HKSAR v. CHAN CHI CHEONG AND OTHERS

CACC 425/2015

[2025] HKCA 1150

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 425 OF 2015

(ON APPEAL FROM DCCC NO 25 OF 2015)

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J U D G M E N T

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The Court:

I.  Introduction

1.  The 1^st defendant Lee Yam Pui David (李欽培, “D1”) was charged with 11 charges of conspiracy to defraud, contrary to Common Law and section 159C(6) of the Crimes Ordinance, Cap. 200 and one charge of offering advantages to an agent, contrary to sections 9(2)(b) and 12(1) of the Prevention of Bribery Ordinance, Cap. 201 and sections 159A and 159C of the Crimes Ordinance. Each of the 2^nd to 12^th applicants (respectively “A2” to “A12”) was charged with D1 on a joint charge of conspiracy to defraud, contrary to Common Law and section 159C(6) of the Crimes Ordinance.

2.  D1 and all the applicants pleaded not guilty and were tried in the District Court before His Honour Judge Sham (“the Judge”). They were all represented by counsel, Mr Philip Wong (“PW”), on the instruction of Jim & Co whose sole proprietor was Mr Jim Yiu Ming (“JJ”).

3.  The Judge convicted D1 of all the 22 charges of conspiracy to defraud but acquitted him of the charge of offering advantages to an agent, and convicted A2 to A12 of their respective charge of conspiracy to defraud.[1]

4.  D1 was sentenced to a total term of three years’ imprisonment. Each of A2 to A5, A7 to A8 and A10 to A12 was sentenced to two years and ten months’ imprisonment, and A6 and A9 were each sentenced to two years and six months’ imprisonment.[2]

5.  A2 to A12 have applied for leave to appeal against conviction and sentence. D1 had also put in an application for leave to appeal against conviction and sentence. He unfortunately passed away in May 2022. His application for leave to appeal was dismissed on 9 June 2022 after his executrix informed the court that the application would not be proceeded with.

II.  The charges

6.  The prosecution of this case stemmed from a small house development in Tai Che Village in Shatin (沙田大輋村). The participants of the development scheme included D1 who was a land developer, Full Wealthy Development Limited (康沛發展有限公司) (“Full Wealthy”) which was a company controlled by D1, Cheung Cheuk Wing who was D1’s employee, A2 to A12 who are male indigenous inhabitants of the New Territories (“NTII”), commonly known as “男丁” or “Dings”, and 11 other NTIIs (“11 Dings”, and collectively with A2 to A12 “22 Dings”).

7.  Under the small house development scheme, each of the 22 Dings entered into an assignment with Full Wealthy for the transfer to him from Full Wealthy of a specific plot of land in Tai Che Village. All the assignments were registered in the Land Registry. No payment was made by the 22 Dings for the transfer of the land. Instead, they each received payments from Full Wealthy or a company called Ever Grace International Holdings Limited (永悅國際集團有限公司, “Ever Grace”) which was indirectly owned by D1[3]. Each of the 22 Dings then made an application to the Lands Department for a free building licence (免費建屋牌照, “FBL”) to build a small house under the Small House Policy (“SHP”). Except one of them[4], all the 22 Dings were issued with a FBL by the Lands Department.

8.  The 11 joint charges of conspiracy to defraud[5] alleged that D1 and Cheung Cheuk Wing conspired with A2 to A12 respectively to defraud the Lands Department, by dishonestly concealing the fact that there was an arrangement to dispose of or otherwise deal with the land for which the FBL application was made, and by dishonestly and falsely representing to the Lands Department that the applicant in question was the owner of the land, causing the Lands Department to issue the FBL to him.

9.  The particulars of the 11 joint charges are in identical terms, save in relation to the period of time during which the alleged dishonest acts were committed. The conspiracy under each charge was alleged to start on the day when the first payment from Full Wealthy was received (in the case of A2 to A10 and A12) or the date of the secret building agreement[6] (in the case of A11), and end on the day when a FBL was issued to the applicant in question. The period spanned from January 2008 to January 2011. Specifically, the particulars stated that:

“[D1] and [A2 to A12 respectively], between [the relevant dates], in Hong Kong, conspired together and with Cheung Cheuk Wing to defraud the Lands Department (“LD”) of the Government of the Hong Kong Special Administrative Region by:

(1) dishonestly concealing that the said [A2 to A12 respectively] had entered into an arrangement with other person(s) to dispose or otherwise deal with the lot of land (“the lot”) at which he was applying for construction of a house by way of a Building Licence; and

(2) dishonestly and falsely representing that the said [A2 to A12 respectively] was the owner of the lot, and

dishonestly causing the LD to issue a Building Licence to the said [A2 to A12 respectively]”.

10.  The other 11 charges of conspiracy to defraud against D1 alleged that he conspired with the 11 Dings respectively and Cheung Cheuk Wing to defraud the Lands Department by using the same dishonest means stated above to obtain a FBL.

III.  The undisputed background facts

11.  Most of the facts in the case are not in dispute. We set out below the undisputed background facts that are material to the understanding of the prosecution case against the applicants and the grounds of appeal advanced by the applicants.

A.  Small House Policy

12.  The prosecution case is premised on the Small House Policy (“SHP”). The evidence at the trial shows that the SHP was first endorsed as a policy in 1972. Under the SHP, a NTII who is 18 years old or above and descended through the male line from a resident in 1898 of a recognised village in the New Territories may build once in his life time, for his own occupation, a three-storey house not exceeding 2,100 square feet on private land at nil premium in a recognised village or its immediate environs. This eligibility or entitlement under the SHP is commonly referred to as “丁權” (Ding right).

13.  An important objective of the SHP is to provide a place of residence to the NTIIs. To regulate the implementation of the SHP, a NTII who wishes to build a small house is required to make an application to the Lands Department for the issue of a FBL (“FBL Application”). To be eligible for the grant of a FBL, a NTII must satisfy two requirements (collectively “the Eligibility Requirements”):

(1)  He must legally and beneficially own the piece of land to which his FBL Application relates and on which the small house is to be built (“Ownership Requirement”); and

(2)  At the time of making the FBL Application, he must not have entered into any arrangement or agreement with any other person(s) to transfer his interest in the land or his rights under any FBL that he may be granted (“No Arrangement Requirement”).

B.  FBL Application

14.  The evidence on the procedure for a FBL Application and how it was processed by the District Lands Office (“DLO”) at the material time may be summarised as follows[7]:

(1)  A NTII who wished to make a FBL Application had to fill in an application form and submit it to the DLO.

(2)  The DLO would conduct investigation and check the Lands Registry records to establish whether the applicant was a NTII and whether he was the registered owner of the land to which the application related.

(3)  The DLO would hold a meeting with the applicant, during which he would be required to make a statutory declaration declaring, inter alia, his status as a NTII, and that he was the “sole legal and registered owner” (唯一合法註冊業權人) of the land and he has not previously applied for a FBL.

(4)  A notice would be put up at the village where the small house was proposed to be built. Any objection received by the DLO would have to be resolved before the application would be further processed.

(5)  If it was decided that a FBL could be issued, a draft FBL would be provided to the applicant, who would be asked to execute a formal copy of the FBL upon his acceptance and agreement to the terms of the licence. Upon the execution of the formal copy, the FBL would be granted and it would be registered in the Lands Registry.

(6)  The licencee could then proceed to apply for the necessary approval(s) or permit(s) for the construction of the small house.

(7)  After the small house was completed to the DLO’s satisfaction and the DLO had checked again that the licencee was still the registered owner of the land, a certificate of compliance would be issued.

C.  Statutory declaration

15.  The statutory declaration that a FBL applicant was required to make was a measure introduced in 1993 in response to the request of Heung Yee Kuk (鄉議局) to streamline the FBL Application process. The content of the statutory declaration had undergone several changes. The changes that are relevant for present purpose may be summarised as follows[8]:

(1)  As from May 1993, an applicant was required to declare under paragraph (d) that: “I am the sole owner of [insert the Demarcation District and lot numbers] on which I wish to erect a small house”[9] (“Ownership Declaration”).

(2)  In October 1997, a new paragraph (e) was added, declaring that: “I have never made and have no intention at present to make any private arrangements for my rights under the Small House Policy to be sold to other individual/a developer”[10] (“No Private Arrangement Declaration”).

(3)  In October 2001, three changes were made to the statutory declaration[11]:

(a)  The Ownership Declaration was revised to become “I am the sole legal and registered owner of Lot No(s). ____ in Demarcation District ____ (“the Lot”) on which I wish to erect a small house”[12]  (“Revised Ownership Declaration”). This was the version that appeared in the statutory declarations made by A2 to A12.

(b)  The No Private Arrangement Declaration was revised to become “I have never made and have no intention of making any private arrangements for my rights under the Small House Policy to be sold to other individual/ a developer”[13] (“Revised No Private Arrangement Declaration”).

(c)  A new paragraph (d)(ii) was added, declaring that: “I have never entered into any arrangements or agreement with any person or persons to transfer, alienate, dispose or otherwise deal with my rights in and over the Lot including but not limited to the right to develop the Lot pursuant to any grant or approval to be issued by the Government”[14]  (“Paragraph (d)(ii)”).

(4)  In July 2006, Paragraph (d)(ii) was removed in circumstances explained in [16] below.

(5)  In December 2007, the Revised No Private Arrangement Declaration was removed in circumstances explained in [17] below.

(6)  In short, the statutory declarations made by A2 to A12 only contain the Revised Ownership Declaration, and do not contain Paragraph (d)(ii) or the Revised No Private Arrangement Declaration.

16.  The removal of Paragraph (d)(ii) in 2006 came about as a result of concerns expressed by the Heung Yee Kuk that an applicant for a FBL might incur criminal liability as a result of making the declaration in Paragraph d(ii). Eventually by a letter dated 20 April 2006[15], the then Secretary for Housing, Planning and Lands, Mr Michael Suen, informed the then chairman of Heung Yee Kuk, Mr Lau Wong Fat, that the Lands Department agreed to remove Paragraph (d)(ii) from the statutory declaration and to incorporate it in the FBL instead. The letter expressly stated that if a licencee was found to be in breach of this provision in the FBL, the Lands Department would take enforcement action and re-enter the land. Such enforcement measure would not involve a criminal conviction. In July 2006, clause 3(a)(iv)[16], which is identical to Paragraph (d)(ii), was added to the Conditions in the FBL (“FBL Conditions”).

17.  The Heung Yee Kuk also pressed for the removal of the Revised No Private Arrangement Declaration from the statutory declaration for the reason that a FBL applicant might face criminal prosecution for making this declaration. The Government considered that, similar to Paragraph (d)(ii), this declaration could instead be included as a condition of the FBL. Accordingly, by a letter dated 7 December 2007[17], the then Secretary for Development, Mrs Carrie Lam, informed Mr Lau Wong Fat of the Heung Yee Kuk that the Lands Department had in November 2007 agreed that, in lieu of the making of a declaration, the requirement in paragraph (e) of the statutory declaration would be incorporated into the FBL Conditions. The letter expressly stated that if a licencee breached this condition, the Lands Department would take enforcement action and re-enter the land, and that such measure would not entail a criminal conviction. The Revised No Private Arrangement Declaration thus became clause 3(a)(v) of the FBL Conditions.[18]

18.  The letters from Michael Suen and Carrie Lam, the removal of Paragraph (d)(ii) and the Revised No Private Arrangement Declaration from the statutory declaration and their replacement by clauses 3(a)(iv) and 3(a)(v) of the FBL Conditions, together with the events leading to these changes were heavily relied on by the applicants both in the trial and in this appeal.

D.  FBL Conditions

19.  When the Lands Department decided to issue a FBL, a copy of the draft FBL would be given to the applicant who would be asked to signify whether he accepted the terms and conditions in it; and if he did, he would be required to execute the FBL in person.[19]  The new clause 3(a)(iv) and (v) of the FBL Conditions that an applicant must abide by are in these terms:

“3(a) The Licensee expressly warrants, represents and declares that –

…

(iv) he has never entered into any arrangements or agreement with any person or persons to transfer, alienate, dispose or otherwise deal with the lots or any part thereof or any interest therein or his rights in and over the lots including but not limited to the right to develop the lots or any part thereof;

(v) he has never made any arrangements to sell or otherwise dispose of his eligibility to apply for a grant of a Licence, Private Treaty Grant of Exchange of land under the Small House Policy referred to in Condition No. 4(a); and

(vi) consequently he is qualified to receive from the Government this Licence free of premium,

and agrees subject to sub-clause (b) of this Condition that if the Licensee is found to be in breach of any part of this warranty, representation and declaration the right of re-entry contained in the Lease and extended to these Conditions … shall be exercisable in respect of such breach. …”[20]

20.  At the material time, the FBL Conditions also contained other provisions that restricted a licensee’s ability to transfer, alienate and dispose of his interest in the land after obtaining the FBL[21]:

(1)  Clause 4(a) prohibited the assigning, partitioning, mortgaging, charging, parting with possession of or otherwise disposing of the land or any part or its undivided share or entering agreement to do so howsoever.

(2)  Clause 4(d)(ii) prohibited the disposal of the licencee’s interest in the small house to a non-NTII within 5 years from the issuance of the certificate of compliance, unless he paid to the Government a premium (a procedure commonly known as 補地價) equivalent to the difference between the market value of an agricultural land plot and that of a land plot with permission to build.

E.  The practice of To Ding (套丁)

21.  At the core of the prosecution case is that D1, Cheung Cheuk Wing and the 22 Dings conspired to carry out a scheme or practice that is colloquially known as “套丁” (To Ding). In broad terms, it involves a Ding, who does not own any land, agreeing with a land developer, who has no Ding right, to sell his Ding right to the developer and to apply for a FBL for the construction of a small house on land owned by the developer. As part of the scheme, the developer will transfer a piece of land to the Ding for no consideration so that he will become the paper owner of the land when in fact he has no interests in it. Thereafter the Ding will make a FBL Application to the Lands Department. The small house eventually built belongs to the developer. The Ding has no intention or prospect of acquiring any interest in it and/or occupying it.

