R. v. FUNG KIT

M.A. No.1052 of 1993

IN THE SUPREME COURT OF HONG KONG

MAGISTRACY APPEAL NO.1052 OF 1993

(On appeal from KT 9050 of 1993)

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J U D G M E N T

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1. The Appellant was charged with 12 offences of employing a person not lawfully employable. Charge A reads : -

"(A)EMPLOYING A PERSON NOT LAWFULLY
EMPLOYABLE

Statement of offence : -

Contrary to Section 171(1) of the Immigration Ordinance, Cap.115, Laws of Hong Kong.

Particulars of offence : -

FUNG Kit, you are charged that on the 21st day of September, 1993, at Wickey Garment Factory, 12th Floor, No.23, Hing Yip Street, Kwun Tong, Kowloon, in Hong Kong, you were the employer of LAM Wing-chung, an employee who was not lawfully employable."

2. The other 11 charges were in identical terms save for the name of the employee. In relation to the first three charges, the employee in each case was an illegal immigrant. In each of the remaining charges, the employee was an overstayer from China. Nothing turns on the difference, at least in relation to commission of the offence, it not being in dispute that each employee was not lawfully employable.

3. After trial before a magistrate, the Appellant was on 26th November 1993 acquitted of charges D, E, G and I. He was convicted of the remaining 8 charges. In relation to charges A, B and C relating to the illegal immigrants, he was sentenced to 15 months imprisonment on each charge. In relation to each of the remaining charges relating to overstayers, he was sentenced to 3 months imprisonment on each charge: The sentences were ordered to run concurrently so that the Appellant was sentenced to a total of 15 months imprisonment. Against both conviction and sentence, the Appellant now appeals.

4. In the early hours of 21st September 1993, the police arrested two persons in Hing Yip Street, Kwun Tong. Those persons were the alleged employees in charges D and E. As a result of what the police learned, they went to the premises of Wickey Garment Factory Limited (the word "Limited" was omitted in the charges but nothing turns on this. "Wickey" is sometimes represented by "Wang Kei".) There, they arrested 9 other persons, who were the alleged employees in relation to the other charges save for charge G. The alleged employee in relation to charge G was arrested at about 4.30 a.m. when he came to the factory and tried to open the door with keys in his possession.

5. At about 9:15 a.m. on the same day, the Appellant returned to the factory where he was intercepted by PC 52199 (PW8). PW8 asked the Appellant if he was the person in charge of that place to which the Appellant replied yes. The Appellant also agreed that he was responsible for the recruitment of workers and agreed that he had employed the 9 persons who had actually been found in the factory. PW8 then arrested the Appellant for aiding and abetting illegal immigrants, employing illegal employees and failing to register information concerning those employees. The Appellant was cautioned but did not say anything.

6. At 10:45 a.m. the same day at Kwun Tong Police Station, PW8 post recorded the arrest and caution. The interview continued. PW8 recorded the interview as follows : -

" "I wish to put some questions to you about the offence with which you have been charged. You are not obliged to answer any of these questions, but if you do the questions and answers will be taken down in writing and may be given in evidence."

I, FUNG kit, wish to make a statement. I want someone to write down what I say. I have been told that I need not say anything unless I wish to do so and that whatever I say may be given in evidence.

Question (1) :Did you take charge of employing staff for Wang Kei Garment Factory Limited?

Answer : Yes.

Question (2) :According to the Police enquiry, it was
known that there were three illegal immigrants, including male LAM Wing-chung, male LAM Wing-kwan, female CHAN Yuet-ming, and six other persons holding China Two-way Permit, including male CHAN Pui- fong, male NG Ka-lau, male YAU Chung-fat, female TSANG Suk-wai, female CHAN Suet-chi and female CHAN Suk-ching, working inside Wang Kei Garment Factory Limited. Did you offer employment to the above-mentioned persons?

Answer : Yes.

Question (3) : Did you record the personal
information of the above-mentioned persons in a Staff Register?

