HKSAR v. CHAN KING CHONG

CACC289/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. CACC 289 OF 2008

(ON APPEAL FROM DCCC NO. 973 OF 2007)

  -------------------------------

----------------------

JUDGMENT

----------------------

Hon McMahon J (giving the judgment of the Court) :

1. On 10 July 2008, the appellant was convicted after a trial before Judge Yau in the District Court of 10 offences of using a document with intent to deceive his principal, contrary to section 9(3) of the Prevention of Bribery Ordinance, Cap. 201 (Charges 1 to 10) and of two offences of conspiracy to defraud, contrary to common law and section 159C(6) of the Crimes Ordinance, Cap. 200 (Charges 11 and 12).

2. Subsequently, on 16 January 2009 Yeung JA granted leave to the appellant to appeal each of his convictions.  The matter was heard by this court on 24 April 2009.  

3. There was no dispute at trial that the appellant was employed at all material times by the government of Hong Kong in the capacity of a programme officer with Radio Television Hong Kong (RTHK), which was, and is, a government operated radio and television station.

4. The prosecution case at trial in respect of Charges 1 to 10 was that the appellant had made 10 claims for payments from RTHK (and thus from the government) for script-writing and research services said to have been performed by his mother on behalf of RTHK in the making of various RTHK programmes.  His mother had not performed those services and to the knowledge of the appellant had no involvement in any way with RTHK or its programmes.

5. Each charged claim was made by way of the appellant completing and signing a standard RTHK form, referred to as a “Form 9A” at trial, which was then submitted by him to his superior at RTHK for approval and onward transmission to the RTHK accounts department for payment.  That payment was duly made and paid into the bank account of the appellant’s mother.  Each of the 10 charged claims was made by way of a single Form 9A, though payment made by the RTHK accounts department occasionally was a single lump sum relating to more than one Form 9A claim.  The appellant would subsequently withdraw the deposited payments from his mother’s bank account by the use of her ATM card.  The total amount involved in respect of Charges 1 to 10 was $41,300.

6. The conspiracy offences the subject of Charges 11 and 12 again revolved around claims for reimbursement by way of the presentation of false Form 9As.  In respect of the conspiracy the subject of Charge 11, the appellant had performed as a freelance actor in an RTHK programme called “The Brave New Teacher”.  Because he was already employed with RTHK he may not have been entitled to any additional payment for his acting services in that regard.  The assistant producer of the programme, Liu Sin Yi, who was particularised in the charge as the appellant’s co-conspirator and who gave evidence for the prosecution under an immunity as PW3, prepared a fraudulent Form 9A on the appellant’s instructions falsely stating that the appellant’s mother had performed as an artist in the programme and seeking payment for her services.  On the basis of the information set out in the form, the RTHK accounts department paid $3,000 into the appellant’s mother’s bank account which the appellant subsequently withdrew.

7. The conspiracy to defraud offence the subject of the 12^th charge involved the appellant and an RTHK programme presenter, Jacqueline Pang.  Over a period of 15 months onwards from October 2000 the appellant, with Pang’s agreement and on her behalf, submitted 16 fraudulent Form 9As claiming payment, on behalf of Pang’s mother, for various script-writing and research services said to have been provided by her.  No such services had in fact ever been performed by Pang’s mother and in due course the RTHK accounts department paid some $49,600 into the account of Pang’s mother on the basis of the information contained in the 16 Form 9As which had been submitted.  Pang eventually had the benefit of those sums of money.

8. The appellant’s case at trial did not dispute these facts.  His defence was to the effect that all the Form 9As the subject of the charges, while falsely describing the nature of the claimed payments as being for script-writing or research fees, and falsely stating that the person providing the services was either his own mother (Charges 1 to 10 and 11) or Pang’s mother (Charge 12), were in fact claims for the reimbursement of genuine expenses such as after hours taxi travel, meals and other expenses in respect of which he and Pang were entitled to be reimbursed in any event.  The appellant’s case was that there had developed a practice within RTHK whereby the claiming of genuine expenses by the use of Form 9As containing false information was condoned by senior officers in RTHK and that the appellant’s own supervisor knew what the appellant was doing in this regard and had approved that course of action.

9. The judge rejected the fundamental assertions of the appellant’s case and found that while there were genuine expenses of the appellant and of Pang which were sought to be recovered by way of the Form 9As, that the information in the forms was misleading and deceptive and that the payments made would not have been made had the accounts department, and those of the management of RTHK responsible for approving payment, known that the information in the forms was false.  In this regard, the judge accepted the evidence of the prosecution witnesses.

