HKSAR v. WOO CHIH WAI

HCMA603/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO.603 OF 2000

(ON APPEAL FROM ESCC 2434 OF 1999)

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J U D G M E N T

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Background

1. The appellant was originally charged with several counts of supplying false information and one count of conspiracy to defraud. At the commencement of the trial, the prosecution elected to proceed only on the conspiracy charge. The appellant denied the offence and was convicted after trial. He was sentenced to a term of six months. The trial was conducted in English.

2. The appellant now appealed against both the conviction and sentence. Counsel only represented the appellant for the sentence and the appellant dealt with the conviction himself. I have heard submissions from both counsel and the appellant.

3. The particulars of the charge alleged that :

" WOO Chih-wai and WONG Kai, between the 1st day of January 1995 and the 27th day of June 1997, in Hong Kong, conspired together to defraud the Hong Kong Arts Development Council (HKADC) by dishonestly obtaining from the said HKADC a literary grant in favour of the Hong Kong (English) Pen Centre for the publication of a journal known as 'Hong Kong Literature' greater than the publishers of the said journal were entitled to receive, by falsely representing in the project report for project grant or matching grant an inflated amount for the actual printing and production costs of the said journal."

4. The prosecution had called a total of eight witnesses at the trial and the appellant had testified also.

5. The following were the persons and organizations involved in this case. It was a summary of what the learned magistrate had stated in his Statement of Findings :-

1. Hong Kong (English) Pen Centre ("the Pen Centre") : it is an organization set up in 1975.

2. Hong Kong Literature : it is a literal journal published by the Pen Centre.

3. Literary Arts Committee ("LAC") : it is a sub-committee under the Hong Kong Arts Development Council ("HKADC"). Its object is to promote art activities. It is responsible for examining and approving grant applications for the related activities.

4. HKADC : it is a statutory organization funded by the government of the HKSAR to subsidize local non-profit making art groups for promoting art activities.

5. PW1, Mr Wong Hong Hin, was the Chairman of the Pen Centre. (The appellant was secretary at the material time.)

6. PW2, Ms Wai Chi Fei, was the assistant secretary general attached to LAC dealing with grant applications.

7. PW3, Mr Ma Shiu Ming, was a certified accountant. He prepared the audit reports relating to the publication of the Journal.

8. PW4, Mr Wong Kai, was the designated printer of the Journal.

9. PW5, Ms Chan Mei Wan, was an account clerk in the employ of PW4's company. She was related to PW4.

10. PW6, Mr Miao Yung Chong, was the proprietor of a book binding company known as Son Tak Printing and Binding Factory Limited, which had taken on the binding work of some of the issues of the Journal.

11. PW7, Mr Chan Kwok Cham, a senior ICAC officer.

12. PW8, Mr Chiu Po Chun, an officer called to produce police licensing office records concerning the Pen Centre.

The prosecution case

6. The prosecution case was bascially this : In relation to the publishing of the 3rd to the 10th issues of the Journal, grants were obtained from HKADC through LAC. Three sets of application forms were submitted to LAC and the appellant had completed the applications. A grant was released upon approval of each application. Upon conclusion of the project, a detailed report on the financial details supported by an auditor's report had to be submitted.

7. According to PW1, the appellant was responsible for all the work relating to the applications for the grants as well as the day to day management and control of the affairs of the Pen Centre. The appellant was the only person dealing with LAC and PW1 would just sign in the application forms as Chairman. PW1 further said that it was the appellant who informed him that the Journal was being published by PW4. PW2's testimony was that she only dealt with the appellant in relation to the applications for grants by the Pen Centre. PW3 stated that all documents and records for the purpose of preparation of the audit reports were provided by the appellant. He pointed out that he would not have signed the reports had he known the details to be false.

8. PW4 confirmed that he was instructed by the appellant to be the printer of the Journal. Actually he was the person who had lodged a complaint to the ICAC regarding the case. According to PW4, it was at the request of the appellant that invoices and receipts, which contained inflated figures of the number of copies made and the production costs, were issued. By way of background information, PW4 agreed that he had been ordered to pay some money to the appellant for a labour dispute. Furthermore, he had earlier pleaded guilty to a charge of similar nature.

