|
HCMA000345/1991
IN THE SUPREME COURT OF HONG KONG
(Appellate Jurisdiction)
MAGISTRACY APPEAL NO. 345 OF 1991
---------------
BETWEEN
|
THE QUEEN
|
Respondent |
|
AND |
|
|
LEUNG SIU FAI
|
1st Appellant |
|
LEUNG SUET WAN |
2nd Appellant |
|
CHAN TAK YEE |
3rd Appellant |
---------------------
Coram: Hon. Hooper, J. in Court
Date of hearing: 20 June 1991
Date of delivery of judgment: 4 July 1991
------------------
JUDGMENT
------------------
1. After a trial that lasted the best part of a week the appellants were convicted of various offences under the Gambling Ordinance, Cap.148 Laws of Hong Kong. The nature of the charges, the evidence in support thereof, and the reasons for the magistrate's verdict in convicting the appellants are set out in his statement of findings as follows:-
|
"The appellants all of whom were jointly represented appeared before me on 5,6, 7, 8, 11 and 12 February 1941 charged with Managing a Gambling Establishment (the first appellant) and Assisting in the Management of a Gambling Establishment (the second and third appellants) - Section 5(b) and 5(c) respectively of the Gambling Ordinance, Cap.148. I convicted all three appellants and fined them 10,000-HKD, 3000-HKD and 1,000-HKD respectively.The appellants now appeal both their convictions and sentences .(There were four other defendants who were convicted at the trial - on charges of gambling in a Gambling Establishment - S.6 of Chapter 148. They have not entered an appeal.).
|
|
The Evidence
|
|
Despite the length of the trial, the evidence in this case was relatively straightforward.
|
|
The premises involved war the GALA Association in Lockhart Road, Wanchai. It was a members club established in May 1990 and basically consisted of 2 dining areas and a number of private rooms (together with management and catering facilities). It was laid out on two floors. As to the private rooms,there were 40 of these altogether, of which 34 were quite small with each one containing a table and four chairs - and having private toilet facilities attached.
|
|
The Court was invited by the Defence Counsel to view the premises at the start of the trial. Not only did this help in understanding the layout but it also demonstrated that the club was clean, expensively fitted out and comprehensively staffed. All the small private rooms viewed contained the wherewithal for playing mahjong and indeed at the time of the viewing (0945) a number of games were in progress.
|
|
Before the trial commenced it was agreed by the parties that the Crown's case (as well as the Defence's) would probably succeed or fail on the basis of whether the Defence could show on a balance of probabilities that the gaming taking place there was lawful under S.3(4) of Chapter 148; in particular whether they could show 'it was not promoted of conducted by way of trade or business...'
|
|
The prosecution adduced evidence as to what occurred in the premises on the day of the raid (5-October 1990 and known hereafter as ('Day 4') as well as on three previous surveillance visits - 28 - June 1990 ('Day 1'); 25-September 1990 ('Day 2') and 4-October 1990 ('Day 3'). I allowed the evidence of the three earlier visits (Days 1 -3) to be put before the Court - initially 'de bene esse'- as similar fact evidence having subsequently been satisfied as to its relevance and probative force. In this respect I also carefully-considered the judgment ofHooper J. in R. v. Wu Wing-fu (Magistracy Appeal 518 of 1989) - that evidence may led of previous visits to the premises by the police.
|
|
The Prosecution case was put forward by the following police officers :
|
|
PW1 - |
the Inspector who supervised the surveillance of the premises from June 1990 onwards and who conducted the raid on 5-October at about 1700. He described how he found 64 people inside 16 rooms playing mahjong and what happened after the raid.
|
|
PW2 - |
who was playing mahjong with 3 other police officers in Room 223 just before the raid on Day 4 and who then assisted in it. Thereafter he took a cautioned statement from the First Appellant, which, after holding a voire dire, I refused to admit.
|
|
PW3 - |
who joined the Club in the middle of June 1990 and then visited there to play mahjong with 3 other police officers on 28-June (Day 1), 25-September (Day 2), 4-October (Day 3) and 5-0ctober (Day 4). After the raid he also took cautioned statements from the second and third appellants, the admissibility of which was not challenged. He also identified (as did PW4 and PW5) the third appellant as the waitress serving him tea in the mahjong room just prior to the raid.
|
|
PW4 - |
who visited the premises as a player on Day 1, Day 2, Day 3 and Day 4. He was involved in the arrest of the 4 gambler defendants.
