IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
CRIMINAL APPEAL NO. 60 OF 2013
(ON APPEAL FROM DCCC 3 OF 2011)
||SZE MEI MUN 施美滿
||CHUNG TO CHUN 鍾道全
||LEE PAK LAM 李伯林
||LEE WAI FUNG 林偉峰
||LAI SHEUNG 黎嫦
|Before : Hon Yeung Ag. CJHC, Lunn JA and Poon J in Court
|Date of Hearing : 11-12 March 2014
|Date of Judgment : 14 May 2014
J U D G M E N T
Hon Lunn JA (giving the Judgment of the Court) :
1. The applicants seek leave to appeal against their convictions after trial by District Court Judge Geiser of a charge of conspiracy to export unmanifested cargo, namely marked oil, contrary to section 18(1)(b) of the Import and Export Ordinance, Cap. 60 (“I & E Ordinance”) and section 159A of the Crimes Ordinance, Cap. 200 (Charge 1) and of various related charges of dealing with property known or believed to represent the proceeds of an indictable offence (Charges 2 to 8).
2. The Particulars of Offence of Charge 1 averred that between 31 and May 2009 and 1 February 2010 the applicants had conspired together and with Cheng Kam Shui, Feng Jiu, Chen Ruihong, Huang Shunping and Shi Rubin to export unmanifested cargo, namely marked oil. The latter four stipulated names were Masters (“the four Masters”) of four fishing vessels on to which it was alleged that marked oil was loaded and then smuggled out of Hong Kong and into the Mainland.
3. The Particulars of Offence of each of Charges 2 to 8 averred that the named applicant(s) had dealt with the proceeds of an indictable offence, namely stipulated amounts of money, in various periods of time in the overall period 31 May 2009 to 3 May 2010.
(i) Charge 2 - 1st and 2nd applicants, $2,623,226,783 (between 31 May 2009 and 1 February 2010).
(ii) Charges 3, 4 and 5 were individual charges against the 3rd, 4th and 5th applicants respectively for dealing with stipulated sums of money; namely
Charge 3 - 3rd applicant, $117,836,926 (between 31 May 2009 and 1 February 2010);
Charge 4 - 5th applicant, $46,151,014 (between 31 May 2009 and 1 February 2010); and
Charge 5 - 4th applicant, $103,802,315 (between 12 June 2009 and 31 January 2010).
(iii) 3 May 2010 - the day of the arrest of the applicants
Charge 6 - 1st and 2nd applicants, RMB 7,141,300 and $9,812,800 at their home, Tower 8, Bel-Air on the Peak.
Charge 7 - 1st to 3rd applicants $627,000 at Flat 1, 10/F, Mei Fung Court in Aberdeen.
Charge 8 - 5th applicant, $3,050,000 in a safe deposit box at a branch of the Bank of China at Tseung Kwan O.
4. All of the applicants were convicted of Charge 1.
5. The 1st and 2nd applicants were convicted of Charges 2 and 6; the 3rd applicant of Charges 3 and 7; the 4th applicant of Charge 5; and the 5th applicant of Charge 4. All of them were convicted by the judge on the basis that they knew that the property with which they dealt was the proceeds of an indictable offence, in particular that alleged in Charge 1.
6. The 1st and 2nd applicants were found not guilty of Charge 7 and the 5th applicant found not guilty of Charge 8.
7. The relationship between the applicants and with others was established by admitted facts. At all material times, the 1st and 2nd applicants cohabited in a flat at Bel-Air on the Peak and had four children. The 3rd applicant was married to the 2nd applicant’s younger sister, of which union the 4th applicant was their son. Finally, the 5th applicant married Cheng Kam Shui in 1988.
The prosecution case
8. The nub of the prosecution case was that the applicants conspired with each other, Cheng Kam Shui and the four Masters to export unmanifested, marked diesel oil from Hong Kong. The four Masters said that they had been recruited to the conspiracy by Cheng Kam Shui, whom they knew by the nickname ‘Lack Chai’, in Ao Tou in the Mainland. At his direction they loaded marked diesel oil onto the vessels under their command from one or other of three oil barges, namely Chi Shing, Chi Shing 18 and Chi Shing 28. The three barges were moored at Pak Shek Kok in Hong Kong. The ultimate object of the conspiracy was to effect the importation of that oil into the Mainland, where it was removed from the vessels.
