The Court of Appeal recently quashed the conviction and sentence against the defendants on charges of conspiracy to defraud in the case of HKSAR v Chan Chi Cheong & Ors [2025] HKCA.
The case involved the 1st Defendant (“D1”) orchestrating a scheme in which, through his companies, bought rights from villagers to build house for developers under the Small House Policy (“SHP”) in which the male indigenous inhabitants of the New Territories (“NTII”) can apply once in their lifetime for a free building licence (“FBL”) to build a small house, whereby the scheme is known as “To Ding (套丁)”.
D1 then entered into a number of agreements in which he would assign plots of land to NTII, including the 2nd Defendant to the 12th Defendant (the “Applicants”). The Applicants will then apply to the Lands Department for the FBL to build a small house. The application includes a requirement that they are the sole legal owner of the plot and have made no arrangements to be sold to another individual (the “Eligibility Requirements”). The NTII are then required to make statutory declarations.
D1 and the Applicants were charged with conspiracy to defraud. The prosecution’s case was that the Applicants 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.
Lawyers acting for D1 and the Applicants, Mr Phillip Wong and Mr Jim Yiu Ming (“PW and JJ”), relied on changes on the statutory declaration, which removed of certain declaration clauses from the FBL application process, which came from the request from Heung Yee Kuk. This was agreed under letters from the then Secretary for Housing, Planning and Lands, Mr Michael Suen, and the then Secretary for Development, Mrs Carrie Lam (“Suen/Lam Letters”). The clauses were then added to the FBL conditions in which allowed the Lands Department for the re-enter to the land for any breach and that such measure would not entail a criminal conviction. The Applicants claimed that that was a decriminalisation of the To Ding.
At trial, D1 and the Applicants were convicted. 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
- were selling their Ding right;
- 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
- did not have any interest in the small houses to be built with the FBL granted to them.
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 Applicants had conspired with D1 to falsely represent that they had both the Ding right and the ownership of the land, when in truth they only had Ding right but no land. Despite the changes to the statutory declaration and the FBL Conditions, the Eligibility Requirement has remained to be a requirement for the issue of an FBL. He further held that the Applicants’ 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.
The Applicants appealed on a number of grounds. The Court of Appeal quashed the conviction on the main ground which was that there was a conflict of interest for PW and JJ to act for all Applicants and D1. The Court of Appeal held this was a worst case of conflict of interest. PW and JJ relied on only the general defence which covered D1 and the Appellants (including the government’s stance on removing the terms in the declarations. But PW and JJ had not considered defences which were open to the Applicants individually. They advised them only on not giving evidence, but the Court of Appeal observed that mens rea being an obvious defence if it was lacking. PW and JJ had not explored such possibilities, and the line of innocent incognizance equally would be obvious for the Applicants to want to give evidence, which may harm D1 the developer. Since there was a blatant conflict of interest for PW and JJ to act for all D1 and the Applicants, the Applicants did not get a fair trial and the convictions were quashed.
The Court of Appeal did not need to consider the merits of decriminalizing To Ding but made the observations that the Suen/Lam Letters only 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. The Suen/Lam Letters hence do not amount to decriminalisation of To Ding.
From the above, although the Applicants were able to quash the convictions, this does not mean that To Ding is allowed. In contrary, the act of selling the rights can still amount to criminal convictions and anyone should be careful when making such FBL applications to be aware they actually meet the Eligibility Requirements before doing so.
Disclaimer: This article does not constitute legal advice and seeks to set out the general principles of the law. Detailed advice should therefore be sought from a legal professional relating to the individual merits and facts of a particular case.