22.  On the prosecution evidence, the act of To Ding, which involves a sale of the Ding right, is contrary to the objective of the SHP and if it was known to the Lands Department the FBL Application would not be processed and a FBL would not be granted.[22]  The applicants’ case, on the other hand, is that To Ding was a prevalent practice known to, tolerated and condoned by the Lands Department.

IV.  The prosecution case against A2 to A12

A.  Summary of the prosecution evidence

23.  At the trial, the prosecution called 12 prosecution witnesses. They included officers of the Shatin DLO and Lands Department (PW1 to PW5)[23], Cheung Cheuk Wing (PW6) and six of the 11 Dings (PW7 to PW12, collectively “Ding Witnesses”). The written statements of several other witnesses were admitted in evidence under section 65B of the Criminal Procedure Ordinance, Cap. 221. Among them was the statement of the solicitor’s clerk, Paul Chan[24], who was involved in the preparation of the legal documents executed by A2 to A12 and Full Wealthy. Cheung Cheuk Wing, the Ding Witnesses and Paul Chan were the immunised witnesses in the case.

24.  The undisputed evidence relied on by the prosecution shows that A2 to A12 had carried out the following acts:

(1)  Each of A2 to A12 (as well as the 11 Dings) and Cheung Cheuk Wing acting on behalf of Full Wealthy had executed a Temporary Agreement for Sale and Purchase dated 1 April 2008 (“Temporary Agreement”)[25], and an assignment dated 17 April 2008 (“Assignment”). Both documents purported to show Full Wealthy had sold certain plot(s) of land in Tai Che Village to each of A2 to A12 at a consideration of HK$150,000.

(2)  All the Assignments were registered in the Land Registry, with the result that on the Land Registry record A2 to A12 appeared to be the respective registered owners of the land plot(s) involved in their respective assignments.

(3)  A2 to A12 (as well as the 11 Dings) did not pay the HK$150,000 stated consideration or anything for the land assigned to them.[26]  Instead, each of them had received from Full Wealthy and/or Ever Grace a sum of money (termed as a “Ding fee”) that ranged from HK$130,000 to HK$250,000[27].

(4)  A2 to A12 also each signed and submitted to the Lands Department a FBL application form dated 18 April 2008. The application form contained a Note (附註) stipulating that an applicant must not enter into any arrangement or agreement with any person(s) to transfer, assign, handle or otherwise deal with his interests or rights in the land concerned, including but not limited to his right under any FBL that may be granted [28].

(5)  A statutory declaration[29] was made by each of A2 to A12 at the meeting with the DLO to establish his NTII status and eligibility to apply under the SHP that took place between October and November 2008. By the statutory declaration, each of them declared that he was the “sole legal and registered owner” (唯一合法注冊業權人) of the piece of land to which his FBL Application related and that he had not previously applied for a FBL.

(6)  When the Lands Department decided to issue a FBL, a copy of the draft FBL was sent to A2 to A12 who were asked to signify whether they accepted the FBL in those terms and to execute the FBL in person.[30]  A2 to A12 each signed an acceptance letter on 15 April 2010[31] which signified their agreement to the terms and conditions in the FBL.

(7)  On various dates between September and October in 2010, A2 to A12 each attended the DLO together with a witness and signed and executed a formal copy of the FBL[32]. The Lands Department subsequently issued to them their respective FBLs[33].

(8)  At all material times, the Lands Department did not know that A2 to A12 did not pay the consideration stated in the Assignments for the purchase of the land to which their FBL Applications related, or that they had received payments from Full Wealthy and/or Ever Grace.[34]

25.  On these bases, the prosecution said that A2 to A12 had sold their Ding right to D1 in return for the Ding fee received from Full Wealthy and/or Ever Grace. The prosecution also said that before executing the FBL, A2 to A12 were aware of the terms and the warranties, representations and declarations contained in clause 3(a)(iv) and (v) of the FBL Conditions, and that it was on the basis of their warranties and representations that the Lands Department issued to A2 to A12 their respective FBLs.  

26.  The prosecution also adduced in evidence the building agreements (建築協議書, “Building Agreements”) that A2 to A12 made with Full Wealthy and the power of attorneys given by A2 to A12 in favour of Full Wealthy and/or its related persons (“POAs”). These documents were executed simultaneously with the Assignments. Similar documents were also executed by the 11 Dings. It is the prosecution case that through the Building Agreements and the POAs, Full Wealthy retained control over the land parcels despite the execution of the Assignments and the appearance of A2 to A12 as the registered owners in the Land Registry record, and that it was agreed among the parties to these documents that the documents were to be kept secret.

27.  Several provisions in the Building Agreements are revealing as to the arrangements between Full Wealthy and A2 to A12 and the true nature of their interest in the land plot(s) to which A2 to A12’s FBL Applications relate:

(1)  Paragraph 6 of the Recital[35] recorded that Full Wealthy had for some time past transferred or assigned to the respective applicants the land described in the agreement for the purpose of construction but without payment or other consideration to Full Wealthy, and that an application for an FBL had been made to the Lands Department.

(2)  Clauses 11 and 13[36] provided that once the small house was built and a certificate of compliance was issued by the Lands Department, the respective applicants shall pay to Full Wealthy HK$ 9 million, and in the event of failure to make the payment they shall apply to the Lands Department for permission to assign the land and the small house to Full Wealthy, who shall be responsible for paying the required premium to the Government.

(3)  Clauses 16 to 18[37] provided that the respective applicants shall execute an irrevocable power of attorney in favour of Full Wealthy and further send all title deeds and documents in relation to the land to Full Wealthy for retention until the HK$ 9 million was paid.

(4)  Clauses 23 and 24[38] prohibited the respective applicants or Full Wealthy from disclosing the Building Agreement made between them, or submitting or registering it with the Land Registry.

28.  Cheung Cheuk Wing’s evidence on the Building Agreements and the POAs, including their purpose and effect, is that:

(1)  The Building Agreements and the POAs effectively allowed Full Wealthy to retain its interest in the land and to have full control over the small houses to be built thereby safeguarded the interest of Full Wealthy.[39]

(2)  The Building Agreements served to secure Full Wealthy’s interest in the small houses in the event any of the Dings claimed to have ownership of the land, and the HK$9 million consideration stated in it was a randomly selected figure. [40]

(3)  The execution of these documents could not be disclosed to the Lands Department because it would reveal the underlying To Ding scheme, which was not allowed, and would jeopardize the FBL Application, and D1 was well aware of this.[41]

(4)  None of A2 to A12 (and the 11 Dings) was given a copy of the Building Agreement that he had executed for fear that the document would be made known.[42]

29.  By the POAs, A2 to A12 authorised Full Wealthy to act on their behalf in their FBL Applications and in all dealings in relation to the small house. The unchallenged evidence of Paul Chan, the clerk of the solicitor firm who prepared the documents, shows that:

(1)  The instructions to the solicitor firm for the preparation of the POAs for the execution by A2 to A12 (and the 11 Dings) came from D1. Some of the POAs adopted the “short form” (i.e. the statutory form in the Schedule and referred to in section 7 of the Powers of Attorney Ordinance, Cap. 31[43]) and this would enable the developer to secure a building mortgage. The other POAs were in “long form” that would allow the developer to sell the small houses after paying a premium to the Government.

(2)  When A2 to A12 signed on the POAs, they were undated and the name of the donee was deliberately left blank. These would be inserted when the POAs had to be put to use[44].

(3)  The execution of the POAs and the related arrangements were in breach of the FBL Conditions as they were prior agreements that A2 to A12 (as licensees) had made with another entity.

30.  As to the Ding Witnesses, who were named as co-conspirators of A1 and Cheung Cheuk Wing[45], the gist of their evidence is that:

(1)  They understood that in order to apply for a FBL, each one of them must own the land to which his application related.

(2)  They admitted to have sold their Ding right to a third party. They also knew that a piece of land had been assigned to each of them though they did not pay for it.

(3)  Sale of Ding right by NTIIs or the practice of To Ding was common and had been going on for many years. At the time they agreed to sell their Ding right and up until their arrests, they believed they did not breach the law.

31.  The prosecution also adduced by agreement the video-recorded interviews of A2 to A8, A10 and A11 and the cautioned statement made by A9.[46]  In essence, except A7, they all admitted to have sold their Ding right in return for the payment received by them. Most of them did not know the developer and/or where Tai Che Village or the land in question was located. Some even did not realise that he “owned” the land to which his FBL Application related. Most of them did not pay any attention to the content of the documents involved in the transactions when they signed them. They all asserted that they did not know that it was illegal to sell their Ding right as many NTIIs had been doing this.

B.  Summary of the prosecution case

32.  Put shortly, the prosecution says that through the To Ding scheme, each of A2 to A12 had conspired with D1 and PW6 to defraud the Lands Department by falsely represented that each of A2 to A12 satisfied the Eligibility Requirements thereby causing the Lands Department to issue a FBL to him.

33.  The prosecution relies on the conduct of the applicants set out in [24] above as their respective conduct in the conspiracy.

34.  As to the false representation, it has two aspects: (1) dishonest and false representation to the Lands Department that the respective applicant was the legal and beneficial owner of the land to which his FBL Application relates, and (2) dishonestly concealing the secret Building Agreement that the respective applicant had separately made with Full Wealthy and/or the irrevocable POA he had executed in favour of Full Wealthy. The prosecution only needs to prove either (1) or (2).

35.  In respect of (1), the prosecution says that: (i) the Ownership Requirement, as reflected in the Revised Ownership Declaration, requires an applicant for a FBL to be the legal and beneficial owner of the land to which his application relates; (ii) the Assignments were shams with the consequence that A2 to A12 never had any legal title or interest in the land to which his FBL Application related; (iii) alternatively, even if the Assignments were not shams and A2 to A12 somehow had legal title in the land, they would hold the land on resulting trust for Full Wealthy with the consequence that they would not have beneficial interest in the land.

36.  As for (2), the prosecution says that: (i) by clauses 3(a)(iv) and (v) of the FBL Conditions, each of A2 to A12 warranted, represented and declared that he had never entered into any agreement or arrangement to deal with or dispose of his interest in the land, or to sell or dispose of his eligibility to apply for a FBL under the SHP; (ii) with the execution and registration of the Assignments, A2 to A12 appeared on the Land Registry record to be the respective registered owners of the land to which their FBL Applications related; (iii) unbeknown to the Lands Department, A2 to A12 had at the time of executing the Assignments simultaneously made the secret Building Agreements with Full Wealthy and/or executed the irrevocable POAs in favour of Full Wealthy; (iv) the Building Agreements and the POAs had the effect of enabling Full Wealthy to retain interests in the land and the small houses to be built; and (v) had the Lands Department known of the Building Agreements and/or POAs, it would not have processed the FBL Applications or issued the FBLs because the effect of these documents was a contravention of the FBL Conditions, and the Lands Department would have sought legal advice and/or made a report to the police.

37.  The prosecution says that notwithstanding the removal of Paragraph (d)(ii) and the Revised No Private Arrangement Declaration from the statutory declaration, the Lands Department has always insisted that an applicant for a FBL must not have entered into any arrangement to transfer or dispose of his interest in the land or his rights under the FBL to be issued to him. [47]   Whether it is in the form of a provision in the statutory declaration or a term of the FBL Conditions, the No Arrangement Requirement is crucial to the grant of a FBL.

38.  It is the prosecution case that D1 and also A2 to A12 acted dishonestly in that they knew all the steps they took, including the execution of the Assignments, Building Agreements and POAs, were to falsely represent to the Lands Department that they satisfied the Ownership Requirement and No Arrangement Requirement. It is said that even if To Ding had been commonplace it would not negate dishonesty; D1 and A2 to A12 knew full well that the act of To Ding falls foul of the objective of the SHP and is simply to get round the Eligibility Requirements.

V.  The defence case

39.  A no case to answer submission was made on behalf of D1 and A2 to A12, but it was rejected by the Judge. D1 and A2 to A12 elected not to give evidence and did not call any witness. From the oral and written closing submissions[48], the main arguments advanced on behalf of A2 to A12 are:

(1)  The Ding right that NTIIs have enjoyed since 1898 is a constitutional right protected by Article 40 of the Basic Law. The Eligibility Requirements introduced in 1972 constitute restrictions on the Ding right and are unlawful, unconstitutional and invalid.

(2)  The removal of Paragraph (d)(ii) and the Revised No Private Arrangement declaration from the statutory declaration means that A2 to A12 did not make any false representation or dishonest concealment as particularised in the charges. Any breach of clause 3(a)(iv) and/or (v) would not attract criminal liability.

(3)  A2 to A12 were under no duty of disclosure when they made their FBL Applications. They did not act dishonestly.

(4)  The prosecution was a breach of the promise that the Government made to the Heung Yee Kuk contained in the letters from Michael Suen and Carrie Lam.

VI.  The Judges’ reasons for verdict

40.  The Judge identified the core dispute to be whether the act of To Ding carried out by D1 and the applicants amounted to defrauding the Lands Department and whether they acted dishonestly under the Ghosh test.

41.  The Judge considered that the only inference to be drawn on the prosecution evidence, including the undisputed evidence, was that all the participants of the To Ding scheme in this case clearly knew that the Dings (1) were selling their Ding right; (2) did not have, and never intend to have, any interests in the land involved in the scheme despite appearing to be the owners on the title documents; and (3) did not have any interest in the small houses to be built with the FBL granted to them.

42.  The Judge took the view that although the particulars of the charges referred to dishonest concealment and false representation, there was in effect only one allegation of falsity, namely the 22 Dings had conspired with D1 and Cheung Cheuk Wing to falsely represent that they had both the Ding right and the ownership of the land and therefore satisfied the Eligibility Requirements when in truth they only had Ding right but no land.

