HKSAR v. SIU KAM LIN

CACC 186/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 186 OF 2009

(ON APPEAL FROM DCCC NO. 1102 of 2008)

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BETWEEN

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REASONS FOR JUDGMENT

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Hon Wright, J. (giving the reasons for judgment of the Court):

1.  The applicant sought leave to appeal her conviction, after trial, by His Honour Judge Andrew Chan of a single charge of dealing with the proceeds of an indictable offence contrary to s.25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap.455, namely moneys which had been deposited into her bank account during the period 5 January 2004 to 28 March 2008, in an aggregate amount of $14,800,191.87. At the conclusion of the hearing we dismissed the application and indicated that we would deliver our reasons thereafter, which we now do.

2.  The applicant was sentenced to undergo imprisonment for a period of 4 years. She applied for leave to appeal that sentence. On 11 November 2010 she abandoned that application.

The trial

3.  The charge sheet before the judge contained five charges each alleging the commission of similar offences: the first three offences were alleged to have been committed by the 1^st accused, who was the applicant’s husband; the fourth charge was alleged to have been committed by the applicant; the fifth charge by the 3^rd accused, the applicant's son. The periods during which each offence was committed differed as did the identities of the bank accounts used and the amounts involved. The 1^st accused absconded prior to the commencement of trial. The applicant and the 3^rd accused were tried together. Each was represented by Mr. David Khoza of counsel instructed by Messrs Ivan Tang and Company. The 3^rd accused was acquitted of the charge he faced.

4.  The evidence against the applicant came from three sets of agreed facts and from the unchallenged evidence of three prosecution witnesses. In short, it showed that during the period covered by the charge the account of the applicant cited in the charge received some 559 deposits, 249 of which were by way of transfer from the 1^st accused’s account, the remainder being either transfer deposits via an automatic teller machine (ATM) or deposits of cash or cheques. During the same period there were some 1094 withdrawals either by way of cash or by way of transfer.

5.  The total amount deposited to the applicant’s account was $14,800,191.87 whilst $14,894,464.91 was withdrawn. In round figures, $2 million was deposited by way of cash or cheque and $12.8 million by way of transfers. It is obviously a significant feature that, of those transfers, $11.7 million emanated from the 1^st accused’s bank accounts. Of further significance is that, in respect of $12.2 million, an amount equivalent to or closely approximating the amount of the inward transfer was withdrawn, in cash, from the applicant's bank account on the same day as the transfer or very shortly thereafter. A further $2.7 million was transferred out of the applicant's bank account.

6.  The applicant was a housewife. The judge noted that she had been educated to Primary 3 level and had married the 1^st accused in 1983. She had given up employment when her children were young but resumed working in 2006, being employed variously at a petrol station and a mahjong school. Other than for the tax year 2006/7 in which she declared an income of $17,783 from her salary as a petrol station worker, she had filed no tax return since the year 2004. She had no previous criminal convictions: she acknowledged that the 1^st accused had been convicted of an offence of bookmaking in March 2008.

7.  The applicant elected to testify. In respect of the moneys which were transferred into her account from the account of the 1^st  accused, it was her case that, insofar as she was concerned, the moneys were legitimately generated by him in the course of running a business involved in the decoration and renovation of premises: that, upon the request of the 1^st accused, she had withdrawn from her account an amount equivalent to that transferred into her account by him and had done so in cash, in order only to hand it back to the 1^st accused who would then use it to pay workers and creditors or generally in connection with his business.

8.  She ventured but one reason for this scheme which, on the face of it, appeared devoid of common sense. The reason she advanced was that the 1^st accused was busy in his work and that, particularly, he did not like queuing up in a bank or in front of an ATM: she felt obliged, she told the judge, to comply with his request. In contradiction of that reason, when she was asked to explain certain specific ATM cash transfers she testified that it was the 1^st accused himself who had paid cash into an ATM in order to transfer it to her bank account so that she could withdraw it, from another ATM, and hand it back to him.

9.  We are unsurprised that the judge found:

Both [the applicant] and D3 stated in their testimony that they took part in handling D1’s financial affairs because the latter did not like queuing up in bank. I find that totally unconvincing and I do not accept it.

