HKSAR v. CHENG YIM FUNG, FLORA

FAMC No.35 of 2017

[2018] HKCFA 5

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO.35 OF 2017 (CRIMINAL)

(ON APPLICATION FOR LEAVE TO APPEAL FROM

HCMA NO.227 OF 2016)

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REASONS FOR DETERMINATION

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Mr Justice Ribeiro PJ:

1.  At the hearing, we dismissed this application for leave to appeal for reasons which we now provide.

2.  The applicant, through her company Henston Limited, traded as “Dr Cheng Health Workshop” (“the Workshop”).  She entered into a contract with an entity called “University of National Union” (“UNU”) represented by one Wan Shun On (“Wan” who gave evidence as PW4) whereby, in return for payment of “accreditation fees” UNU would accredit programmes to be conducted by the Workshop and would confer diplomas in Osteopathic Medicine and degrees of Bachelor of Alternative Medicine in Osteopathy. The applicant marketed courses ostensibly leading to such degrees and diplomas. 

3.  UNU was, to put it mildly, wholly insubstantial.  It was described by Wan as “an internet university” and was said to be situated in the self-styled Hutt River Principality near Perth, which claimed to have seceded from Australia as a sovereign state.  The contract required the Workshop to “guarantee” that it would provide “quality programmes” to students whose assignments would be sent to UNU, which would then accredit them.  The contract was dated 27 April 2009 and was valid for a year. 

4.  The prosecution’s case, accepted by the magistrate, was that Wan told the applicant in April 2011 (a year after the contract had already expired) that UNU would not renew its licence.  Nonetheless, on dates between September 2011 and April 2012, when she knew that UNU was no longer in existence, the applicant persuaded PW1, PW2 and PW3 to sign up for courses leading to the degree or diploma, showing them what purported to be a UNU leaflet. 

5.  PW1, PW2 and PW3 testified that they had paid the applicant sums of $88,000 and $46,800 for the degree and diploma courses respectively, the applicant having claimed that UNU was registered and recognized in the United States or internationally.  She had also said that recognition of such qualifications in Hong Kong was anticipated.  When these witnesses became dissatisfied with the courses offered and heard from the media that UNU was in difficulties, having heard nothing from UNU, they sought refunds, to no avail.

6.  The applicant faced three charges of fraud[1] on the basis that she had induced each of them to enrol in the programmes, falsely representing that UNU would issue the relevant degree or diploma upon their completion.  She did not give evidence and was convicted by the Magistrate[2] who sentenced her to 8 months’ imprisonment.  Her appeal to the Court of First Instance was dismissed.[3]

7.  Leave to appeal to this Court is sought on the substantial and grave injustice ground, the following complaints being made:

(a) That the Judge wrongly upheld her conviction on facts other than those found by the Magistrate and on grounds other than those relied on by the prosecution (1^st ground); and

(b) That the Judge wrongly rejected the three grounds of appeal advanced before him, namely:

(i) That the prosecution had failed to disclose Wan’s previous criminal records, rendering the conviction unsafe (2^nd ground);

(ii) That the Magistrate had inadequately explained why she had accepted that PW1 was an honest and reliable witness (3^rd ground); and

(iii) That defence counsel instructed before the Magistrate was guilty of flagrant incompetence by failing to present her case adequately (4^th ground).

8.  We do not consider any of those grounds reasonably arguable.

1^st and 2^nd grounds

9.  The Magistrate found that Wan had told the applicant that UNU would not seek to renew its licence before she enrolled the three prosecution witnesses.  It later emerged that Wan had three relatively minor convictions[4] some 25 or 26 years prior to the trial which are said to bear on his credibility.  While they should have been brought to the Magistrate’s attention, defence counsel then instructed indicated that he thought it unlikely, given the staleness of the convictions, that he would have cross-examined Wan on them.  In any event, the Judge was entitled to hold, having closely examined the testimony of PW1, PW2 and PW3, that there was overwhelming evidence, not just from Wan, of the applicant’s deceit and dishonesty in enrolling them in the programmes.    The appeal being by way of re-hearing, the Judge was entitled to rely on matters established by those witnesses in the evidence.[5]  Non-disclosure of Wan’s convictions therefore did not render the verdict unsafe.  The same applies to the complaint regarding the Judge’s reliance on the expiry date of the contract as a matter not featuring as part of the prosecution’s case: there was ample evidence to support the magistrate’s findings without needing to rely on such expiry. 