43.  The Judge did not accept the prosecution submission that the applicants had a duty to disclose to the Lands Department facts that are relevant to their eligibility to apply for a FBL. In coming to this view, the Judge took into account the changes to the statutory declaration and the FBL Conditions and Carrie Lam’s letter to the Heung Yee Kuk as well as the Court of Appeal decision in HKSAR v Chan Shu Hung, CACC 512/2001; [2001-2003] HKCLRT 316 & 325.

44.  The Judge however held that despite the changes to the statutory declaration and the FBL Conditions, the Ownership Requirement has remained to be a requirement for the issue of a FBL. He further held that A2 to A12’s silence, when considered against their overall conduct during the conspiratorial period, amounted to a positive, but false, representation that they had both Ding right and ownership of the land to which their FBL Applications relate.

45.  Applying the two-stage Ghosh test[49], the Judge held that A2 to A12 were dishonest. First, they were dishonest by the ordinary standards of reasonable and honest people, having regard to the fact that they sold their Ding right for profit, which was contrary to the objective of the SHP, and made false representation about their eligibility by means of sham documents such as the Assignment. The Judge also distinguished HKSAR v Chan Shu Hung, supra, and drew an analogy with obtaining comprehensive social security assistance by making a false representation as to eligibility. Second, A2 to A12 knew that ordinary reasonable and honest people would not approve of their acts and would regard their acts as dishonest in that they knew (a) the documents they had executed, including the Temporary Agreements and the Assignments, did not reflect the true position; (b) these documents were to cause the Lands Department to believe that they owned the land in question and satisfied the requirements for the grant of a FBL; and (c) it was dishonest to use the sham documents to satisfy the Eligibility Requirements.

46.  The Judge was satisfied beyond reasonable doubt that D1, A2 to A12 had entered into the conspiratorial agreements particularised in the charges, these agreements were to deceive a person holding a public office into acting contrary to his public duty and they had caused the Lands Department to issue FBLs to A2 to A12, which it otherwise would have not done had it been aware of the To Ding scheme. He accordingly convicted A2 to A12 as charged.

VII.  Grounds of appeal

47.  The grounds relied on by A2 to A12 in their application for leave to appeal against conviction have undergone several amendments. The grounds of appeal advanced by A2 to A12 as appear in their Re-Amended Perfected Grounds of Appeal against Conviction and counsel’s submissions may be  summarised under the following broad headings:

(1)  Flagrant incompetence of counsel[50]

A2 to A12 complain that there were serious incompetence and failure of duties on the part of their trial counsel in the preparation and conduct of the trial which had materially affected the conduct of each of their defence case with the result that they did not receive a fair trial.

(2)  Constitutionality of the charges and convictions[51]

This involves firstly, a complaint that the Judge failed to consider and deal with the constitutional challenge made by the defence, and secondly, a challenge to the constitutionality of the charges and convictions on the basis that the Eligibility Requirements are unlawful restrictions on the exercise of the Ding right protected by Article 40 of the Basic Law.

(3)  Findings on false representation[52] and duty of disclosure[53]

This is in essence a challenge to the Judge’s holdings that the act of To Ding carried out by A2 to A12 amounted to act of defrauding the Government, and that the non-disclosure of the arrangement they had made with D1 and/or Full Wealthy amounted to positive false representation that they satisfied the eligibility requirements to build a small house. The applicants complain that the Judge misunderstood the Revised Ownership Declaration which does not require a NTII to be the beneficial owner of the land such that the applicants’ non-disclosure that they were not the beneficial owners of the land does not amount to false representation and an act of defrauding the Lands Department. It is also argued that the Judge’s finding that the non-disclosure constituted a positive representation is incompatible with his finding that the applicants had no duty of disclosure. A2 to A12 further complain that the Judge failed to have proper regard to the removal of Paragraph (d)(ii) and the Revised No Private Arrangement Declaration from the statutory declaration, the letters from Michael Suen and Carrie Lam, and the fact that a breach of the FBL Conditions only attracts civil liability (see [15] to [17] above).

(4)  Findings on dishonesty[54]

This involves a challenge to the Judge’s application of the Ghosh test. It is said that the Judge erred in finding the documents used in the applicants’ FBL Applications were false documents, drawing an analogy with fraudulent comprehensive social security assistance application, and failing to have sufficient regard to all the relevant circumstances, including the applicants’ personal background and knowledge, the history and operation of the SHP and the Government’s attitude on To Ding and the constitutionality of the Eligibility Requirements.

(5)  Material non-disclosure[55] and abuse of process[56]

A2 to A12 complain there was a material irregularity in that the prosecution failed to disclose, before and during the trial, materials and/or information pertaining to the letters from Michel Suen and Carrie Lam to the Heung Yee Kuk. The materials refer primarily to 17 sets of minutes of meetings held between the Government and the Heung Yee Kuk during mid-2004 to 2008, which were disclosed in the course of this appeal[57]. A2 to A12 argue that they are relevant to, among others, the Government’s knowledge, acquiescence, toleration or condoning of the practice of To Ding and the Government’s stance on the changes to the statutory declaration and the FBL Conditions and its agreement not to criminalise acts that contravene the FBL Conditions. It is said that these materials would materially affect the conduct of the defence case and the Judge’s determination on the key issue of dishonesty.

A6 and A9 additionally complain that the prosecution is an abuse of process in that (a) it is a breach of the Government’s promise that it would only take civil enforcement action and not to bring prosecution against the sale of Ding right, as contained in the letters from Michael Suen and Carrie Lam and reflected in the changes to the statutory declaration and the non-disclosed materials, and (b) the applicants were prosecuted for concealing what they were not required to disclose. 

(6)  Causing the Lands Department to act contrary to their public duty[58]

A6 and A9 contend that the Judge erred in finding that the 22 Dings had by their false representation caused the officers of the Lands Department to grant FBLs to them in that they would not have done otherwise.

VIII.  Flagrant incompetence of counsel

48.  We begin with the consideration of the flagrant incompetence of counsel ground, which in light of the evidence received on this ground at the hearing has become pivotal to the disposition of this appeal.

A.  The complaints

49.  Putting together all the allegations of the remaining applicants, there are eight major complaints against PW (and JJ), namely that he (or the team):

(1)  failed to consult the applicants in retaining PW as their counsel;

(2)  failed to obtain proper instructions from each and every applicant and in certain cases even to meet the applicant in person;

(3)  failed to properly advise the applicants that there was a serious potential and/or actual conflict of interest between them and D1 which greatly hampered their defence;

(4)  failed to properly analyze the individual cases of the applicants and advise them to testify particularly when dishonesty is a key element of the charge against them;

(5)  failed to call as defence witness retired civil servant, Christopher Robinson, albeit that his evidence would help;

(6)  failed to summon the responsible officials to show that by conduct Government might have condoned or tolerated the practice of To Ding which was widespread;

(7)  failed to call or consider calling the conveyancing solicitor or his clerk to ascertain what advice the applicants might have received in the land transactions, and the relevance if any of that advice to the applicants’ subjective beliefs;

(8)  failed to apply for a permanent stay of proceedings.

50.  These complaints can be found in the affirmations of the applicants, and in some cases their family members, both in initiating this ground of appeal and as further supplements. Account is also taken of the evidence of A6 and A8 who testified in this appeal.

B.  The respondent’s position   

51.  Both PW and JJ filed affirmations. They also gave evidence. Overall, it is the respondent’s position that there was no conflict of interest between D1 and the others because of the commonality of their defence; that PW did advise generally on the pros and cons of giving evidence; and that regardless of the conduct of their lawyers, the ultimate question is whether the applicants had had a fair trial. Given the state of the evidence against them, as well as their clear admissions under caution, the actions of the applicants were so obviously dishonest that they must have subjectively understood that ordinary people would regard them as dishonest. On that basis, the respondent argues that there would be very little chance of success even if the applicants had elected to give evidence.

C.  Putting the major complaints in context

52.  To flesh out the bulk of the applicants’ complaints, and to give them context, a rough two-stage account of what allegedly took place before and after the case was transferred to the District Court is as helpful as it is important. Details will be also provided from what was affirmed or testified to by A2 to A12. Where it is not strictly necessary to distinguish between them, D1 and the remaining applicants will be referred to collectively as “the applicants”.

C1.  Up to the 1^st Mention Hearing

53.  According to the court records, the applicants were arrested in 2011. Four years later, charges were brought and the applicants had their first court appearance on 15 January 2015. On 3 February 2015, the case was transferred to the District Court (“Plea Day”) when all the applicants were represented by JJ and PW except A6 who had his own representation. It was however intimated that A6 would soon exhaust his means and apply for legal aid.

54.  A month later, on 6 March 2015, a mention hearing was held (“1^st Mention Hearing”) where, acting in person, A6 told the court that his legal aid application was pending. In the meantime, on behalf of all the other applicants, JJ was already telling the court that those he represented were unlikely to testify, that there would be no defence witnesses, and that all the cautioned interviews would be objected to because of the officers’ misleading accusations.

55.  As to how those positions might have come to be taken, a convenient starting point to examine is a letter dated 18 October 2016, filed in response to the court’s directions that JJ should reply to the questions raised by the applicants’ current solicitors (“October 18 Letter”).[59] JJ or more precisely his firm stated:

“5. Our Mr Jim first met A1 to A5, A7 to A12 … and took preliminary instruction from them in a Saturday morning at our firm’s Fanling office … in early January 2015. Our Mr Jim then met them on 15 January 2015 and 3 February 2015 in Eastern Magistracy. They then had informal meeting with our Mr Jim and counsel Philip Wong at our Fanling office for preliminary discussions. We met in the early morning of 6 March 2015 when they attended District Court ...”

56.  That reportedly was the situation up to the 1^st Mention Hearing. To complete the picture, the letter continued:

“A6 (Wan Kwai Lun) started instructing our firm and counsel on 2 April 2015 to represent him for trial when we met at our Fanling office that day. Our Mr Jim and counsel met A1 to A12 at about 10 am on 10 April 2015 in District Court, and met them on 26/4/2016 [sic] at our Fanling office, and later met them in the morning of 6 May 2015 (PTR) in District Court, and later again on 14 September 2015 in District Court. I did not take notes about what they instructed and they simply asked questions during the meetings with counsel who answered them direct, in line with the defence as he conducted at trial, and none of A1 to A12 ever raised any objection to how trial counsel should defend them. Our Mr Jim had emailed to trial counsel written instructions of what he understood and observed from A1 to A12, and such instructions were exhibited in his 3^rd Affirmation.”

57.  The exact meaning of the above narrative which repeatedly described the meetings as “informal”, and the instructions “preliminary”, for at least up to the 1^st Mention Hearing, was not elaborated in either the October 18 Letter or any other document that JJ and PW made available for this appeal. If one turns to the affirmations of the applicants, there was in fact no suggestion of anything remotely resembling a lawyer-client conference until March or April 2015. See for example the affirmations of A4, A8’s wife and A12’s brother in which only two meetings, dates forgotten, were said to have taken place between then and the trial (26 October 2015).

58.  Going a little deeper, both the meetings concerned were, according to A12’s brother, held at JJ’s Luen Wo Hui office (“the Meetings”). In the first meeting, because of the huge turnout, not a few defendants and their families were left standing on the street and never made it into the interior of the office. This included A12’s brother and another family member who, in any event, were left idle for no more than half an hour before someone called Cheng On (鄭安) emerged and announced that everyone should just leave and wait for the notification of the next court date.

59.  In the second meeting, PW was introduced to everyone as their defence counsel. Apart from some bold references to his past professional achievements, the message he put across was that, as was made clear by a Government letter, the buying and selling of Ding rights incurred no criminality; that he would call the responsible officials, Michael Suen and Carrie Lam, as witnesses; and that he had in store a secret weapon (秘密武器) (meaning never divulged). For his part, JJ also claimed that the documentary exhibits proved nothing. In sum, the whole meeting was but a general briefing on the prosecution’s case with no analysis of individual merits on a one to one basis, with the exception of D1 whom JJ and PW retained for discussion. At no time during the Meetings were A12’s brother and other family members asked who they represented nor were they asked to sign any retainer.

60.  As said, the above content is to varying degrees of detail corroborated by A4 and A8’s wife. It is so also with regard to what the rest of the applicants claimed about not receiving individual legal advice, the unexplained failure of the lawyers to follow through with the “secret weapon” and the non-use of an “expert report” to which PW had also made reference (content equally not divulged). It should also be mentioned that A8 and A12 missed the Meetings because they were allegedly at work (one so in the Mainland) and were told that they did not have to attend in person. And if what A8 said is correct,[60] he had gone on to forgo at least one court hearing (14 September 2015) because Cheng On, the only contact between him and the lawyers, omitted to tell him.

61.  Cheng On[61] who has already featured twice in the preceding paragraphs was a figure of some centrality. Drawing together what A4, A6, A8, A8’s wife, A9 and A12 said in their affirmations, the other applicants being silent on this point, it would appear that Cheng was from the same village as A8 and A9; that he was either under the employ of D1 or was otherwise deeply involved in the To Ding business; and that it was he who made the arrangements for A4, A8 and A12 to be legally represented. It was observed that Cheng was the person who notified A2 and A8 of the Meetings whereupon A2 went on to notify others. It was also observed that he took physical care of D1, played an active part in the Meetings and was later frequently sitting in on the trial.

62.  On the question of legal representation generally, A4, A8 and A12 had specifically stated that they had paid nothing in terms of legal fees. A6 and A9 who attended one or both of the Meetings went further and quoted JJ as telling everyone in attendance that he was acting pro bono for all the Dings (A2 to A12). As for the choice of barrister, A9, the only applicant who had spoken on this subject, said he had no idea why or on what criteria PW was picked nor did he know if JJ had considered other alternatives. Apart from A12’s brother, A8 and A12 also said they had never signed any retainer for either solicitor or counsel.

