr Chan was reimbursed the moneys paid in 2007 by Mr Thomas Kwok and Mr Raymond Kwok.” [277]

The prosecution closing speech

329.  In his closing speech to the jury, Mr Perry said of the role of Thomas Chan in respect of Counts 5 and 7 :[278]

“ …the prosecution say that he was involved in the process of paying bribes. And his job was to ensure that the source of the payments could not be linked to his big bosses at SHKP.”

330.  Earlier, Mr Perry addressed the issue of reimbursement to Thomas Chan of the payments made via Francis Kwan to Rafael Hui in November and December 2007 :[279]

“ As you know, the prosecution case is that the $12 million paid by Thomas Chan was effectively reimbursed by the $12 million paid to Thomas Chan in April 2008…”

Thomas Chan’s closing speech

331.  In his closing speech to the jury, Mr Winter asserted that the prosecution had failed to prove that “…the Count 7 moneys came from either Thomas or Raymond Kwok, or were reimbursed by either of them.  That in itself causes the case to collapse.”  Subsequently, Mr Winter returned to that submission :[280]

“ Can I turn to count 7.  The case is clear.  And unless you are sure that the $12 million paid by Mr Chan through Villalta in early November 2007 came from or was reimbursed by Thomas or Raymond Kwok, then the verdict on 7 is “not guilty”. It has to come from at least one of them.  And that’s clear from what prosecutor said, both in the opening and closing: he wouldn’t be doing it on his own account, Mr Chan, he wouldn’t be paying the money through to the 1st defendant.  He is going to be doing for the people he worked for.  And in closing, he said Thomas Chan would not be out of pocket in relation to the 12 million.  So the case depends on the evidence that it came from or was reimbursed from one or other of the Kwok brothers.”

Summing up

332.  Mr Winter invited this Court to note that in his summing up, the judge had suggested to the jury that one of the “central issues” for the jury to decide in respect of Count 7 was :[281]

“ …whether the payments of $11.182 million made to D1 were bribes, as the prosecution allege, for which D4 was later reimbursed with payments from D2; or whether the payments from D5 to D1 might be unconnected with or have nothing to do with the payments from D2 to D4.”

333.  As Yeung VP pointed out in oral argument, the judge went on to say :

“ If they were bribes, as the prosecution allege, the issue then arises as to who knowingly participated in the plan to pay them.”

334.  For his part, Mr Winter pointed out that the judge had adverted to the submissions made on behalf of Thomas Chan later in the summing up :

“ In relation to Count 7, Mr Winter argues that the prosecution failed to prove that the Count 7 moneys came from either D2 or D3 by way of payment or reimbursement.”

335.  Of the elements of the offence averred in Count 7, the judge directed the jury :[282]

“ Now, the specified offence in this count which the defendants are alleged to have conspired to commit is offering an advantage to a public servant. This offence requires the prosecution to prove these ingredients or elements which I shall go through once slowly and then read again to you. And there are six of them.

(1) That there was an offer of an advantage to a public servant.

(2) That the offer was made without lawful authority or reasonable excuse.

(3) That the offer was an inducement to or reward for or otherwise on account of the performing or abstaining from performing, or having performed or having abstained from performing, any act.

(4) That that act was to be performed or was to be abstained from performing or had been performed or had been abstained from performing, (pause) that that act was to be performed or was to be abstained from performing or had been performed or had been abstained from performing in his capacity as a public servant.

(5) That the act, whilst not necessarily particularised in the particulars of the offence, was discernible, that is, identifiable, within his capacity as that public servant.

(6) That the defendants knew of these factors.”

336.  Of the first ingredient, the judge went on to explain that “an advantage” meant “a payment”.  Then, he identified the question arising for the jury as being :[283]

“ …whether there was, as a matter of fact, an offer… of a payment to D1, who was at the time a public servant.”

337.  Noticeable by its absence was a direction to the jury that the prosecution was required to prove that Thomas Kwok and/or Raymond Kwok were the provenance of the monies paid to Rafael Hui, either prospectively or retrospectively.  No objection was taken by any counsel, including Mr Winter, to the judge’s stipulation of the ingredients of the offence the subject of Count 7.  If, as Mr Winter contended, proof of the provenance/reimbursement of the monies was “a key element in the agreement alleged” [284] and “core elements of the substantive s.4 POBO offence, the object of the conspiracy” [285] why was issue not taken with the judge’s summing up?

338.  On the other hand, the judge identified the basis on which the prosecution and the defence advanced their respective cases :

“ The prosecution invite you to infer from the facts of this case that each defendant must have known of all of those factors and was a knowing participant in the conspiracy, as demonstrated by the elaborate way that very substantial and secret payments were arranged and paid. They say the flowchart at A-55 explains exactly what was going on, and that each defendant must have known what was going on.

 The defence say you cannot be sure there was a conspiracy to pay Rafael Hui bribes, or that a particular defendant was a knowing member of that conspiracy, or that the money D1 received in November and December 2007 was connected with the payments made in April 2008.  They say you cannot be sure there is a connection between the right side of the flowchart and the left.  And D3, of course, says he is not mentioned in that flowchart or indeed the one at A-53.”