10.  The judge went on to consider the applicant’s credibility on the question of whether the $11.7 million transferred from the 1^st accused’s bank account to hers may have represented proceeds generated by his renovation business. He concluded:

Having heard [the applicant’s] evidence, I again find that to be unconvincing and incredible.

It is not disputed that the applicant’s husband was engaging in decoration business. Having examined all the evidence, exhibits placed before me, I am of the view that the decoration business was no more than a small operation.

and provided compelling reasons for that finding.

11.  After reviewing further aspects of the applicant’s evidence, to one of which we shall return, the judge concluded:

Having considered all the evidence, in particular, the in and out of the money, the size of the money, the ways the money handled, the unknown origin of some of the money, I have no doubt that there are ample grounds for a common sense right-thinking member of the community to conclude that the property in whole or in part, represents proceeds of an indictable offence.

12.  The judge had earlier found that the applicant was aware of all the various forms of deposit and withdrawal in her account. She had never disputed that to be so.

The grounds of appeal

13.  Three grounds were advanced in support of the application, the first two of which were interdependent. The first ground asserted flagrant incompetence of the trial counsel, the essence of this allegation revolving around the alleged failure of trial counsel to take instructions from the applicant and to elicit evidence from her during her testimony concerning a number of deposits into her account to which, for ease of reference, we shall refer, as did the judge, as "unknown deposits"; the second, the perceived failure on the part of the judge to "warn" trial counsel that he intended to rely on the existence of those unknown deposits, despite the fact that they were contained in evidence which was subject of admitted facts, when he considered the case against the applicant; the third, that the judge had failed to take into account the personal attributes of the applicant when applying the objective test for criminal liability in respect of this offence. We deal with each in turn.

14.  In the course of considering the applicant’s evidence in his clear and concise Reasons for Verdict, the judge had regard to a number of deposits into her bank account the source or purpose of which was not apparent from the documentation before him. These were the unknown deposits. The applicant was asked to explain, in her evidence in chief, a number of those unknown deposits and she provided varying explanations for a number of them. There remained, we accept, a large residue about which she was not asked during her testimony.

15.  In support of her allegation of flagrant incompetence, the applicant provided an affirmation in which, inter alia, she asserted that counsel and those instructing him had not asked her, at any stage prior to trial, whether she was able to furnish explanations for any or all of the unknown deposits. She went on to assert in her affirmation that, had she been asked, she would have been able to do so and annexed a schedule which dealt with a large number of unknown deposits which she asserted she had not previously addressed but which she then purported to explain.

16.  As a consequence, trial counsel and his instructing solicitor were afforded the opportunity of dealing with these allegations by way of affirmation. They did so, denying what was said about them. Although they were present at court on the hearing of the appeal, Mr. Joseph Tse SC, who appeared for the applicant before us, did not seek to adduce testimony on the part of the applicant or to cross-examine trial counsel.

17.  We note, for the sake of completeness, that Mr. Alex Lee, who appeared for the respondent, invited our attention to 19 transactions in the annexure to the applicant’s affirmation about which, in fact, she had already testified during trial. He pointed out, further, that in eight instances what she said in the annexure to her affirmation was in contradiction of the evidence she had given in court. Mr Tse accepted this to be so.

18.  The thrust of Mr. Tse’s argument in respect of Ground 1 was that the applicant had been deprived of a fair trial by virtue of the fact that trial counsel had not asked her during the trial to deal with the residue of the unknown deposits when she would have been able to do so had she been asked; had she done so, this may have affected the judge’s view of her credibility and reliability which, in turn, may have resulted in the judge having a reasonable doubt and acquitting the applicant.

19.  That submission ignores the reality of the situation which was that, in respect of several of the unknown deposits of significant amounts of money, the applicant had been asked to provide an explanation and, when she did so, the answer which she supplied struck a blow deep into the heart of her credibility. A single illustration is sufficient: when she was asked to provide an explanation for a deposit of $50,000 on 20 March 2004 by somebody at a different ATM machine the applicant said, at first, that she could not recall where the money came from or who had deposited it, whereafter the following exchange occurred:

Court: You see, [the 1^st accused] was right at the cash machine, he could withdraw cash, why would he instead transfer $50,000 to your account and on the same day you gave him back $60,000?