9. The appellant was interviewed by PW7 on 21 January 1999, and there was a further interview on 13 March 1999.

The defence case

10. As to the defence case, the learned magistrate had, in his Statement of Findings, succinctly summarized the account as follows :-

"The Defence Case

The Appellant challenged the voluntariness of the 3 records of interviews which were video taped and subsequently reduced into writing. The Appellant elected to give evidence and called no witness. The Appellant alleged that threat and inducement were used by PW7 upon him. The interviews were conducted in an unfair and tricky manner. The Appellant further alleged that he was feeling unwell at the interviews and the detention on the day of arrest at ICAC office was unduly long and oppressive. In the case of general issues, the Appellant elected to give evidence and called 4 witnesses (DW2 - 5). The Defence case was that the Appellant had no knowledge about the overstating of number of copies of journal printed. The Appellant was unaware of any agreement between PW1 and PW4. The Appellant had not conspired with PW1 nor PW4 to defraud HKADC. PW1 and PW4 framed him up as a party to the conspiracy. The Appellant had a clear criminal record. DW2 - 5 gave evidence that the Appellant was a trustworthy, honest and hardworking person."

11. Having considered the evidence and the objections made, the learned magistrate was satisfied that the three records of interviews were made voluntarily and he admitted them into evidence. He had already explained why that was the case in his Statement of Findings.

The magistrate's findings

12. Apart from the evidence relating to the records of interview, the learned magistrate had also considered the other evidence in a very careful manner. His analysis was contained in the paragraphs stated under the Reasons for Findings. In conclusion, the magistrate stated :-

"(17) Having accepted the testimonies of PW1 to PW6, I found that the Appellant conspired with PW4 to overstate the number of copies of journal actually printed in the project reports for obtaining of grants. As to the element of dishonesty, I was satisfied that it was dishonest in the mind of ordinary persons to obtain a sum of money which would not have been granted but for the overstating of number of copies actually printed. The Appellant knew that had the expenditure been less than the grant approved, HKADC would demand a refund of the surplus from him. The Appellant knew it was dishonest to conspire with PW4 for the purpose of inflating number of copies of journal actually printed in the project report to justify the obtaining of the grant approved. I was therefore satisfied beyond all reasonable doubt that the prosecution had proved the guilt of the Appellant. I disbelieved the evidence of the Appellant and convicted him accordingly. The admissions by the Appellant in the records of interviews were accepted as truth. I reminded myself that the Appellant had a clear criminal record. I was satisfied of the guilt of the Appellant beyond all doubt even without the reliance on his records of interviews."

13. Hence, in evaluating the testimony of the appellant, the magistrate had already taken into account of the fact that the appellant had a clear record.

The grounds of appeal

14. Conducting his own appeal, the appellant had prepared several sets of written submissions. The latest one was dated 30 March 2001. It consisted of three pages of Chinese writing. In short, the issues he had raised were as follows :

(1) The ICAC had, deliberately, tried to hide important evidence from the court, the conduct of which would constitute the crime of perversion of course of justice. In this connection, the appellant submitted that the ICAC was being untruthful regarding his first complaint to the ICAC. Furthermore, the appellant argued that the ICAC had deliberately deleted a few items in the statement produced in September 1999. If the record was not falsified, it would show that he had in fact spent some $100,000 of his own money on the centre.

(2) The trial magistrate stated in his oral judgment that there was no defrauding.

The appellant had elaborated on these matters further in his oral submissions to the court during the appeal hearing.

15. To be clear about the second point, I shall quote from the appellant's original written submission. He stated :-

“李家齊裁判官在判決時說：『被告騙取的七千七百多元（這『七千七百多元』，從前面的舉證中可知完全是廉署違法捏造出來的），控方未能證明其下落，因而假定該款已被用在《香港筆薈》的出版開支之上。』同時李裁判官亦肯定我對香港文化及文學界所作出的努力及貢獻。（後來在書面判詞中，李裁判官沒有將這段寫上，僅為口頭判決中的計算錯誤致歉，但我有當日在場旁聽的多位朋友可以作證，而翌日的《明報》亦有作出以上的報導）。遺憾的是，雖然我向法庭指定要索取2000年4月7日的口頭判詞紀錄，但在交給我的二千六百多頁紀錄中，卻偏偏缺少了這關鍵性的口頭判決紀錄。這種『選擇性』的提供紀錄做法，實在令人詫異。