339.  In his oral submissions, Mr Perry submitted that it was not and never had been a key or core element of the prosecution case that the monies paid by Thomas Chan to Francis Kwan, which in turn were paid to Rafael Hui, had their provenance in or were reimbursed by Thomas Kwok and/or Raymond Kwok.  Rather, it was a factual assertion only made by the prosecution.   

340.  There is no issue that, although articulation of the prosecution case that it was alleged that the monies paid to Rafael Hui had their provenance in and/or were reimbursed by Thomas Kwok and Raymond Kwok was not stipulated in the Particulars of Offence, the allegation to that effect made in pre-trial submissions, in the prosecution opening and elsewhere are to be regarded as particulars of the way in which the prosecution put its case.  However, as was noted in the judgment of the Court of Appeal in Wales in R v Hancock :[286]

“ ….simply because the particulars of an offence are given does not mean that those particulars are an essential ingredient of the offence.”

341.  In that case, the Particulars of Offence condescended to ten stipulations of the alleged dishonest conduct in the conspiracy to defraud.  At issue in the appeal was whether or not the judge was in error in not having given a Brown direction[287], namely that the jury was required to be agreed on at least one of the stipulated particulars.  In answering that question in the negative, the Court said :[288]

“ The essential ingredients of the offence of conspiracy to defraud, or what the Crown had to prove to establish the actus reus of the offence is that each of the accused has entered into an agreement to defraud the agents. It was necessary to prove that there was an agreement to act dishonestly to prejudice the agents and that each of the accused was a party to the agreement.”

342.  Of the nature of the particulars, the Court said :[289]

“ In a case such as this the particulars do no more than specify the nature of the case the prosecution seek to prove and the principal overt acts upon which they rely to invite the jury to infer that there was a dishonest agreement and that a particular defendant was a party to it.”

343.  With respect, I agree with his submission that the key issue in the case was whether any of the named conspirators was a party to the agreement to offer a bribe to Rafael Hui on the evidence admissible against them in their respective cases.  In that context, the judge had given the jury the standard direction that they were to consider, “…each count separately, and the case against and for each defendant separately on each count.  The evidence concerning each count and each defendant is different, and therefore your verdicts need not be the same.” [290]

344.  The allegation by the prosecution that the monies paid to Rafael Hui had their provenance in and/or were reimbursed by Thomas Kwok and Raymond Kwok was not an element or ingredient of the offence alleged in Count 7.  The agreement alleged was one to bribe Rafael Hui.  The ingredients of the offence were those stipulated by the judge in his directions to the jury, to which reference was made earlier.  I am satisfied that, in the words of Thomas LJ, as Thomas LCJ was then, in the judgment of the Court of the Appeal of England and Wales in R v K & Others[291]there was, “a clear distinction between the agreement alleged and the reasonable information given in respect of it.”  The prosecution allegations in respect of the provenance and/or reimbursement of the monies by Thomas Kwok and Raymond Kwok fell into the latter category and “form no part of the ingredients of the offence.”

345.  Clearly, whilst the jury was not satisfied that Thomas Kwok and Raymond Kwok were parties to an agreement to bribe Rafael Hui they were so satisfied in respect of Thomas Chan.  As Mr Perry pointed out, there was direct evidence of the involvement of Thomas Chan in payment of monies, via Francis Kwan, to Rafael Hui.  No doubt, it was the absence of such direct evidence that led the prosecution to allege, in proof that Thomas Kwok and Raymond Kwok were parties to the agreement to bribe Rafael Hui, that Thomas Kwok had authorised payments to Thomas Chan by way of reimbursement in 2008.

346.  I do not accept Mr Winter’s submission that Thomas Chan’s conviction on Count 7 is “fundamentally unfair”.  In particular, that he was convicted of an offence “… not sufficiently particularised such that he had no opportunity to defend it.”  The essence of the allegation made in Count 7 was simple: Thomas Chan was a party to an agreement to bribe Rafael Hui.  Thomas Chan testified that he was not a party to such an agreement.  The monies that he had caused to be paid to Francis Kwan in November and December 2007 were an investment pursuant to the Longally agreement.  In particular, “He had no knowledge until this case that any of the $12 million which he had invested had ended up going to D1.” [292]  There is no merit in this ground of appeal.

Francis Kwan 

347.  In light of our rejection of the submissions that the offence alleged in Count 5 was unknown to law, the submissions advanced on behalf of Francis Kwan, that an affirmative response to those submissions rendered the conviction of Francis Kwan on Count 7 unsafe, fall away.  Mr Blanchflower’s support for the separate and discreet arguments advanced by Mr Winter in respect of Count 7 have been addressed and rejected earlier.

Conclusion

348.  For the reasons set out above I would refuse Rafael Hui leave to appeal against conviction on grounds 1, 2 and 8 but grant leave on ground 7.  Treating the hearing of the application as the hearing of the appeal I dismiss Rafael Hui’s appeal against conviction.  For the reasons set out above, I would dismiss the appeals against conviction of Thomas Kwok, Thomas Chan and Francis Kwan.