10.  Mr Cheung submitted that Wan was in fact the fraudster and had maintained in existence the purported website of UNU which referred to the applicant as his partner in the UNU enterprise well after the date when, according to him, he had told the applicant that UNU had been deregistered.  Wan was of course not on trial, but even if one accepts the possibility that he was acting dishonestly in maintaining the website in existence, the magistrate was nevertheless fully entitled to find that he had informed the applicant of the true position regarding UNU’s deregistration.  There is no inconsistency between Wan maintaining the façade of UNU as a going concern and the finding that the applicant had fraudulently induced the three witnesses to part with money in the expectation of receiving degrees from UNU knowing that those degrees would never materialise.

The 3^rd and 4^th grounds

11.  The 3^rd ground is no more than an invitation for this Court to conduct a further assessment of the evidence which, as has often been stressed, it will decline. 

12.  The 4^th ground is one which should never have been advanced.  Regrettably, this is not the first time that we have had to express our disapproval of a misconceived and inappropriate charge of “flagrant incompetence” levelled at counsel appearing at the trial.  

13.  In Chong Ching Yuen,[6] Sir Thomas Eichelbaum NPJ stated:

“The expression ‘flagrant incompetence’ rightly underlines an appellant's need to show much more than a mistake, an error of judgment, or a decision to follow one course when in hindsight another would have been preferable. ... The bottom line is that to succeed, an appellant must be able to show he or she received less than a fair trial.”

14.  And as Li CJ emphasised:

“The fact that a second or subsequent set of lawyers thinks of a new point which the earlier advisers did not consider or might have thought was unmeritorious cannot be a basis for effectively re-opening a matter where arguments then considered proper had been deployed and duly considered. If that were the applicable standard, there would never be finality in any court proceedings.” [7]

15.  The Application for Leave in the present case states as follows:[8]

“The Applicant's complaint was not on the general competence of defence counsel but on the specific issue of his flagrant failure in putting forward certain material instructions given by the Applicant in her Proof of Evidence in cross-examining the prosecution witnesses. There was no complaint about the defence counsel's advice after the close of the prosecution's case in relation to whether the Applicant should testify, nor was there any complaint about the voluntariness of the Applicant's decision not to testify. ...

The Deputy Judge dealt specifically only with one of the three complaints raised by the Applicant, namely, the complaint that defence counsel had not put to the prosecution witnesses the defence case that she did not promote to PW s 1-3 only about UNU, but she had also connections with other universities which could award the relevant Degree to them (see para 84 of the  Judgment). However, the Deputy Judge's explanation that this version was not that given by PWs 1-3 shows that the Deputy Judge missed the point of complaint. It is exactly because PWs 1-3's version was contrary to the Applicant's instructions that defence counsel had a basic duty to put forward the defence case to them. In particular, the Applicant had provided defence counsel in her Proof of Evidence other leaflets of her programme which did not bear the name of UNU to support her claim that she did not only print the UNU leaflet in Exhibit P5 and did not refer only to UNU [when] promoting the programme.”

16.  The criticism is thus that particular points regarding the applicant’s marketing of university courses other than UNU courses were not put in cross-examination.  Such a complaint comes nowhere near to founding the suggestion that the applicant was deprived of a fair trial.  The evidence of the three prosecution witnesses was that they had been sold courses on the basis that they would lead to UNU-accredited qualifications.  Any reference that the applicant might have made to her involvement with other universities was quite peripheral. 

17.  What we stated in HKSAR v Chow Wing Wai[9] applies equally here:

“It is regrettable that it was thought fit to allege that there was flagrant incompetence on the part of defence counsel at the trial. Such an allegation is not justified merely by suggesting possibly viable lines of cross-examination that might have been, but were not, adopted. Trial counsel was faced with an overwhelming case against the applicant and had to exercise his judgment as to how the defence was to be conducted.”

18.  Advocates have a professional responsibility not to make allegations of flagrant incompetence without a proper basis.