從李裁判官口頭判決可知，李裁判官亦明白本人並沒有向香港藝展局詐騙金錢。事實上，本人從藝展局所得之全部金錢，均已悉數用於指定之出版物上，而且本人更為刊物補貼了相當數量的金錢。至於金錢的調配運用上，縱與藝展局的指定方法有出入，亦只屬技術方面的過失，而決非刑事之罪行。”

16. The appellant further complained that all he had done was to promote Hong Kong culture and he had spent a lot of personal effort, time and even his own money for that purpose. But now he was caught in this litigation for almost two years because of a personal vendetta. It was a torture to him and he felt no justice was done.

The merit of the appeal

17. I had taken time to consider the various matters raised. Regarding whether the appellant had made an earlier complaint to the ICAC, it was really a collateral matter. The main question in the trial was the credibility of the witnesses and the contents of the appellant's admission. The conduct of the ICAC officers was indeed raised in the trial and the magistrate was obviously aware of it. However, I failed to see the usefulness of this point on appeal. The same applied to the issue of the account records concerning the publications. Whether the ICAC officers had falsified such records was again a matter for the trial magistrate to consider.

18. As to the allegation against the magistrate having failed to refer to contain amount of money ($7,000 odd) in his written judgment, I had gone through the record to consider the significance of this point. I noticed that the learned magistrate did say in his Reasons for Sentence that "There was no evidence from the prosecution on the whereabouts of the monies which were fraudulently obtained by the Appellant. I therefore accepted the mitigation submitted on behalf of the Appellant that monies were all spent on the Hong Kong Pen Centre and not for his personal gain. ..."

19. Hence, it was against the context of the mitigation and sentence that the learned magistrate had made the statement. The question was, could that be taken to mean that the magistrate should have found that there was no defrauding on the part of the appellant in the circumstances.

20. In this connection, Mr Geoffrey Chang, counsel for the appellant at the trial, had raised similar points in the final submission. He argued :-

"53. There is no allegation from the prosecution that the other expenditure (other than printing and production cost) contained in the project reports were false, despite lengthy and detailed investigation by the ICAC. Therefore, it could be seen that the Defendant actually was out of his own pocket for 3rd to 10th issues by more than $100,000, as he said out of his own savings.

54. ...

55. Therefore it is submitted that the prosecution cannot prove that the Defendant's conduct was dishonest by the standard of an honest ordinary man as perceived by the Defendant himself. There is absolutely no personal benefit for the Defendant, while there were substantial deficit coming from his own pocket due to his love of literature and his sense of obligation to the Pen Centre and due to WHH's keeping of a substantial sum of the grants. The portion WHH kept was roughly equal to this deficit. (see pros. table.)"

21. In my judgment, the issue here was clearly not whether the appellant himself had spent his own money on the activities of the centre. It was also not relevant to the charge whether all the money obtained from LAC was spent on the centre in toto. The charge related to whether the appellant had conspired with others to defraud the HKADC by false representations, namely, using inflated figures concerning the actual number of copies printed and production costs of the Journal. Even if the appellant had used his own money for the activities of the centre and/or that the money obtained from HKADC was all spent on the centre, that would have no direct bearing on this specific charge. The learned magistrate had also directed himself on the mens rea element and he was satisfied that the appellant was dishonest in these circumstances.

Conclusion on the appeal on conviction

22. As I had previously explained to the appellant, my role in hearing appeals is not to re-try the case. The trial magistrate had seen the witnesses and heard their testimonies and he would be in the best position to decide on their truthfulness and reliability. Here the learned magistrate had done that and made his findings on the credibility of the witnesses. In the end, he found the prosecution witnesses to be credible. Based on such a conclusion, and the findings on other relevant documentary evidence, he found that the charge was proved by the prosecution to the required standard.