Thomas Chan’s appeal against sentence

349.  Mr Winter advanced no oral or written submissions in support of the grounds of appeal against sentence filed on behalf of Thomas Chan.  There, it was submitted that the judge had erred in concluding that the appropriate starting point for sentence for the ‘instigator’ of a bribe in the circumstances that resulted in a prosecution for the offences stipulated in Counts 5 and 7 was 6 years’ imprisonment.  That sentence was appropriate where actual favour was shown by the recipient of the bribe.  Here, there was no evidence that Rafael Hui had done anything other than that which he would have done without payment of the bribe.

350.  In light of the judge’s determination that Thomas Chan was not the “instigator of the payments”, it was submitted that his role was that of a “mere conduit for the monies”.  As such, it was contended that the appropriate starting point for sentence was significantly below the appropriate starting point for sentence of the instigator.

Count 5

351.  It was submitted that the judge erred in taking a starting point of 5 years’ imprisonment for Count 5.  In doing so, the judge did not afford Thomas Chan any discount for his personal mitigation, although he did state that he afforded Thomas Chan a discount of 9 months’ imprisonment from the overall sentence of imprisonment imposed on him to reflect his good character.

352.  Finally, it was submitted that the judge erred in ordering the one year of the sentence of imprisonment imposed in respect of Count 7 was to be served consecutively to the sentence of 5 years’ imprisonment imposed in respect of Count 5.  The prosecution case was that there was one conspiracy, presented for ease of presentation as two separate counts.  Accordingly, the sentences ought to have been ordered to be served concurrently.

Reasons for sentence

353.  At an early stage in his reasons for sentence the judge acknowledged that he was sentencing defendants in their 60s of unblemished character, who were going to prison for the first time.  He noted that Thomas Chan was 68 years of age.[293]

Count 5

354.  In addressing the issue of the appropriate starting point to be taken for sentence in respect of Count 5, having noted that the maximum sentence was 7 years’ imprisonment, the judge said :[294]

“ There is a compelling argument that the payment of an $8.5 million bribe by the instigator of the offence to the number 2 in government, made in a deliberately complex and intricate way, through various co‑conspirators, which then took months, if not years, to uncover and unravel, is an extremely serious example of the offence…..

Accordingly, there is a compelling argument that this offence merits a starting point and a maximum of 7 years imprisonment.”

355.  Nevertheless, in determining that it was not an appropriate case to adopt the maximum sentence as the starting point for sentence, the judge said :[295]

“ Serious though it is, given the high degree of trust placed in D1 by the government and people of Hong Kong when he was sworn in as Chief Secretary to the HKSAR government, the case against the 2nd defendant has never been that D1 as Chief Secretary in fact did anything specific or in fact did anything which he would not otherwise have done for the money which he received. The allegation has always been that the defendants conspired together for D1 to misconduct himself by being or remaining favourably disposed to Sun Hung Kai Properties or the other entities set out in the count.”

356.  The judge went on to determine that misconduct in public office in those circumstances, “…is at its most attenuated…in the context of an allegation of favourable disposition by being ‘kept sweet’.” [296]

Starting point for sentence

357.  The judge stipulated a starting point for sentence for Count 5 of 6 years’ imprisonment for the instigator of the offence, whom he identified to be Thomas Kwok.  In adopting the starting point, the judge said that he had regard to the fact that he intended imposing a substantial fine on Thomas Kwok, which in the event was $500,000.  He said that he was satisfied that, in combination, those sentences were sufficient to deter others, as was required, “…tempted to embark upon a course of conduct which subverts the conduct of public officials.” [297]

358.  The judge stipulated a starting point for sentence for Count 5 of 5 years’ imprisonment for Thomas Chan, whom he described as, “not the instigator of the payments”, but rather the “loyal and reliable servant of SHKP.” [298]  Of the role of Thomas Chan, the judge said that, “he was central to the intricacy of the scheme and central to the conspiracy.”  He went on to note that the payment of $10.8 million to Rafael Hui “was effected by D4’s company Villalta, via Wedingly Limited, to D5.” [299]

Count 7

359.  The judge noted that the maximum sentence for the offence the subject of Count 7 was 7 years’ imprisonment.  In the context of the verdict of the jury, acquitting Thomas Kwok and Raymond Kwok of Count 7, and the evidence that Thomas Chan was the provenance of the monies paid to Rafael Hui, via Francis Kwan, the judge said that the jury must, “…have been sure that there was a conspiracy to bribe D1, of which D4, and, for that matter, D5, were a part.  They were simply unsure how D4 got the money.”  The judge went on to say that in sentencing Thomas Chan he did so having regard to the fact, “that there is no suggestion that the 4^th defendnat was bribing D1 for his own personal benefit, divorced from the interests of SHKP.” [300]

360.  Of the role of Thomas Chan in the events the subject of Count 7, the judge said that he, “…played the same central role in the conspiracy on Count 7, but I would also accept that he was not the instigator of the offence.” [301]