Answer : No.

Question (4) : For the above-mentioned persons, how
did you employ them?

Answer : As our office always hurried on with
the production, one of the above- mentioned persons helped me to employ the said persons to help me to rush through my work. As to which person offered me the help, I do not remember.

Question (5) : Who did take charge of paying salaries
to the above-mentioned persons?

Answer: Our office paid their salaries.

I, FUNG Kit, have read the above record of interview, consisting of two pages. It is an accurate record of questions asked, and answers I provided."

7. I have set that out in full (apart from the usual signatures) because it was crucial to the Crown's case and an important part of this appeal. Ground one of the appeal against conviction was : -

1. The Learned Magistrate was wrong to admit the Defendant's statement under caution in that:

(i) The Defendant's initial reaction to the caution was to remain silent and he should not in those circumstances, have been questioned by PW8. The Magistrate's reasoning that there was no breach of the right of silence because the Defendant's initial reaction formed part of the post-record was illogical and/or incomprehensible.

(ii) PW8 admitted that at the time of taking the statement, the police had already decided to charge the Defendant.

(iii) PW8 admitted that in a number of material respect, the statement was not an accurate record of his interview with the Defendant."

8. For the Appellant, Mr. Bell said that the matters of which he there complains taken together amounted to oppression so that the statement was involuntary. The magistrate should therefore have ruled it inadmissible. Alternatively, in the exercise of her residual discretion, the magistrate should have excluded the statement on the grounds of unfairness. When, after the post-recording, PW8 sought to put questions to the Appellant who had previously remained silent, Mr. Bell said that PW8 was pestering the Appellant. I accept that in some circumstances to seek to question or interrogate an arrested person who has hitherto remained silent might amount to pestering and be oppressive. In this case, I am wholly satisfied that it was not, particularly in the light of PW8's evidence which was refreshingly candid.

9. Mr. Bell then complained that the Appellant, having said that he wished to make a statement, was then in fact in interrogated by PW8, the first three questions put to the Appellant being leading. He said that it will never be known what the Appellant would have said had he been allowed to make his own statement. Further, this amounted to a breach of rule IV (b) of the "Rules and Directions for the Questioning of Suspects and the Taking of Statements" (the Rules) given by the Secretary for Security for the guidance of police officers. That rule provides : -

"Any person writing his own statement shall be allowed to do so without any prompting as distinct from indicating to him what matters are material."

10. I accept that, prima-facie, there was a breach of this rule.

11. In the statement which I have set out above, PW8 referred to "the offence with which you have been charged." In fact the Appellant had not at that stage been charged. In his evidence, however, PW8 agreed that it had already being decided to charge the Appellant. Mr. Bell said that PW8 was in breach of rule III (b) of the Rules, first paragraph, which reads : -

"It is only in exceptional cases that questions relating to the offence should be put to the accused person after he has been charged or informed that he may be prosecuted. Such questions may be put where they are necessary for the purpose of preventing or minimizing harm or loss to some other person or to the public or for clearing up an ambiguity in a previous answer or statement."

12. Again, I accept that, prima-facie, there was a breach of that rule.

13. Finally, Mr. Bell contended that PW8 had made three serious mistakes or omissions in taking the statement. He said first, that PW8 had not recorded that the Appellant said he was willing to answer verbally. Second, PW8 wrongly recorded that the Appellant had been charged with the offences. Third, PW8 did not record that he had told the Appellant that the Appellant could add to, delete from or amend his statement. Accordingly, said Mr. Bell, the statement did not accurately record what had taken place between PW8 and the Appellant and was again in breach of the Rules, in particular, the final paragraph of rule III (b) which reads : -

"Any questions put and answers given relating to the offence must be contemporaneously recorded in full and the record signed by that person or if he refuses by the interrogating officer."

It was also Mr. Bell said in breach of rule V (a) and (c) : -

"V. Interview Records

The questioning of suspects shall be recorded in the following manner : -

(a) Accurate records must be made of each interview with a person suspected of an offence.

