HKSAR v. TSO KIN CHEONG

HCMA 1157/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 1157 OF 2004

(ON APPEAL FROM ESCC 2489/2004)

____________

____________

_______________

J U D G M E N T

_______________

Background

1. The Appellant was convicted after trial of an offence of “Agent deceiving his principal by document”, contrary to section 9(3) of the Prevention of Bribery Ordinance, Cap. 201. He was sentenced to a Community Service Order for 80 hours.

2. The Appellant appealed against the conviction. After hearing submissions I allowed the appeal, quashed the conviction and set aside the sentence. I now give my reasons.

The Prosecution case

3. The prosecution case has been succinctly set out by Ms. Sin, counsel for the Respondent, in her written submission and I will adopt the same here.

4. The Appellant was at all material times a Correctional Services Assistant Officer II, earning a monthly salary of $17,925. He applied, under Civil Service Regulation (CSR) 618, for an advance of his salary in the sum of $25,300 for expenses on moving into new accommodation. He made his application as required in a prescribed form “GF 421 (Revised) 94” which was dated 18.5.1998 (Exhibit P1). Under paragraph 3 of the application form in relation to his outstanding debts, the Appellant stated “nil.” Approval for the application was recommended by his superior (PW5) on 26.6.1998 and the Director of Accounting Services, having approved the application, effected payment of the advanced sum of $25,300 into the Appellant’s bank account at the Hong Kong Bank on 13.7.1998.

5. Investigation by ICAC revealed that on 18.5.1998, the Appellant had three outstanding debts owed to three different commercial lending institutes, namely JCG Finance Co. Ltd., United Asia Finance Ltd. and Promise (HK) Ltd. It was alleged that by stating “nil” in paragraph 3 on his application form dated 18.5.1998, the Appellant had made a false statement in a material particular.

Defence case

6. The Appellant did not testify nor call any witness. His case was that the prosecution had failed to establish all the elements of the offence on strict proof.

Grounds of Appeal

7. Mr. Raymond Yu, counsel for the Appellant, advanced 4 grounds of appeal. In view of the concession by Ms. Sin that the conviction was unsafe and unsatisfactory, it is not necessary for me to deal with the other grounds.

Submission by Respondent

8. I will reproduce the concession by Ms. Sin here:

“	Ground 4 – whether the conviction was unsafe and unsatisfactory
	15.	It was essential for the prosecution to prove that (1) the statement under paragraph 3 of Exhibit P1 was not only false, but it was false in a material particular, and (ii) the Appellant knew it would be so regarded by the approving authority.
	(i) Whether the Appellant’s outstanding debts were material to the consideration of his application
	16.	The Appellant was eligible to apply for advance of salary under CSR 618. His eligibility may be limited if he had any outstanding advances from the Government at the material time (See CSR 618(4).) There was no mention in CSR 618 of any requirement of the Departmental Officer or the Treasury Officer to consider the financial resources of the applicant in recommending or approving the application where the applicant had no outstanding Government advances.
	17.	The requirement to consider the applicant’s financial resources appears in CSRR 616 (10) and (2). Both regulations however deal with the application by an officer already in receipt of an advance of salary with his previous advances still outstanding. Under CSRR 616 (1) and (2), an officer seeking for a waiver of the limitation on his eligibility for further advances, has to “show to the satisfaction of the approving authority that his financial resources are sufficient to repay both advances without pecuniary embarrassment.”
	18.	The advance of salary is interest free and no profit is expected to be made by the Government. It seemingly provides for the welfare and benefit of the needy staff. (See CSRR 616 (1) and (2), 618 (5) and 639.) The consideration of financial resources is seemingly to ensure that the officer concerned would not himself suffer pecuniary embarrassment rather than a concern of the risk of financial loss the Government may be subjected to. The recovery of the advanced salary is secured by way of deductions from the staff’s salary by auto-pay. The risk of non-recovery, if any, is low, particularly if the staff was on pensionable terms.  (See CSR 615 (2).
	19.	Furthermore, it seems that the officers, especially the recommending officer, even in dealing with an application requiring waiver of limitation under CSR 616, are not expected to have any expertise to make proper assessment of the financial risks to the Government or to balance the risks of loss against the profit to be made as in a commercial transaction. In paragraphs 7-10 of Exhibit P1, the recommending officer’s declaration does not seem to concern the Appellant’s outstanding debts other than those owed to the Government. Nor was the Part for use of Treasury revealed any such considerations.
	20.	If it was not a requirement to consider an officer’s financial resources in CSR 618 simplicitor application (i.e. without waiver of limitation), information sought under paragraph 3 would not be applicable. It follows that though what the Appellant had stated in paragraph 3 of his application was false, it was not false in a material particular.
	(ii) Whether the Appellant knew his outstanding debts were material in the consideration by the approving authority
	21.	PW1’s and PW4’s testimonies appeared to be that the 90% income rule was an internal guideline known only to those responsible for processing the applications. Quite apart from such rule appearing to be arbitrary and inconsistent with the purpose and intent of the provisions under the said CSRR and may possibly be ultra vires those regulations, it was a rule unknown to the Appellant or those who were eligible to apply for advance of salary.
	22.	When there was no official circular notifying all about this 90% income rule, nor was there clear indication on the prescribed form there was such a consideration, and given that the requirement to show financial resources was stipulated under CSR 616 and not CSR 618, it would be reasonably open to an eligible officer to regard that the requirement to show financial resources does not apply under CSR 618 when waiver under CSR 616 is not sought.
	23.	Regrettably it appears that only CSR 618 and not all the relevant CSRR had been produced in court and properly explained to the learned magistrate.”

Judgment

9. Ms. Sin has very fairly drawn my attention to the relevant CSRR. I must emphasis that, on the available evidence before her at the trial, it would be difficult to fault the reasoning of the learned magistrate, or the inferences she has drawn. However, in view of the concession by the Respondent that the conviction was neither safe nor satisfactory, I allowed the appeal, quashed the conviction and set aside the sentence.