Totality of sentence

361.  The judge stated that he did not accept the submissions that had been made on behalf of Thomas Chan, that the sentences to be imposed in respect of Counts 5 and 7 ought to be ordered to be served concurrently.  He noted that the monies the subject of Count 7 had been transferred from Thomas Chan, ultimately to Rafael Hui, in November 2007, whereas the monies the subject of Count 5 had been transferred 2 years and 5 months earlier in June 2005.[302]

362.  In determining the appropriate totality of sentence, the judge said that he would have ordered 21 months of the sentence of imprisonment imposed in respect of Count 7 be served consecutively to the sentence of 5 years’ imprisonment imposed in respect of Count 5. Accordingly, the total sentence he would have imposed on Thomas Chan was 6 years and 9 months’ imprisonment.  However, in order to, “…allow a reduction of 9 months for the 4^th defendant’s good character”, he ordered that only one year of the sentence of imprisonment imposed in respect of Count 7 was to be served consecutively to the sentence of imprisonment imposed in respect of Count 5.  The resulting total sentence was the same, namely 6 years’ imprisonment.[303]

A consideration of the submissions

363.  I am satisfied that the judge was correct to determine that it was necessary to impose a deterrent sentence in respect of Count 5.  There was and is an obvious significant public interest that others are deterred from committing the offence the subject of Count 5.  That public interest resonates with the public interest that requires a deterrent sentence to be imposed in respect of offences of bribery of public officers.

364.  There is no dispute that the judge was correct to describe Thomas Chan as not being the instigator of the offence the subject of Count 5.  Nevertheless, I am satisfied that he was also correct in determining that he was, “central to the intricacy of the scheme and central to the conspiracy.”  The obvious purpose of the intricacy of the scheme was to prevent or make very difficult the determination of the ultimate provenance of the monies paid to Rafael Hui.  Thomas Chan lent himself enthusiastically to that scheme.  Although the intricacies were eventually unraveled by painstaking investigations, it took many months if not years to achieve that objective.

365.  Very obviously, in respect of both Count 5 and Count 7, regard is to be had in sentencing to the very substantial sums of money paid to Rafael Hui, respectively $8.5 million and $11.182 million. Further, the fact that the object of the misconduct and the bribe was the Chief Secretary of the HKSAR, the second most senior public servant, was highly relevant to sentence.

366.  In the result, I am satisfied that the judge was correct in stipulating 5 years’ imprisonment as the starting point for sentence for each of Count 5 and Count 7.

Discount for good character

367.  The judge was entitled to discount the sentences to be imposed on Thomas Chan by 9 months’ imprisonment to reflect his positive good character.  However, with respect to the judge, in my judgment as a matter of principle that discount ought to have been reflected in the separate sentences imposed on Thomas Chan for each of Count 5 and Count 7.  To do otherwise is to create unnecessary potential difficulties in this Court in the event that the conviction on one of those counts was quashed on appeal.  As a result, the judge ought to have imposed sentences of 4 years and 3 months’ imprisonment on each of the two counts.

Consecutive sentences

368.  I am satisfied that the judge was right to regard the two offences as “two distinct conspiracies.”  As he noted, they were committed 2 years and 5 months’ apart.  It was appropriate, subject to a consideration of totality, that the sentence imposed in respect of Count 7 be ordered to be served consecutively to the sentence of imprisonment imposed in respect of Count 5.  I am satisfied that the judge was correct in his initial determination, having had regard to the issue of the totality of sentence, to order that 21 months’ imprisonment of the sentence of imprisonment imposed in respect of Count 7 was to be served consecutively to the sentence of imprisonment imposed in respect of Count 5.  Accordingly, the total sentence of imprisonment that ought to have been imposed on Thomas Chan remained the same, namely 6 years’ imprisonment.

Conclusion

369.  I would allow the appeal against sentence of Thomas Chan and quash the sentence and orders made by the judge.  Intheirplace, Iwouldorderthat Thomas Chanbesentenced to 4 years and 3 months’ imprisonment on each of Counts 5 and 7.  Iwould order that 21 months of the sentence imposed in respect of Count 7 be served consecutively to the sentence imposed in respect of Count 5.  Accordingly, the total sentence I would impose on Thomas Chan remains the same, namely 6 years’ imprisonment.

Hon Pang JA:

370.  I have read the judgments of the two Vice Presidents and I agree with them.

Hon Yeung VP:

Conclusion

371.  The appeals against conviction of Rafael Hui, Thomas Kwok, Thomas Chan and Francis Kwan are dismissed.  Thomas Chan’s appeal against sentence is allowed to the extent as indicated in para 369 hereof, but his total sentence remains the same at 6 years’ imprisonment.

372.  We direct that any application for costs by the respondent, together with written submissions in support, is to be filed with the Court within 14 days hereof. Any written submissions opposing such an application, if any, are to be filed with the Court within 14 days thereafter.  The Court will deal with the application on papers.

[1] Having been sentenced to a total of 7½ years’ imprisonment, the 1^st defendant’s application for leave to appeal against conviction was not subjected to the consideration of the single judge. The 2^nd defendant appealed against conviction with the leave of the single judge on ground 2 and as of right on ground 1, given that it involved a question of law only. The 4^th defendant appealed against conviction with the leave of the single judge on ground 7 and as of right on ground 1, given that in it involved a question of law only. The 5^th defendant appealed against conviction with the leave of the single judge on ground 4 and as of right on grounds 2 and 3, given that they involved a question of law only.