10. There were four grounds of appeal advanced by the unrepresented appellant.  They may be stated as follows :

(1)     There were witnesses not called by the prosecution who should have been called, thus rendering the convictions unsafe.

(2)     The judge did not properly consider the fact that the use of Form 9As containing incorrect information by RTHK staff for the purpose of obtaining reimbursement of expenses was condoned by the management of RTHK.

(3)     The judge ignored the fact that the Form 9As used by the appellant to claim reimbursement of expenses had attached to them a sheet of paper accurately describing what the expenses were.

(4)     There being no evidence that the appellant obtained any monetary gain, there was no proof of his intending to defraud.

Ground 1 — witnesses not called

11. The complaint of the appellant in this regard is that while the prosecution called as witnesses a number of senior officers from RTHK to establish what the correct procedures were in respect of staff claiming reimbursement of expenses, and what was the proper use of a Form 9A in making such claims, the prosecution had not called as witnesses the appellant’s immediate superiors or those of his supervisors who, he said, had approved of his manner of use of Form 9As in seeking reimbursement of his various expenses.

12. The essential point that the appellant makes in this regard is that while each of the senior RTHK officers called as witnesses denied that a Form 9A was the proper vehicle by which to claim reimbursement for the sort of expenses which the appellant in his evidence asserted were the basis of his claims, there were those of his supervisors who would have given contrary evidence and who were not called as witnesses by the prosecution.  Indeed the appellant’s case was that there were at least two of his supervisors who had suggested he use Form 9As to make his claims for reimbursement of his own expenses in the way that he did, and that they should have been called as witnesses.

13. The appellant’s complaint in this regard is misconceived.  The appellant was represented by counsel at trial.  There is nothing to suggest full disclosure was not made to the defence before trial and it was never suggested at trial, so far as can be seen from the papers before us, that the appellant’s case was prejudiced because of the unavailability of a witness.

14. As a general principle, the prosecution does not have to call witnesses who may give evidence favourable to a defendant.  The duty of the prosecution is to notify the defence of the existence of any such witness and their particulars should that be known.  It is generally the responsibility of a defendant to call such witnesses as may be thought to assist his case.  In the present case it was peculiarly within the knowledge of the appellant whom of his supervisors may have given evidence supporting his case that what he did in providing false Form 9As in claiming the reimbursement of expenses was a practice commonly accepted within RTHK, and it was a matter for the appellant, who as we say, was represented at trial, to take steps to call any such witness if he believed their evidence would assist his case.  There was no obligation on the prosecution to do so.

15. In any event the appellant’s complaint in this regard has no practical force for the simple reason that the judge accepted that others within RTHK had abused the use of Form 9As in the way that the appellant had, and that he had been advised by some of his senior officers to do so.  The judge, in dealing with the matter in his reasons for verdict, said this :

“93.     … Although the court accepts the evidence of the defendant that he was told by his senior officers to do so the court does not accept that he had no choice but to obey them.  He could have easily refused to follow their instructions or even to complain against them.  It is of no doubt that he made his own judgement to abuse Form 9As so that he could claim the expenses incurred by an easier means.”  (emphasis added)

and

“94.     Judging from the evidence adduced LEE Kam Ming Wendy no doubt was fully aware of the manner in which the defendant used Form 9As.  No doubt they worked together to make sure that expenses which could not be claimed or were troublesome to claim could be claimed with the minimum hassles by using Form 9As.”

16. It is plain that even had the “missing” witnesses been called their evidence would have added little to the case for the simple reason that the judge had, as will shortly be seen, quite properly concluded that even if others within RTHK knew of the appellant’s falsification or had themselves participated in the same activity, that provided no defence to the appellant’s own criminality.

17. This ground was misconceived and was of no merit.

Ground 2 — The practice of using Form 9As within RTHK

18. This ground is closely related to the previous ground but goes further in that, by it, the appellant asserts that because of the prevalence of the practice within RTHK of using Form 9As in the way in which the appellant did, the judge was wrong to find either that the appellant had an intention to deceive as required by Charges 1 to 10 or an intention to defraud as required by Charges 11 and 12.

19. As we have said, the judge concluded that although other staff within RTHK had abused the use of Form 9As, that did not mean that the appellant did not himself know what he had done was wrong.  The judge, in his reasons for verdict, said :

“92.     …. The court has no doubt that the defendant is exaggerating when he says that everybody in RTHK was doing it.  The court accepts that there were employees in RTHK using Form 9As to claim expenses other than payments to artists or casual contributors.  It is, however, the finding of the court that it was only confined to a small number of them. 