|
|
PW5 - |
who went to the premises prior to the raid on Day 4 and then after the raid became exhibits officer and took photographs of the premises.
|
|
The evidence relating to the situation prevailing in the premises prior to the day of the raid (i.e. the surveillance visits) was given by PW3 and PW4. This showed that -
|
|
(a) |
On 28-June ('Day 1'); 4 of them were there in one of the small rooms for 3 1/2 hours and were charged 111-HKD for 16 cups of tea (including a 10-HKD service charge)'.
|
|
(b) |
On 25-September ('Day 2') 4 were there for 3 hours and charged a total of 108-HKD for 12 hot teas and 1 cold drink (including service).
|
|
(c) |
On 4-October ('Day 3') 4 were there for 3 hours and were charge 140-HKD for 4 cups of tea and 4 cold teas (including service).
|
|
(d) |
On 5-October ('Day 3'), 4 were there for 2 1/2 hours and were charged 167-HKD for 8 cold lemon teas and no hot tea (but including service).
|
|
Receipts issued by the Association in respect of the bills incurred above on the last three visits were put before the Court. These receipts were significant and merit comment. On the top left there were spaces (comprehensively filled in on each occasion) for date, room number, name, membership number and arrival and departure times - and remarks. On the right and inner side were the printer accounts relating to the particular visit.
So far as the accounts figures were concerned the first print-out was called '1. Food' followed by totalling and service charge calculations.
Now during the four visits none of the four officers involved at any time ordered or consumed any food. They only had drinks - and those varied from hot tea (which was supplied apparently once an hour automatically) to cold drinks. However after the 'Day 1' visit, the officers rejected the provision of hot tea (to a greater or lesser extent).
The way the bills were calculated was queried on each occasion. PW3 was told it was 32-HKD per hour per room (less 10%) - or 29-HKD, plus the appropriate charge for the cold drinks (normally 10-HKD each).
In other words and in summary, the prosecution alleged and sought to prove that the party of four was being charged 29-HKD pet hour whether or not tea was served or consumed. On the face of the bill there was nothing to indicate whether this charge was for mahjong hire, room rental, tea or food. It was just 'lumped together' under, 'food' and was charged in addition to any cold drinks actually served. It was therefore, the prosecution alleged, a charge for the room and mahjong - but disguised as a tea fee.
This allegation of a flat net charge of 29-HKD per room per hour was supported by PW3's evidence, but the three receipts (with time entries) and also by the uncontested cautioned statement of the cashier - the second appellant. In this she said that the Association charged the room occupants 8-HKD tea fee per head, calculated by time, on top of the drinks charges; and that the mahjong fee was included in this amount. Further the strong implication from her replies was that this charge was levied irrespective of whether tea was served.
Given all the above the Prosecution said, they had clearly established that -
|
|
(a) |
The establishment was a gambling establishment (given the design, fittings and facilities of the premises well as the equipment seized). S.19(c) of Cap.148.
|
|
(b) |
Any gambling there was prima facie unlawful -S.3(1) of Cap.148.
|
|
(c) |
Gambling was clearly taking place there both previously and on the day of the raid.
|
|
(d) |
The onus was on the defendants (appellants) to prove that any gambling was lawful or fell within one of the statutory exceptions - S.18 of Cap.148.
|
|
(e) |
S.3 (4) (d) was the appropriate exceptions' section but the Defence could not claim the benefit of it since by charging 32-HKD per room gross or 29-HKD net (with or without tea) they were providing or conducting mahjong by way of trade or business.
|
|
For the Defence, the first appellant gave evidence. He explained the GALA Association was a new club, with 5,000 members and 60 staff and further 90% of its income came from food and catering. He said that both within and provided for the 40 rooms were 61 sets. of mahjong, 10 chess sets and 4 Karaoke machines. He denied that most people came up to play mahjong but could not indicate how this was reflected in the 'Register'. He said the 'tea money' charge was cancelled on l-October - and before that there was a flat 4-HKD per person irrespective of time. He said that mahjong was charged at 20-HKD per hiring. He said the bill for 5-October was incorrectly made out by the cashier but admitted if there had been a charge of 32-HKD per room per hour it would have been illegal. The first appellant was not a plausible and credible witness in many areas of his evidence.
The defence also called an accountant from the GALA Association who said that 80% of takings at the club was attributable to food and catering. She also stated in cross-examination that mahjong hire would not be itemised on the bill, but there would be a separate charge for Karaoke and chess.
The third (and last relevant) defence witness was the third appellant. She admitted she worked there and took the bill up to the room where the police were gambling on Day 4.