[2] The 5^th defendant appealed against sentence with the leave of the single judge.

[3] Contrary to Common Law and section 101I(1) of the Criminal Procedure Ordinance, Cap. 221.

[4] Contrary to Common Law, sections 159A and 159C of the Crimes Ordinance, Cap. 200 and section 101I(1) of the Criminal Procedure Ordinance, Cap. 221.

[5] Contrary to Common Law, sections 159A and 159C of the Crimes Ordinance, Cap. 200 and section 101I(1) of the Criminal Procedure Ordinance, Cap. 221.

[6] Contrary to section 19(1)(b) of the Theft Ordinance, Cap. 210.

[7] Contrary to Common Law, sections 159A and 159C of the Crimes Ordinance, Cap. 200 and section 101I(1) of the Criminal Procedure Ordinance, Cap. 221.

[8] Contrary to Common Law and section 101I(1) of the Criminal Procedure Ordinance, Cap. 221.

[9] Contrary to sections 4(1)(a) and 12 of the POBO and sections 159A and 159C of the Crimes Ordinance, Cap. 200.

[10] Contrary to Common Law and section 101I(1) of the Criminal Procedure Ordinance, Cap. 221.

[11] Appeal Bundle, page 1465.

[12] Appeal Bundle, page 1486.

[13] Appeal Bundle, page 1503.

[14] Appeal Bundle, page 172.

[15] Appeal Bundle, pages 4008-11.

[16] Appeal Bundle, page 1523.

[17] Appeal Bundle, page 213.

[18] Appeal Bundle, pages 213-5.

[19] Appeal Bundle, pages 215-7

[20] Appeal Bundle, pages 223-4.

[21] Appeal Bundle, page 224.

[22] Appeal Bundle, page 224.

[23] Appeal Bundle, pages 225-6.

[24] Appeal Bundle, page 179.

[25] Appeal Bundle, pages 186-7.

[26] Appeal Bundle, page 217.

[27] Appeal Bundle, page 173.

[28] Appeal Bundle, page 173.

[29] Appeal Bundle, page 173.

[30] Appeal Bundle, page 173.

[31] Appeal Bundle, page 43.

[32] Appeal Bundle, pages 43-4.

[33] Appeal Bundle, page 44.

[34] Appeal Bundle, page 44.

[35] Appeal Bundle, page 30.

[36] Appeal Bundle, page 45.

[37] Appeal Bundle, pages 171-2.

[38] Appeal Bundle, page 108.

[39] Appeal Bundle, pages 108-9.

[40] Appeal Bundle, page 110.

[41] Appeal Bundle, pages 228-230.

[42] Appeal Bundle, page 229.

[43] Appeal Bundle, page 245.

[44] Appeal Bundle, page 245.

[45] Appeal Bundle, pages 246-7.

[46] Appeal Bundle, page 1465.

[47] Appeal Bundle, page 1498.

[48] Appeal Bundle, page 243.

[49] Appeal Bundle, pages 248-9.

[50] Appeal Bundle, page 249.

[51] Appeal Bundle, page 256.

[52] Appeal Bundle, page 249.

[53] Appeal Bundle, page 250.

[54] Appeal Bundle, page 250.

[55] Appeal Bundle, page 251.

[56] Appeal Bundle, page 251.

[57] Appeal Bundle, page 252.

[58] Appeal Bundle, page 252.

[59] Appeal Bundle, page 252.

[60] Appeal Bundle, page 253.

[61] Appeal Bundle, page 173.

[62] Appeal Bundle, page 250.

[63] Appeal Bundle, pages 252-3.

[64] Appeal Bundle, page 253.

[65] Appeal Bundle, pages 253-4.

[66] Appeal Bundle, page 254.

[67] Appeal Bundle, page 256.

[68] Appeal Bundle, pages 254-5.

[69] Appeal Bundle, page 257.

[70] Appeal Bundle, pages 257-8.

[71] Appeal Bundle, pages 258 and 263.

[72] Appeal Bundle, page 259.

[73] Appeal Bundle, page 259.

[74] Appeal Bundle, page 260.

[75] Appeal Bundle, page 260.

[76] Appeal Bundle, page 260.

[77] Appeal Bundle, pages 266-7.

[78] Appeal Bundle, page 266.

[79] Appeal Bundle, page 266.

[80] Appeal Bundle, page 267.

[81] Appeal Bundle, page 279.

[82] Appeal Bundle, page 280.

[83] Appeal Bundle, page 280.

[84] Appeal Bundle, page 280.

[85] Appeal Bundle, page 286.

[86] Appeal Bundle, page 286.

[87] Appeal Bundle, page 287.

[88] Appeal Bundle, page 287.

[89] Appeal Bundle, page 287.

[90] Appeal Bundle, page 287; page 193 King Yip Group Limited dealt exclusively with the Kwok family private companies.

[91] Appeal Bundle, page 288.

[92] Appeal Bundle, pages 304-5.

