Teresa Cheng

Hong Kong justice minister avoids prosecution over suspected illegal structures, but husband will not

  • Modifications to Teresa Cheng’s home were either built before she bought the property or the date of construction was unknown, prosecutions chief says
PUBLISHED : Friday, 21 December, 2018, 5:34pm
UPDATED : Saturday, 22 December, 2018, 1:33pm

Hong Kong justice minister Teresa Cheng Yeuk-wah will escape legal action over suspected unauthorised structures at her luxury home, but her husband will face prosecution, officials said on Friday.

Director of public prosecutions David Leung Cheuk-yin said he made the decision after an independent legal expert concluded there was no reasonable prospect of securing a conviction against Cheng, who was caught up in the scandal for weeks when she took office earlier this year.

But top engineer Otto Poon Lok-to will be charged with “knowingly commencing or carrying out building work without having first obtained from the Building Authority approval and consent in writing”.

Poon allegedly violated the Buildings Ordinance, a statement by Leung said.

Poon told the Post by phone in response: “I’m currently not in Hong Kong, I’m not sure what I will do next.”

He then hung up and could not be reached. Cheng is on leave until December 27 and could not be reached for comment.

Checks on Hong Kong homes for sale ‘needed to tackle illegal structures’

The scandal, which called Cheng’s integrity into question, broke on January 6 – the same day she took office. Media reports revealed that suspected unauthorised building work had been found at the couple’s two neighbouring houses at Villa de Mer in Tuen Mun. One property was owned by Poon and his daughter, Karen Poon Wing-yun, while the other was held by Cheng through a company.

Officers from the Buildings Department looked into the matter and in November submitted their findings to the prosecutions division of the Department of Justice, Friday’s statement said.

Cheng, as head of the justice department, had to delegate her power to Leung to determine whether to prosecute, to avoid a conflict of interest.

The statement said the suspected unauthorised building works at Cheng’s house – including a basement, a rooftop structure and a garden deck – were either built before she bought the property or the date of construction was unknown.

It said the Department of Justice had sought independent legal opinion from barrister Edwin Choy Wai-bond SC to avoid a conflict of interest.

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“Mr Choy, having carefully considered all the available evidence and materials, advised that there was no evidence to suggest the unauthorised building works were constructed after Ms Cheng had bought [her house], or that she knowingly commenced or carried out works after she became the owner,” the statement said.

That led Leung to conclude there was only a prospect of prosecuting Poon, it said.

Building surveyor Vincent Ho Kui-yip said it was difficult to prosecute Cheng under the Buildings Ordinance as the relevant provisions only targeted those who “carry out” unauthorised buildings works.

When the scandal broke, Cheng said the suspected unauthorised structures had existed before she bought the house.

Ho explained: “Generally speaking, even if the sale and purchase agreement or mortgage documents show a property buyer is aware of the existence of illegal structures at the time of purchase, this does not show the buyer has ‘carried out’ or directed such work and is therefore liable.”

Structural engineer James Lau Chi-wang, who was also a barrister, said unless a construction worker could testify and suggest it was Cheng who ordered the building of the illegal structures, it was hard to hold her liable.

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At the time the incident almost engulfed the justice minister, an arbitration expert, as critics and pan-democrat politicians took issue with her over her less than forthcoming approach in dealing with the allegations.

Although she met the press three times after the scandal broke, she did not reveal that 10 more unauthorised structures were found at her three other properties. That was only disclosed by the Buildings Department when it updated the progress of its probe three weeks later.

Leung’s statement on Friday did not mention those other structures at her two properties in Sha Tin and one in Repulse Bay. She earlier pledged she would rectify them.

Critics also questioned Cheng’s account over her Tuen Mun house as its mortgage document had never mentioned a basement.

Some had suggested it could potentially involve misleading the bank when Cheng applied for loans, as the document, signed by her in 2008, included a clause that said she had inspected the property, and that she confirmed the conditions matched the descriptions in the document.

Former Bar Association chairman Edward Chan King-sang said the key question was whether Cheng could claim she was not aware of the basement in applying for mortgage. The jury would have to decide if someone with legal knowledge “would not have known there is tight control of the floor area of this kind of houses”.

“Unless there are some special circumstances, I think a normal person would have visited and looked at the property before deciding to buy it, and should know that there is an extra basement which was not shown in the [original building] plan for mortgage purpose,” the legal heavyweight said.

He added that authorities should also question the previous owner of Cheng’s house and the builder.

But engineer Lau questioned the likelihood of Cheng being held accountable. He said the clause on property inspection in the loan application was “standard”.

“Banks would not really care about whether there’s an illegal structure, because the mortgage is granted based on the original building plan, and it would not grant it based on the extended floor space,” he said.

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The justice department did not disclose further details of the allegations against Poon, saying only that they concerned a “pool structure” 2.5 metres wide, 4.65 metres long and 1.24 metres deep. Legal proceedings were under way, it said.

The length and details of the statement on Friday – which contained more than more than 1,400 words – was more than twice as long as one the justice department released when it announced last week that it would not prosecute Leung Chun-ying, the city’s leader from 2012 to 2017.

Cheng’s department was under fire for not seeking independent legal advice before it concluded it would not lay any corruption and misconduct charges over a HK$50 million payment Leung received from Australian engineering firm UGL.

Civic Party leader Alvin Yeung Ngok-kiu said he was dissatisfied with the amount of information disclosed on Friday.

The prosecutions chief should publish Choy’s legal advice in full to allay public concerns, Yeung said.

But he conceded that David Leung had demonstrated the correct procedure had been followed for handling a case involving a sensitive figure such as a top official.

Choy, best known for defending the city’s former No 2 official Rafael Hui Si-yan in a corruption trial in 2015 and pro-independence activist Edward Leung Tin-kei in a riot trial last year, could not be reached for comment.