63.  Turning to the oral evidence, A6 was one of the two applicants who testified in this appeal. As said, he was not represented by JJ until sometime after the 1^st Mention Hearing.[62] It was moreover his evidence that they had only had one meeting before the trial, for the sole purpose of passing on his case papers. There was no discussion of his individual situation on that or any subsequent occasion. A6 admitted knowing what charge he faced, and that he was anxious to know how it could be met. But because he was a late comer and was told by JJ that his case was the same as all the others (全部都係一樣), he did not press JJ for a proper consultation. He said he was at a loss as to what he had done wrong but did not think it was for him to keep pestering the lawyers.

64.  A8 was the other applicant who testified in this appeal. The focus of his evidence was on what if any advice the applicants was given about testifying at the trial. In this sense, A8’s evidence is representative. It was a central part of his and every remaining applicant’s complaint that they received no individual legal advice including the advice on whether to give evidence.

65.  According to A8, the lawyers would never explain to them how the trial was progressing. D1, they would often pull aside for conversation but not the others. A8 was not unconcerned by this but given JJ’s reassurance that it was not such a big matter, and PW’s frequent reference to a secret weapon, he was resigned to just following along. A8 said he knew what the charge alleged but because he knew very few of the applicants, and D1 was the only contact he had regarding the transaction, he was unable to understand how the conspiracy was made out.[63]

66.  Moving on, A8 disagreed that there was any discussion on the merits and demerits of giving evidence. It is correct that he had never asked but neither did PW tell the applicants they should testify. He admitted knowing that To Ding would involve some manner of law-breaking but understood it to be something very minor and would at most incur a financial penalty. Looking back, if he were to testify, he would tell the court everything. He would say that, had he known it to be so serious, he would never have participated. In an important concession, A8 also admitted that notwithstanding his initial denial, his memory was in fact vague as to whether PW had explained to them an earlier case[64] in which some deed of assignment was held to be false by the same trial judge. He insisted however that he had never signed any document stating that he would not give evidence (“Disputed Document”).

67.  Finally, regarding a two-page document purportedly written out to confirm a number of other instructions already given (“Manuscript Document”)[65], the evidence of A8 was that it was signed in the utmost haste. It was after a full day in court, he said. JJ was still writing it out and had only filled a few lines when the defendants were made to file into a conference room to append their names at the bottom. Despite counsel’s strongest suggestion to the contrary, A8 maintained that he was incognizant of what he was signing.

68.  What A8 said in evidence, he finds support in A12’s affirmation. According to A12, the only time they would see the lawyers during the trial was at the breaks, in a group and with their families all packed into one small conference room. There was never any meeting during the overnight adjournments when individual consultations could have been arranged. It was also during one of these conference room sessions that A2 asked if he should testify and explain his case when PW brusquely replied that the evidence of the immunized witnesses[66] was no different from anything any of them had to say, i.e. they had no idea that To Ding was against the law, so that unless the applicants were as well-spoken as he, they should really put that thought to rest (你講嘢有冇我咁叻? 有先畀口供啦!). As regards the Manuscript Document, A12 and A8 were not only highly consistent on the circumstances of its making but A12 was able to pinpoint the time of its signature to after PW had made his closing submissions.

69.  For the rest of the applicants, their version is the same: they signed the Manuscript Document without knowing what it was; JJ who was drafting it never cared to explain. In addition, A6 and A9 also put the signing of that document at sometime late in the trial.

C2.  1^st Mention Hearing and beyond

70.  As said, certain positions were indicated by JJ at the 1^st Mention Hearing.[67]  As it turned out, they were completely consistent with how PW would subsequently contest the case. Take JJ’s then ground of objection to the cautioned interviews as an example. It was, as it now transpires, premised entirely upon the misuse of an outdated version of a declaration which the interviewing officers wrongly accused A2 to A12 of making in their application for a Building Licence. It goes hand in hand with the core defence that with the new and correct declaration, there was no misrepresentation on the part of the Dings hence no criminality. It reflects what PW argued was fundamentally wrong about the prosecution case, not how individual applicants might have a defence that was merit-based. And if PW was correct, there was indeed no need for the applicants to give evidence or to call witnesses, which were the two other positions JJ indicated.

71.  After the 1^st Mention Hearing, there were one second mention hearing (“2^nd Mention Hearing”), one pre-trial review (“PTR”) and one third and final mention hearing (“3^rd Mention Hearing”). The sole purpose of the 2^nd Mention Hearing, which took place on 10 April 2015, was to confirm A6’s legal representation whereas the Judge, did not take charge of the case until the PTR on 6 May 2015, when PW also began to appear on the court records. As it turned out, the PTR was a slow and long-drawn out process. It lasted from 9:45 am to 2:20 pm with two 1.5‑hour breaks in between. Repeatedly PW was asked which part of the prosecution case he could agree to with little success, which was what prompted the breaks[68] and the Judge’s remark that given the long adjournment since the 2^nd Mention Hearing, he was surprised counsel was still not properly prepared.[69]  On his part, PW explained that his idea for the PTR was to identify the issues,[70] that he would like to reserve his position[71] and that, at least up to that point, he would require strict proof but ‘not on everything’.[72]  There was no mention of anything in connection with any individual applicant.

72.  In the 3^rd Mention Hearing on 14 September 2015, the prosecution applied to split the existing groups of wheel conspiracies (as in the original charge sheet) into smaller counts of linear conspiracy against each applicant (as the convictions now stand) and was met with no objection, the defence having been given ample notice.[73] The only thing worth mentioning about this otherwise uneventful proceeding is the absence of the applicants, about which PW’s initial explanation was that most of them were at work.[74]  This did not satisfy the Judge who ordered them all to attend in the afternoon.[75]  When despite that order JJ only managed to secure A6, JJ put before the court a letter admitting that it was his fault in not making it clear to the applicants that their attendance was obligatory.[76]  When the Judge pressed the point that A6 and A9 were aged 70 and 79 hence unlikely to be still in employment, JJ further admitted that he was generalizing and was in fact unable to contact A9.[77]

73.  On 26 October 2015, the trial finally started. Again it proved to be a laborious exercise. It began with the prosecution seeking a second amendment to the then split charges, namely reframing the particulars of defrauding into two limbs, concealment and misrepresentation, and that under the second limb, the matter misrepresented be changed from “sole legal and beneficial owner” to “owner” (as in the charges now).[78] This was objected to by PW who took the somewhat obscure argument that the original wording accurately reflected the government undertaking to remove any declaration-based criminality from the application[79] hence providing a defence, whereas the proposed amendment would constitute a breach of that undertaking deserving of a stay of prosecution.[80]  In the event, the judge heard full submissions and allowed the amendment. When asked if he would now apply to stay the prosecution, “I would do so at a suitable moment after hearing the evidence” was what PW said. He said he would have to see if the evidence supported a stay application on the additional ground that the investigating officers had misled the defendants in the interviews.[81]

74.  With those submissions, the trial entered the evidence stage on its second day. Contrary to previous indications, PW did not actually ask to have any voir dire. On the eighth day, 4 November 2015, the prosecution finished its case and PW intimated that the applicants were unlikely to give evidence.[82] He also said there would be no half-time submissions.[83]  When the trial resumed a week later, however, PW changed his mind and made a no case submission on the basis that first, there was no duty on the part of the applicants to disclose anything beyond what was stated in their FBL application forms and second, there can be no dishonesty in doing something that was widely known and widely accepted,[84] namely To Ding. Those submissions were rejected after which PW immediately told the court that there would be no defence witnesses; he did not ask for time to consult the applicants.[85]  Upon further inquiry, PW also stated that he would not be applying for a stay of prosecution but would rather adopt the same two grounds as before[86] in his closing submissions.[87]  Finally, on 25 November 2015, when he did make his closing submissions and was asked if there was anything helpful to the defence in the cautioned interviews, PW answered the Judge in the negative.[88]

D.  The lawyers’ evidence

75.  As said, both members of the original defence team gave evidence: JJ first, then PW. We would however reverse the order of our summary of their evidence because the evidence of JJ covered both a longer period and a wider circle of personalities and organizations. With the retrospectivity thus provided, it is believed that the factors affecting counsel’s decisions would be better identified.

D1.  Counsel

76.  From the start and in reply to questions posed by Ms Maggie Wong SC[89], PW admitted that he had never asked for nor was he ever given any written instructions. Rather, he was informed of a broad and general defence (概括性嘅抗辯理由) (“General Defence”) the substance of which was that the applicants had not committed any offence. This according to his own analysis was correct: everything the applicants stated in their application was true, plus there was the Ding rights argument under Article 40 of the Basic Law (“BL40”) which, as a package, he had explained to the applicants in two to three pre‑trial group meetings. There was no need to delve into individual merits for so long as he had grasp of the General Defence; those were JJ’s instructions (指示係個律師畀我).

77.  PW was aware that different applicants had said different things under caution. But he had never sought individualized instructions on them, nor was he ever told what each of the applicants was thinking at the time of the offence. Given the General Defence which applied generally, he did not think it mattered. He did not think these subtle distinctions should stand in the way of him acting for all the applicants. If anyone had anything special to say, he could raise it in the pre-trial group meetings or tell it to the solicitors but none did.

78.  PW could not recall if he knew Wai Yiu Kwok, an immunized Ding giving evidence for the prosecution, was A4’s father. Someone did mention that there were some family connections between the two sides but that was all he remembered. Either way, he was not instructed to seek immunity for A4. It did cross his mind to try but since chances were slim, he did not turn that thought into action.

79.  Regarding the complaint that showing on A4’s building application was Wai Yiu Kwok’s name, but in spite of which PW and JJ had failed to investigate how Wai might have co-opted A4 into the scheme,[90] PW’s reply was that he did not think any of this was important. Likewise, it had not escaped his attention that a middle man (中間人) was mentioned in many of the cautioned interviews but his focus was on the General Defence, not the details.

80.  It did not bother PW who it was that took the applicants to the solicitors’ office. Nor did he ask if the applicants understood English. To him, it was irrelevant what the Dings were told about the documents they were signing. It was enough for the building applications to describe them as “sole legal and registered owners”[91] of the land in question. This characterization was the correct characterization which lent support to the proposition that the applicants did not commit any offence.

81.  It is true that A7 claimed to have paid money for the house to be constructed under caution. Yet, the General Defence remained the best defence (最佳辯護) and the applicants were in no need (唔需要) of another “alternative”[92] on top of BL 40. As regards A5’s reference to Mok Kam Kwai, Chairman of the Shatin Rural Committee, as agent (代理人) and the question whether inquiries should have been made of the exact role this person played, PW’s reply was again: “I didn’t think it mattered (唔覺得重要).”  The same applied to A12 who never gave any cautioned interview, video or written.

82.  PW denied using the phrase “secret weapon”. He might have used the word “secret” to describe the protection “hidden” (隱藏) in the Basic Law but not “secret weapon”. Upon being shown a contradictory statement by JJ,[93] PW said either he or JJ could have remembered wrong and in any event, they meant the same, i.e. there was a protection under BL40 which he preferred to bundle together with an objection to the charge as opposed to making it a ground for an application to stay. The latter course would mean putting the prosecution on advance notice.

83.  BL40 had nothing to do with the elements of the offence, PW agreed. He disagreed that failing it, the applicants would be left without a fallback position. He said he was running at least two major arguments and in the unlikely event that they both failed, the judge would still have to consider the exculpatory parts of the cautioned interviews. PW disagreed that to refute dishonesty, the applicants must give evidence. It is true that without making themselves available for cross-examination, the applicants must expect less weight to be attached to their out-of-court statements but his concern was on the applicants tripping over the questions posed by the prosecution.

84.  PW admitted not to have taken the applicants through the pros and cons of giving evidence in the particular context of this case. “The defences we were running were strong (好有力). There was no need, nor was it necessarily beneficial (未必有利) to offer an alternative through giving evidence”, he explained. When counsel protested that this decision was not his but his clients’, PW added: “I just didn’t explain in the kind of detail you are suggesting (冇好似妳咁詳細講). I said, to give evidence, they could tell the court why they did what they did (點解會參與呢件事) but in return, the prosecution would ask them wide ranging questions like why they signed the documents and whether they paid for the land.”

85.  When pressed how without a proof of evidence or detailed instructions he could hope to lead the applicants in evidence if the applicants decided to give evidence, PW said, “I don’t know what instructions you mean (我唔知有咩嘢指示) except they had not committed any offence and that nothing they did was false, full stop (總之由頭到尾佢哋都話冇犯法, 佢哋都話嗰啲行為冇虛偽).”  And then seconds later, “What need was there for detailed instructions (咁使唔使幫佢再詳細錄口供, 再講一套說話) when, at the time, the thinking was they would never go into the witness box (當時個諗法係根本唔會上去)?”  “The applicants can dispute dishonesty by reference to the fact that every information they provided to the Lands Department was correct”, PW said.

86.  According to PW, the decision not to testify was formed from the start. It remained un-wavered throughout the prosecution case and was formalized at half-time. The ruling that there was a case to answer was disappointing but given their conviction of the correctness of the General Defence, the applicants persisted. As to why if that was true the transcripts did not show PW to have asked for time to confer with the applicants[94], PW said he must then have remembered wrong. He must already have their confirmation before the ruling was given. As to whether and how he might have explained the concept of prima facie evidence to the applicants, PW said, “I didn’t. These are legal questions.”  “I told them I wouldn’t be making any half-time submissions but when I changed my mind and went ahead with one, I didn’t consult them”, he added. And also, “I never said give evidence only if you are as well-spoken as me. All I did was to ask them to consider their verbal ability”[95].

