FU KOR KUEN PATRICK AND ANOTHER v. HKSAR

FACC No. 4 of 2011

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 4 OF 2011(CRIMINAL)

(ON APPEAL FROM CACC NO. 179 OF 2010)

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JUDGMENT ON COSTS

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Mr Justice Bokhary PJ :

1.  After being brought before a magistrate, these two appellants were tried in the District Court.  They faced 20 charges – brought against them jointly – of false trading, contrary to s.295(1) and (6) of the Securities and Futures Ordinance, Cap. 571.  After trial they were convicted on all charges.  Their convictions were affirmed by the Court of Appeal but quashed by this Court. They now seek their costs in the Magistrates’ Court, the District Court, the Court of Appeal and this Court.  And they ask that the appearances before this Court (meaning the appearance before the Appeal Committee at the hearing of the application for leave to appeal and the appearance before the full Court at the hearing of the appeal itself) be certified fit for three counsel.

2.  The respondent asks that the appellants be deprived of their costs in the Magistrates’ Court and the District Court on the ground that they had brought suspicion upon themselves and misled the prosecution into thinking that the case against them was stronger than it was.  Alternatively, the respondent asks that the appellants be deprived of a part, say a third, of their costs of the trial in the District Court.  That would be because they had successfully but wrongly argued at trial that the burden on defendants under s.295(7) of the Securities and Futures Ordinance was only an evidential burden (rather than a persuasive burden as we eventually held).  The respondent does not oppose an award to the appellants of their costs in the Court of Appeal.  Nor does the respondent oppose an award to the appellants of their costs in this Court.  But the respondent asks us to certify the appearances before this Court fit for only two rather than three counsel.

3.  We feel unable to say that the appellants had brought suspicion upon themselves or misled the prosecution into thinking that the case against them was stronger than it was.  The appellants had traded in derivative warrants issued by Macquarie Bank Ltd.  As the issuer of those derivative warrants, Macquarie operated a “commission rebate” scheme.  Such schemes were permissible under the Stock Exchange’s rules at the time.  On 20 days during the charge period, the appellants bought and sold Macquarie derivative warrants back and forth to one another, usually at the same price.  At the end of each day, they exited the market by selling the warrants: sometimes for a little more than they had paid, sometimes for a little less and sometimes for the same price.  They made money because they received more by way of commission rebates than they paid by way of brokerage commission.  As Mr Justice Gleeson said (in para.102 of his judgment with which judgment all the other members of the Court agreed), “the purpose of pursuing commission rebates, a purpose that was consistent with a defence under s.295(7), was obvious once the primary facts were established”. That being so, the appellants are not to be deprived of any their costs on the “bringing suspicion upon oneself” ground.

4.  We turn now to the question of depriving the appellants of some of their costs in the District Court because they had argued there for an evidential burden only.  What (if any) increase in costs that resulted in has not been demonstrated. That being so, we do not feel justified in depriving the appellants of any of their costs in the District Court on the ground that they had argued there for an evidential burden.

5.  The remaining issue is whether we should assist the taxing officer by certifying the appearances before this Court fit for three counsel or by certifying them fit for two counsel only.  A case in the Court of Final Appeal is almost always bound to involve some considerable importance and difficulty. But for the purposes of the taxation of costs, a certificate for more than two counsel requires something exceptional even by those standards.  We do not regard the present circumstances as exceptional in that sense.  It is true, as the appellants have stressed, that the respondent was represented by three counsel at the hearing of the appeal before us.  While a receiving party seeking a certificate for more than two counsel can point to the fact that the paying party was represented by more than two counsel, that can only be done to support an argument that the case was exceptional.  Sometimes it gets the receiving party home, but sometimes it does not.  This time it does not.  We certify the appearances before this Court fit for two counsel, not three.

6.  Although the appellants have not been awarded everything they asked for, they have been awarded substantially more than the respondent has conceded.  In the circumstances, we order that the costs to appellants include the costs of the written submissions on costs. 

7.  We thank counsel on both sides for their assistance.