HKSAR v. LIU TJONG SLAM

FAMC No 8 of 2013

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 8 OF 2013 (CRIMINAL)

(ON APPLICATION FOR LEAVE TO APPEAL FROM CACC NO 87 OF 2012)

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REASONS FOR DETERMINATION

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Mr Justice Tang PJ:

1.  Section 25(1) of the Organized and Serious Crimes Ordinance (OSCO) Cap 455 has two limbs, the knowing limb as well as the reasonable grounds to believe limb.   A defendant could be convicted on either limb.  The applicant (D1at trial) was convicted on one count of money laundering,namely, that he used three bank accounts to deal with property in the total sum of about HK$10,061,000 between 1 June 2009 and 14 July 2010 knowing that the property represented the proceeds of an indictable offence.  The judge also convicted him on the alternative basis, namely, that he had reasonable grounds to believe that the property represented the proceeds of an indictable offence.  He was convicted with his brother, D2 of one count of conspiracy to deal with property between the same dates in the sum of $853,439 using D2’s bank account knowing that it represented the proceeds of an indictable offence.  Again, they were also convicted on the alternative basis.  The applicant was sentenced to 4¾ years and 2 years respectively with six months of the two-year term to be served consecutively.  D2 has served his sentence and is not party to this application.

2.  The facts are straight-forward. Their father was involved in the manufacture of and trafficking in “ice” in a very big way and has pleaded guilty to 4 counts of trafficking,having been caught red-handed with about $50 million worth of “ice”. Equally substantial amounts of ice were also found in premises controlled by the father.  The moneys in the impugned accounts came from the father.  The father gave evidence on behalf of the defendants at trial that the moneys in the accounts were not proceeds of any indictable offence.  The defendants also gave evidence that they did not know and had no reason to believe that the property in the accounts were the proceeds of any indictable offence.  Their evidence was rejected by the trial judge who found the prosecution’s case proved beyond reasonable doubt.

3.  The applicant applied for leave to appeal on the substantial and grave injustice ground regarding his conviction on the knowing basis.  It was not suggested,rightly so in our view, that the conviction on the alternative basis of reasonable grounds to believe could be successfully challenged.

4.  The applicant also applied for leave to appeal on sentence.  First, that, had he been convicted only on the second limb, the sentence would have been substantially lower.  Secondly, it is said that the sentence in respect of the second count should not be ordered to be served even partially consecutively.

5.  Mr Graham Harris SC on behalf of the applicant submitted that on the knowing limb it was necessary for the prosecution to prove that the moneys in the applicant's accounts were in fact the proceeds of an indictable offence, in this case trafficking in dangerous drugs. He relied on what McHugh NPJ said, with the concurrence of the other members of the court, in Oei Hengky Wiryo v HKSAR(No 2),(2007) 10 HKCFAR 98 at137.

“106 … Moreover, in practice, it is likely that the first limb of s25(1) – the ‘knowing limb’ – canseldom be used unless the prosecution proves that the property did in fact represent a person’s proceeds of an indictable offence…”

6.  Mr Harris added, the prosecution never sought to prove that the moneys were the proceeds of an indictable offence beyond reasonable doubt; the prosecution case was that the proceeds might have been or were more likely than not to be proceeds of drug trafficking.  Also, at the no case to answer stage, the prosecution conceded that they were not relying on the first limb.  Even so, although the trial judge never expressly found that the money in the accounts were the proceeds of an indictable offence, she convicted the applicant under the first limb.  Mr. Harris submitted that the Court of Appeal had failed to recognize the error of the judge.

7.  Despite the strength of MrHarris’s submissions, we do not believe this is a suitable case for leave.  As noted, the applicant has been correctly convicted on the second limb, the appeal would be academic unless the sentence would be reduced as a result.

8.  The applicant was sentenced on the basis that he knew that he was handling proceeds from drug trafficking.  Mr Harris submitted that had the applicant been sentenced on the second limb only, the sentence would be substantially lower.  But we agree with the prosecution that, even in that event, the total sentence of 5¼ years is not excessive.  This is a very bad case.  The judge quite properly found that the applicant knew about the father’s drug business, large quantities of drugs having been left in places to which the applicant had access.  It was also accepted that the applicant knew that the money came from the father.  Thus, even if his liability were approached on the “reasonable grounds to believe” basis, this would be a case where the lack of actual knowledge arises in a situation close to one of wilful blindness.

9.  Mr Harris also complained about making part of the sentence in respect of the conspiracy charge partly consecutive.  But, when the sentences are looked at in totality, they are not excessive.  In any event, this is not a case where one can say that there has been substantial or grave injustice.

10.  For the above reasons we have refused leave to appeal.