87.  PW was not unaware that the cautioned interview of A3 bore content that may be understood as pointing the finger at D1. Given what the applicants shared in the form of the General Defence, however, he did not think there was any problem with actual or potential conflict. When counsel would not let pass that answer, PW stated further that first, he thought the General Defence more beneficial (更有利) and second, advancing an alternative would affect the collective case of the applicants under it (影響到十幾名被告嘅整體抗辯), plus the Judge could take into account whatever content there was in a record of interview.

88.  In sum, PW disagreed that there was any conflict of interest in that A2 to A12 could say they were misled by the developer and the developer’s lawyers whereas D1, the developer, could not. He denied noticing this conflict from the start, decided that it would hamper the General Defence[96] and deliberately disregarded what A2 to A12 might have to say as individual defendants. The General Defence was what D1 to A12 all shared, he said. There was never anything else. It is not true that he was barred from running any defence that was based on or in line with the cautioned interviews. It was just a tactical decision not to “weaken” (削弱) the General Defence by so doing.

89.  PW did consider calling Christopher Robinson as a witness. D1 had given him a copy of Robinson’s report from another case. When it was discovered that there was not enough funding, however, PW studied the matter further and concluded that no expert witness was required to raise the constitutional point. The same objective could be achieved by questioning the witnesses from Lands Department. As for whether and how any of this was communicated to the applicants, “calling an expert” was his original turn of phrase. He later changed it to having a “secret defence”[97] the meaning of which the applicants must come to appreciate latest by when the Lands Department witnesses gave evidence. The applicants might have asked, or he might have explained, but it was plain that his cross-examination was about the protection under BL40. The applicants were told very early on that he would not be relying on Robinson and his report.

90.  PW denied failing to have proper conference with the applicants. When confronted by the October 18 Letter, PW adjusted his answer and laid stress on the point that he took time to speak to the group at every pre-trial proceeding. “Does that not count?” he remonstrated. Regarding the 3^rd Mention Hearing where the bulk of the applicants failed to turn up, he said he was only doing his best to provide the court with an impromptu explanation. The rest was down to the solicitors. As for his stay application made on the strength of a handwritten note on the first day of trial, PW denied that it was either random or capricious. “I had had it in mind all along”, he said. “I just didn’t prepare for the formal application with the stipulated notice.”

91.  Approaching the end of Ms Wong’s cross-examination, PW agreed and confirmed in a series of questions that the Manuscript Document was created at the conclusion of the trial, when the parties had already finished making their submissions, the purpose of which was to record retrospectively (補簽) the instructions that the applicants had given. If however JJ said there was another piece of paper confirming the applicants’ decision not to give evidence i.e. the Disputed Document[98], that would vaguely accord with his memory too, now jogged. What he found difficult to confirm was what JJ said about him (PW) getting hold of and then losing this document. It was too long ago for him to have any clear recollection.[99]

92.  The topic concerning the Manuscript Document was picked up by Mr Arthur Luk SC[100]. With the intervening break of an overnight adjournment, PW retracted what he had said about the timing of this document, moved it back to a point much earlier in the trial and attributed it to the need to seek confirmation on the areas of evidence that he could agree with the prosecution. “I got confused”, PW said. “It was the Disputed Document that was created at or around the time of the final submissions, not the Manuscript Document.”  As regards the range of matters not covered, but which may nevertheless affect the course of the defence, “I had instructions on those too” was PW’s answer. “They just happened to be non-written ones.”  He said, “As a barrister of forty years, I do not believe it is always necessary to have written instructions.”

93.  On his handling of the records of interview, PW explained that his strategy was to urge the court to accord them with less or no weight on the ground that the applicants were misled whilst, at the same time, count on the implicit duty of the court to take into account whatever content that was favourable to the defence. Either way, counsel would be absolved of the need to take instructions or to run voir dires – or so PW would argue. Finally, according to PW, he was unaware that D1 was funding the entire defence. He was briefed to defend everyone and that was what he did.

94.  In answer to Mr Martin Hui SC[101], PW stated that (a) it was he who “proposed” the General Defence to the applicants[102]; (b) as corroborated by JJ[103], he had explained to the applicants that because the Dings paid nothing, the judge had held in another case of To Ding that the papers the Dings signed were false documents, hence it was not advisable to give evidence; and (c) although all this was in line with the defence strategy of “avoid the weighty and engage the less onerous” (避重就輕), the decision whether to give evidence remained with the applicants. To conclude, he said the decision not to run any voir dire was tactical because everything would otherwise lay bare before the court, plus admissions like selling Ding rights at a price would still be capable of proof by such prosecution witnesses as the conveyancing clerk, plus the challenge remained intact as to weight because of the misleading accusation interviewing officers made.

D2.  Instructing solicitor

95.  In order to economize on the length of this judgment, only the main points in JJ’s evidence would be summarized below. The areas sufficiently covered by PW will not be repeated.

96.  Sometime before Plea Day on 3 February 2015, JJ sent PW a three-page letter summarizing what he considered to be important in the unused material (“Dear Philip Letter”). Examples include the stages and documents involved in applying for a building licence. The objective was to identify for counsel matters that might impact on the direction of the defence (對辯護方向有關嘅嘢畀大律師知道).

97.  The Dear Philip Letter was drawn up some nine months before the trial (26 October 2015). JJ had it drawn up so much in advance because Heung Yee Kuk was highly concerned about the case (好著重呢單案). In fact, the Kuk was following the case so closely that before any barrister was retained, it invited JJ to a meeting to discuss the choice of counsel. In the event, the Kuk had no objection to PW, the candidate he put forward, but it was also urged upon him that because the case would have a long lasting effect on small house applications (對鄉事即係丁屋嘅申請有好長遠嘅影響), he should really give it extra care and attention (要特別小心留意). That was the Kuk’s message to JJ (佢當時畀我嘅訊息係咁). The question of representation thus settled, PW was then introduced to all the applicants in a group meeting with no one disagreeing. Only then was there a formal retainer for PW.

98.  When asked why the Dear Philip Letter was undated, JJ said it was just a word document that he had sent via email. This and his other emails on the subject, all of which were dated, would have been available for inspection except for the fact that in 2016, when preparing for this appeal, his focus was on answering the applicants’ substantive complaints and it did not occur to him to include them as exhibits. To add to the problem, there was in June 2019 a Law Society intervention on his firm with everything taken away from his office, papers and computers included.

99.  When asked why the Manuscript Document was also without a date, JJ said the copy now on file was but a WhatsApp image stored in his phone, with the date already left out when the original picture was taken. In any event, it was 3 November 2015, about a week into the trial, when the original hard copy of this document was created. It would have been better to have it typed up in the office but at the time, he opted for writing it out long hand in court. This copy was then passed on to PW but given the bits and pieces of papers that were already lying on counsel’s table, he took a picture of it and sent it to PW by WhatsApp as well. For fear that he might disturb (打擾) PW, however, he had never asked for the return of the hard copy.

100.  The Disputed Document, the only piece of paper that the applicants allegedly signed for not giving evidence, was stated to be for helping PW prepare his final submissions in JJ’s affirmation.[104] As to how that document might have achieved that purpose, JJ was at a loss for an answer. “I only did what PW asked me,” he said. Either way, as the prosecution had just finished their case and the Judge was keen to find out the position of the defence and to set a timetable for the rest of the trial, things became a bit rushed (嗰陣時比較急) and it slipped JJ’s mind to make himself a copy – this time not even by taking a picture. In due course, he did try to have the document back but after a few unsuccessful attempts, he became too embarrassed to keep pestering PW (唔好意思再煩佢) and the document was lost.

101.  As far as JJ was concerned, Cheng On did not work for D1. Instead, Cheng was some kind of village go-between who looked after the more elderly amongst the applicants. It was also through Cheng that all communications with the applicants must channel. Hence, it was Cheng’s personal number that JJ had in his phonebook, not any of the applicants’. Finally, it was Cheng who did the headcounts and introductions in the group meetings. And it was Cheng who came up with all the misinformation about the applicants’ absence during the 3^rd Mention Hearing.

102.  While on the group meetings, of which there were admittedly two in numbers, the version JJ now offered was that conference notes were indeed taken – which contradicted the October 18 Letter. When asked why he had not exhibited them anyway, JJ’s initial response was: “No one asked me for the dates of these meetings so I omitted to put them down in my affirmation.” Answers that went further off on a tangent were then proffered until minutes later, JJ ground himself to a stop and said, as with his emails, these conference notes were lost in the 2019 Law Society intervention. “In 2016, I had the feeling that the applicants’ solicitors were just out to find fault with me. That’s why I withheld my notes from them,” he added.

103.  JJ did get paid for his services but not by any of the applicants. Rather, his fees were footed entirely by a third party (第三者) who happened to have redeemed the mortgage that D1 took out for the building project and therefore had an interest (利益) in the case. The duty of confidentiality did not allow him to disclose anything further but this extra dimension did admittedly have an effect on the formulation of his principal defence in this case (引伸到去處理呢個 … 官司嘅主要答辯方向).

104.  It was on PW’s advice that Christopher Robinson was not called by the defence. Since Robinson had been ruled a mere factual witness in another case and the same factual evidence was forthcoming from the witnesses from Lands Department, there was no point. Seeing how much it was concerned about the case, however, the defence team then turned to Heung Yee Kuk for identifying and hopefully financing an expert on BL 40 but the Kuk never responded.

105.  JJ did not think there was any conflict between representing D1, the developer and A2 to A11, the Dings. The agreement between them was entirely lawful – that was their one and only instruction. Likewise, the Heung Yee Kuk lawyers were keen to know which version of statutory declaration was involved in the case and when he said 2008, they too were satisfied that there was no illegality. In due course, when all this was explained to the applicants, the crux of which was that their declarations were factually correct and legally incapable of defrauding the Lands Department, it was received positively. The reaction of the applicants was like: “Correct! That’s right! We broke no law (係吖係吖, 我冇犯法呀)!”

106.  When taxed, JJ conceded that “we broke no law” was not really an instruction. He agreed that nothing in the Dear Philip Letter, or the body of technical discussion that made up the Manuscript and Disputed Documents, was actually based on things that the applicants told him. He admitted preparing no proofs of evidence, and that all he had conveyed to PW was his own analysis on how to argue the lack of criminality in the applicants’ conduct. The applicants themselves had never explained why they thought they had not broken any law. Nor had they ever said they knew which version of statutory declaration they were signing.

107.  The need for preparing detailed instructions was dissipated by the early decision of the applicants not to give evidence made months before the trial. Before that, the risks of being cross-examined and of the Judge repeating his adverse finding in another To Ding case were explained. Due regard was also given to what the applicants said under caution. What JJ conceded not to have done was to sit with the applicants, analyze the contents of their records of interviews and probe deeper into how and through what agency exactly had they come to be registered owners of the land in question – not least with A12 who had not given any interview under caution. Admittedly, he had taken everyone’s silence as conclusive.

108.  Coming to the end of his evidence, JJ explained that he and PW did consider running other defences but given the admissions that one saw in the records of interview, they did not think that was an open option.

E.  Discussion

E1.  The quality of the evidence

109.  At one point during his evidence, PW made the remark that he did not find the applicants very well educated. We are in no position to agree or disagree with that statement. What we did find however is that neither A6 nor A8 was particularly well disposed to the use of complicated language and ideas. Perhaps because of this reason their evidence was plain, direct, at times emphatic and mostly consistent; as were the affirmations of the rest of the remaining applicants.

110.  The case with JJ and PW is less straightforward. As legal professionals, they are expected to follow the rules, keep good records and if challenged after the fact, be able to provide a comprehensive account of what, when and why as to their action. Contrary to that expectation, however, multiple aspects of their evidence have left in us a deep and unsettling sense of unease. Take the timing of the Manuscript Document as an example. PW’s initial account was that this document was signed after the final submissions. Significantly, “補簽” meaning “retrospective” or “to make up for” was the word he used. It connotes doing something which is past its due date and it accords largely with what all the applicants said, particularly A12. It was only after an overnight adjournment that he advanced this document to an earlier stage of the trial and be in line with JJ. Another subtle but nonetheless telling point is the setting out in full the underlying arguments of the General Defence in the Manuscript Document, which makes absolutely no sense if it was just for agreeing admitted facts with the prosecution, as now alleged. Objectively, that document looks every way more like a post-recording of an agreed course of defence in which the admitted facts were but a constituent item. Its opening sentence declares it to be for confirmation of the instructions previously given.

111.  Next on the list is the Disputed Document. Unlike JJ who vouched for its existence, PW whose affirmations contained no direct reference to this document[105] was anything but certain on the subject. “Vague memory now jogged” and “too long ago to remember clearly” were some of the answers he offered when questioned about it in evidence. The circumstances in which this document was allegedly made – and lost – present further problems. Writing it out quickly hence forgetting to make himself a copy is, according to JJ, the main reason for losing it eventually upon PW’s misplacement, and it was because the court was putting pressure on the parties. This narrative, however, sits badly with the court records in that they show (a) the trial was adjourned for a week at the close of the prosecution case; (b) the adjournment was specifically for allowing PW time to re-consider making a submission of ‘no case’[106]; and (c) upon the hearing and outright dismissal of such an application on the return day, PW immediately notified the court that there would be no defence witness. This rundown suggests to us that either JJ had made use of the long adjournment to have it drafted and signed or there was no Disputed Document. We see no room for a third scenario in which time was a factor.

112.  A final example that is sufficiently serious to warrant separate treatment is JJ’s claim of loss of most of his case papers. It includes the conference notes which he said he had taken of the group meetings between him, PW and the applicants. He put it down to the 2019 Law Society intervention whereas everything including his emails were allegedly safe and intact in 2016. When asked why in that case he had failed to provide them to the applicants for their preparation of this appeal, he answered: “I wasn’t about to give in to some fault-finding lawyers out on a fishing exercise.”[107] This answer which did not find its way into the evidence until after much obfuscation is, however, as problematic as it is extraordinary. If true, it would mean concealing material that may potentially affect the applicants and given the Master’s orders of 19 August 2016 and 8 September 2016 to exhibit all the documents, a blatant disregard of those orders as well as telling a lie in the October 18 Letter.