93.      Even though there were other employees of RTHK, including the defendant’s predecessor in the post of producer in Morning Suite, abusing Form 9As, it certainly cannot be used as a defence by the defendant.  The defendant as a Programmer Officer must be able to make his own judgment.  The court has already found that the defendant actually knew that it was wrong to use Form 9As to make the claims in the 10 charges. …”

No complaint can be made of the judges reasoning in this regard.

20. The appellant’s case was that the use of Form 9As was accepted within RTHK as a convenient method for the reimbursement of staff expenses for items such as food and drink provided to guests appearing on RTHK programmes and for staff taxi fares, even though the forms in their terms were expressed to be for the obtaining of payments for services provided by external actors and other contributors to RTHK programmes.  But that does not go to explain why the appellant took steps to distance himself from the payments by nominating his mother’s bank account as the account into which the funds were to be paid.  Nor does it really explain why it was necessary to use another person’s name on the forms at all.  There was no satisfactory explanation for this offered by the appellant in his evidence.

21. To put it quite simply, the judge was entitled to find, as he did, that even though other staff within RTHK had abused the use of Form 9As, the appellant nevertheless was aware that what he did was wrong, and that the false information he provided in the relevant Form 9A would deceive those responsible into approving and making the payments claimed.  This ground failed.

Ground 3 — The “description sheets”

22. The appellant’s case at trial was that, in respect of each Form 9A, he had attached to it, when submitting it for approval, a sheet of paper describing accurately the actual expenses the claim was for.

23. The appellant’s case was that if such sheets had been attached to the Form 9As then that would be strong evidence that he had not intended to mislead or deceive RTHK.  But the appellant’s case that such sheets were attached to the forms was rejected by the judge.  He accepted the evidence of PW2 and PW4 who, as the appellant’s senior officers within RTHK, had processed the Form 9As the subject of the charges, and in that regard said in his reasons for verdict :

“86.     … PW2 and PW4 who countersigned the forms as checking and approving officers give clear evidence that no description forms, receipts or vouchers were submitted to them together with the Form 9As and that they had never seen anything similar to a description form.  The evidence of PW2 and PW4 is accepted by the court.”

and then more generally went on to say :

“87.     The defendant must know that payments of the claim of the Form 9As would surely be refused if it came to light that the forms contained false information.  It is impossible that he would have attached such description forms, vouchers, receipts or invoice to the Form 9As.  It is the finding of the court that no such documents were attached to the Form 9As when they were submitted for approval and payment.”

24. The judge then, perhaps unnecessarily, went on to say that even if descriptions of the expenses had been attached to the Form 9A claims, those forms would still have been misleading and deceptive.  Bearing in mind that the forms purported to be claims for reimbursement for the mother of the appellant, so far as Charges 1 to 10 and 11 are concerned and for the mother of Pang, so far as Charge 12 is concerned when neither of those individuals had provided any service to RTHK or incurred any such expenses, that seems to us to be a perfectly reasonable conclusion.

25. There was no substance to this ground.

Ground 4 — The absence of monetary gain

26. The appellant argues that there was no evidence that he or Pang had obtained any monetary or financial advantage by way of the use of Form 9As.  Accordingly, says the appellant, that must suggest he had no intention to mislead or deceive RTHK or the government. 

27. The judge accepted that there was no evidence that the appellant or Pang had profited in claiming reimbursement for expenses under the misleading Form 9As.  He found in this regard that the claims made by the appellant and Pang did in fact relate to expenses properly incurred, though he noted that the claims had generally been rounded up or down to whole figures.  Because there was no evidence as to whether the claims had been rounded up or rounded down, the judge concluded quite rightly that there was therefore no basis to infer that the appellant or Pang received or intended to receive any financial gain.

28. The conclusion the judge reached however was that by providing false information in the Form 9As, the appellant had acted to the prejudice of RTHK in that by deceiving those responsible into believing that the services and expenses had been provided and incurred by external artists or contributors, and not by himself or Pang who were staff of RTHK, the appellant had deprived RTHK of the opportunity of properly scrutinizing and assessing the claims.

29. He said in his reasons for verdict :

“80.     The defendant was a Programme Officer of RTHK and was educated up to post-graduate level.  He must know that money used to pay for the claims of the 10 charges had to come from the public coffer and the government would have to scrutinise all these claims, making payment only if it was satisfied that the claims were in order.  Even though the court has found that the expenses claimed had been incurred in connection with the operation of RTHK the defendant must know that scruitinising claims for payments to artists and casual contributors for services rendered and scrutinising claims for newspapers expenses and expenses of breakfasts and drinks for guests were different matters and different considerations would apply.

