HKSAR v. CHANG CHI KEUNG DAVID

DCCC 20/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 20 OF 2015

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Reasons for Verdict

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1.  The defendant has pleaded not guilty to 15 charges of forgery.

2.  At the time, the defendant was company secretary of a company set up to manage a property owned by his cousin.  The prosecution say the defendant forged his cousin’s signature on 15 cheques issued by the company.  This was done to assist his brother, who was using the company in his own business dealings.

3.  The evidence against the defendant is that he admitted this whilst being interviewed by the ICAC.

4.  The defendant’s case is that the admissions are unreliable due to their nature and length, having regard to the effect of his uncontested mental illness.  They say, as this is the only probative evidence against the defendant, he says the prosecution cannot prove its case to a criminal standard, that is, beyond all reasonable doubt.

5.  The background is as follows.

6.  The company, Pacific Gateway Limited (that is, PGL) was established in August 2009 by PW1, the defendant’s cousin, Wong Chin-hei Peter.  PW1 was the sole shareholder and sole authorised signatory for the company’s accounts. 

7.  In June 2010 the defendant left his post in Pacific Gateway Limited and PW1’s elder brother, C H Wong, was installed as company secretary.

8.  The company managed one property in Tung Chung, which was rented out.

9.  Philip Chang is the defendant’s younger brother. In 2010 Philip Chang used PGL for contracting orders from HLS Air Sea (International) Limited, a company he had been general manager of.

10.  Between July 2010 and July 2011, Chang awarded 95 transportations orders valued at $5,427,303.40 to PGL.  PGL co-loaded these orders to Excel Network Limited (that is, ENL).  HLS paid $5,427,303.40 to PGL to settle transportation expenses.

11.  Between 8 August 2010 and 1 June 2011, a number of cheques were issued by PGL (Pacific Gateway Limited) to meet payments of Excel Network Limited, a contracting party to Pacific Gateway Limited and HLS Air Sea (International) Limited, and also personal payments to the defendant. The cheques required PW1’s signature. 

12.  The defendant admitted that he forged those signatures.

13.  These 15 cheques form 15 charges.

14.  The payees and amounts are as follows:

(1) Charge 1 is $455,254.65 to Excel Network Limited;

(2) $60,000 to the defendant;

(3) $164,997.95 to Excel Network Limited;

(4) $60,000 to the defendant;

(5) $626,566.15 cents to Excel Network Limited;

(6) $239,955.40 to Excel Network Limited;

(7) $320,000 to the defendant;

(8) $200,000 to the defendant;

(9) $191,601.15 to Excel Network Limited;

(10) $273,151.33 to the defendant;

(11) $289,438.15 to Excel Network Limited;

(12) $238,253.85 to Excel Network Limited;

(13) $120,000 to the defendant;

(14) $563,586.29 to Excel Network Limited; and

(15) $60,000 to the defendant.

15.  In his video recorded interviews on 19 and 20 February 2013, the defendant admitted having issued the 15 cheques under Charges 1 to 15 by forging PW1’s signature in order to settle payments to Excel Network Limited and to meet his own personal expenses.  The company chop, blank cheque and chequebook were recovered from the defendant’s residence.  PW1 was outside Hong Kong during the time that the cheques were issued.

16.  Philip Chang was arrested and interviewed by the ICAC, but jumped bail on 23 April 2013.  To date, he has not been located.

The evidence

17.  A large part of the evidence was agreed, including:  the establishment and ownership of Pacific Gateway Limited; the operation of HLS Air Sea (International) Limited and Honour Lane Shipping Limited; documents relating to Excel Network Limited and Conson, a company providing virtual office facilities to Pacific Gateway Limited; and the bank records of Pacific Gateway Limited. 

18.  Facts were admitted in respect of the ICAC interview of Philip Chang. 

19.  It was admitted that the defendant has a clear record.

20.  PW1 was called to give evidence.  He confirmed he was the sole director and shareholder of Pacific Gateway Limited.  He is the defendant’s maternal cousin.  Pacific Gateway Limited, he said, was set up to purchase a rental property in Tung Chung.  The company was not authorised to be used for any other purpose. 

21.  PW1 said he did not sign any of the 15 cheques in question.  Only he could sign the account.  The chequebooks for PGL were left at the defendant’s premises.  He did not keep an eye on the bank account. He had no knowledge about the operation of the account.  The defendant had the PIN number to access and inspect the account.  The defendant was responsible to deal with the tenant.  The only income into the account was the rental fee.