[93] Appeal Bundle, page 288.

[94] Appeal Bundle, page 289.

[95] Appeal Bundle, page 290.

[96] Appeal Bundle, page 290.

[97] Appeal Bundle, page 291.

[98] Appeal Bundle, pages 294-5.

[99] Appeal Bundle, page 295.

[100] Appeal Bundle, page 311.

[101] Appeal Bundle, page 311.

[102] Appeal Bundle, page 313.

[103] Appeal Bundle, page 313-4.

[104] Appeal Bundle, pages 314-5.

[105] Appeal Bundle, page 315.

[106] Appeal Bundle, pages 315-6.

[107] Appeal Bundle, page 318.

[108] Appeal Bundle, pages 1458-9.

[109] Appeal Bundle, pages 1459.

[110] Appeal Bundle, page 2698.

[111] Appeal Bundle, page 2709.

[112] Appeal Bundle, page 2001.

[113] Attorney-General v Chung Fat Ming [1978] HKLR 480.

[114] Appeal Bundle, pages 2723-4.

[115] Appeal Bundle, page 79.

[116] Appeal Bundle, pages 80 L - 81 G.

[117] Appeal Bundle, page 85 F-I.

[118] Appeal Bundle, pages 85 T - 86 G.

[119] Appeal Bundle, page 88 E-F.

[120] Appeal Bundle, page 83 I-M.

[121] Appeal Bundle, pages 88 J - 89 O.

[122] Appeal Bundle, page 98 G - Q.

[123] Appeal Bundle, pages 98 R - 99 K.

[124] Paragraph 71.

[125] Shum Kwok Sher v HKSAR (2002) 5 HKCFAR 381.

[126] Shum Kwok Sher v HKSAR; page 404, paragraph 68.

[127] PD Finn ‘Public Officers: Some Personal Liabilities’ (1977) 51 ALJ 313 at 315.

[128] Shum Kwok Sher v HKSAR; page 405, paragraph 69.

[129] Shum Kwok Sher v HKSAR; page 408, paragraph 81.

[130] Shum Kwok Sher v HKSAR; page 408 F-J, paragraphs 82-3.

[131] Shum Kwok Sher v HKSAR; page 409, paragraph 86.

[132] Sin Kam Wah v HKSAR (2005) 8 HKCFAR 192.

[133] Re A-G’s Reference (No 3 of 2003) (2004) 2 Cr. App. R. 23.

[134] R v G & Another [2004] 1 AC 1034.

[135] Sin Kam Wah v HKSAR; page 200 E-G, paragraph 12.

[136] Sin Kam Wah v HKSAR; page 206 H-J, paragraph 32.

[137] HKSAR v Sin Kam Wah (CACC 520/2003; unreported, 11 June 2004) Ma CJHC: (paragraph 16(2))

  “The relevant acts on his part ….. were the acceptance of sexual favours bestowed on him by the 2nd Applicant.  There is no doubt that these favours were provided to and accepted by him in relation to his office.  First, the 1st Applicant was, as we have already noted, a Senior Superintendent. Secondly, the favours that were provided to him were well beyond the normal hospitality that might be involved in, say, a meal (although the dinner that were given to the 1st Applicant in relation to charges 1 and 3 were lavish).  The money paid to the hostesses was substantial.  The inference here (which was never undermined) was that these forms of entertainment were provided to the 1st Applicant as some sort of ‘sweetener’ to him.”  [Italics added.]

[138] Sin Kam Wah v HKSAR; page 207 H-I, paragraph 36.

[139] Sin Kam Wah v HKSAR; page 208 F-G, paragraph 39(4).

[140] Sin Kam Wah v HKSAR; pages 210 I - 211 B, paragraphs 45-46.

[141] Sin Kam Wah v HKSAR; page 211 D-F, paragraph 47.

[142] Sin Kam Wah v HKSAR; page 213 G-I, paragraph 54.

[143] Sin Kam Wah v HKSAR; page 213 I, paragraph 54.

[144] Chan Tak Ming v HKSAR (2010) 13 HKCFAR 745; at 751, paragraph 3.

[145] HKSAR v Wong Lin Kay (2012) 15 HKCFAR 185.

[146] HKSAR v Wong Lin Kay; pages 191-2, paragraph 17.

[147] HKSAR v Wong Lin Kay; page 193, paragraph 22.

[148] HKSAR v Wong Lin Kay; page 194, paragraph 26.

[149] R v Whitaker [1914] 3 KB 1283.

[150] HKSAR v Wong Lin Kay; page 197, paragraph 44.

[151] HKSAR v Ho Hung Kwan Michael (2013) 16 HKCFAR 525.

[152] HKSAR v Ho Hung Kwan Michael; page 533, paragraph 26.

[153] HKSAR v Ho Hung Kwan Michael; page 534, paragraph 29.

[154] Re A-G’s Reference (No 3 of 2003); page 383, paragraph 59.

[155] HKSAR v Ho Hung Kwan Michael; page 538, paragraph 42.

[156] Attorney General v Chung Fat Ming [1978] HKLR 480.

