HKSAR v. FUNG KA SHING

DCCC 330/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 330 OF 2012

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VERDICT

1.  The defendant pleads not guilty to one charge of obtaining property by deception, contrary to section 17(1) of the Theft Ordinance, Chapter 210 (charge 1); one charge of theft, contrary to section 9 of the Theft Ordinance (charge 2); one charge of fraud contrary to section 16A of the Theft Ordinance (charge 4) and one charge of doing an act tending and intended to pervert the course of public justice, contrary to Common Law and punishable under section 101I(1) of the Criminal Procedure Ordinance, Chapter 221 (charge 5).

Introduction

2.  Mr Woo Ma-wan (PW1) together with his wife Madam Lam Kit Ting (PW2) operate the Matsumoto Car Services Limited (“Matsumoto”).  The business includes car maintenance, insurance and the selling of European and Japanese vehicles.  Around October 2010 one of their insurance clients Mr Siu Wai-man introduced the defendant to PW1 to assist PW1 in obtaining China- Hong Kong vehicle licences.

3.  As a result of this introduction an agreement was reached whereby the defendant would obtain licences for PW1.  This however did not materialise and no licences were obtained at that time.  Whilst there is a dispute between PW1 and the defendant over the obtaining of these licences this is not the subject of any charge but sets the background for the subsequent dealings between PW1 and the defendant.

4.   In summary the prosecution case is that in November and December 2010 PW1 entered into two consignment agreements with the defendant (exhibits P2 & P5), whereby the defendant was to find a buyer for a BMW and a Toyota.  In breach of the agreements the defendant sold the two vehicles without telling PW1 and without paying PW1 the agreed price under the agreements (charges 1 & 2).  In April 2011 PW1 entered another agreement (exhibit P21) to buy a China-Hong Kong vehicle licence from Win Dragon (Hong Kong) Limited (“Win Dragon”).   Win Dragon however did not authorise the sale, the agreement not being drawn up and signed by Win Dragon (charge 4).  After the defendant was arrested he approached Mr Wong Ting-fan (PW7), a director of Win Dragon, asking him to say some good words for him and that he had seen the agreement (charge 5).

5.  The defence case in summary is that the defendant did inform PW1 of the sale of both the BMW and the Toyota and paid PW1 the agreed price stated in the agreements; the agreement (exhibit P21) was genuine PW7 handing the same to the defendant authorising him to sell the licence; and that the defendant never said anything to PW7 which amounts to perverting the course of justice.

Evidence

6.  The prosecution called four witnesses set out in the list of prosecution witnesses attached to the prosecution opening.  For ease of reference I have used the same witness numbers as in that list.  These were Mr Woo and Madam Ting (PW1 and PW2); Mr Chong Chun-chuen (PW3), who bought the BMW; and Mr Wong Ting-fan (PW7), one of the directors of Wing Dragon.

7.   Facts have been admitted pursuant to section 65C of the Criminal Procedure Ordinance, Chapter 221 (exhibit P25 & 25A), including the three agreements subject of charges 1, 2 & 4 (see paragraphs 1, 3 & 11, exhibit P25); and that on the 17th May 2011 Mr Ng Chun-man (PW4) purchased the Toyota subject of charge 2 (see paragraph 2, exhibit P25A).

8.  The defendant elected not to give evidence or call witnesses.  No adverse inference is drawn against the defendant for remaining silent.  That is his right.  This proves nothing one way or the other.  The prosecution must prove the charges beyond reasonable doubt.   

Verdict

9.  I have carefully considered all the evidence and the submissions made together with the written submission of Mr Souyave.  I have fully familiarized myself with all the documentation.

10.  In reaching my verdict I remind myself of the burden and standard of proof and that the burden is on the prosecution throughout.  The defendant has to prove nothing.  I direct myself that I must be sure of the guilt of the defendant on each charge before I can convict, each charge to be considered separately.

11.  I remind myself that when drawing inferences from the evidence the inference must be a compelling one and the only one that no reasonable man could fail to draw from the direct facts proved.

Credibility

12.   The prosecution case very much rests upon the credibility and reliability of the witnesses, in particular PW1 in respect of charges 1, 2 & 4 and PW7 in respect of charges 4 & 5.  In considering reliability and credibility of witnesses I remind myself that inherent probabilities provide a better yardstick than reliance upon demeanour of witnesses  (see R v Ng Wing-ming [1995] 1 HKCLR 64).

