Introduction
In 2009, Chan Chi-Wan, former general manager of TVB, was paid HK$112,000 for hosting a New Year’s Eve talk show at a shopping mall in Kowloon. The payment was made by the mall through a company run by Tseng Pei-kun, Chan’s then assistant. Subsequently, Chan and Tseng were both arrested and charged. As the first defendant, Chan was charged with (1) conspiracy to accept an advantage as an agent, (2) accepting an advantage as an agent and (3) conspiracy to defraud. The pair was first acquitted by Poon J in the District Court in 2011, followed by an appeal by the Department of Justice to the Court of Appeal. In ruling that Poon J had erred in law in acquitting the pair, the Court of Appeal sent the case back to Poon J for a retrial. On 7 March 2013, Poon J stood by his original verdict.

As mentioned in our previous newsletter, “Bribery Offences – What We Learnt from Stephen Chan Chi-wan’s Case”, the Department of Justice subsequently filed an appeal against the verdict to the Court of Appeal for the second time. We now revisit the topic as the appeal has finally been heard on 8 and 9 September 2015, with judgment handed down on 26 October 2015.

The Court of Appeal’s Rulings
In finding Chan and Tseng guilty, the Court of Appeal discussed several important legal issues.

Proving or Disproving Reasonable Excuse – Burden on Whom
In criminal proceedings, the Prosecution has the burden to prove beyond reasonable doubts that the Defendant is guilty of the offence. Although the Defendant would sometimes bear an evidential burden, this burden only requires him to produce evidence in order to show the existence or non-existence of certain facts at trial. Strictly speaking, the Defendant does not need to prove anything. However, if the Defendant is seeking to rely on certain defence, he will bear a burden to prove his defence on the balance of probabilities. In that case, the burden of proof is said to have reversed.

In the present case, a charge which Chan was facing was accepting an advantage as an agent, contrary to section 9 of the Prevent of Bribery Ordinance (Cap. 201) (the “Ordinance”). Chan argued that he had a “reasonable excuse” in accepting payment from the mall. In deciding which party had the burden of proof in relation to the existence of “reasonable excuse”, the Court clarified that it depended on whether the existence of “reasonable excuse” related to the elements of the offence.

In the case of HKSAR v Yan Pak Cheung [2009] 1 HKC 339, the Defendant was also charged with accepting an advantage as an agent contrary to section 9 of the Ordinance. The Court held that the elements of the offence only consisted of (1) the acceptance of an advantage; (2) as an inducement to or reward for any act; and (3) that the act relates to the principal’s affairs or business. The lack of a “reasonable excuse” was not an element of but a defence to the offence. Applying Yan Pak Cheung, the Court of Appeal found that Chan had the burden to prove he had a “reasonable excuse” on the balance of probabilities.

How to Prove Reasonable Excuse
Given the Prosecution had proved all the elements of the offence, the issue remained as to whether Chan had a “reasonable excuse” in accepting payment. In establishing the existence of a “reasonable excuse”, Chan argued that TVB had acquiesced in Chan’s acceptance of payment since TVB was well aware of the talk show in question.

In rejecting Chan’s argument, the Court of Appeal found that in order to justify the agent’s acceptance of an advantage, the agent had to endeavour to follow the procedure under section 9(5) of the Ordinance to obtain permission from the principal. Section 9(5) requires the agent to seek permission from the principal either before the acceptance of the advantage or as soon as reasonably possible after such acceptance. The agent was only allowed to rely on “reasonable excuse” if he had tried his best to obtain permission. The Court felt that it would destroy the legislative intent if the Court easily allowed conducts which did not comply with the procedure under the Ordinance to justify the agent’s acceptance of advantage.

Given the fact that Chan had neither before nor after his acceptance of the payment sought permission from TVB, the Court found that he had not established the defence of “reasonable excuse”.

Conclusion
The Court of Appeal found that the Poon J had come to a conclusion or finding of fact which no reasonable magistrate, applying his mind to the proper considerations and giving himself the proper directions, could have come to, and this would be regarded as an error of law. The Court of Appeal ruled that the only conclusion that could be made from the evidence before the Court was to find Chan and Tseng guilty of conspiring to accept an advantage as an agent. Accordingly, the Court of Appeal sent the case back to Poon J and ordered him to convict and sentence the pair.

Third Appearance at District Court
At this stage, Chan and Tseng are granted bail of HK$100,000 on condition that they would not leave Hong Kong. The pair will appear at the District Court on 13 November 2015 for sentencing. Although this will be the third time the pair appears before Poon J, the matter may not come to an end since Chan and Tseng can appeal against their verdict and sentence further to the Court of Final Appeal. We shall wait to see if the issues would be further clarified by it.

For enquiries, please contact our Litigation & Dispute Resolution Department:

E: criminal@onc.hk

W: www.onc.hk

T: (852) 2810 1212

F: (852) 2804 6311

IMPORTANT: The law and procedure on this subject are very specialized and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.