CHAU LIN SU-E v. HKSAR

FACC No. 2 of 2004

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 2 OF 2004 (CRIMINAL)

(ON APPEAL FROM HCMA NO. 872 OF 2003)

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J U D G M E N T

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Mr Justice Bokhary PJ:

1. At the conclusion of the hearing of this appeal, we allowed it to quash the appellant's conviction , saying that we would give our reasons later. Counsel for the respondent then applied for a retrial. We refused to order a retrial, again saying that we would give our reasons later. The Court's reasons for quashing the conviction and refusing to order a retrial are now handed down, being those given by Mr Justice Chan PJ.

Mr Justice Chan PJ:

Introduction

2. This case involves what the prosecution describes as a "confirmor fraud" by an estate agent in handling a sale of property. It is not known how common this malpractice is. But it is not only a punishable crime. It also inflames property speculation with an undesirable impact on the property market to the prejudice of genuine home buyers.

3. As with most fraud cases, this case depends mainly on the evidence as presented to the court by the parties. But unlike some other frauds, it is focused on only one narrow aspect of the evidence.

The prosecution case

4. According to the prosecution, the fraud was practised in this way. In early July 2001, the owners (PW3 and PW4) of a certain flat (including a roof) in Shamshuipo offered it for sale through the appellant who was an estate agent. The asking price was initially around $800,000 to $900,000. At first, there was no success and the owners had to reduce their asking price. On 21 July 2001, during an inspection of the flat, a Mr and Mrs Mak (PW1 and PW2) made an offer through the appellant to buy the flat at $780,000. But the appellant did not disclose this to the owners. On 25 July 2001, she induced the owners to sign a provisional sale and purchase agreement agreeing to sell the flat at $580,000 to a Madam Yeung and a Mr Chau who was the appellant's husband. On 5 August 2001, with the assistance of the appellant, they in turn entered into another provisional sale and purchase agreement agreeing to sell the flat to Mr and Mrs Mak at $780,000 which was the price the couple had previously offered to the owners. It was not until the completion of the sale at a solicitor's office that Mr and Mrs Mak discovered that they were in fact buying the flat not directly from the owners but through Madam Yeung and Mr Chau acting as confirmors. It was accepted that the owners would not have sold the flat at $580,000 to Madam Yeung and Mr Chau had they been told by the appellant of the higher offer of $780,000.

The conviction and appeal

5. The matter was then reported to the Independent Commission Against Corruption ("the ICAC"). The appellant was subsequently charged with fraud, contrary to s.16A of the Theft Ordinance, Cap. 210. She was convicted after trial before a magistrate (Mr M L So) at the North Kowloon Magistracy and sentenced to six months of imprisonment. Her appeal to the Court of First Instance (Tong J) was dismissed. With leave of the Appeal Committee, she now appeals against conviction on the ground that she has suffered substantial and grave injustice.

The crucial issue

6. As can be seen from the above brief summary of the case, the crucial issue was whether on 21 July 2001, Mr and Mrs Mak had inspected the flat and made an offer through the appellant to buy the flat at $780,000.

7. If they had done so on that day and the appellant, knowing the existence of this offer, failed to inform the owners of it but instead persuaded them to sell at $580,000 to her husband and Madam Yeung so that the latter could in turn sell the flat to Mr and Mrs Mak, reaping a huge profit out of the difference, then it would not be difficult to draw the only reasonable inference that the appellant had the necessary dishonesty and intent to defraud as required for the offence. The charge would be made out against her for having defrauded the owners causing them to suffer a loss of $200,000.

8. If on the other hand, Mr and Mrs Mak did not on that day conduct the inspection and make the offer or if there was a reasonable doubt as to whether they did so or not, the appellant would have to be acquitted.

The evidence of Mr and Mrs Mak

9. The evidence of Mr and Mrs Mak on how they came to inspect the flat and make the offer is thus of critical importance. It is necessary to examine the important parts of their evidence.

10. Mrs Mak said she knew the appellant prior to this incident because she had previously engaged her services in the purchase of another property and she trusted the appellant. In mid July 2001, she was interested in buying a flat for investment purposes and the appellant introduced her to the flat in question. On 16 July 2001, the appellant took her to inspect the roof of the flat since it was then let out and no inspection of the inside could be made. The appellant told her that the owners would sell at "$800,000 something" but she considered the price too high. On the following night, 17 July 2001, Mrs Mak and her husband went with the appellant to see the flat a second time. But since it was then in the evening, they made an appointment to have another inspection on 21 July 2001 during the day time. On that day, during the inspection, the appellant told them that the owners were only prepared to sell at $820,000. Notwithstanding that they still could not see the inside of the flat, Mr and Mrs Mak made an offer to purchase the flat at $780,000. On 27 July 2001, they were informed by the appellant that their offer was accepted by the owners. But it turned out that it was Madam Yeung and Mr Chau who agreed to sell the flat to them at that price.