[157] (2) Any public servant who, whether in Hong Kong or elsewhere, without lawful authority or reasonable excuse, solicits or accepts any advantage as an inducement to or reward for or otherwise on account of his-  

(a) performing or abstaining from performing, or having performed or abstained from performing, any act in his capacity as a public servant;

[Amended in 1980 to add “whether in Hong Kong or elsewhere”.]

[158] Attorney General v Chung Fat Ming, page 482.

[159] Attorney General v Chung Fat Ming, pages 485-6.

[160] Attorney General v Chung Fat Ming, page 487.

[161] Attorney General v Chung Fat Ming, page 488.

[162] Attorney General v Chung Fat Ming, page 488.

[163] Attorney General v Chung Fat Ming, pages 496-7.

[164] The Queen v Paul Kiang (CACC 243/1989; unreported, 25 July 1989).

[165] (1) Any agent who, without lawful authority or reasonable excuse, solicits or accepts any advantage as an inducement to or reward for or otherwise on account of his-

(b) showing or forbearing to show, or having shown or forborne to show, favour or disfavour to any person in relation to his principal's affairs or business, shall be guilty of an offence.

[166] The Queen v Tsou Shing Hing (CACC 249/1988; unreported, 9 February 1989).

[167] The Queen v Paul Kiang, pages 8-10.

[168] Appeal Bundle, pages 88 S - 89 A.

[169] Sin Kam Wah v HKSAR; pages 206 J - 207 A, paragraph 32.

[170] HKSAR v Sin Kam Wah, page 16.

[171] 5 November 2015.

[172] 5 November 2015.

[173] HKSAR v Sin Kam Wah, Ma CJHC, page 16.

[174] HKSAR v Sin Kam Wah,Ma CJHC, page 17.

[175] HKSAR v Sin Kam Wah, District Court Judge Saunders, page 16.

[176] Attorney General v Chung Fat Ming, page 488.

[177] Li Defan v HKSAR (2002) 5 HKCFAR 335 B-E, paragraph 32.

[178] Shum Kwok Sher v HKSAR; page 409, paragraph 86.

[179] HKSAR v Ho Hung Kwan Michael; page 534, paragraph 29.

[180] Appeal Bundle, page 44.

[181] Appeal Bundle, page 1128.

[182] Appeal Bundle, page 1077.

[183] Appeal Bundle, page 85.

[184] Appeal Bundle, page 88.

[185] Appeal Bundle, page 330.

[186] Appeal Bundle, page 2005.

[187] Appeal Bundle, pages 2026 and 2029.

[188] Appeal Bundle, pages 2107-2120.

[189] Appeal Bundle, page 2152.

[190] Appeal Bundle, page 336.

[191] Appeal Bundle, page 139.

[192] Appeal Bundle, page 156.

[193] Appeal Bundle, pages 144-5.

[194] Appeal Bundle, page 145.

[195] Appeal Bundle, page 84.

[196] Appeal Bundle, pages 1952-3

  “MR PERRY:…so far as the character of the defendants is concerned, they have a clear record, and Rafael Hui, Thomas Kwok and Thomas Chan have given evidence, and Raymond Kwok has advanced an account in his written representations.  In those circumstances, it appears to us that they should have the benefit of a full character direction, giving directions on both limbs as would ordinarily be required, first in relation to credibility, their credibility, and secondly, their propensity or lack of propensity to commit the offence alleged against them by the prosecution.

There is a wrinkle in the case of the 1st defendant, Rafael Hui, because in the course of his evidence he has admitted that he failed to declare the payments in his tax returns.  My Lord, the prosecution case in relation to that is of course he failed to declare the payments in his tax returns because they were bribes. The prosecution are not advancing a case of cheating The Revenue.  My Lord, we would be content, if your Lordship felt it appropriate, just to give the conventional direction and leave it to the parties to address that point. Certainly, I will be addressing the jury on the basis that they should not hold against Rafael Hui anything to do with his lifestyle or his failure to declare the payments in his tax returns, unless they are satisfied that that was a failure because he was concealing what amounted to general sweetener payments.

So, my Lord, that’s the way that I am minded to address the jury at the moment.

HIS LORDSHIP:  I think it becomes rather messy if I start qualifying a good character direction in relation to D1.  My present inclination is that I give the same direction.”  [Italics added.]

[197] Appeal Bundle, page 75.

[198] Specimen Direction 37, ‘Specimen Directions in Jury Trials’ issued by the Judicial Institute.

[199] Appeal Bundle, page 76.

[200] Appeal Bundle, page 262.

[201] Appeal Bundle, page 272.

[202] Appeal Bundle, page 273.

[203] Appeal Bundle, page 44.

[204] Appeal Bundle, page 105.

[205] Appeal Bundle, page 119.

[206] Appeal Bundle, page 260; also see the 1^st defendant’s evidence-in-chief, page 1546.

[207] Appeal Bundle, page 269.

[208] Appeal Bundle, pages 279-305.

[209] Appeal Bundle, page 286.

[210] Appeal Bundle, page 287.

[211] Appeal Bundle, page 290.

[212] Appeal Bundle, page 290.

[213] Appeal Bundle, pages 335-6.