23. More specifically, he also found that the appellant had given the interviews voluntarily during which he had made admissions to the effect that he had overstated the number of printed copies of the Journal. The magistrate found these admissions to be true. On this alone, the magistrate could have found the charge proved. However, the magistrate went on and considered that even without these admissions, he would find the charge proved in view of the evidence. Having read the Statement of Findings as a whole, the documents involved and the relevant parts of the transcript, I am unable to find any reason to upset the magistrate's findings and conclusions. The magistrate did not err in his findings of fact and directions on law.

24. Despite the appellant's numerous complaints, I agreed with the succinct analysis stated in the respondent's written submissions. I would dismiss the appeal on conviction accordingly.

Appeal on sentence

25. The appellant also appealed on the sentence. In his Reasons for Sentence, the learned magistrate gave the following analysis as to why he imposed six months for the offence :-

" There was no evidence from the prosecution on the whereabouts of the monies which were fraudulently obtained by the Appellant. I therefore accepted the mitigation submitted on behalf of the Appellant that monies were all spent on the Hong Kong Pen Centre and not for his personal gain. Nevertheless, he was fully aware of his dishonest act. The present offence had been premeditated and continued for a period of two and a half years. The co-accused who pleaded guilty in the very first opportunity was sentenced to three months imprisonment suspended for a period of twelve months. The role of the co-accused was less significant. The Appellant was the mastermind of the whole fraud.

I bore in mind that the Appellant had a clear criminal record. I accepted that the Appellant was found to be a literature lover and contributed a great deal in the field of art. Having considered of all the aforesaid, the contents in the background report and the mitigation submitted, I considered that the present case was not the most serious type of fraud. However, imprisonment was inevitable and for the present offence six months imprisonment was appropriate after trial."

Submissions by counsel for the appellant

26. I have read and heard counsel's submission regarding this sentence. Counsel stated that :-

"1. The learned magistrate either failed to consider or failed to consider adequately the following factors when he passed the sentence:

1. Hong Kong Pen centre was an organization for the promotion of culture and literature and was a non-profit making organization.

2. All the committee members, including the appellant and the prosecution witness who was a committee member (e.g. PW1 Mr. Wong Hon Hin) were working in the Pen Centre on a voluntary basis. The appellant was serving the community without pay.

3. The money gained in excess of the expenditures of the journal of Hong Kong Pen was all kept by the Hong Kong Pen Centre and there was no personal gain of the appellant.

4. The act of the appellant was solely for the benefit of the Pen Centre and indirectly for the promotion and advancement of culture and literature in Hong Kong.

5. The personal background of the appellant and the unfailing contribution of the appellant in the promotion of culture should also be an important element to be taken into account.

6. The offence was not the most serious type of fraud.

2. There was a great disparity in the sentence between that of the appellant and the co-accused, even taking into account that the co-accused pleaded guilty and was not the mastermind. He was sentenced to three months imprisonment, suspended for twelve months only.

3. In all the circumstance of the case, the sentence was severe and manifestly excessive."

The respondent's argument

27. The respondent argued, however, that the magistrate had already taken into account of the relevant factors raised and the sentence imposed was neither excessive nor wrong in principle.

Merit of the appeal

28. On the face of it, a term of six months for this offence appeared to be entirely appropriate. However, it was unfortunate that the learned magistrate did not clearly state whether this six months was the starting point or that the mitigating factors had already been considered. Apart from his clear record, the most important mitigating factor, in my view, was that the appellant made no personal benefit from the money obtained. The learned magistrate had accepted that to be the case and some discount should be given to reflect this factor. Perhaps the learned magistrate had taken this as a sentence after discount but did not say so clearly. To be fair, I would treat the six months to be the starting point and reduce it by two months to reflect the mitigation.

29. On the other hand, I agree with the magistrate for not considering a suspension of the term. The offence involved defrauding the public resources and that is always a serious matter, even if the purpose was to promote cultural activities. In this case, the other defendant had pleaded and was given a term of suspended sentence. I could not accept the argument of disparity raised by counsel. It was not appropriate to compare the sentence of the appellant with the other defendant as their roles and involvement were different. The other defendant had also testified for the prosecution.

Conclusion on the appeal on sentence

30. For the above reasons, I would therefore allow the appeal on sentence. The sentence of six months would be reduced to four months, but I shall make it plain that this should not be taken as a precedent for the sentence of similar cases.