11. Under cross examination, Mrs Mak said that it was on 21 July 2001 that they had an inspection of the flat and made their offer to the appellant. She could remember that because it was a Saturday and in the week that followed, her son was taken ill and had to be admitted to Caritas Hospital on the night of the 24th. She said that her husband usually worked in the afternoon on Saturdays but on 21 July 2001, he came home early in order to see the flat in the day time. However, she could not recall the time when the inspection took place but said that it might be some time between 3 pm and 5 pm.

12. It was Mr Mak's evidence that his wife asked him to view the flat in the evening on 17 July 2001. But they could only see the roof of the flat. They wanted to have another inspection during the day time and so they made an appointment to go there again on the 21st. On that day, he inspected the roof with his wife and they made the offer to the appellant. He said he could remember that it was 21 July 2001 because he had to attend a training course on the following Monday, the 23rd. He could also recall the admission of his son to the hospital on the 24th.

13. Under cross examination, Mr Mak said he had to work in the afternoon on every Saturday. But on 21 July 2001, he went off duty one or two hours early. He was sure that it was around 5 pm to 6 pm. that he and his wife conducted the inspection. This was consistent with what he said in his statement to the ICAC which was made on 6 November 2001, about three months after the incident. However, he also said that the inspection took more than half an hour and it lasted "until sometime around dusk". And in response to a question from the bench, he replied that he first mentioned $780,000 "in the evening" of 21 July 2001.

14. In support of their evidence of the visit to the flat on 21 July 2001, the prosecution produced documents showing that their son was admitted to hospital on 24 July 2001 and that Mr Mak had a training course on 23 July 2001.

The immigration record of the appellant

15. Before the prosecution closed its case, there was produced by agreement of the parties a departure record from the Immigration Department showing that the appellant went through an immigration checkpoint at the ferry terminal in Tsimshatsui at 3.33 pm on 21 July 2001 leaving for the Mainland.

16. This record was a document which was obtained by the defence a few days before the trial and was apparently in the possession of both parties at the trial. However, apart from the cross examination mentioned above, the Duty Lawyer representing the appellant at the trial did not put this record to the witnesses. Nor did the prosecution refer to it in re-examination. After it was admitted in evidence by agreement, no application was made by the prosecution to the magistrate to recall Mr and Mrs Mak to clarify the matter arising from this record.

The defence case

17. The appellant did not give evidence or call any witness at the trial. Her case, as put to the prosecution witnesses by her lawyer, was that it was a frame up by Mr and Mrs Mak in that they never had any inspection of the flat on 16, 17 or 21 July 2001 and that it was not until 31 July 2001, a few days after the owners had already agreed to sell the flat to Madam Yeung and the appellant's husband, that the couple showed any interest to buy the flat. It was suggested to Mr and Mrs Mak that their motive in lying against the appellant was that they felt aggrieved for having purchased at a much higher price and wanted the appellant to recover half of the difference in price for them (this was admitted by Mrs Mak) and that having failed to get anything from the appellant, they framed her up. To rebut this fabrication on their part, the appellant, by the production of the immigration record, in effect relied on an alibi which was that at the time when these two witnesses said they had an inspection of the flat and made the offer, she was already in the Mainland.

How the magistrate decided the crucial issue

18. As mentioned above, the issue to be decided before the appellant could be convicted was whether Mr and Mrs Mak had inspected the flat and made the offer on 21 July 2001. Since the appellant put up an alibi, the time when this alleged inspection took place was clearly of great importance.

19. The magistrate was impressed by the prosecution witnesses including Mr and Mrs Mak and found them to be honest and reliable witnesses. He was satisfied that Mr and Mrs Mak did attend the flat for inspection and made an offer to buy the flat for $780,000, but he found that they must have been mistaken as to the time of the inspection. In concluding that they were correct on the date of the inspection, the magistrate was obviously influenced by the fact that Mr Mak "did not make any mistake in his recollection in relation to his child being admitted to the hospital for fever, and his attendance to the training course arranged by his company which were special events." In concluding that they must have been mistaken as to the time, the magistrate found that the wife was not very certain about the time and that Mr Mak "goes to work every day. It is not surprising at all that he could have mistaken the time as to when he got off work on a particular date."

20. In upholding the magistrate, the judge considered that "there is nothing wrong" for the magistrate to have come to this conclusion, having seen and heard the witnesses giving evidence and listened to the submissions. The judge added:

"In fact, judging from the whole statement of findings, the Magistrate had analyzed and summarized in a very objective and systematic manner the evidence in this case, and come up with findings of facts in the end. He did not err in law nor did he draw any unreasonable inference. The grounds of appeal in this case are only concerned with the appellant's dissatisfaction towards the findings of primary facts by the Magistrate. Nonetheless, the arguments put forward by the Defence had actually been dealt with comprehensively by the Magistrate. Concerning the findings of facts by the Magistrate, I do not have the power nor the basis to overrule them."

Was magistrate entitled to conclude there was mistake

21. This Court does not function as a court of criminal appeal in the normal way, does not review convictions on the unsafe and unsatisfactory ground, and intervenes only on the ground that there has been a departure from accepted norms leading to a substantial and grave injustice. See So Yiu Fung v. HKSAR (1999) 2 HKCFAR 539 at 543.