Charge 3

13.   Reference needs first to be made to charge 3, a charge of fraud preferred against all three defendants originally on the charge sheet.  The prosecution part way through evidence-in-chief of PW1 offered no further evidence on this charge. Charge 3 related to obtaining a China-Hong Kong vehicle licence and was a similarly worded fraud to that of charge 4, in that the prosecution alleged that the defendant falsely represented he could arrange and sell the legal title to the vehicle licence bearing registration mark ZD898. 

14.   After PW1 said he actually obtained the licence, which he had used and was still using as at the date of trial, the prosecution having taking further instructions from the Department of Justice offered no further evidence.  There being no evidence before the court that PW1 had not obtained the legal title and therefore the defendants had made false representations, I dismissed the charge.

15.  Mr Souyave in cross-examination, however, at great length, sought to discredit PW1 in respect of charge 3.  In attacking the credibility of PW1 Mr Souyave submits that not only was there no fraud as alleged but that it was PW1 who was clearly dishonest by reporting to the police that he lost RMB$480,000 thereby implying that he could not use ZD898 (see paragraph 17(i) of the written submission). Mr Raffell agreed with this implication.  Further Mr Souyave submits that PW1 deceived the Certified Public Accountant William Lam and the Transport Department when purporting to be a director of the Hong Kong China Town Electronic Ltd when in fact he was only a director of the offshore company of the same name incorporated in the Marshall Islands          (see paragraph 17(iv) of the written submission). 

16.   Perhaps not without significance it was never suggested that PW1 ever told the police he did not receive the licence.  I am quite sure had PW1 told the police he had never received the licence this major inconsistency would have been brought to my attention in cross-examination.  On the other hand if he had told the police he had received the licence the investigation would have perhaps taken a different course.  The conclusion I reach from this is that PW1 was probably never asked whether he actually received the licence.

17.   Apart from PW1’s evidence as to his understanding of how to obtain such a licence no evidence has been placed before the court as to how under Mainland law such a licence can be obtained or transferred.  In particular nothing has been placed before me as to whether the method of using an offshore company is a legal way.  Whether PW1 did obtain the legal title there simply is no evidence before me therefore to say PW1 must have made a false report to the police is not a fair criticism.

18.   Whether or not PW1 obtained legal title what PW1 did after transferring the licence from HD103 to RB4923 is of concern to the court.  On the evidence and documentation placed before the court, it would appear that PW1 has, as submitted by Mr Souyave, purported to be a director of the Hong Kong Company when he was only a director of the Marshall Islands Company.  After being given a warning against self-incrimination PW1 declined to answer some but not all questions relating to this aspect.  I am prepared to take into account this conduct in assessing PW1’s credibility and reliability.

19.   I now turn to consider the individual charges.

Charges 1 & 2

20.  Whilst each charge must be considered separately both these charges arise from the same factual background and have common features.  It is therefore convenient to consider the charges together. 

21.  In summary the defendant asked PW1 if he had any cars for sale.  As a result PW1 agreed to assign the BMW and the Toyota to the defendant to see if the defendant could sell them.  This resulted in the two agreements, exhibits P2 and P5.  PW1 was the registered owner of the Toyota and his wife (PW2) the registered owner of the BMW.  The prosecution case is that in breach of the agreements the defendant sold the cars and kept all the proceeds. 

22.  Without doubt there was an agreement reached for the defendant to sell the BMW and the Toyota.  The evidence is equally clear the defendant sold both vehicles.   One may therefore say the only question to determine is whether the defendant paid the agreed sums to PW1, PW2 or Matsumoto.   In my view in determining this I must look at the overall evidence of PW1 and PW2 as to these two agreements. 

23.  The vehicle registration documents (exhibits P26 & P27) bear the signature of the registered owners.  The signatures appear to be a single letter of the alphabet A for the Toyota and T for the BMW.  The same signatures appear on the Notice of Transfer of Ownership of a Vehicle (exhibits P4 & P6) filed with the Transport Department.  PW1 and PW2 both say these are not their signatures. Further PW1 says he handed over to the defendant both the Vehicle Registration Documents unsigned. 

24.  PW1 explained that his usual practice was to sign the Vehicle Registration Document when he sold the vehicle and that was why in the two agreements it was stated that the sale would only be valid once he had signed the Vehicle Registration Document.  PW2 said that generally speaking there was no signature on the Vehicle Registration Document.