22.  The defendant kept chequebooks, company chop and seal at his home.  He, PW1, did not authorise the defendant to use the chequebooks.  He said he did not sign any of the cheques that he left in Hong Kong.  The defendant was given cash for most expenses.  PW1 did not know that C H Wong had been recorded as taking over as company secretary.  He did not know about Conson, the management company for PGL.  He might have signed cheques in relation to management fees for less than $2,000.

23.  In cross-examination, PW1 also said he was not close to Philip Chang but he had loaned him US$16,000 in November 2011.  He had stayed with Philip Chang and the defendant at the defendant’s flat when he visited Hong Kong. 

24.  He could not rule out the possibility that Philip Chang may have signed the cheques in question.  The signatures on Pacific Gateway Limited documents look very much like his signature, but he said he did not sign them.  He had never provided a sample of his signature for forensic analysis.

25.  In cross-examination, he admitted to having signed some blank cheques.

26.  Prosecution also led evidence by way of witness statement from Leung Chi-shing, the general manager of Excel Network Limited, which dealt with the employment of Philip Chang and that all dealings with Pacific Gateway Limited were through Philip Chang or a man called “Ray”.  He said that Ray was not the defendant.

27.  A summary of matters said by Philip Chang was also admitted by way of admitted facts.

The video recorded interviews

28.  The prosecution sought to admit three video recorded interviews into evidence.  They have been referred to at the trial as the first, fourth and fifth VRIs. 

29.  The defendant was arrested at his home at 7.31 on 19 February 2013.  The first VRI was at 1041 to 1252 on 19 February 2013. 

30.  Following the interview, the defendant sought and was given access to a lawyer.  A further interview followed.  The prosecution did not seek to admit that.

31.  On the evening of 19 February, the defendant was told he would be detained overnight.  Following this, he informed the ICAC he needed his medication.  He was taken to the Nethersole Eastern Hospital to obtain medication.  The interviewing officer overheard the defendant tell the emergency unit doctor that he, the defendant, suffered from a mental illness.

32.  On the next day, 20 February 2013, the defendant was interviewed at 1145.  The prosecution did not seek to admit this interview.

33.  At 1612, the defendant indicated he had information to give.  A fourth VRI was conducted from 1755 to 1939 hours and a fifth VRI from 2049 to 2209.

34.  In summary, the defendant said that the first VRI was irrelevant and not admissible; that the fourth and fifth VRIs were oppressive; that the defendant was not cautioned properly about his admission to forgery in the fourth VRI; the admission of the interviews would be unfair to the defendant; and that court should exercise its discretion to exclude them.

35.  The prosecution called the doctor who saw the defendant at Pamela Youde Nethersole Eastern Hospital (PYNEH) on the evening of 19 February 2013 and also the interviewing officer.

36.  Defence called DW1, Dr Robin Ho, to give expert evidence on the effect of the defendant’s mental condition and medical condition on his state of mind.

Prosecution evidence

37.  Dr Tsoi saw the defendant at 2018 hours at PYNEH, the emergency unit.  The defendant suffered from alcohol dependence and dysthymia.  This information came from his medical records.  He was prescribed his usual medicine, namely, escitalopram for depression; haloperidol, an antipsychotic; thiamine, a vitamin; and Zolpidem, a sleeping pill.

38.  The defendant was described as calm, co-operative, coherent, polite, with relevant speech and a social smile.  He was not seen to be suffering from alcohol withdrawal, although he was not specifically assessed for that.  Benzodiazepine was not prescribed, as it was not part of his usual prescription.

39.  The interviewing officer gave evidence that he was aware the defendant told the doctor at PYNEH that he suffered a mental illness.  This did not affect the interview.  There were no protocols or special ways of dealing with persons with mental illness.

40.  But the defence witness, DW1, Dr Robin Ho gave evidence.  There were also statements of other doctors - Dr Mark and Dr Wat - were adduced.

41.  In summary, the evidence was that the defendant had been an alcohol dependent since 2004.  The defendant was suffering from depressive illness and alcohol dependent syndrome. 

42.  DW1 produced a report with the same conclusions as to the defendant’s medical condition.  She opined that the defendant suffered from alcohol dependent syndrome after his arrest.  He was not given alcohol so he will have developed alcohol withdrawal syndrome.  This would develop within eight hours of his last drink and peak by 24 to 72 hours.