(c) Where a contemporaneous written record of an interview has been made, .... The record must accurately reflect the total of what occurred during the interview."

14. Again, I accept that there was a breach of the rules.

15. The Rules (which replace the old judges' rules that led to so much jurisprudence) may lead to disciplinary action on the part of a police officer if he is in breach thereof, but they are not rules whose breach necessarily requires a court to rule a statement inadmissible or to exclude it. They are, of course, particularly relevant where an accused person makes allegations of impropriety such as force or threats on the part of a police officer who has taken a statement. Clearly breach of the Rules may raise a doubt in the mind of the court about the voluntary nature of the statement. The greater the breach or the incidence of breaches, the more likely it is that the court will have doubts. Where, however, as in this case, no allegations of impropriety of the usual nature are made against the police, the less relevant do the Rules become. The crucial question was whether the Appellant was dealt with fairly. In my judgment, there was no question that the Appellant was dealt with very fairly and that the magistrate was right to rule the statement admissible.

16. Ground 2 was that there was no or no sufficient evidence that the Appellant was a duly authorized agent, manager or factor of the factory. Ground 3 was that there was no or no sufficient evidence that the persons named in the charges had entered into contracts of employment with the factory. These grounds depend upon a consideration of s.17G of the Immigration Ordinance which is headed "Interpretation" and provides that

17. Mr. Bell said that it was necessary for the Crown to prove that the Appellant was the "agent, manager or factor" of the factory and that he was duly authorized. He said that the answers to leading questions in the statement made by the Appellant did not establish the Appellant's precise status in the factory and did not establish beyond doubt that he was an agent, etc. only that he had played some part. He said that there was no evidence of authorization, either as to who authorized the Appellant or what the Appellant was authorized to do. He said that on the authority of AG v. Yip Man Chung (1989) 2 HKLR 547, an offence under s.171(1) is one of strict liability and, therefore, requires strict interpretation of the statutory provisions. He contended that the Crown had made no effort to prove anything in relation to authorization, no doubt having overlooked the need to do so.

18. For the Crown, Mr. Lo argued that there was abundant evidence of the Appellant's position or from which his position and authorization might be inferred. He said that the admissions made by the Appellant when he was first intercepted at the factory, combined with his answers recorded in his statement, show that the Appellant was in charge of employing persons in the factory for which he must undoubtedly have been authorized.

19. Mr. Bell said that the verbal admissions made at the factory were made before the Appellant had been cautioned. He suggested that the magistrate rightly had not relied upon them in reaching the conclusion which she did.

20. In fact, the magistrate did rely upon those admissions. In her statement of findings she said, "it was never put to PW8 that the Defendant never made the admissions at the scene; it was not challenged at all." I see no reason why the magistrate should not have relied upon those admissions. They were made before the position had crystallized and before PW8 became aware of precisely what offences had been committed, and who might have committed them. Thereafter, it having been appreciated that the Appellant was involved he was properly arrested and cautioned and thereafter, as I have found, dealt with very fairly.

21. In my judgment, the magistrate rightly found that the Appellant was in charge of employing staff in the factory and authorized by the company to employ staff.

22. The question therefore arises as to whether there was a contract of employment between the factory and the various persons named in the charges. Mr. Bell said that the definition contained in s.17G is not helpful and that it is necessary to fall back upon a consideration of what constitutes "employment". He referred to Chitty on Contracts, Chapter 7, which deals with employment. At 3851 Chitty said : -