Reasons for Verdict
In my judgment I first considered the relevant provisions of the Gambling Ordinance. Firstly I found that, from the evidence of the various prosecution witnesses both on the surveillance visits and on the day of the raid, as well as from the court's own observations, the premises were clearly and beyond reasonable doubt a gambling establishment. Further gambling was taking place there and such gambling was prima facie and under S.3, unlawful.
I then turned to consider whether the Defence had managed to show on a balance of probabilities that 'mahjong was not being promote or conducted by way of trade or business in the promises other than to the extent of charging a fee not exceeding the prescribed amount of 20-HKD per day'. To answer this, it was necessary to ascertain whether the alleged 32-HKD per room per hour (gross) (or 29-HKD with discount) was being charged and if so, what for.
If it was, was it a justified and minimal fee for tea with the room being lent to member for free, or was it a charge for the room with free tea provided - or a mixture of both? Firstly, I found that throughout the 4 visits under consideration an effective charge of 29-HKD was being levied on the 4 occupants of the room. As mentioned to support this there was the clear evidence of PW3, Supported by others; furthermore it was corroborated by the entries on the three bills (with detailed time entries) and supported by what the second appellant (an experienced cashier there) said. Of course, I noted carefully that what the second appellant said in her cautioned statement was only evidence against her. Nothing the defence said raised by any doubt in my mind.
What was it for? The charge was clearly levied irrespective of whether tea was ordered or received - and was done on a time basis. The only reasonable conclusion was that it was a time charge for the room and this was supported by PW3's evidence and that of the second appellant.
I therefore found as a fact- and beyond reasonable doubt - the rooms in the Association were being let out for 29-HKD per hour.
I then turned to consider what the rooms were being let out for. There were 40 of them altogether of which 4 were large (for Karaoke) and the rest basically small four seaters, all equipped with or for mahjong. There was nothing else in the club apart from the large dining room and one small one.
I had no hesitation in finding that the mahjong room facilities were the 'Raison D'etre' of the club. Further this was supported by the Register extracts for the 3 days in question which showed that everyone who entered the premises was put down as playing mahjong. Additionally, at the time of the raid 16 out of the 17 rooms occupied were occupied by active mahjong players.
I found therefore that the rooms were being let out to members for mahjong, that they were being charged for it and that this was the basic attraction and facility offered by the club. Nothing the Defence said raised any doubt about these findings; indeed their evidence tended to support it.
Defence Counsel argued that even if the Court found this 32-HKD per hour or 8-HKD per person per hour (either for tea or for the room) was being charged, it was reasonable; it was not done for business or trade or to generate profit and made up less than 10% of the income of the club. It was a notional charge and de minimis. The club was respectable, impressive and efficient and the Ordinance was not designed to trap such establishment.
I accepted part of what the Defence Counsel said but I found:
|
|
(a) |
The receipts for all their superficial clarity charged in a curious and clumsy way with tea, room charge and mahjong lumped in altogether (but meals, Karaoke and chess all separate). I could not conclude, on the evidence, that the charge was for tea and a maximum of 20-HKD per day for mahjong tiles. Defence had failed to show it was other than a room charge and explain the reason for the time entries.
|
|
(b) |
The purpose of visiting the club and renting a room was to play mahjong; and Defence had failed to show, on a balance of probabilities, any other major reason for membership or for visiting there.
|
|
(c) |
The charge made was not notional or de minimis. If, for example (and I emphasised there was no evidence on this), all the 26 rooms on the second floor had been let out - say - for 12 hours each day at the rate of 32-HKD per hour, the club would have received from them alone about 300,000-HKD per month. Out of this income there were very few running expenses to pay; whereas catering, even if did constitute 80% or 90% of the income, contained a high percentage of in-built costs.
|
|
Taking all the above into account I found that mahjong was being provided or conducted by way of trade or business and the extent of it (29-HKD per hour) was far in excess of the 20-HKD per day allowed for the hire of mahjong tiles. As Roberts C.J. said in Kam Kim Chung (Magistracy Appeal No. 1091 of 1986) 'it seems to me to be quite divorced from reality to pretend that charge of 16-HKD per hour for the hire of a room in which mahjong was to be played was other than a charge related to the promotions or conduct of that game...'