E2.  The emerging picture

113.  We have gone to considerable lengths in summarizing the evidence. From that evidence and other materials in the appeal bundles an overall picture has emerged that is as disturbing as what we have just highlighted, as follows.

114.  Notwithstanding the missing gaps in detail, it seems clear that Cheng On was working for the money side of the project. The fact that it was Cheng who put the applicants on to JJ for free legal representation speaks volumes.[108] Moreover, it is not challenged that Cheng had at least some control over the applicants’ access to the lawyers, played host at the group meetings, sat regularly in on the trial and if JJ were to be believed on this point, took liberty to decide what information or misinformation to provide the court in justifying the mass absence from the 3^rd Mention Hearing.

115.  Beyond D1 and his financier, namely the third party who had redeemed his mortgage, there was an even wider circle of interests that were concerned with the outcome of the case. Instead of the individual defendant, however, their focus was on whether upon the introduction of the new version of the statutory declaration and the FBL in 2007/2008, those engaging in the act of To Ding would be safe from prosecution. These considerations had an immense effect on JJ in that the General Defence became his principal defence. JJ admitted as much in evidence.

116.  Repeatedly it was stressed that the applicants had not broken any law. Repeatedly it was stressed that that was their common position. There is however zero evidence as to how A2 to A12 might have come to acquire that understanding, nor is there any suggestion that they were aware of the wording hence significance of the declaration they were making, if any. On the evidence, it was JJ who filled in the blanks for them by coming up with a substantive defence to which they all agreed.

117.  Although PW was adamant that it was based on his own analysis of the situation, the defence he adopted was a close copy of how JJ had laid it out in the Dear Philip Letter, with BL40 being the only added component. And irrespective of how he had gone about prosecuting that defence, by taking one particular course or another, the arguments he put forward were invariably legal technical in nature. In fact, he went so far as saying that the advancement of individualized defences would weaken the collective case of the applicants.

118.  When fully played out, and with every ancillary argument thrown in, the collective case or General Defence of the applicants went roughly as follows:[109] the declarations made by the applicants were true; the secret agreements they had with D1 were but a breach of the FBL amenable to civil redress; that is the outcome of Michael Suen and Carrie Lam ‘decriminalizing the matter’ vide their letters of 2006 and 2007[110]; what the applicants admitted under caution was therefore neither here nor there and in any event procured by ICAC making inaccurate accusations and asking loaded questions; given how open and widespread To Ding was as a practice, it is impossible to infer dishonesty on the part of the applicants.

119.  In contrast, the prosecution had never based their case on the correctness or otherwise of the applicants’ declarations. Their allegation was much wider, namely A2 to A12 did not truly own land plus it was not their intention to build houses for their own accommodation, the two key components underlying the small house policy that were widely known and widely published. See the original charge sheet pleading the lack of beneficial ownership and making secret arrangements as particulars. This position which the prosecution made clear at the PTR[111] had never changed with the amendment of the charges. Anyone engaging in those acts must know that they were dishonest, the prosecution contended.

120.  When asked to address the above dichotomy in his final submissions, PW conceded that the ambit of the Suen/Lam letters was in fact narrow (兩封信嘅範圍好窄):[112] they purported to clear the declaration-making stage of criminal liability (申請屋牌個階段啲聲明改動到冇刑事責任)[113] but not To Ding (唔係話套丁免刑責)[114]. His argument was: although the basis of the conspiracy the prosecution alleged was wide, the actual wording of the charges was focused on the declaration hence squarely within the permit of the Suen/Lam Letters (控罪詳情都係嗰個範圍).[115]  He prayed in aid the case of HKSAR v Chan Shu Hung, supra[116].

E3.  Core issue

121.  We have not been asked to consider the merits or demerits of the General Defence. Nor is there any need to. As is clear from the cross-examination of JJ and PW, the bulk of the applicants’ complaints are somehow, directly or indirectly, related back to the question of conflict of interest the classic statement of which is found in the Privy Council case of Arthur Mills v The Queen [1995] 1 WLR 511, at 523B-E:

“It is axiomatic that counsel engaged on behalf of more than one defendant in a criminal case must consider whether there is a conflict of interest between them which might inhibit his proper and effective defence of one of them. Counsel must consider the matter in the light of the prosecution case and the instructions he receives from the defendants. If there is, or might be, a conflict of interest, he must promptly advise separate representation. Any doubt must be resolved in favour of separate representation. Those duties of counsel arise as soon as he is engaged. It is, however, a continuous duty. If at any time before the trial a conflict arises, counsel must advise separate representation of the defendants. If contrary to all expectations such a position arises at trial, counsel may be obliged to seek a discharge of the jury in order to enable separate representation at a new trial. These propositions flow from the right of a defendant to have his defence properly and effectively placed before the jury. It is an integral part of his constitutional right to a fair trial. But their Lordships add one qualification. The province of the law is practical affairs. The question is whether there is, or might be, a real risk of a conflict of interest inhibiting counsel in the discharge of his duties on behalf of one or more defendants. In a practical world wholly theoretical or fanciful risks can be disregarded.”

122.  In analyzing this problem, it is fair to say that at a glance, the General Defence cum BL40 argument has the appearance of a perfect umbrella defence. It covered everyone including D1 and given its legal technical nature, avoided having to deal with any inconvenient facts.[117] Significantly, it would also mean preserving the To Ding mechanism which would then be left alone to carry on un-impugned by others. In the event, the defence went nowhere and the question arises as to whether there was some other defence to which A2 to A12 could have availed but not and why.

123.  On this last question, the position of the original defence team is that they had no position. They were content to stick to the “we have not broken any law” mantra and look no further. Such self-imposed nescience naturally prohibited them from having a position. It could also be because of the restricted nature of the General Defence that PW told the Judge that the defence could derive no help from the cautioned interviews.[118] It is only in the appeal before us that PW repeatedly stated that the Judge should take into account whatever content he considered beneficial to the applicants. Even on his own case, this approach is astonishingly narrow not least because A2 to A11 all claimed that they did not know selling one’s Ding right was illegal.

124.  Lest we be misunderstood, we are not unaware of the admissions that the majority of the applicants had made in their interviews. These admissions were however all about taking part in the setting up of the mechanical side of a To Ding scheme. They say nothing about the applicants knowing that everything may not be aboveboard. There was, for example, no mention of the government’s right to repossession and on what condition whereas A5 had made the point that everything they did was done in a law office with the help of lawyers. It is not unthinkable therefore that if instructions were properly taken, at least some of the applicants may say, given how open and widespread the practice of To Ding was at the time, they actually believed it to be a legitimate device for capitalizing on their Ding rights, circumventing a restriction that can be lawfully circumvented, or just a grey area of undetermined legal status. We are not saying it would or would not work but it was certainly something JJ and PW should have looked into.

125.  As it were, JJ and PW had never got round to exploring such possibilities. This surprises us because mens rea is a very obvious defence if it was lacking. That said, it is equally obvious that if A2 to A12 did explain their case along the line of innocent incognizance, they were likely to want to give evidence and what they say may harm D1 the developer and unhinge the General Defence. Perhaps because of this Ms Wong SC has very boldly suggested that alive to the issue, JJ and PW were determined to have it suppressed from the start.[119] This is an atrocious idea to moot for even a brief moment but seeing how A12 who gave no cautioned interview was ignored, uninvestigated and left faceless under the General Defence does make one wonder. The evidence of JJ and PW does not help either.

126.  Given the background and everything that had transpired before, during and after the trial, including what did or did not take place in the preparation and hearing of this appeal, we find it impossible to dismiss the complaint of conflict of interest against JJ and PW. On the contrary, we feel compelled to find A2 to A12 to have been deprived of a fair trial in what is arguably the worst case of conflict that this Court, in its collective experience, has been asked to consider. Quite simply, no lawyers would have allowed themselves to act for all D1 to A12.

E4.  Other matters

127.  Given the above conclusion, the need to deal with the other items of counsel incompetence falls away. We would however observe that insofar as the alleged failure to apply for a stay concerns the Suen/Lam letters, we are satisfied that they do not support the claim that there was a government undertaking to decriminalize To Ding. The law on estoppel aside, the wording of the letters makes it clear that the change was on removing content that may turn the statutory declaration itself into a false declaration. That was the extent of the change in 2007/2008. Nothing more can be read into those letters.

128.  On this ground alone, A2 to A12’s application for leave to appeal and their appeal against conviction must be allowed. It will not be necessary for us to deal with the other grounds of appeal. We will only make some observations on the formulation of the conspiracy to defraud charges and the presentation of the prosecution case which are relevant to the other grounds of appeal. We will also indicate our views on the constitutional ground, albeit not in great details, in view of the full and thorough submissions from counsel.

IX.  The charge of conspiracy to defraud

129.  The elements of the offence of conspiracy to defraud were authoritatively set out in Mo Yuk Ping v HKSAR[120]:

“Conclusions on material issues concerning the offence

55. It follows from the preceding discussion:

(1) that dishonesty is an essential element in the offence in that the means agreed upon must be dishonest;

(2) that the test for dishonesty is the two-stage test enunciated in Ghosh;

(3) that the offence includes cases of economic loss and the ‘contrary to public duty’ cases;

(4) that the essence of the offence in the former category is to use dishonest means to cause economic loss to another or to put at risk another’s economic interests and while there is strong authority to support the proposition that the offence extends to cases of non-economic loss, the correctness of this proposition remains finally to be resolved; and

(5) the offence does not extend beyond the ‘contrary to public duty’ cases to ‘contrary to private duty’ situations.

...”

130.  It is also important to note that before arriving at the above conclusions, Sir Anthony Mason NPJ said in the earlier discussion that:

“Conspiracy to defraud: the essential elements

40. What emerges from this discussion of the cases? First, that there is no formulation which amounts to a comprehensive definition of the common law offence. Secondly, that the offence is constituted by becoming a party to an agreement with another or others to use dishonest means (a) with the purpose of causing economic loss to, or putting at risk the economic interests of, another; or (b) with the realization that the use of those means may cause such loss or put such interests at risk. The offence extends also to cases in which the dishonest means cause a person to act contrary to his public duty, this being a class of case which requires no further consideration by the Court in the circumstances of this case. …”

“44. Dishonesty apart, conspiracy to defraud involves another state of mind – the intention or purpose of inflicting economic loss on another or the realization that the action agreed upon will or may put that person’s economic interests at risk, the element to which Lord Goff referred in The Queen v Wai Yu Tsang. This state of mind may well involve dishonesty. It is preferable, however, to treat it as a separate element. In this respect, it was not suggested in argument that R v Woollen, a decision on intent in murder, has any application to the mental element in conspiracy to defraud.” (emphasis added)

131.  Thus, the element relating to “economic loss”, “putting at risk another’s economic interests” and “causing a person to act contrary to his public duty”, correctly understood, refers to the defendant’s state of mind. Although it may be that the acts which are said to have caused the intended result such as economic loss are often pleaded as overt acts in order to prove the existence of the conspiracy, it should not be forgotten that conspiracy is an inchoate crime. The desired/intended result does not form part of the actus reus.  Accordingly, it is not necessary for the prosecution to prove that the defendants have indeed caused the intended result of the conspiracy.

132.  In simple terms, the actus reus for the offence of conspiracy to defraud is “becoming a party to an agreement with another or others to use dishonest means” to cause the intended result.

133.  When framing a charge of conspiracy to defraud, it is instructive for the prosecution to bear in mind the discussion and the observations made by the Court of Final Appeal in sections C and D of HKSAR v Chen Keen[121]relating to the object or purpose of the conspiracy; the overt acts and particulars; the dishonest means particularised; and the complexity involved when a conspiracy with agreed specific dishonest means is charged.

134.  In the present case, the conspiracy charges involving D1 and the 22 Dings took the same form and read:

“D1 and AAA between X and Y, in Hong Kong, conspired together and with Cheung Cheuk-wing to defraud the Lands Department (‘LD’) of the Government of the Hong Kong [Special] Administrative Region by:

(1) dishonestly concealing that the said AAA had entered into an arrangement with other person(s) to dispose [of] or otherwise deal with the lot of land (‘the lot’) at which he was applying for construction of a house by way of a Building Licence; and

(2) dishonestly and falsely representing that the said AAA was the owner of the lot, and

dishonestly causing the LD to issue a Building Licence to the said AAA.”

135.  It was this formulation which led leading counsel for A6 and A9 to argue that particulars (1) and (2) as well as the ending sentence in the charge represented the dishonest means agreed upon which formed part of the conspiratorial agreement (instead of mere overt acts) and which “must be proved by the Prosecution”

136.  We also note that grounds 3 and 5 advanced on behalf of A2 to A5, A7, A8 and A10 to A12 respectively assert that the Judge erred in finding the applicants’ act of To Ding “amounted to acts of defrauding the Government” and erred in regarding their “act of non-disclosure as the basis of finding an act of defrauding the Government”. These grounds, if meant to convey that the prosecution had to prove an actual fraud on the Government, would be quite misplaced because:

“... Particulars are frequently given of overt acts allegedly performed by the accused which the prosecution relies upon to invite the jury to infer the existence of the prior conspiratorial agreement and in particular, that it involved an agreement to use dishonest means. Subject to what is said below, such particulars should not be confused with the co-conspirators’ common purpose which forms the essence of the alleged conspiracy to defraud.”[122]

137.  Similarly, when leading counsel for A6 and A9 argued at paragraph 17 of their reply submissions that:

“The authorities instead establish that the invalidity of an administrative measure can, on the facts, negate a requisite element of the offence — for example, in the present case, invalidity of the Two Restrictions would go to whether A’s conduct did cause a public officer to act contrary to his public duty...”,

the argument may be misconceived because it is the co-conspirators’ common purpose or intention which forms the constituent element of the offence of conspiracy to defraud, not the actual consequence.