81.      When the defendant submitted the Form 9As his intention was of course to obtain payment of the claims in the forms.  By misrepresenting the true nature of the claims the defendant was depriving his employer a proper scrutiny of the claims.  The defendant no doubt must be aware of this.”

Although these comments were made in the context of the judge’s analysis of Charges 1 to 10 they were later adopted by him in respect of the two conspiracy charges, i.e. Charges 11 and 12.

30. In respect of Charge 11, the court went on to say :

“101.   As regards the deprivation of a proper scrutiny, the defendant being a civil servant must know that the government would take extra care in scruitinising a claim of payment for services rendered by a civil servant to a government department.  An even higher level of care was called for in the case of the defendant because the services he had rendered were to his own department.  If the defendant had put in true information in the Form 9A the questions which would have naturally arisen would have been whether he was doing something within his duties and whether he was doing it at his own time.  In giving false information in the Form 9A the defendant had seriously deprived the government of a proper scrutiny of his claim.

and similarly in respect of Charge 12 :

“126.   As pointed out above the wordings of the Form 9A were clear and unequivocal.  PANG being a full time staff member of RTHK must know that false information was being provided to RTHK.  She must have intended to mislead the government into accepting the information to be true to make payment to her mother.  This must also have the effect of depriving the government of a proper scrutiny of the claims.  The analysis of the court in this charge in respect of the defendant in the same issue also applies here”

31. So far as the offences the subject of Charges 1 to 10 are concerned, proof of monetary gain, or of an intent to obtain monetary gain is not a necessary element of the offence.  The offence created by section 9(3) of the Ordinance simply requires proof that the defendant, with intent to deceive, used a document containing a “false erroneous or defective” statement which to his knowledge was intended to mislead his principal.

32. There is no doubt that even in the absence of proof of monetary gain by the appellant, or of an intent to cause economic loss to RTHK or the government generally, the elements of an intent to deceive and the knowing use of a misleading document were well established by the evidence and properly found to have been so by the judge. 

33. So far as the conspiracy to defraud offences, the subject of Charges 11 and 12 are concerned, it is trite law that to establish the requisite mens rea of such an offence proof of an intent to cause the risk of economic loss is not the only form of prejudice encompassed by the offence.  Causing a government officer to act to the prejudice or detriment of his duty is sufficient : see Welham v DPP (1961) AC 103 where Lord Radcliffe said :

“But in that special line of cases where the person deceived is a public authority or a person holding a public office, deceit may secure an advantage for the deceiver without causing anything that can fairly be called either a pecuniary or an economic injury to the person deceived.”

34. That general principle of law has been accepted on numerous occasions by courts in Hong Kong : see recently HKSAR v Chan Chun Hong (2006) 1 HKLRD 346 at paras. 18 to 26 and HKSAR v Law Kam Fai (2006) 2 HKLRD 879 at para. 24.

35. In the present case the judge’s finding that the agreements the subject of Charges 11 and 12 had the intended effect of preventing the responsible RTHK officer of subjecting the claims for reimbursement to a proper scrutiny was sufficient to establish the element of fraud required to be proven as part of the charged conspiracies.  This ground must also fail.

36. That concludes our analysis of the grounds of appeal put forward by the appellant.  There was however one further matter which, although not raised by the appellant, caused us some concern.  It related solely to the 11^th charged offence of conspiracy.  The charge was particularised as follows :

“Particulars of Offence

         CHAN King-chong, between a date on or around the 18^th day of May 2001 and the 30^th day of May 2001, in Hong Kong, conspired with LIU Sin-yi to defraud the Government of Hong Kong Special Administration Region, by dishonestly:

         (1)     falsely representing that WONG Yuk-fong, the mother of the said CHAN King-chong, had provided services as an artiste for the Radio Television Hong Kong (“RTHK”);

         (2)     preparing and submitting a false or misleading document, namely, a payment request form of ‘Payment of Fees to Artists/Casual Contributors’ purporting to show that the said WONG Yuk-fong did provide such services; and

         (3)     causing or procuring payment to be made by RTHK to the said WONG Yuk-fong for the said services;

when in fact no such services had been provided by the said WONG Yuk-fong.”

37. It can be seen that by this charge the appellant was alleged to have conspired solely with PW3, an assistant programme officer, to defraud the government by certain dishonest acts involving the preparation and presentation of, and the obtaining of payment upon, the single falsified Form 9A claim the subject of the offence.  However PW3, who had prepared the Form 9A on the instructions of the appellant, had consistently and explicitly in her immunised evidence denied any intention to defraud the government or RTHK.  She was questioned a number of times about this in cross-examination and the encapsulating passages of her evidence in this regard are as follows :

“Q.   You were accused of conspiracy with Mr Chan.