Accordingly I saw little merit in the Defence's argument and found they had failed to show, on a balance of probabilities that the premises had complied with S.3 (4) (d) of the Ordinance. I therefore convicted all the appellants."
|
2. Omitting the grounds of appeal which have been abandoned the appellants all rely upon the following grounds of appeal : -
|
"
|
1. |
The magistrate's finding that the Gala Association was charging more than $20 per day per Mahjong table was not supported by any evidence.
|
|
2. |
The statistical analysis by which the magistrate concluded that 'substantial profits' in fact arose from the rental of rooms in which the Mahjong could be played was not supported by any evidence.
|
|
3. |
The magistrate failed to give proper weight to the evidence (given by police officers) of the rigourous and methodical way in which the membership requirements and rules of the Gala Association were enforced by the management. Consequently he failed to distinguish this case from other cases cited to him where the 'rules' and the 'club' itself were a sham.
|
|
5. |
Having viewed the club and 'been impressed by the quality of its fixtures and fittings', having seen the television and other facilities in each room, the extensive menu and the notice setting out the maximum charge for mahjong (displayed in each room), it was contrary to those facts and those exhibits to find that any charge over $20 was necessarily attributable to Mahjong." |
3. Mr Haynes, for the appellants, recognises that the grounds l and 5 relate to the same matter and argues that the general picture in this case is that Gala is a very fine, high quality set of rooms which contain a number of small rooms each with toilet and TV. The magistrate seems to have failed to recognise the presence of the TV sets in each room. He points out that there were four Karaoke rooms suitable for up to two dozen people with a large TV and toilet and a large dining room area and large menu. He submits that the magistrate wrongly came to the conclusion after viewing the premises and hearing all the evidence that the "Raison D'etre" of the premises was for the playing of mahjong. He contends that the "Raison D'etre" was to make a profit for the company that ran it. It is clear from the legislation he says that the actual playing of mahjong is not in itself unlawful. The general position is that within certain defined limits playing mahjong is not unlawful. It only becomes unlawful if it is conducted by way of trade or business in the premises. The issue therefore, he says, was this "Has the defendant shown on a balance of probabilities, the game was not conducted by way of trade or business in premises otherwise than for a fee not exceeding $20 per day?" There must not be a making of money out of mahjong above that figure of $20 per day. It is, Mr Haynes' contention that the business of Gala was a perfectly respectable business for perfectly respectable people. It was not a sham. Counsel's opinion was taken so that the law would be complied with and notices were put up in each room as follows :-
|
"Dear Sir,
|
|
In accordance with the Gambling Ordinance, our association to be the first one (run the business) according to. the Law, that is the mahjong rent do not exceed $20 for 24 hours. It is completely according to Government's policy.
Therefore our members who is holding our membership card (apply for membership must complete an application form and our committee will consider the application within 48 hours, afterward if no. disapproval, the membership will be consider to be valid immediately). will not commit an offence provided that no gambling or commission money is involved in the game.
A second notice was posted in the following terms "CLUB HOUSE AND RESTAURANT CANNOT CHARGE MAHJONG RENT MORE THAN $20 PER DAY, OTHERWISE IT IS AN OFFENCE.
Attorney General Mr Thomas said in the Legislative Council that 'Presently any private. club house association or restaurant which provides mahjong to the customers cannot charge more than $20 each day, otherwise it is an offence'. Upon answering question from Mr Lui Sing-lung the Legislative Council, (Mr Thomas) said that 'any association or private club house receives mahjong rent more than $20 each day, the premises will be considered to be a gambling establishment. Those people who were found playing mahjong at these premises maybe subject to prosecution.'
In accordance to the Society Ordinance, our association only charge mahjong rent at $5 each table (for 24 hours) and each hour charge____ for tea drinks fee (calculate in 4 persons each table). Members may refuse to pay if no tea drink is served within that hour.
Note : If members requested not to be distrubed, then the calculation will be change
|
4. Mr Haynes argues that :-
"The whole business about $20 has bedevilled every body because the magistrate came to the conclusion that $29 was for the hire of the room."
5. He suggests there is no evidence to support this finding and that it could have been for watching TV or for having a meal. He complains that it seems to have been assumed by the magistrate that the dominant activity was the mahjong activity, and that from that it automatically followed that mahjong was promoted by way of a trade or business. There had been blurring, he says, of the idea that if a place is designed for an enjoyment. activity in a particular part, then that enjoyment activity is promoted by way of trade and business. He submits that the test whether it is or not is to look at the question as to whether there is a direct charge for the playing of the regulated game. The magistrate made a mistake in assuming mistakenly that because mahjong was the "Raison D'etre", that this automatically meant that mahjong was being promoted by way of trade or business. He submits the evidence was quite to the contrary. and it wasn't really contradicted. The evidence was that something like 90% of the cash turnover for the Club came from food and drink. There was no evidence that a charge was not levied if the customer didn't play mahjong.