43.  The fourth and fifth VRIs were conducted 32 to 34 hours after the defendant’s arrest.

44.  DW1 considered that it was possible that the alcohol withdrawal syndrome could lead to cognitive impairment.  She saw the defendant was restless and nervous when answering questions in the fourth and fifth VRIs.

45.  She said that the medication prescribed by Dr Tsoi (PYNEH, Emergency Unit) was insufficient to fully neutralise the effects of the defendant’s alcohol withdrawal syndrome and benzodiazepine would have been the drug of choice and been more effective in the circumstances.

46.  To be admissible, an admission against interest must be proved by the prosecution to have been voluntarily given.  The court also has the discretion to exclude an otherwise voluntary statement on general grounds of fairness.  Of course, the burden of proof, standard of proof of these matters are the usual criminal standard.

47.  A statement obtained by oppression would not be voluntarily given.  Oppression is any conduct calculated to sap the will of a person being interviewed.  It can be questioning which by its nature or attendant circumstances, excites hopes or fears or so affects the mind and subject that his will will crumble and he speaks when he otherwise would have remained silent.

48.  Furthermore, by Rule 2 of the Rules and Directions, as soon as an officer has evidence which would afford reasonable grounds for suspecting that a person has committed an offence, he shall caution that person or cause him to be cautioned before putting any questions or further questions relating to that offence.

49.  The defence submit that in relation to the first VRI, the first interview was not about forged cheques but about other alleged offences committed in relation to the operation of these companies.  The replies were not relevant.

50.  In relation to the fourth and fifth VRIs, it is said that the defendant had been in custody for 32 hours and there had been over 3 hours of questioning, and that, combined with the evidence of the defendant’s mental condition, made the questioning oppressive.

51.  At counter 274 of the fourth interview, the defendant is questioned about the cheques and admits the forgery.  Yet he is not cautioned in respect of the offence until further questioning takes place. This is submitted to be in clear breach of the Rules and Directions, particularly Rule 2.

Resolution of this issue

52.  The first issue is whether the continued questioning of the defendant on 20 February 2013 was oppressive.

53.  Firstly, the interview took place at the defendant’s behest.  That can be seen in counter 8. 

54.  There is the service of the usual Notice to Persons in Custody and a caution, this has already occurred in other interviews.

55.  The defendant confirms he does not need the presence of a solicitor.

56.  He is asked if he took his medicine that we know have been prescribed.  He confirms he did and that he slept.  He said that at counter 39.

57.  He says he is not affected by the medicine, at counter 43.

58.  He confirms himself that his mental condition is all right, at counter 49.

59.  The defendant goes on to say that only he and Philip Chang were involved in the matter.

60.  These answers appear to show, firstly, the interview was at the defendant’s request; that he was unaffected by his medication; that he was mentally well; that he was rested, having slept; that he acted voluntarily, in the normal (as opposed to the legal) meaning of the word.  This provides clear first-hand evidence of the defendant’s state of mind.

61.  The conclusions of Dr Ho on the matter are obviously her expert opinions.  However, it does not appear to me to be able to displace the conclusions that can be drawn from the defendant’s own mouth, from his own words.

62.  Furthermore, perusal of the recorded interviews show the defendant appears well and displays none of the direct symptoms that have been described of alcohol withdrawal syndrome, such as delirium tremens, sweating, shaking. 

63.  Despite the defendant’s report to Dr Ho of impaired cognitive functions as a result of nervousness, depression, irritability and fatigue, there is no evidence of those symptoms on perusal of the video recorded interviews.

64.  The defendant’s answers in both interviews show clear cognitive function, especially memory.  He constructs a narrative which is chronologically accurate and accessible.  This is, in my view, clear evidence of unimpaired cognitive function. 

65.  I note that Dr Ho, when questioned and asked about the existence of cognitive dysfunction, said cognitive impairment is likely if he was suffering from alcohol withdrawal syndrome, but she answered, “Without further investigation, I cannot tell.” 

66.  She also agreed that the medicine, haloperidol, which had been part of the defendant’s prescription from the Pamela Youde Hospital, would lessen the effects of alcohol withdrawal syndrome.