"There is no comprehensive definition of such a contract (Montreal Locomotive Works Ltd. v. Montreal and A.G. [1947] 1 D.L.R. 161, 169 (P.C.); construction Industry Training Board v. Labour Force Ltd. [1970] 3 All E.R. 220, 224; Maurice Graham Ltd. v. Brunswick (1974) 16 K.I.R. 158, 165.) and the decided cases merely indicate a number of indicia or factors which are relevant to a finding that a particular contract is one of employment, or a "contract of service". (Simmons v. Heath Laundry [1910] 1 K.B. 543, 550; short v. J. & W. Henderson Ltd. (1946) 62 T.L.R. 427, 429; Kilboy v. South Eastern Fire Area Joint Committee, 1952 S.C. 280, 285-286; Market Investigations Ltd. v. Minister of Social Security [1969] 2 Q.B. 173, 184; Ready-Mixed Concrete (South East) Ltd. v. Minister of Pensions and National Insurance [1968] 2 Q.B. 497.) The presence or absence of any one such factor is not conclusive, since the decision depends on the combined effect of all the relevant factors, when those pointing towards "employment" are weighed up with those pointing against."

23. Chitty goes on to deal with the sort of factors which an English court at least would expect to find in an employment relationship. At the end of the day, however, it is as always a question of the court finding facts and then placing the appropriate legal interpretation upon those facts.

24. The English law in relation to employment has evolved over a long period of time and against a background of a more sophisticated statutory framework. As Chitty said, there is no definition of contract of employment. In Hong Kong, however, the legislature has attempted such a definition, at least in relation to immigration law in s.17G of the Ordinance. Effect must be given to that definition. In the context of Hong Kong, I would be very surprised if a person carrying out specified work in a factory in return for a daily wage is not a party at least to an implied oral agreement.

25. At trial, it was submitted to the magistrate that the Crown had not proved any contract of an employment. The magistrate does not appear to have considered this point. She appears to have taken it as axiomatic that, the Appellant having admitted that he employed or offered employment to certain people, contracts of employment existed.

26. In relation to charges A and B, the alleged employees each said he had been working at the factory for a day or two before being arrested, doing specified work for a specified daily wage. Neither was engaged directly by the Appellant. If, as I have found, however, the Appellant was the duly authorized agent, etc. of the factory, the offence being one of strict liability, he could be found guilty on these charges.

27. No witness was called in relation to charges H, J, K and L, the overstaying employees apparently having left Hong Kong. The only evidence, therefore, was that coming from the Appellant himself to the effect that he had employed them.

28. The alleged employees were called in relation to the other two charges, C and F, on which the Appellant was found guilty. Unfortunately, these two witnesses, like the witness called in relation to charge E, each said early in their evidence in chief, in answer to what was probably a leading question, that they did not get a job or work while in Hong Kong. Each was then cross-examined on the basis of a contradictory statement which he or she had given to the police when arrested. This forms the basis of ground 4 of the Grounds of Appeal that the witnesses were treated as hostile when no hostile animus had been proved and were cross-examined by the Crown before having been declared hostile. There is substance in this complaint. PW6, the witness in relation to charge F, was cross-examined at length on his statement. There was, however, no application by the Crown to have the witness declared hostile, no ruling that he was hostile, and no leave given or him to be cross-examined upon his statement. In the event, his evidence was to the effect that he had worked casually at the factory two or three times. The magistrate, however, disbelieved his evidence in its entirety. Plainly, she was wrong to do so because the cross-examination of this witness by the Crown was improper so that his evidence was not assessed on a proper basis. Had it been, the magistrate may have come to the conclusion that there was at least some doubt as to whether there was a contract of employment as defined.

29. PW3 and PW5 gave evidence in relation to charges C and E respectively. The Appellant was, of course, acquitted of charge E. Each witness was, with leave, cross-examined on a previous inconsistent statement. Each witness was entirely disbelieved by the magistrate. In consequence, of course, the magistrate relied entirely upon the Appellant's statement to convict in relation to charge C. The Crown now concede that the conviction on charge C cannot stand because there is anyway a lacuna in the evidence connecting the named employee with the charge. Nonetheless, the question of cross-examination of these 2 witnesses, as well as of PW6, is of importance because of the implication that their presence in the factory was on the basis of something more casual than a contract of employment.

