News Business Crime & Financial Services 6th Dec 2017

Will a gambler change Hong Kong Law?

Significant judge made changes to the law (as opposed to those created by statute) are rare events, not least in crime. And yet, like London buses, you can wait forever for one to arrive and then two come along at pretty much the same time.

In February 2016, the English Supreme Court, also constituted as the Judicial Committee of the Privy Council, delivered its judgment in R v Jogee [2016] UKSC8, Ruddock v The Queen [2016] UKPC 7 and held that the law had taken a wrong turning in the pre handover Hong Kong appeal to the Privy Council in Chan Wing Sui v R [1985] AC 185 when it had been decided that those taking part in an unlawful joint enterprise had sufficient intent for the offence of murder if they had in mind the possibility that some serious bodily harm might result incidentally during the course of their joint enterprise – the so called doctrine of parasitic liability. Followed consistently, not least by the House of Lords in R v Powell, R v English [1999] 1 AC 1, that remained the law for over 30 years. Now, the Supreme Court has held that the mental element for secondary liability is the intention to assist or encourage the crime; foresight is only evidence of intent and the need to prove an intention to assist the principal is required.

For those jurisdictions whose final appeals are heard by the Privy Council (broadly, the Crown Dependencies, British Overseas Territories, independent republics such as Trinidad & Tobago and Mauritius and certain Commonwealth countries predominantly in the Caribbean, including Jamaica, and the South Pacific), Jogee now represents the settled law but other common law based or influenced jurisdictions have been less impressed. In Miller v The Queen (and other conjoined appeals) [2016] HCA 30, the High Court of Australia rejected the argument that their doctrine of extended joint enterprise should be reviewed in the light of Jogee and held that the foresight test in McAuliffe v The Queen [1995] HCA 37 remained the common law of Australia. It was a matter for the State Parliaments to legislate otherwise if they chose. More pertinently for the purposes of this article, the Hong Kong Court of Final Appeal in HKSAR v Chan Kam Shing [2016] HKCFA 87 has concluded that Jogee is not to be adopted and that Chan Wing Sui continues to apply in Hong Kong.

Now, the Supreme Court has harnessed the coach to the horses for a second time and, in October 2017, driven through the criminal law relating to dishonesty in their decision in Ivey v Genting Casinos UK Ltd (t/a Crockfords Club) [2017] UKSC 67.

The Complainant in this civil action was Phil Ivey, the legendary gambler and a man frequently regarded as having been the best all round poker player in the world. This time playing punto banco (a form of baccarat) at Crockfords in London in 2012, Mr Ivey won over £7m but the casino refused to pay out beyond his initial £1m stake due to his use of ‘edge sorting’ which is a means of enabling the player to recognise the value of a playing card from minute details of difference in the printing on the rear of a card previously seen in earlier play. Here, assisted by a lady called Cheung Yin Sun, another professional gambler, the croupier had been asked to rotate certain cards and retain the same deck with the result that Mr Ivey was able to recognise cards even when shuffled and even when placed face downwards.

And so – was this cheating within the meaning of the Gaming Act 2005 (which creates a criminal offence) or simply skilfully removing the house’s advantage resulting from the different odds at which winning bets are paid out?

It was cheating, the Supreme Court decided, upholding the decisions of the trial judge (who had specifically found that Mr Ivey was genuinely convinced he was not cheating but that he was wrong in law) and the Court of Appeal. There was an implied term that a player in a casino would not cheat but, it was held, cheating did not necessarily involve dishonesty.