67.  I consider the evidence of Dr Ho on the existence of cognitive dysfunction or impairment that would render the defendant’s interviews oppressive and unreliable is tentative and contradicted by the actual record of the defendant’s demeanour, attitude and the answers given.

68.  The interviews four and five - this applies to both interviews four and five - they were at the defendant’s request and these interviews, on my finding, have been proved beyond reasonable doubt to be voluntary. 

69.  The failure to caution is not in issue.  The defendant admits the forgery at counter 278 of the fourth video recorded interview, but is not cautioned for that forgery until counter 657, although another caution is given at counter 614 in respect of a theft.

70.  In deciding whether to exclude an otherwise voluntary statement for breach of Rules and Directions, the court should look at the effect of the absence of caution.

71.  The defendant had been informed of his general rights and cautioned previously.  He had consulted a lawyer and declined to answer questions in respect of the second and third VRI.  The defendant was fully appreciative of his legal rights.

72.  I do not find the defendant was prejudiced by the failure to caution promptly for forgery.  I see no reason to exclude these statements, given that the statements were otherwise given voluntarily.

73.  I did not find there was any basis on which to exclude any of the statements, on the basis of this exercise of my residual discretion, on the basis of unfairness.

74.  I was satisfied to the standard of proof in a criminal case that the statements should be admitted and there was no basis on which to exclude them on the basis of unfairness.

75.  As far as the first statement is concerned, it was not alleged the statement was involuntary; it was said to be irrelevant. 

76.  However, from counter 700 onwards, the defendant is questioned about Pacific Gateway Limited cheques signed to himself, totally over $1½ million, of which over $1 million formed part of the cheques in the indictment.

77.  The defendant’s replies are relevant to later admissions made by him and are clearly relevant and admissible.

78.  I therefore admitted this first VRI in addition to the fourth and fifth VRIs.

79.  The admissions of the defendant are comprehensive and, if accepted as being true and relevant and reliable, provide unassailable evidence on defendant’s guilt on all 15 charges.

80.  The defence submit that no weight should be attached to the admissions and that, in any event, they are unreliable.

81.  They point to the following considerations:

(1) that there is no forensic evidence to show that the 15 cheques were signed by the defendant or that they were not signed by Peter Wong, PW1. We knew his handwriting was never tested;

(2) no other witnesses can say that the cheques were signed by the defendant, other than the defendant’s own admission of having done that;

(3) PW1 could not rule out the possibility that Philip Chang signed the cheques;

(4) that PW1 had said in cross-examination that he had signed blank cheques and that Pacific Gateway Limited documents had in the past been sent to him to sign;

(5) that the man Leung Chi-shing in his statement confirmed the existence of a man called “Ray” who worked for Pacific Gateway Limited and this man was not the defendant.

82.  Defence also submits PW1 was not a reliable witness:

(1) he had, as I have said, at one point said he had signed no blank cheques. Later in cross-examination, he admitted to signing some;

(2) he had given Philip Chang US$16,000, although he said he was not close to him;

(3) PW1 was not certain of his own signature.

83.  It was said that either C H Wong or Philip Chang could have signed the cheques or even the man Ray evidenced in Leung Chi-shing’s witness statement could have signed the cheques, that they, as the operators of Pacific Gateway Limited, would have more reason to sign those cheques than the defendant. 

84.  The submission also referred to the admitted facts about the interview of Philip Chang, when he said the defendant had no involvement in Pacific Gateway Limited. 

85.  Furthermore, Philip Chang’s absence leaves the court unable to resolve issues such as the extent of his involvement in Pacific Gateway Limited, Ray’s identity, who had access to Pacific Gateway Limited’s chequebooks and banking facilities at the material time. 

86.  Furthermore, it was also said that, as the defendant was suffering from alcohol withdrawal syndrome to some extent, no weight should be attached to the admissions in the fourth and fifth video recorded interviews, as the court could not find those admissions to be reliable or truthful and could not satisfy the criminal standard of proof.

87.  As far as legal issues are concerned, the prosecution bring the charges.  They are required, in order to establish in each charge against the defendant, to prove that a charge is proved beyond all reasonable doubt.  The burden of proof remains on the prosecution at all times.

88.  The defendant is a man of clear record.  It is certainly relevant to consideration of his propensity to commit this kind of crime or any kind of crime and also to the consideration of the reliability of any statements that have been made by him.