138.  Nevertheless, given our findings on the ground of flagrant incompetence, we do not find it necessary to dwell further into these other grounds of appeal. Suffice to say that when drafting a charge of conspiracy to defraud, prosecuting counsel should be alert to the warning given in Archbold and the comments made by Professor Ormerod as summarised by the Court of Final Appeal in Chen Keen[123]

X.  Constitutionality of the prosecution and conviction

A.  The constitutional ground

139.  The constitutional ground as formulated in A2 to A12’s Re-Amended Perfected Grounds of Appeal against Conviction[124] is that: (1) the Ding right and the exercise of the Ding right are protected by BL40; (2) the Eligibility Requirements (comprising the Ownership Requirement and the No Arrangement Requirement)[125], which were not part of the SHP when the Basic Law was promulgated, are unconstitutional restrictions of the Ding right as they do not satisfy the “prescribed by law” test and/or are disproportionate interference with the Ding right; and (3) consequently, the charges are defective as being unconstitutional and the convictions are also unconstitutional; and (4) the Judge erred in failing to deal with the constitutionality arguments raised by the defence at trial.

140.  A6 and A9’s Re-Amended Perfected Grounds of Appeal also complain of a breach of Article 105(1) of the Basic Law[126]. However, no submissions were advanced on this probably as a result of this Court’s earlier refusal of the other applicants’ application to further amend their Perfected Grounds of Appeal to include Article 105 in the constitutional ground.

B.  The arguments

141.  In summary, A2 to A12 argue, firstly, that BL40 preserves the Ding right of building (or at least a right to apply to build) a small house under the SHP as crystallised, understood and exercised as at 4 April 1990 (which is the promulgation date of the Basic Law), being in line with the principles of continuity and generous interpretation of BL40 as manifested in Kwok Cheuk Kin v Director of Lands (No. 2) (2021) 24 HKCFAR 349. It is submitted that the right under the SHP should have crystallized in 1990 in the manner identified in Kong Yunming v Director of Social Welfare (2013) 16 HKCFAR 950 at [33]:

“like many other constitutional provisions, art.36 is intended to operate as a framework provision. Read together with art.145, it provides the framework for identifying a constitutionally protected right to social welfare: Once it is clear that an administrative scheme such as the CSSA scheme has crystallized a set of accessible and predictable eligibility rules, those rules may properly be regarded as embodying a right existing "in accordance with law", qualifying for art.36 protection.” (emphasis added)

142.  The applicants also rely on Kwok Cheuk Kin v Director of Lands (No.2) at [35] and [46], which they contend has held that the context and purpose of BL40 is to be determined with reference to the relevant time of April 1990, and whether a right of interest is “traditional” for the purpose of BL40 is to be determined by reference to the state of affairs in April 1990. It is further said that the Court of Final Appeal has left open the question of whether and how BL40 may constrain post-1990 changes to the SHP.

143.  Secondly, A2 to A12 argue that the Eligibility Requirements, being imposed subsequent to, and do not form part of the SHP as at 4 April 1990, must be justified under BL40. It is the applicants’ submission that the Ownership Requirement does not satisfy the “prescribed by law” test as the declaration made by an applicant that he is the “sole legal and registered owner” (唯一合法註冊業權人) is unclear and uncertain in meaning and does not impose a requirement that the Ding must legally and beneficially own the relevant land. The applicants also submit there is also no evidence from the respondent to show that the restrictions are proportionate. Relying on DPP v Ziegler [2022] AC 408 at [57] and [94], the applicants further argue that the convictions themselves are unjustified restrictions on their BL40 right which must be justified and proportionate.

144.  In response, the respondent’s primary position is that it is not open to the applicants to argue that the SHP was crystallised in April 1990 and became immutable from then onwards. It is, firstly, submitted that BL40 has been authoritatively interpreted in Kwok Cheuk Kin (No. 2) as protecting only a public law right to have one’s application dealt with according to the criteria prescribed in the Government’s statements of the current policy subject to the lawful discretion of the Lands Department. At the same time, SHP is by nature an administrative policy subject to changes in order to cater for the changing circumstances. Hence, what was “crystallized” in April 1990 is not a substantive right but a right to apply for a grant and to have the application processed in accordance with the criteria of the policy that was current at the time of the application.

145.  Secondly, the respondent argues that the Eligibility Requirements do not engage BL40 in that they cannot be said to impose a “restriction” on the right under BL40 in light of the object of the SHP to enable a male villager to obtain a grant to build, once in his lifetime, a small house in his own village for his own occupation.

146.  Alternatively, even if the Eligibility Requirements have to be separately justified, the Ownership Requirement would pass the “prescribed by law” test in that (1) it is plain from a number of judicial decisions, as well as the various letters and documents from the Government to Heung Yee Kuk and the content of the statutory declarations and the FBL application form, that an applicant of a FBL must be the legal and beneficial owner of the land in question and should not abuse the grant; (2) there is no uncertainty in the requirement and the fact that D1 and the applicants had to undergo an elaborate scheme to circumvent the requirement highlights its predictability and foreseeability; and (3) judicial review is available as a safeguard against any arbitrary application of the requirement. The Eligibility Requirements would also satisfy the proportionality test as they pursue and are rationally connected to the legitimate aim of the licensing system having regard to the social and economic context and considerations at stake and the object of the SHP, and also strike a proportionate balance between the Dings’ individual interests and the wider societal interests.

147.  Thirdly, the respondent takes the point that as the applicants are not challenging the constitutionality of the offence of conspiracy to defraud a person to act contrary to his public duty, they cannot rely on the challenge to the constitutionality of the Eligibility Requirements as a defence because the constitutional challenge does not concern the elements of the offence but only the underlying licensing scheme. Reliance is placed on Secretary for Justice v Ocean Technology Ltd & Ors [2009] 1 HKC 271, Secretary for Justice v Latka [2009] 2 HKC 100 and HKSAR v Pun Lin Fa [2017] 4 HKLRD 708.  The respondent also distinguishes DPP v Zigler on the facts and circumstances of the case. It is pointed out that even if the Eligibility Requirements were unconstitutional, the fact remains that the applicants were parties to a conspiratorial agreement to use dishonest means to defraud the Lands Department officers to act contrary to their public duty, and their convictions are not disproportionate when no fundamental rights are engaged and their charges do not restrict any BL40 right.

148.  In reply to the last point, the applicants submit that Ocean Technology, Pun Lin Fa and Latker do not establish or support the respondent’s broad proposition that a constitutional challenge is a valid defence only if it challenges the constitutionality of the offence. Instead these cases establish that the invalidity of an administrative measure can, on the facts, negate a requisite element of the offence. In the present case, the invalidity of the Eligibility Requirements goes to whether the applicants’ conduct did cause a public officer to act contrary to his public duty because if they are constitutionally invalid the Lands Department and its officers would have no public duty to consider and/or enforce them. Also, the applicants’ conduct of To Ding cannot be objectively dishonest under the Ghosh test if it is a constitutionally protected exercise of fundamental rights. The applicants make the further submission that it is the misapplication of the offence and the resultant severe penal consequences that unjustifiably restricts the Dings’ exercise of their constitutional rights under BL40.

C.  Discussion

C1.  BL40 and Kwok Cheuk Kin (No. 2)

149.  BL40 provides that: “The lawful traditional rights and interests of the indigenous inhabitants of the ‘New Territories’ shall be protected by the Hong Kong Special Administrative Region.”  In Kwok Cheuk Kin v Director of Lands (No.2), the applicant sought to judicially review the SHP on the ground that it is unconstitutional for being discriminatory on the basis of birth, sex and social origin. It is not in dispute that the policy is on its face discriminatory. The central issue in the case is whether the policy is protected by BL40. Before the Court of Final Appeal, the applicant argued that “lawful” means that BL40 is qualified by the anti-discrimination provisions in Articles 25 and 39 of the Basic Law and that “traditional” means the Ding right has to be traceable to 1898 and it is not. The respondent and the interested party, on the other hand, argued that BL40 limits and qualifies the application of the anti-discrimination provisions and that “traditional” means traditional by 1990, not 1898.

150.  In dismissing the applicant’s appeal, the Court of Final Appeal held that the right which an applicant has under the SHP is a right founded entirely on public law, and defined the right as a right to have one’s application dealt with in accordance with the criteria laid down in the Government’s statements of current policy, subject to the lawfully exercised discretion of the Lands Department:

“The starting point is to identify the nature of the “right” or “interest” which an applicant under the Small House Policy may be said to have. The existence of the Policy is implicitly acknowledged in a number of Ordinances, as well as the Basic Law itself. They included notably the Buildings Ordinance, which applied to the New Territories since 1961 in the manner provided by the Buildings Ordinance (Application to the New Territories) Ordinance, and exempted certain categories of houses there, including those which did not exceed the dimensions specified for the purpose of the Small House Policy; the provision for rating exemption in section 36(1)(c) of the Rating Ordinance; and the provision for a rent freeze in BL122. But the Policy itself has never had a statutory basis. It is applied as a matter of administrative discretion. In those circumstances, it cannot give rise to a legal right in the ordinary sense of the word. The actual grant of a building licence or a lease gives rise to a right which is good against the world, but an application for such a right or interest does not. The relevant right is founded entirely on public law. We would define it as a right to have one’s application dealt with in accordance with the criteria laid down in the government’s statements of current policy, subject to the lawfully exercised discretion of the Lands Department. That discretion is not unlimited. It is governed by law. “Where a public authority has issued a promise or adopted a practice which represents how it proposes to act in a given area, the law will require the promise or practice to be honoured unless there is good reason not to do so”: R (Nadarajah) v Secretary of State for the Home Department; c.f. Ng Siu Tung v Director of Immigration, and Mandalia v Secretary of State for the Home Department. This is therefore an inherently imperfect right. It depends on the availability of judicial review, a jurisdiction with highly flexible remedies. Moreover, unless BL40 makes the Small House Policy immutable (a question which we do not decide), it may change. But while the Policy remains in force in its current terms, it creates something which is clearly a “right” in the sense meant by BL40. Otherwise BL40 applies to very little.”[127]

151.  The Court of Final Appeal further held that the word “lawful” in BL40 refers to the lawfulness of the way that the discretion to make a grant under the SHP is exercised as a matter of public law, and the relevant right of an applicant under the SHP is lawful if such discretion is lawfully exercised.[128] As to the word “traditional” in BL40, it does not require that a protected right or interest be traceable to the period before 1898, and traditional rights are those recognised as traditional in April 1990.[129] 

152.  It is clear to us that Kwok Cheuk Kin (No. 2) has laid down the scope and effect of BL40 and the nature of the right protected by BL40 in the context of an applicant under the SHP. Although the dispute in the case concerns whether the SHP is unconstitutional for being discriminatory, the Court of Final Appeal’s construction of BL40 and the right of an applicant under the SHP protected under BL40 applies with full force to the present case and is binding on this Court.

153.  We do not read Kwok Cheuk Kin (No. 2) as establishing, or supporting the proposition, that the right protected by BL40 is to be determined with reference to the SHP that existed, or has crystallised, at the promulgation of the Basic Law in April 1990. Importantly, the Court of Final Appeal (at [39]) has drawn a distinction between a grant of a building licence which gives rise to a legal right that is good against the world and an application for a grant which does not give rise to any legal right. It held that the right of an applicant in the latter case is founded on public law, being a legitimate expectation that his application will be dealt with in accordance with the criteria laid down in the Government’s statements of the current policy subject to the lawfully exercised discretion of the Lands Department. This provides the context for the statement that “unless BL40 makes the Small House Policy immutable (a question which we do not decide), it may change”, which should be read together with the statement that follows, namely “while the Policy remains in force in its current terms, it creates something which is clearly a ‘right’ in the sense meant by BL40.”  What is protected by BL40 is thus the public law right of an eligible Ding to apply for a grant under the extant SHP (i.e. as existing at the time of the judgment in Kwok Cheuk Kin (No. 2) in 2021), and to have his application dealt with according to the criteria of the policy that was current at the time of the application, subject to the lawfully exercised discretion of the Lands Department. The Eligibility Requirements, which were introduced before 2021, were part of the SHP considered and referred to by the Court of Final Appeal in its deliberation on BL40.

154.  We agree with the respondent that it is inapt to say that the SHP has crystallised in April 1990. We do not consider the Court of Final Appeal’s statement that it did not decide on whether BL40 makes the SHP immutable or the decision in Kong Yunming assists A2 to A12 in this regard. Firstly, as can be seen from the historical account given in Kwok Cheuk Kin (No. 2) at [1]-[16] and [48]-[49], the SHP had undergone substantial changes in the course of the 20^th century, including the adoption of restrictions or measures to prevent abuses of the policy. Secondly, it must have been intended and expected that the SHP, being an administrative policy, will undergo changes to meet the changing societal circumstances and public interest considerations such as town planning, development control and government revenue. Thirdly, in Kwok Cheuk Kin (No. 2), the Court of Final Appeal referred to April 1990 only as the date for establishing the relevant factual and legal context for construing BL40 (see [35]) but not for determining the content of the SHP or the right protected by BL40 (see [39] and [45]). Fourthly, in not expressing a view as to whether BL40 makes the SHP immutable, the Court of Final Appeal leaves open the position of future changes to the SHP but not the question of whether the SHP existing at the time of the judgment in 2021 is unconstitutional. Fifthly, unlike the social welfare rights in Kong Yunming, which is a substantive right, the right under SPH protected by BL40 is a right to apply under the extant administrative policy which may be changed subject to principles of fairness and good administration.