25.  PW1 further explained that he handed over the Vehicle Registration Documents so that the defendant could arrange for the annual vehicle examination.  This is required by section 88B of the Road Traffic Ordinance, Chapter 374 and the original or a certified copy of the Vehicle Registration Document is required when presenting the car for the examination.  Whilst the remarks on both agreements state the Vehicle Registration Documents were handed over to the defendant the reason why is not stated.  Specifically there is no mention that the defendant is to arrange for the annual vehicle examination.

26.  This conveniently brings the court to consider the remarks in both agreements, both being identical.  The defence case is these remarks were added after the defendant signed.  Both transactions are stated to be completed within three months, with the specific date of before the 11/3/2011 being mentioned.  PW1’s evidence in chief and in cross-examination as to how this date came to be decided were very different, neither of which I find reliable (see paragraph 23 of the written submission). 

27.  PW1 further explained that the transfer was to be completed by Matsumoto because until the transfer was completed he was still liable for all penalty tickets, however I note according to clause 3 of the agreements on handing over of the vehicle the assignee, namely the defendant, became liable for all penalty tickets. 

28.  Specifically with regard to charge 2 a question mark hangs over when this was actually signed.  The date was a Sunday.   Whilst one can readily accept a person will go in on Sundays to do work, especially where the business is a family business, this was not PW2’s evidence until pointed out to her that the agreement was signed on a Sunday.  I was not impressed in this aspect of PW2’s evidence.

29.  Nor was I impressed with PW2’s evidence as to how she came to sign P5.  The seller is clearly stated to be PW1 not PW2 yet she signs in her name.  PW2 testified this was her habit.  I note what Mr Raffell said that she was signing on behalf of Matsumoto.  Whilst the agreement is prepared by Matsumoto the vehicle was owned by PW1 and not Matsumoto.  PW1 was clearly signing for her husband.  To suggest she did this as a habit was not convincing.

30.  I would add that if as PW1 contends he was never paid for the two motor vehicles by 11/3/2011 it is most surprising he was entering into other transactions with the defendant in March and April 2011, which transactions are the subject of charges 3 & 4.

31.  Having carefully considered all the evidence I find I am not satisfied as to the circumstances in which the two agreements came to be signed and the terms that were agreed at that time, in particular with regard to handing over the Vehicle Registration Documents.  I find that it would be unsafe to rely on PW1 and PW2’s evidence concerning these two agreements.

32.  In reaching these findings I have not overlooked the evidence of PW3.  I was left with the impression PW3 was less than frank with the court as to what he knew and his involvement in the sale of the Toyota.  He was himself trying to make profit in a sub-sale of the Toyota to a supposedly good friend without telling the friend of this, and for which there was no documentation.  I find I cannot rely on his evidence.

33.  The benefit of the doubt is given to the defendant who is acquitted of charges 1 & 2.

Charge 4

34.  Win Dragon (Hong Kong) Limited (“Win Dragon”) and the associated Mainland company Hao Daiyang Leatherware (Shenzen) Company Limited (“Hao Daiyang”) were the holders of vehicle licence quota for private car travelling to and from China and Hong Kong with registration mark ZB 172.  By agreement dated 26 April 2011         (exhibit P21) Win Dragon purported to sell the vehicle licence for ZB 172 to PW1 for his permanent use. 

35.  The prosecution case is that the defendant without the authority of Win Dragon drew up the agreement, which he signed in the presence of PW1.  The defence case is that Mr Wong Ting-fan (PW7), one of the directors of Wing Dragon, authorised the defendant to handle the sale of the licence to PW1 and arranged for the agreement, exhibit P21, to be chopped and signed by Cheung Chi-sing, another director of Win Dragon, before returning the agreement to the defendant. 

36.  The prosecution have chosen not to call Cheung Chi-sing or explain why he is not available.  This in itself may not be fatal where the evidence is covered by other witnesses.  The prosecution called PW7 who states that he was the only one authorised to sign such an agreement and that the signature on P21 is not that of Cheung Chi-sing.  In answer to the court PW7 said he seldom saw Cheung Chi-sing sign and had only seen his signature once a year on the Annual Return of Win Dragon.  In these circumstances I am satisfied no reliance can be placed on PW7’s evidence the signature was not that of Cheung Chi-sing.  Furthermore no genuine signature of Cheung Chi-sing has ever been placed before court.