What followed was clearly obiter dicta, but, as some commentators have observed, perhaps a little waspishly, there are, in truth, different types of obiter – and when it comes from an authority such as Lord Hughes in the Supreme Court, albeit in a civil case, one should imagine at one’s peril that it will not be endorsed in the English criminal appellate courts. Indeed, within days of the decision in Ivey, Sir Brian Leveson, President of the QBD, observed that it was difficult to think that the English Court of Appeal would not follow it in criminal cases (see DPP v Patterson [2017] EWHC 2820) – and what that amounted to was this:

Since 1982, where appropriate, a judge had been required to direct a jury in regards to dishonesty by applying the two stage test laid down by Lord Lane CJ in R v Ghosh [1982] 75 Cr App R 154

‘(1) In determining whether the prosecution has proved that the defendant was acting dishonestly, a jury must first of all decide whether according to the ordinary standards of reasonable and honest people what was done was dishonest. If it was not dishonest by those standards, that is the end of the matter and the prosecution fails.

(2) If it was dishonest by those standards, then the jury must consider whether the defendant himself must have realised that what he was doing was by those standards dishonest. In most cases, where the actions are obviously dishonest by ordinary standards, there will be no doubt about it. It will be obvious that the defendant himself knew that he was acting dishonestly. It is dishonest for a defendant to act in a way which he knows ordinary people consider to be dishonest, even if he asserts or genuinely believes that he is morally justified in acting as he did’

But  no more.

In providing the joint opinion of the Supreme Court, Lord Hughes stated that the second limb of Ghosh produced serious problems, for six reasons which he identified (at para 57)

‘(1) It has the unintended effect that the more warped the defendant’s standards of honesty are, the less likely it is that he will be convicted of dishonest behaviour.

(2) It was based on the premise that it was necessary in order to give proper effect to the principle that dishonesty, and especially criminal responsibility for it, must depend on the actual state of mind of the defendant, whereas the rule is not necessary to preserve this principle.

(3) It sets a test which jurors and others often find puzzling and difficult to apply.

(4) It has led to an unprincipled divergence between the test for dishonesty in criminal proceedings and the test of the same concept when it arises in the context of a civil action.

(5) It represented a significant departure from the pre Theft Act 1968 law, when there is no indication that such a change had been intended.

(6) Moreover, it was not compelled by authority. Although the pre- Ghosh cases were in a state of some entanglement, the better view is that the preponderance of authority favoured the simpler rule that, once the defendant’s state of knowledge and belief has been established, whether that state of mind was dishonest or not is to be determined by the application of the standards of the ordinary honest person, represented in a criminal case by the collective judgment of jurors or magistrates.’

Accordingly, he concluded (at paras 74-5), the second stage did not correctly represent the law and directions based on it should no longer be given.

Allying the test in criminal cases with that in civil law (as per Lord Nicholls in Royal Brunei Airlines Sdn Bhd v Tan [1995] 2AC 378 and Lord Hoffman in Barlow Clowes International Ltd (In Liquidation) v Eurotrust International Ltd [2005] UKPC 37) the direction to be given to English juries from now on is this –

  • When dishonesty was in question, the fact-finding tribunal had first to ascertain, subjectively, the actual state of the individual’s knowledge or belief as to the facts. The reasonableness of that belief was a matter of evidence going to whether they had held the belief, but it was not an additional requirement that the belief had to be reasonable; the question was whether it was genuinely held. When the state of mind was established, the question whether the conduct was honest or dishonest was to be determined by applying the objective standards of ordinary decent people. There was no requirement that the defendant must appreciate that the conduct was dishonest by those standards.
  • It followed, he said, that, had cheating at gambling included an additional legal element of dishonesty, that would have been satisfied in Ivey.

The Ghosh test has not been universally and unequivocally used throughout the common law world, but it has been employed in Hong Kong, and as Sir Anthony Mason NPJ observed in Mo Yuk Ping v HKSAR [2007] HKCFA 386, at para 51 of his judgment  “the Ghosh two stage test has been consistently applied in Hong Kong since it was enunciated by the English Court of Appeal”

But what of the future? The second limb of the Ghosh test has rarely been of practical significance in most cases involving dishonesty but a professional card player has been the cause of a once in a generation change in England and Wales. By analogy to Mr Ivey’s profession, will Hong Kong now follow suit?

Andrew Radcliffe QC

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