A.          Yes.

Q.    Namely, that you agreed with Mr Chan to falsely represent to RTHK that WONG Yuk-fong had performed in the programme.

A.          Correct.

Q.          In fact, you never agreed to do that.

A.          Correct.

Q.          And in fact you were not the one making the decision, it was the director.

A.          Correct.

…

Q.          You have no intention whatsoever to lie about it.

A.          Correct.

Q.          So when the ICAC put the allegation against you you don’t think that it’s justified.  Not without reason.

…

A.          Correct.

Q.        Because ever since 2001 when this happened, until today, you never ever intention to deceive RTHK … to the effect that WONG Yuk-fong had performed and was entitled to the pay.

A.          Correct.

…

Q.          I’m telling you now.  In this case your explanation is that you did not agree to defraud RTHK, right?

A.          Correct.

Q.          It’s just that this form doesn’t tell what was on your mind at that time and today.

A.          You mean to deceive RTHK, no.  I mean, I did not.

Q.          Miss Liu, I’m not here to prosecute you, I’m here to give you the opportunity to explain.  In fact, you told the ICAC that had you known that there’s anything improper about it you wouldn’t have done it.

A.          Correct.

Q.          Finally, your understanding when Mr Chan said to you that put his mother’s name as the payee, when he said this to you, your understanding was make the money payable to the mother’s account, right?

A.          Yes.

…”

38. The judge accepted all of PW3’s evidence except for those parts exemplified by the above passages where she denied an intent to defraud or deceive RTHK and hence the government.

39. After a careful and thorough analysis of PW3’s evidence in the context of the evidence as a whole, the judge concluded that he did not accept PW3’s denials in this regard and, from the contents of the Form 9A the subject of the charge and PW3’s obvious concern about what she was being asked to do, inferred that she must have intended to defraud RTHK and therefore the government.  The judge’s reasoning as expressed in his reasons for verdict, was as follows :

“Agreement

106.    The defence submits that there was no agreement between the defendant and PW3.  With due respect the court cannot agree to this submission.  PW3 says in evidence that she did not intend to cheat RTHK.  She, however, says that she was puzzled when the defendant told her to put down his mother’s name as the payee.  She obviously regarded it as something wrong otherwise she would have done accordingly right away instead of consulting the director of the programme, Mr PONG Tin Pang, first.  PW3 even says that as an assistant it was not convenient for her to ask so much and was not for her to confront the director.  All these must show that she was not only puzzled but knew that it was wrong to do so.

107.    As pointed out above the wordings of the Form 9A were clear and unequivocal.  PW3 as an Assistant Programme Officer must know that she was providing false information to RTHK.  In putting in the form with the false information she must have intended to mislead the government into accepting the information to be true and make payment to defendant’s mother.  Her act also had the effect of depriving the government of a proper scrutiny of the claim and the analysis and discussion of the court concerning the defendant in the same issue in this charge also apply to her.

108.    Taking all these into consideration it is of no doubt that PW3 in submitting the claim in such a manner must know it would cause and must have intended to cause the prejudice to the government.  The government was no doubt prejudiced.  She must have the intention to defraud the government and was dishonest when she prepared and submitted the Form 9A in accordance with the request of the defendant.  Although she had not expressly told the defendant that she agreed to do as told her subsequent action clearly showed that she had agreed with the defendant to defraud the government.”

40. The judge’s analysis was painstaking and had considerable merit.  Nevertheless we are concerned that he has gone a step too far in drawing the inferences that he did.  Not without some hesitation we have concluded another reasonable inference is that PW3, after checking with her supervisor and being told to proceed as instructed by the appellant (who was also her superior officer) had resolved her concerns and concluded that what she had been asked to do in the course of her duty, if odd, was proper.

41. We bear in mind that the 11^th charged offence related to a single Form 9A; that PW3 had checked that what she had been asked to do in preparing the form was proper; that she was simply performing a secretarial role and that she obtained no gain from her actions.  In those circumstances, the conspiracy unravels and the appellant is left as a single fraudster.  The conviction on the 11^th charge in our view must therefore be set aside.  No doubt there were other charges that may, in hindsight, have been more appropriately laid but we do not intend to embark upon any examination as to that.

42. Accordingly for the reasons we have set out above, we dismiss the appeals in respect of all offences of which the appellant was convicted with the exception of the offence the subject of the 11^th charge.  That conviction is quashed.  We make no other order.