...

Applicant: I cannot see that it was him who deposited into my account. As it was such a long time ago, when you asked me about it, I would make a guess and I thought this amount was given to me by him.

Court: All right. If it wasn't given by him, do you have any idea who would give you $50,000?

Applicant: I've no idea.

...

Applicant: For such a big amount, besides from my husband, there would be nobody who would transfer such an amount to me.

20.  This was irreconcilable with her evidence that the scheme existed because of the 1^st accused’s dislike of queuing in banks or at ATMs. We were mindful, also, of the applicant’s later unequivocal evidence when cross-examined that "All the money was deposited into my account from my husband" with, obviously, the exception of individual items which she had identified as coming from other known sources.

21.  We did not know nor were we prepared to speculate as to whether trial counsel appreciated that he would simply have damaged the applicant’s case even further by pursuing this line of questioning; whether he took the view that it simply was unnecessary to deal with every one of the 559 entries, a course which apparently Mr Tse would have chosen to follow; whether trial counsel merely overlooked a number of the entries. We were satisfied that, given the judge’s cogent reasons for rejecting the applicant’s version, to have pursued the suggested course would have had no beneficial outcome whatsoever for the applicant.

22.  The criticism of the judge in Ground 2, that he had failed to alert trial counsel to the fact that he would rely upon the lack of evidence concerning the residue of the unknown deposits, was equally unmeritorious. It sufficed to dispose of this ground for us to say that the fact of the unknown deposits was evidence which was before the judge, by way of agreement moreover, upon which he plainly was entitled to rely.

23.  However, two further points were pertinent to note: first, the judge signalled, at a very early stage of the applicant’s evidence in chief, his interest in the unexplained deposits, referring specifically to deposits on 12 and 13 February 2004 to which no reference had been made before counsel sought to move on to entries in March 2004 - it can hardly have come as any surprise, therefore, when he referred to the unexplained deposits in his Reasons for Verdict; secondly, as may be seen from the quotation at §11 above, the issue of the unexplained deposits was only one of the factors which he took into account when arriving at his decision, the remaining factors to which he referred being in themselves, in our judgment, full justification for his decision.

24.  Ground 3, that the judge erred in not taking into account the applicant’s personal attributes when considering the appropriate test, is a novel proposition which, as Mr. Tse conceded, is unsupported by any authority.

25.  The test in respect of criminal liability for this offence is well established. It has been expressed in a number of reported decisions: the judge had regard to that of  HKSAR v WAN Yet-kwai CACC 372/2008 where Hartmann JA said:

21. The phrase "having reasonable grounds to believe" is not new to Hong Kong's criminal statutes. It is now well settled that having "reasonable grounds to believe" involves both subjective and objective elements. Objectively, it requires proof that there are grounds that a common sense, right-thinking member of the community would consider sufficient to lead a person to hold a particular belief. Thereafter, subjectively, it has to be proved that these grounds were known to a defendant.

26.  It was Mr. Tse’s submission that the objective test should be qualified to provide that it must be a common sense, right-thinking member of the community possessed of the same personal attributes as the accused before the court, in this case the applicant. It was his contention that the judge should have taken into account what he categorised as the applicants’ personal attributes: she was only educated to primary three level; she had little working experience; she was a long-time spouse having been married since 1983; she relied entirely upon her husband.

27.  We were satisfied that, disregarding the fact that the judge was bound by the test as it presently stands, the test suggested would not have availed the applicant in any event. As against the attributes relied upon, was her own evidence that she speculated in dealing in shares without the assistance of her husband; she was the owner of immovable property; she was able to manage the income from that property.

28.  Given the frequency, value and nature of the transactions in the applicant’s account it seemed to us to be self-evident that reasonable grounds existed for any such a person, even with limited education, to believe that the moneys concerned represented, in whole or in part, proceeds of crime. But, as we say, that is not the true test and on the basis of the established test, too, the application, a fortiori, was doomed.