HKSAR v. YE FANG

CACC 299/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 299 OF 2014

(ON APPEAL FROM DCCC NO. 1022 OF 2012)

____________

____________

___________________

J U D G M E N T

___________________

Hon Lunn VP (giving the Judgment of the Court) :

1.  By a Notice of Motion, filed with the Court on 1 June 2016, the 2^nd appellant invited this Court to certify that points of law of great and general importance are involved in the decision of this Court on 26 May 2016 allowing her appeal against her conviction after trial on 25 August 2014 by District Court Judge E. Yip of an offence of dealing with property known or believed to represent the proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455. The points of law said to be of great and general importance were identified in two questions.

Question 1

On a charge of dealing with proceeds of crime contrary to s 25(1) of the Organized and Serious Crimes Ordinance (Cap 455) (“OSCO”), is it necessary for the prosecution to prove, as an essential element of the offence, that the proceeds being dealt with were in fact the proceeds of an indictable offence?  Was Oei Hengky Wiryo (2007) 10 HKCFAR 98 wrongly decided on this issue?

Question 2

In circumstances where the prosecution deliberately elected not to advance a positive case that the proceeds dealt with were the proceeds of an indictable offence (notwithstanding the fact that in a separate trial of the alleged offenders linked to the predicate very same proceeds such a positive case was advanced) does s.25 (1) OSCO operate so as to cast a burden on a defendant to explain the “reason for or purpose of…or use of” the impugned deposits of money (see para 141, Judgment of the Court of Appeal) so that a case to answer may be established purely on the basis of the absence of explanation for large sums of monies going through a defendant's account?

2.  On 3 August 2016 the appellant filed an amended Notice of Motion withdrawing the point of law identified in Question 1, which the appellant acknowledged had been decided conclusively in the judgment of the Court of Final Appeal in HKSAR v Yeung Ka Sing, Carson.[1] At the request of the parties, we have dealt with the application on the papers.

As to Question 2

3.  For the appellant, Mr Derek Chan submitted that, in upholding the judge’s ruling that the appellant had a case to answer on the single charge which she faced, this Court’s determination “depended critically on the fact that the existence of unexplained large sums of money going through a bank account is capable of supporting an inference of guilt such as to justify a finding of a case to answer in the context of s. 25(1) offence.”  Mr Chan contended that “the Court’s approach necessarily means that the mere receipt of a large amount of money imposes a burden on an accused person to provide a positive explanation of dealing with such a sum, the lack of which is capable of establishing a prima facie case.”  In the context of the burden of proof, Mr Chan submitted that “the lack of an explanation ought not be a piece of evidence against an accused.”

4.  In opposing the application, Mr William Tam, SC submitted that no point of law of great and general importance was involved.  Rather, he contended that this Court merely applied the well-established test, articulated in R v Galbraith and cited with approval in the Attorney General v Li Fook Shiu Ronald, to the evidence adduced in the prosecution case, as to whether or not a case to answer was established, namely whether a jury properly directed “could, may or might, be satisfied beyond reasonable doubt of such inferences as have to be drawn if all the elements of the prosecution case are to be established?”

5.  The appellant’s submissions that the judge had erred in ruling that there was a case for the appellant to answer was addressed at some length in the judgment of this Court.[2]  As this Court noted, the judge made it clear that he was considering the evidence “adduced in the prosecution case only.” [3]  The fact and provenance of the 17 impugned deposits into the appellant’s bank account was the subject of admitted facts.[4]  Evidence of the history of earlier deposits and the quantum of the account balance in the bank account was adduced in the prosecution case.  In the period of 12 months prior to the transfer into the account of the appellant of $68.95 million on 12 March 2010 the account balance had not exceeded around $4 million.[5] It was the prosecution case that the appellant had described herself as a “housewife” in opening a bank account in Hong Kong in her name and then applying for an identity card.  Further, it was an admitted fact that in the relevant period the appellant had made no tax return or payment to the Inland Revenue Department.[6]

6.  It was in that context that, in reviewing the relevant evidence, this Court noted that whilst there was evidence of the provenance of the deposits into the bank account “the purpose was largely unexplained… Similarly, the purpose of significant withdrawals was largely unexplained”.[7] Further, we went on to observe that one of the 17 deposits, namely of over $24 million, on its face was related to earlier purported loans in the same amount, in respect of which the loan documentation made no provision for security or interest.

7.  In the result, in upholding the judge’s ruling, this Court concluded:

“ The total sum of the 17 impugned deposits was not commensurate with the earlier credit balances or the total deposits in the 2nd appellant’s bank account. At the close of the prosecution case the reason for or purpose of most of the 17 impugned deposits was unexplained as was the use of those monies.”

8.  In so determining, the Court was doing no more than answering in the affirmative the question set out earlier, posed in R v Galbraith, namely that at the close of the prosecution case, having regard to all the evidence adduced, a jury properly directed could, may or might be satisfied beyond reasonable doubt that it was to be inferred that the appellant had reasonable grounds to believe that she was dealing in the proceeds of an indictable offence.  That was merely the application of trite law to the facts.  Clearly, no question of law of great and general importance arises.

Conclusion

9.  Accordingly, the application is refused.

Costs

10.  We direct that any application for costs by the respondent is to be filed with the Court within 14 days and, in the event of such an application, any submission in reply is to be filed with the Court within 14 days thereafter.