30. It is not clear to me as to the basis on which the magistrate gave leave for the witnesses PW3 and PW5 to be declared hostile and to be cross- examined on their statements. It seems to have been sufficient that they said simply that they did not work in Hong Kong and that they had made, as counsel then for the Crown informed the magistrate, a previous inconsistent statement.

31. There was no dispute between Mr. Lo and Mr. Bell that, before a witness can be declared hostile, he or she must have shown a hostile animus. It is a matter for the magistrate to determine whether such animus has been shown and to exercise his or her discretion as to whether cross-examination be allowed. Generally, but not invariably, such cross-examination will be on the basis of a previous inconsistent statement. The purpose of such cross- examination is to try and mitigate the damage which counsel, who has been examining the witness, perceives to have been done to the case.

32. I accept that in this case the question of whether the various witnesses were working or employed in the factory was crucial. I very much doubt, however, whether a simple assertion by the witness that he or she had not worked, probably in answer to a leading question, was a sufficient basis for a declaration that the witness was hostile. The magistrate seems to have been persuaded, at least in part, by the Crown's assertion that the witness had made an inconsistent statement. The fact that a witness has made a previous inconsistent statement is neither here nor there when it comes to consideration of hostile animus. A magistrate must base his consideration upon what the witness has said, the manner in which he has said it and its relationship to the case as a whole. I accept that not infrequently an application to have a witness declared hostile is accompanied by an announcement that the witness has made a previous inconsistent statement. Frequently, the court will make a rolled-up ruling pursuant to s.12 of the Evidence Ordinance to the effect first, that the witness may be cross- examined as being hostile and second, that the witness can be cross- examined on the basis of the previous inconsistent statement.

33. The fact of the previous inconsistent statement, however, should not be a factor taken into account by the court in deciding whether or not a witness has demonstrated hostile animus.

34. I am not satisfied that PW3 and PW5 were treated as hostile on correct principle. Consequently their evidence was not examined as it might otherwise have been. The evidence might have shed light upon the nature of the relationship between the various witnesses and the factory.

35. Further, the oral admissions and statement of the Appellant required closer scrutiny in the light of Answer (4) in the statement. That answer is less than clear but at least hints at an arrangement other than a direct contractual relationship.

36. The offence with which the Appellant was charged is a technical one and one of strict liability. It therefore requires a magistrate to give close consideration to the various ingredients which go to make up the offence. One of those ingredients is the existence of a contract of employment. As I have already said, no particular attention appears to have been given to this ingredient.

37. The matter does not rest there. S.17N of the Immigration Ordinance provides a : -

"Any person who is found at a place where employees are in the employment of an employer shall, unless evidence is adduced that he is lawfully employable, be presumed in the absence of evidence to the contrary --

(a) to have entered into a contract of employment to be employed by that employer; and

(b) to be an employee of that employer."

38. Mr. Lo sought to rely on this presumption. The presumption was not however mentioned by anyone until raised by Mr. Lo half way through his submission in answer to Mr. Bell. The Crown may not rely on the presumption at this stage. First, to allow the Crown to rely on it would be in effect to apply the proviso. There is no proviso in relation to appeals to the High Court from a magistrate (although there should be). Second, there was evidence from some witnesses which, if properly evaluated, may have been sufficient to rebut that presumption. I leave for another time consideration of Mr. Bell's suggestion that the presumption is anyway inconsistent with the Bill of Rights.

39. In all the circumstances I have come to the conclusion that, the offence being one of strict liability, the convictions including those in relation to charges A and B are unsafe and unsatisfactory. Accordingly, I allow the appeal against conviction; I quash the convictions and set aside the sentences. Subject to anything the Crown may have to say, I do not propose to order a retrial. I imagine the illegal immigrants and overstayers are no longer available to give evidence, evidence which may be crucial to a proper determination of the case. The Appellant no doubt has learned a painful lesson and will think twice before allowing into his factory anyone who cannot satisfy him that he or she has a right to be employed in Hong Kong.