9. The three oil barges were owned by Super Success (HK) Limited (“Super Success”, Right Kit Limited (“Right Kit”) and Chi Shing Development (HK) Limited (“Chi Shing HK”) respectively, each of which company was incorporated in Hong Kong and of which the 2nd and 3rd applicants were their directors. The three oil barges were leased by Chi Shing Development Limited (“Chi Shing”). The 2nd and 3rd applicants held equal holdings of all of the issued shares of Chi Shing and were its directors, whilst the 1st and 2nd applicants were the only two signatories of its bank accounts. Chi Shing’s registered address was at Flat 1, 10/Floor, Mei Fung Court, Aberdeen Centre, 7 Nam Ning Street, Aberdeen (“Mei Fung Court”) and from June 2007 its business address, and those of Super Success, Right Kit and Chi Shing HK was at Flat 2, 21/Floor, Goodview Centre, 12 Wu Pak Street, Aberdeen (“Goodview Centre”).
The four Masters
10. The four Masters had been detained by the Mainland authorities on 31 January 2010. Thereafter, in April 2010, on their pleas of guilty they were convicted of offences in relation to the import of the diesel oil into the PRC and sentenced variously to 12 or 13 years’ imprisonment. However, beginning in May 2012, pursuant to a Letter of Request issued by the High Court of Hong Kong and on the direction of the Supreme Court of the People’s Republic of China the four Masters gave evidence in the Shenzhen Intermediate People’s Court before Judge Zeng and District Court Judge Geiser, sitting as a Commissioner. In due course, the transcript of their evidence, and the exhibits that they produced, was remitted to the Registrar of the High Court in Hong Kong and admitted into evidence by the judge in the trial of the applicants in Hong Kong.
11. The Voluntary Control Scheme (“VCS”) implemented by the Customs and Excise Department involved a system of reporting the sale of marked oil, first by the major oil suppliers such as Shell and second, by the companies operating oil barges who onsold the marked oil to vessels. The purpose of the scheme was to combat the illegal use of marked oil, including smuggling it out of Hong Kong as unmanifested cargo and into the Mainland. The three Chi Shing marked oil barges were registered participants and provided the Customs and Excise with details of the purchase and sales of marked oil. That information was provided on documents relating to individual barges which were faxed by Chi Shing on a regular basis to the Customs and Excise Department.
12. In consequence of concerns arising from an increase in the sales of marked oil, the Customs and Excise Department issued a general circular dated 21 January 2009 to the owners and persons-in-charge of oil barges, advising them that the Department had found :
“ ...smuggling syndicates using fishing vessels licensed in (the) Mainland and Hong Kong with enlarged oil tanks for smuggling Red diesel. Those fishing vessels will frequently buy large amount of marked high sulphur diesel from oil carriers ….. for smuggling to the Mainland.”
The owners and persons-in-charge were enjoined to be “..alert to stay away from suspicious transactions”.
13. At a meeting on 9 April 2009 with Customs and Excise Officer Lo Wing Nin, the 3rd applicant had signed that general circular, and another circular setting out the purpose of the scheme, acknowledging that he understood its contents.
White and yellow Chi Shing invoices
14. On 3 May 2010, officers of the Customs and Excise Department conducted searches of Chi Shing’s registered address at Mei Fung Court, and its business address at Goodview Centre.
Mei Fung Court
15. On 3 May 2010, in the presence of the 2nd and 3rd applicants a large volume of white invoices in Chi Shing’s name for each of the three Chi Shing barges were seized at the Mei Fung Court address. They encompassed the period January to March 2009 and July 2009 to January 2010.
16. On 3 May 2010, a large volume of yellow invoices in Chi Shing’s name, together with completed VCS forms, for each of the three Chi Shing barges for the period June 2009 to January 2010 were seized at the Goodview Centre address. The VCS forms matched those for that period that had been received by fax at the Customs & Excise Department. Also, seized at the premises were white Chi Shing invoices and related Daily Sales Transaction Summaries for the 3 Chi Shing barges for the month of April 2010. Partially completed VCS forms were found in a tray next to a fax machine.
17. The sales described in the yellow invoices supported the returns made in the VCS forms for that same period of time, whereas those described in the white invoices for the same date and barge were completely different and bore different invoice numbers...