C2.  The Eligibility Requirements

155.  We also do not agree that the Eligibility Requirements amount to a restriction on the right protected by BL40. It has always been the object of the SHP to enable an eligible Ding to build, once in his life time, a small house in his own village for his own occupation: see Kwok Cheuk Kin (No. 2) at [3], [10]-[15]. It is an integral part of the SHP that the small house to be built is for the Ding’s own occupation. The prosecution evidence at the trial is that To Ding, which involves the sale, or transfer for profit, of the right of an eligible Ding to apply for a FBL, is contrary to and not allowed under the SHP. As early as 1976, there were already in place restrictions against alienation of the interest in the land or small house after the grant of the FBL. The Eligibility Requirements in restricting alienation and transfer of the Ding right serve the same purpose of preventing abuse of the SHP and are in furtherance of the object of the SHP. In this regard, it is important not to confuse the Eligibility Requirements with the requirement to make the statutory declaration by which an applicant affirms that he has met the criteria under the SHP, which includes the Eligibility Requirements. While the statutory declaration was introduced in 1993, neither this nor the subsequent modifications of the content of the statutory declaration has added anything additional or substantive to the criteria for the exercise of the right of a Ding under the SHP.

156.  In the circumstances, the core planks in A2 to A12’s constitutionality challenge, namely the right protected under BL40 is a right in accordance with the SHP that was crystallised in April 1990 and the Eligibility Requirements, being a restriction to the right introduced after 1990, have to be separately justified therefore fall away.

157.  Given that the Eligibility Requirements do not engage BL40, the issue as to whether the requirements satisfy the “prescribed by law” and the proportionality tests does not call for determination. Suffice to say, even if the Eligibility Requirements have to be separately justified, we are of the view that the Ownership Requirement, examined holistically[130] in the light of the common law, the published policy and guidelines and their application in the licensing process, and the availability of judicial review as an effective safeguard against arbitrary interference, would have satisfied the “prescribed by law” test. We do not agree there is ambiguity or uncertainty in the declaration that the applicant is the “sole legal and registered owner” (唯一合法注冊業權人). That an applicant for a FBL is required to be both the legal and beneficial owner of the land to which his application relates is clearly established in the judicial decisions beginning with Best Sheen Development Ltd v Official Receiver [2001] 1 HKLRD 866 at 872E-J, applied in Chung Mui Teck v Hang Tak Buddhist Hall Association Ltd [2001] 2 HKLRD 471 at 478C–479A[131]. The predictability and certainty of the requirement is not undermined by the absence of an express reference to beneficial ownership in the declaration or the fact that the wording of the declaration had undergone modification. The requirement of beneficial ownership is made plain in the correspondence with the Heung Yee Kuk and the documents involved in the FBL application. [132]

158.  We are further of the view that the Ownership Requirement and the No Arrangement Requirement would have passed the proportionality test. In requiring that the land is in reality owned by the applicant and the small house to be built is actually for his use, the requirements pursue and are rationally connected to the legitimate aim of upholding the object of the SHP to enable an eligible Ding to build, once in his life time, a small house in his own village for his own occupation, and preventing abuse of the SHP. We do not accept the argument of A2 to A12 that, since building land in Hong Kong is scarce and expensive and most Dings cannot afford to have the land or money to build a small house, there is no warrant to prohibit a Ding from agreeing on terms with a developer for assistance in the provision of land and capital to build the small houses. The argument is incompatible with the nature and scope of the right under BL40 as held by Kwok Cheuk Kin (No. 2), which is not a right to have or build a small house, but a right in public law to make an application, and to have his application dealt with, according to the criteria of the policy that was current at the time of the application. It is also not the object of the SHP to provide NTIIs with, or enable them to obtain, financial relief or assistance to meet their housing needs. The argument further overlooks the facts and evidence in this case which show that A2 to A12 obtain no interest in the land or the small houses and have no intention to live in the small houses.  In our view, precisely because building land is scarce and expensive that a balance has to be struck between, on the one hand, individual interests of eligible Dings and, on the other hand, societal interests especially of those who are not eligible to apply for a FBL. The Eligibility Requirements, in ensuring strict observance of the object of the SHP and preventing abuse of the SHP by transferring the Ding right for profit, serve to strike a proportionate balance.

C3.  Ocean Technology, Latka and Pun Lin Fa

159.  We turn next to the arguments concerning the decisions in Secretary for Justice v Ocean Technology, Secretary for Justice v Latka and HKSAR v Pun Lin Fa. Given our conclusion that the Eligibility Requirements do not engage BL40 or amount to restrictions of the right under BL40, we can be brief in addressing the parties’ submissions. First, we do not consider Ocean Technology has laid down a general proposition that an accused can only raise a constitutional challenge as a defence if the challenge concerns an element of the offence, and that consequently the applicants are precluded from raising the constitutionality of the Eligibility Requirements as a defence. In Ocean Technology, the Court of Appeal (Ma CJHC, Stock JA and A Cheung J[133]) held that the defendant could not raise the legality of the underlying licensing regime as a defence to a prosecution brought under sections 8 and 20 of the Telecommunications Ordinance, Cap. 106, which create the offence of broadcasting without a licence. The rationale being that upon a proper construction of the statutory provisions, it is not the legislature’s intention that the legality of the underlying licensing regime is a necessary ingredient of the offence, and it must be the legislature’s intention that an applicant who wishes to attack the underlying licensing regime should do so once he has received a response to his application which might be impugned at law. The Court was only addressing the issue as to whether the validity of the underlying licensing regime has any bearing on the constitutionality of the offence-creating provisions.

160.  The point can be seen from the judgment in Latker which was decided shortly after Ocean Technology[134]. The defendant in Latker made a constitutional challenge to section 63[135] of the Road Traffic Ordinance, Cap. 374 which makes it an offence not to comply with a notice to provide information of a driver suspected to have committed an offence or involved in a traffic accident. The challenge succeeded before the magistrate. The Court of Appeal (Ma CJHC, Stuart-Moore VP and Stock JA) allowed the Secretary for Justice’s appeal by way of case stated, holding that while the right to silence and right to a fair trial were engaged the section was constitutionally justified. The Court of Appeal, however, did not accept the Secretary’s argument that it was not open to the defendant to challenge the validity of section 63 at trial and that the proper avenue should be by way of judicial review. Stock JA stated (at [163]) that:

“The decision in Ocean Technology is not to be read as precluding constitutional challenges to offence-creating provisions as part of the defence to a charge alleging the commission of that offence. Indeed, the decision in Ocean Technology did just that: it addressed the constitutionality of the offence-creating provision but in so doing concluded that upon a proper construction of the Ordinance in question, the validity of the licensing scheme was not a constituent part of that offence. ...”

Stock JA’s view was shared by Ma CJHC who held that “only clear words could take away the right of a defendant in criminal proceedings to challenge the lawfulness of a provision where the prosecution is premised on its validity”: see [63] and [64].

161.  Pun Lin Fa, which applied Ocean Technology and Latker, is a further illustration that whether a defendant may raise as a defence the legality of any relevant permission or licensing scheme, or the decisions made under the scheme, depends on the true construction of the offence-creating provision: see [14] to [16].

162.  Second, the respondent rightly points out that the present case stands in a different light from Ocean Technology and Latker in that it does not concern a constitutional challenge to the offence-creating provision or the offence itself. A2 to A12 in fact accept that the Eligibility Requirements do not arise from the offence of conspiracy to defraud itself. Their submission is that it is the misapplication of the offence together with the resultant severe penal consequences that unjustifiably restricts the Ding’s exercise of their rights under BL40.[136]  In light of the nature of the challenge and the way in which it was argued, we see little or no direct relevance in the decisions in Ocean Technology, Latker and Pun Lin Fa.

163.  Third, A2 to A12 have sought to contrast the present case with the outcome in Ocean Technology on the basis that an essential element of the offence is involved in their constitutional challenge. They argue that, as the conspiracy alleged against them was to deceive the Lands Department to act contrary to its public duty and their conduct in relation to the Eligibility Requirements was alleged to have dishonestly caused the Lands Department to issue a FBL to them, if the Eligibility Requirements were constitutionally invalid, the Lands Department would have no public duty to consider or enforce them and would not have acted contrary to any public duty in issuing the FBLs. Further or alternatively, their convictions would themselves be unjustified restrictions on their rights under BL40 as they were entitled to exercise their rights without being subject to the Eligibility Requirements. We do not accept these arguments. Primarily, the right protected by BL40 is a right to apply under the SHP and to have the application dealt with according to the current criteria of the policy. The Lands Department officer in processing the application is under a public duty to act in accordance with the policy and to observe and enforce the Eligibility Requirements so long as they are a part of the policy. This would be so even if the Eligibility Requirements were subsequently held to be unconstitutional. The constitutional invalidity of the Eligibility Requirements would also not justify the entering into an agreement to use dishonest means to defraud the Lands Department. It would have been open to the applicants to assert their right by challenging the validity of the Eligibility Requirements in judicial review proceedings, but it would not be permissible for them to deploy dishonest means to circumvent the Eligibility Requirements and to defraud the Lands Department.

C4.  DPP v Ziegler

164.  Turning to the UK Supreme Court’s decision in DPP v Ziegler, we do not consider it assists the applicants.  The discussions in the case on whether the defendants’ convictions were justified restrictions on their right to freedom of expression and right to assembly under Articles 10 and 11 of the European Convention for the Protection of Human Rights and Fundamental Freedom (“ECHR”) have to be read in context. In Ziegler the defendants were charged with wilful obstruction of a highway without lawful authority or excuse, contrary to section 137(1) of the Highways Act 1980. Their appeal to the Supreme Court was allowed by a majority (Lord Hodge and Lord Sales dissenting in part). One of the two certified questions in the Supreme Court concerned whether deliberate physically obstructive conduct was capable of constituting a lawful excuse for the purposes of section 137 of the 1980 Act. This involved a consideration of whether the public authority’s interference with the defendants’ rights was proportionate having regard to the rights under Articles 10 and 11 of ECHR, which are qualified by, and subject to, restrictions set out in Articles 10(2) and 11(2). The jurisprudence of the European Court of Human Rights (notably in Kudrevicius v Lithuania (2016) 62 EHRR 34, [100]-[101]) recognized that arrest, prosecution and conviction are all restrictions falling within Articles 10(2) and 11(2)[137]. It was thus common ground between the parties that the prosecution and conviction of the defendants was an interference with their rights under Articles 10 and 11.[138]  It was against such background that the majority (Lady Arden, Lord Hamblen and Lord Stephens) considered that the question was whether the defendants’ convictions for offences under section 137(1) of the 1980 Act were justified restrictions on the rights under Articles 10 and 11 of ECHR[139]. The case does not lay down a general proposition that a conviction on the basis of an exercise of fundamental rights is a form of restriction on such rights and must be justified and proportionate.[140]  The factual and legal context of the present case is also very different to that in Ziegler.

165.  For the above reasons, we reject the constitutional ground.

C5.  Other matters

166.  Before leaving this ground, we will mention and deal with two further matters. The first is A2 to A12’s application to further amend their Perfected Grounds of Appeal to widen the scope of the challenge under the constitutional ground to include Article 6 of the Basic Law[141] and A2 to A5, A7, A8 and A10 to A12’s similar application to include Article 105 of the Basic Law[142]. We had refused the amendment applications as plainly unarguable. In gist, we do not consider that the two provisions are engaged. First, on the evidence none of the applicants has ever paid for or owned the land to which their FBL Applications relate. As such, no private property rights are involved in the case. The right under Article 6 is therefore not engaged. Second, the right of a NTII in the context of the SHP is a public law right to apply for a licence to build, and to have the application dealt with, in accordance with the Government’s current policy. It is not a right to build and not a property right. The argument that the property right protected by Article 105 encompasses the Ding right to build a small house on a designated land, which can be sold and thus carries an economic value, such that the freedom to acquisition, use, disposal or inheritance of property under Article 105 is engaged cannot stand.

167.  The second matter concerns the respective application by A2 to A12 and the respondent to adduce as evidence in the appeal the 2^nd Affidavit of Christopher James Robinson (“CJR 2^nd Affidavit”) and two affirmations of Lam Tung Yee Tony (“TL Affirmations”). Both Mr Robinson and Mr Lam had worked in the District Lands Office and the Lands Department for a substantial period of time before their retirement from the Government. They were to be called as factual witnesses, in the case of Mr Robinson for the purpose of showing that the practice of To Ding was widespread and had been known to and condoned by the government since before 1990 and until at least 2001, and in the case of Mr Lam to refute and answer Mr Robinson’s evidence and also to deal with issues that were only raised on appeal. Their evidence was received de bene esse.

168.  At the hearing of the appeal, A2 to A12 only sought to admit the exhibits to CJR 2^nd Affidavit, which was not opposed by the respondent. A2 to A12 did not object to the exhibits to TL Affirmations, but contended that the respondent must explain the basis for admitting the body of TL Affirmations having regard to the requirements of Section 83V(1) of the Criminal Procedure Ordinance, and further took the position that those parts of CJR 2^nd Affidavit that were referred to in TL Affirmations should also be admitted. The respondent opposed the admission of the relevant parts of CJR 2^nd Affidavit as being not credible.

169.  We have considered the position taken by the parties on the applications. We further note that counsel had in their submissions made no or very scant reference to the body of CJR 2^nd Affidavit and TL Affirmations.  The matters deposed to by Mr Robinson, notably the government’s views on and attitude towards the practice of To Ding, bear no significance to our reasoning and conclusions. In the circumstances, we will admit the exhibits to CJR 2^nd Affidavit and TL Affirmations as evidence but make no order on the applications in so far as they relate to the body of CJR 2^nd Affidavit and TL Affirmations.

XI.  Disposition

For the above reasons, we grant leave to A2 to A12 to appeal against conviction. We treat the hearing of the leave applications as the hearing of the appeal, allow the appeal, quash the respective conviction of A2 to A12, and set aside the sentence imposed on each of them.