37.  Exhibit P21 is clearly based on the Approval Notice (exhibit P22) issued by the Mainland authorities.  PW7 explained he gave a copy of this notice to the defendant so that the defendant could show to a friend for reference.  In cross-examination PW7 said he just casually took the copy from his briefcase which he then gave to the defendant. 

38.  I was not impressed by the explanation of PW7 that he just gave a copy of P22 to the defendant for reference.  There is also the somewhat curious evidence that PW1 wrote on P22, “Hereby received from WONG Ting-wah”.  PW7’s explanation that he did not know a person by the name of WONG Ting-wah and that he was intending to write his own name was not credible.

39.  After careful consideration I find there is force in the submission this document was given with a view to selling or transferring the licence, in particular considering that PW7, also at the request of the defendant, arranged for Hao Daiyang to fax a copy of their business licence       (exhibit D12) to the defendant (see paragraph 43 of the written submission).  At the very least this is a possibility I cannot rule out.

40.  The evidence of PW1 is equally unimpressive, in particular his evidence relating to the signing of P21.  The Approval Notice         (exhibit P22) which is referred to in P21 also bears the name Cheung Chi-sing.  PW1 agreed in cross-examination that a copy of the Approval Notice was produced to him at the time he signed P21.  That PW1 did not realise, at the time he says the defendant signed on behalf of Win Dragon, that the defendant in fact signed not his name but that of Cheung Chi-sing, is hard to believe.

41.  Also to be taken into account is the inconsistency between PW1 and PW7 as to whether they met.  In examination-in-chief all that PW1 said was that he made contact with Win Dragon in September.  Whilst not proving the truth of the matter no evidence was adduced by the prosecution as to what led PW1 to report this matter to the police.  In cross-examination PW1 said he related the matter to someone from Win Dragon who told him about the fraud.  PW1 said that he showed the agreement (P21) to a Mr Wong but he did not know his full name. 

42.  PW7 on the other hand says he does not know PW1 and had never met PW1.  No evidence was however adduced to show when PW7 first became aware of the existence of P21, and if this was before he was seen by the police, the circumstances he was shown P21.  This may have explained the inconsistency in the evidence.  As the matter stands this inconsistency between PW1 and PW7 is inexplicable. 

43.  Having carefully considered all the evidence I find I am not satisfied I have been told the whole truth, particularly about how P21 came into existence and when and who signed P21.  The benefit of the doubt is given to the defendant and he is acquitted of charge 4.

Charge 5

44.   This charge rests on the credibility and reliability of PW7 as to what was said when the defendant approached him on the night of the 22nd October 2011.   Although objection was taken to PW7 refreshing his memory about the date, there was in fact no issue that a meeting took place where the defendant met and spoke to PW7. 

45.  What is in issue therefore is what was said.  I am however somewhat surprised I was not told the significance, if anything, of the 22nd October. I note from paragraph 24 of the opening this was said to be after the defendant had been arrested the same day.  This evidence however is not before me. 

46.  PW7 testified that the defendant told him to say he had seen a document but did not specify which document nor did the defendant have the document with him.  PW7 went on to say he knew what the document was because the police had mentioned this to him.  There is, however, no evidence before the court as to when the police first saw PW7 and what documents if any they had mentioned to him or shown to him prior to the defendant approaching him.  I am only aware PW7 made a witness statement to the police two days later on the 24th October.

47.  PW7 further testified that the defendant told him he had a dispute with PW1 over the buying and selling of a China-Hong Kong licence and in the repeated phone calls referred to the document as the agreement. Whilst a court may infer this is P21 the court should have been told which documents if any he had been shown by the police, in particular considering his evidence he had never met PW1. 

48.  This is all the more important when considering that upon first being asked when he last saw the defendant PW7 replied probably September 2011 and when asked if he was sure he did not see the defendant after September replied he was sure.  Only after a pause, while the prosecution were considering whether to again refer the evidence to the Department of Justice, did the witness remember.

49.  What did PW7 forget?  Did he forget the date, the event, or both?  The probability is he forgot the date.  As said there was no issue that a meeting took place. However can the court rule out whether he forgot the details of what happened and what was said because during the incident nothing untoward happened?

50.  Having doubts about PW7’s credibility and reliability with regard to exhibit P21, I find it would equally be unsafe to rely on his evidence with regard to what was said when the defendant went to see him, in particular considering he forgot this at first.  The benefit of the doubt is given to the defendant and he is acquitted of charge 5.