6. So far as ground 2 is concerned, Mr Haynes contends that the evidence was that 90% of the turnover was generated by the provision of the room and services. There was no way the Club could force people to play mahjong. The crown had failed to show a commercial interest in the playing of the game on the part of the operators. He also complains that the magistrate's calculations as to the profits which could be made were theoretical and that there was no evidence as to the occupation level at any particular time. He also contends that the authorities which had been shown to the magistrate in relation to this type of offence concerned sham clubs and chip joints which were far removed from the sort of operation concerned in this case. The management had no interest at all whether in fact mahjong was played. This was borne out by the fact that the police officers were charged $32 per hour for pretending to play.
7. Mr Macleod, for the Crown, contends that the magistrate's finding that the Gala Association was charging more than $20 per set of mahjong per day was well supported by evidence. The evidence of PW3 (PC7499), the three bills (exhibit no. P9, P10 and P11) and the evidence of the second appellant, the cashier, showed that an effective charge of $29 was being levied on the four occupants of the room. The said charge was levied irrespective of whether tea was ordered or received and that it was done on a time basis, that is $29 per hour for four mahjong players per room. He relies on the dictum of Roberts, C.J. in the Attorney General v. Kam Kim-chung & others MA1041 of 1986, when he said :
"It seems to me to be quite divorced from reality to pretend that a charge. of $16 per hour for the hire of the room, in which mahjong was to be played, was anything other than a charge related to the promotion or conduct of that game by way of trade or business in the premises".
There were 40 rooms altogether on the premises. Four were large (for Karaoke) and the rest basically small four seaters, all equipped with or for mahjong. There was nothing else in them Association apart from the large dining room and one small room. At the time of the raid 16 out of 17 rooms were occupied by active mahjong players. The gambling was conducted "in such a manner that the promoter of the mahjong intends to derive some profit from it, though whether he makes any net profit is irrelevant. It is sufficient to show that the game is promoted for the purposes of profit." (per Roberts, C.J. in Attorney General v. Kam Kim-chung, MA No.1041/86.)
8. So far as Ground 2 is concerned, Mr Macleod contends that the magistrate was entitled on the evidence before him, including the charges levied on the mahjong players, the number of mahjong players, both actual and potential, and the layout of the premises, to draw the inference that substantial profits arose from the rental of the rooms on the premises.
9. In respect of Ground 3, Mr Macleod contends that the authorities cited before the magistrate were indistinguishable from the facts of the case before him.
10. Mr Macleod contends that the display of a notice in the terms set out above would not rebut the presumption which arises. He refers to a dictum of Bewley J.in Wong Kar-kui [1982] HKLR p. 488 where the learned judge held the display of a notice prohibiting gambling to be neutral in character and did not assist him in deciding whether the presumption had been rebutted. It was an attempt, he says, to run a mahjong school without a license, and therefore not subject to the strict conditions applicable to such schools.
11. Mr Haynes replies that the charge was the same whether mahjong was played and that the Club was not a sham and subjected itself to strict rules and regulations.
12. Having considered the evidence and submissions I must now address the real issue before the magistrate. There can be no doubt in this case that the presumption that the premises were a gambling establishment arose and an evidential burden lay upon the appellants to establish the contrary. The magistrate was fully aware of this and directed himself properly on the burden and standard of proof. He was not satisfied with the evidence of the appellants concerning the charges that were levied by the establishment and indeed Mr Haynes concedes that their evidence was not satisfactory on this aspect. It is difficult to see, therefore, how it can now be said that the magistrate could not reach the conclusion he did on the evidence before him.
13. In my judgment, the magistrate was perfectly entitled to reach the conclusion he did that the appellants had failed to rebut the presumption.
14. No issue has been taken on this appeal with the magistrate's finding that the appellants managed or assisted in the management of the establishment once it was proved that it was a gambling establishment. Neither has there been any issue as to whether it had been proved independently of the presumption that they had the necessary mens rea. It was clearly open to the magistrate to find they had and indeed he referred to their intent at the time of giving his extempore judgment.
15. In the circumstances, the appeal is dismissed and the convictions affirmed.
|
N.B. Hopper
Judge of the High Court
|
Representation:
Mr H. Macleod, for the Crown.
Mr John Haynes, (wong Hui & Co.), for Appellants.
|