89.  The defendant faces 15 charges of forgery by making a false instrument.  This requires the prosecution to prove that each of the 15 cheques was false, in that it purported to be made by PW1 when it was not, and that the false signature was made with the intention that it should be used to induce someone to accept it as genuine and by reason of so accepting it to do some act to his own or another’s prejudice.

90.  The issues in this case involve the forgery of PW1’s signature.  Clearly, if it is forged, I believe it cannot be disputed that the only available inference that could be drawn from that fact is that requisite intent existed.

91.  I find that the signatures of PW1 on the 15 cheques are forgeries. 

92.  I wholly accept PW1’s evidence that the signatures on the cheques are not his.  They must therefore be forgeries.

93.  I found PW1 to be a truthful, honest and reliable witness.  I saw no reason to have any doubt about his evidence that he had not signed any of the 15 cheques.  I accepted PW1’s evidence that Pacific Gateway Limited was set up solely to manage a property, that the chequebook and company chops were left with the defendant, who was the company secretary. 

94.  Naturally, PW1’s evidence as to the forgery of his signature is supported by the defence’s admissions in the fourth and fifth video recorded interviews.

95.  Who signed the cheques?  The defendant admits he forged PW1’s signature on all 15 cheques.  Is this a reliable admission? 

96.  I found the submissions in relation to Philip Chang and Ray to be speculative.  Philip Chang’s admission is not evidence of the truth of its contents. 

97.  Furthermore, both Philip Chang and Pacific Gateway Limited’s use of and work for Pacific Gateway Limited was not in any way inconsistent with the defendant’s admissions as to forgery of the cheques by himself.

98.  The defendant supplies full and reliable account of why he should sign the cheques. 

99.  In the fourth video recorded interview, the defendant’s explanation can be summarised. 

100.  Firstly, at counter 55, he said, “It’s done by Chang Chi-kin Philip and me only to deal with the money and accounts.” 

101.  He goes on to explain:

(1) how PW1 set up Pacific Gateway Limited with the defendant as secretary;

(2) that Philip Chang used Pacific Gateway Limited to get goods delivered for his air freight company;

(3) the defendant set up Conson to act as an office;

(4) that cheques were deposited to Pacific Gateway Limited and then cheques were acquired by Pacific Gateway Limited to another company;

(5) that PW1 had no idea about this (that is said at counters 112 and 122);

(6) that he put C H Wong’s identity to be the new company secretary in 2010.

102.  At counter 190 he says, “I intended so Chang Chi-kin in doing his business.” 

103.  At counter 277, the defendant is asked:  “Did PW1 know or authorise you to sign the cheques on behalf of him?”  The answer was “No.” 

104.  At 279, the question is asked:  “You forged his signature,” and the answer is “Right.”  He again confirms PW1 was unaware of this and not informed, and the defendant goes on to repeat his admission to forgery at counter 358.  He was told by Chang Chi-kin when and to whom to issue cheques to. 

105.  At counter 658 the defendant admits forgery of PW1’s signature on a cheque in order to get money for himself.

106.  In the fifth video recorded interview, the cheques were presented to the defendant and he admits forging them.  It can be seen from this that the defendant makes comprehensive and detailed admissions to forging the cheques, which rules out the possibility of anyone else being involved in the production of those forgeries, thereby rebutting the matters raised in submission by the defence from the defendant’s own mouth.

107.  I am required to evaluate what, if any, weight, should be attached to those admissions.

108.  I find that full weight should be attached to the admissions contained in both the fourth and fifth video recorded interviews.  The admissions accord with the known and agreed facts and the evidence of PW1, so there is independent confirmation of PW1’s evidence that he was not told and had no knowledge of the forgery of the signature.

109.  The admissions are also clear and detailed. 

110.  I note the evidence of DW1 is relevant to this issue.  I find that her somewhat speculative conclusion that it was likely that the defendant’s alcohol dependency and withdrawal syndrome had affected his cognitive functions.

111.  I find this is clearly not the case, given the comprehensive and detailed nature of the defendant’s exposition of his role in creating forgeries.  I find the admissions to be truthful, practically correct and reliable.  The evidence of admission fully establishes the defendant’s role and provides evidence of his making of the forgeries of each of the cheques in all 15 charges.

112.  Furthermore, the requisite intent in the charges is proved, as a result of being the only available inference that can be drawn from these primary facts beyond reasonable doubt.

113.  The defendant will therefore be convicted on all 15 charges, and that is the decision of the court.