[214] Judgment, paragraphs 111 and 129.

[215] Judgment, paragraphs 246-249.

[216] Appeal Bundle, pages 291-3.

[217] Appeal Bundle, page 743(3)-(20).

[218] Appeal Bundle, page 743(3).

[219] Appeal Bundle, page 743(4), paragraph 9.

[220] Appeal Bundle, page 743(5), paragraph 11.

[221] Appeal Bundle, page 743(6), paragraph 13.

[222] Appeal Bundle, page 2809 a-f.

[223] Appeal Bundle, page 743(7), paragraph 15.

[224] Appeal Bundle, pages 2932-44.

[225] Appeal Bundle, page 2935, paragraphs 17-8.

[226] Appeal Bundle, page 2935, paragraph 20. 

[227] Appeal Bundle, page 2936, paragraph 23.

[228] Appeal Bundle, pages 2946-2974.

[229] Appeal Bundle, page 2945.

[230] Appeal Bundle, pages 2927-2930.

[231] Appeal Bundle, page 743(8), paragraph 16.

[232] Appeal Bundle, page 743(8), paragraph 17.

[233] Appeal Bundle, page 743(8), paragraph 18.

[234] Appeal Bundle, page 743(9), paragraph 21.

[235] Appeal Bundle, page 743(10), paragraph 23.

[236] Appeal Bundle, page 743(15)-(16), paragraphs 36-7.

[237] Appeal Bundle, page 743(11), paragraph 26.

[238] Appeal Bundle, page 743(15), paragraph 36.

[239] Appeal Bundle, page 743(16), paragraph 37.

[240] Appeal Bundle, page 743(17), paragraph 43.

[241] Appeal Bundle, page 743(16), paragraphs 39-40.

[242] Appeal Bundle, page 743(17)-(18), paragraph 43.

[243] Appeal Bundle, page 743(20), paragraph 51.

[244] Appeal Bundle, page 743(14), paragraph 33.

[245] Appeal Bundle, page 743(14), paragraphs 33-4.

[246] Appeal Bundle, page 743(15), paragraph 35.

[247] Appeal Bundle, page 2040.

[248] Appeal Bundle, page 2040.

[249] Appeal Bundle, page 2040.

[250] Appeal Bundle, page 2040.

[251] Appeal Bundle, page 1547.

[252] Appeal Bundle, page 1636.

[253] Appeal Bundle, page 1636.

[254] Appeal Bundle, page 1636.

[255] Appeal Bundle, page 2834.

[256] Appeal Bundle, page 1637.

[257] Appeal Bundle, page 261 C-H.

[258] Appeal Bundle, page 329 J-M.

[259] Appeal Bundle, page 3267 - ‘Fund Flow - Nov & Dec 2007 Payments’.

[260] Appeal Bundle, page 2062.

[261] Appeal Bundle, pages 1640-1.

[262] Appeal Bundle, page 276 D-J.

[263] Appeal Bundle, page 0(j).

[264] Appeal Bundle, page 7.

[265] Appeal Bundle, page 23g.

[266] Appeal Bundle, page 2400, paragraph 269.

[267] Appeal Bundle, page 2401, paragraph 271.

[268] Appeal Bundle, page 2401, paragraph 272.

[269] Appeal Bundle, page 2429, paragraph 82.

[270] Appeal Bundle, page 2429, paragraphs 83-4.

[271] Appeal Bundle, page 23 a-v.

[272] Appeal Bundle, page 1051 (pages 62-3).

[273] Appeal Bundle, page 1053 (page 72).

[274] Appeal Bundle, pages 1076-7 (pages 52 and 55).

[275] Appeal Bundle, page 1395 (pages 107-8).

[276] Appeal Bundle, page 1448 (page 72).

[277] Appeal Bundle, pages 1945-6 (pages 48-9).

[278] Appeal Bundle, page 2093 (page 68).

[279] Appeal Bundle, page 2083 (page 25).

[280] Appeal Bundle, page 2224 (page 32).

[281] Appeal Bundle, page 45.

[282] Appeal Bundle, page 96.

[283] Appeal Bundle, page 97.

[284] Submissions of the 4^th defendant, paragraph 35.

[285] Submissions of the 4^th defendant, paragraph 47.

[286] R v Hancock [1996] 2 Cr. App. R. 554.

[287] R v Brown (1984) 79 Cr. App. R. 115.

[288] R v Hancock, page 559 F-G.

[289] R v Hancock, page 560 A-B.

[290] Appeal Bundle, page 52.

[291] R v K & Others [2005] 1 Cr. App. R. 25, paragraph 36.

[292] Appeal Bundle, page 318.

[293] Appeal Bundle, page 360.

[294] Appeal Bundle, page 360.

[295] Appeal Bundle, page 361.

[296] Appeal Bundle, page 361.

[297] Appeal Bundle, page 361.

[298] Appeal Bundle, pages 362-3.

[299] Appeal Bundle, page 363.

[300] Appeal Bundle, page 363.

[301] Appeal Bundle, page 363.

[302] Appeal Bundle, page 363.

[303] Appeal Bundle, page 364.