HKSAR v. CHAN YEE CHING

HCMA 736/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 736 OF 2003

(ON APPEAL FROM ESCC 931/2003)

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REASONS FOR JUDGMENT

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1. The Appellant was convicted of five charges of 'Agent using Document with Intent to deceive his Principal', contrary to section 9(3) of the Prevention of Bribery Ordinance, Cap 201. She now appeals against these convictions.

The Case Below

2. The Appellant was not the only one on trial. On all five charges she was jointly charged with D1 who eventually pleaded guilty. They were at all material times insurance agents with AIA Limited. D1 was the Appellant's direct supervisor. In any event, the two arranged to be filed five fake life insurance applications which AIA accepted and, as a result, paid $152,880.72's worth of commission into the Appellant's bank account. That, in a gist, was the prosecution's case. It was presented in the form of admitted facts, witness statements and supporting documentation. The Appellant, on the other hand, did not give evidence. Nor did she call any witnesses.

1st Ground of Appeal

3. The fact that it was a paper-trial suggests that much of the prosecution case was not disputed. The thrust of the defence contention, at trial as on the appeal, is that the inferences required to ground the convictions were lacking. In particular, it is argued that there was no or no sufficient evidence for the Magistrate to find that: (a) the Appellant knew about the transfers of commission money into her account; (b) the Appellant's signature was the agent's signature on each of the fake application; and (c) the Appellant was consciously taking part in the scheme.

(a) Knowledge of the Transfers

4. Admittedly, the Appellant's knowledge of the commission was one of the factors that swayed the Magistrate towards a guilty verdict. It was a finding based on inference. The Magistrate had said that "they are substantial amounts, and within the normal procedures followed by AIA, she would have been kept fully informed of the progress of these policies in the normal course of business".

5. The criticism now directed at this conclusion is that what is or is not substantial is relative, an agreed fact being that the Appellant was able to meet her business quota without the commission in question. There was also no evidence on the state of the Appellant's account, not least that she would check it. In any event, the timing of this inferred knowledge was crucial, but the Magistrate had omitted to give that question any attention.

6. In my judgment, these criticisms completely missed the point. The so-called section 65B statement of AIA's accounts supervisor is clear the commission was paid out in five transfers of $9,773.92, $23,142.35, $48,440.19, $34,418.74 and $37,105.52 respectively. These are not insignificant sums by any standard. This is what the Magistrate clearly meant.

7. One also bears in mind that all five policies were taken out during the Appellant's first year of employment at AIA. The average monthly commission that she earned during that period was $33,333 for the first half-year and $68,752 for the second. It follows that the transfers, two effected during the first and three during the second half-year, did constitute a substantial part of her income. This is so whether or not the Appellant had other means.

8. At any rate, the transfers were paid into the account from which the Appellant normally received her pay. All of them were effected a month after the approval of their corresponding life insurance applications. Such was the company policy. It was also a term of the Appellant's employment that her commission had to be set-off against a "financed income", a kind of basic salary. In all the circumstances, it is against common sense that she was or would be unaware of these payments.

9. As regards the question of timing, the Appellant is of course right that knowledge after the fact is not enough to ground a conviction. I also note her emphasis that D1 was involved so she could well have been an innocent party. The point is, whoever was the mastermind, it is simply unthinkable that he would launch the scheme using the Appellant's account without the Appellant's collaboration. This is obviously what swayed the Magistrate.

(b) The Signatures

10. The evidence on this comprised Mr Lee of AIA who identified the Appellant's signatures on the fake applications; Ms Tsang, also of AIA, who witnessed the Appellant's signing of a job-related agreement; and Mr Fung, expert document examiner, who compared the signatures between the two.

11. The Appellant's criticism is that the Magistrate was wrong in admitting Mr Lee's evidence - he was no expert - and also in giving weight to Mr Fung's - there was only one control specimen (the job-related agreement) hence the inconclusive conclusion that the signatures on the applications were "probably" the Appellant's.

12. For a start, I note that Mr Lee's evidence came in the form of a section 65B statement, i.e. without any objection. I also note what the Magistrate said was that Mr Lee "purported" to identify the Appellant's signatures. As regards Mr Fung, he did say that having one control specimen hampered full evaluation of writing characteristics and their variations, but added that all the signatures were fluently written, and were comparable in writing movement, stroke connection, size ratio and relative alignment of writing features, hence his conclusion. I do not see why the Magistrate should disregard it.

13. In any event, the Magistrate did not find the Appellant author of the questioned signatures on these evidence alone. Reference was again made to the facts that D1 and the Appellant were working together (his signature appeared in some of the applications as countersigning agent), that commission was paid into the Appellant's account, and that, in the normal course of business, the Appellant would have been kept fully informed on the progress of the policies. In other words, the Magistrate was asking the same rhetorical question - how could someone in the office have forged the Appellant's signature and thought he would get away with it?

(c) Conscious Participation

14. Here, the attack is mainly on the Magistrate's remark that documentation in relation to the five policies would have passed through the Appellant's hands, on the basis that AIA believed she was the handling agent. It is argued that whoever was the perpetrator might have the means to keep the Appellant out of the picture.

15. In my judgment, this, not the Magistrate's conclusion, amounts to mere speculation. I note from the statement of AIA's accounts supervisor that once premium was received, a receipt would be issued to the handling agent for dispatch to the policyholder. The same happened when the policy contract was ready. These are but examples of how very improbable that, in an office setting, the Appellant could be kept in the dark.

16. I should also mention one thing. It has been pointed out to me that, for the third and the fifth applications, the address of the Appellant appeared as the address of the purported applicant, but not the one she gave when she joined AIA. The Respondent argues that such personal information brought the Appellant right up to the door-step of the scheme. I agree.

17. Looking at the matter in the round, the Magistrate was convinced of the Appellant's guilt not by one circumstance, but a series of circumstances. That this is so is clear from the Statement of Findings. Nothing about the thought process or conclusion can be faulted.

2nd Ground of Appeal

18. In a nutshell, the Magistrate is criticized for not dealing with the Appellant's clear record in the Statement of Findings. This is true, but a good character direction was given in the oral reasons. The omission was clearly inadvertent in what constituted a transcribing exercise. There is nothing to this ground.

Conclusion

19. The appeal lacks merits. It is dismissed. The convictions are upheld.