22. In the present case, the question for this Court is whether there was any basis for the magistrate to conclude on all the evidence and materials before him that Mr and Mrs Mak were correct in respect of the date of the inspection but mistaken in respect of the time of such inspection. As the Appeal Committee said when granting leave to appeal, it would be a departure from accepted norms to find that particular witnesses were mistaken if there was no evidential basis for so finding. This is because if there was no such evidential basis, the magistrate would have "erred in law" and have "drawn an unreasonable inference" in that his conclusion would be considered as one which no reasonable tribunal of fact would have come to and the judge would be wrong to say that he had no power to overrule the magistrate.

23. Upon close analysis of all the evidence and materials before the magistrate, the position is this. There is a conflict between the evidence of Mr and Mrs Mak. On the one hand, Mrs Mak said she could not remember when it was on 21 July 2001 that they went to have the inspection during which they made the offer, but it might have been some time between 3 pm to 5 pm. On the other hand, Mr Mak said he was sure that it was at around 5 pm to 6 pm. Then, there is a conflict between the evidence of the couple and the immigration record of the appellant's movement on that day. Assume for the moment (since there is no evidence on this) that it took the appellant 20 minutes to half an hour to travel from the flat in question to the Tsimshatsui ferry terminal and to pass through the immigration checkpoint. If, according to Mr Mak, the inspection on that day took more than half an hour, the alleged inspection on 21 July 2001 would have to commence at the latest at 2.15 or 2.30 pm and finish at around 3 pm. In any event, such hour of the day could not have been "around dusk" or "in the evening" as Mr Mak said.

24. It would not be too difficult to resolve the first conflict since Mr Mak's evidence (rightly or wrongly) seems to be clearer than that of his wife on this aspect of the case and thus preferable. However, the second conflict presents much greater difficulty. Given the immigration record, the alleged inspection could not have been conducted at around 5 pm to 6 pm as alleged by Mr Mak (or for that matter, between 3 pm and 5 pm as alleged by the wife). It is true that there was documentary evidence to support the couple's evidence that Mr Mak had to attend a training course on 23 July 2001 and that their son was admitted to hospital on 24 July 2001. If they were telling the truth, these two events would assist them in their recollection of the events. But there being a serious issue whether they were, as alleged by the appellant, deliberately telling lies to frame her up, it is necessary to approach these events with greater caution. Ultimately, it is the evidence of Mr Mak and Mrs Mak on whether anything happened in the afternoon of 21 July 2001 which is important, not the fact that their son was admitted to hospital or the fact that Mr Mak had to attend a course.

25. There is some force in the submission of counsel for the appellant before the judge that "the Magistrate should not let himself be convinced of the credibility of the witnesses' evidence first before he concluded that they were merely mistaken about the time." The correct approach is that the magistrate must consider the evidence of Mr and Mrs Mak in the light of the immigration record before he could come to a conclusion whether it was safe to rely on their evidence. Looking at the Statement of Findings as a whole, it would seem that the magistrate had already formed the view that the evidence of Mr and Mrs Mak was to be accepted before he came to resolve the conflicts which had arisen from the immigration record. He then tried to resolve the conflicts by attributing them to be the result of a mistake on the part of Mr Mak.

26. If these conflicts could be resolved one way or another, the magistrate would be in a better position to decide whether the case was proved to the required standard or whether there was a reasonable doubt. Since the defence was that Mr and Mrs Mak had fabricated a case against the appellant, it is understandable that defence counsel, having cross examined the witnesses on the issue and extracted what he considered as sufficient to raise a reasonable doubt, did not put the immigration record to them. For some unknown reason, the prosecution did not see fit to re-examine or apply to recall Mr and Mrs Mak to clarify the matter which had arisen from the production of the immigration record. There might or might not be any answer to this record. The conflicts in the evidence might or might not have been resolved by recalling these witnesses and confronting them with the immigration record since it is not clear what their testimony would be if they were recalled. But whether there was or could be any answer to the immigration record, the fact remains that these witnesses were not recalled and no further evidence was placed before the court. In these circumstances, the magistrate was not entitled to speculate as to what answer Mr and Mrs Mak might have to the immigration record. In particular, he was not entitled to speculate that they were mistaken as to the time of the alleged inspection. There was simply no evidential basis to enable him to make a finding that Mr and Mrs Mak was correct on the date of the inspection but mistaken as to the time it took place. The judge was also wrong not to intervene.

Conclusion

27. For these reasons, we are satisfied that the conviction was arrived at by way of a departure from the accepted norm that findings are not made without an evidential basis. This has resulted in substantial and grave injustice to the appellant. Her conviction must be quashed and the sentence set aside.

28. The prosecution applied for a retrial. The reason given was that the appellant was an estate agent licensed under the provisions of the Estate Agents Ordinance, Cap. 511 and that the licensing authority should know whether the appellant had or had not been involved in a confirmor fraud. It was submitted that it is in the public interest that there should be a retrial.

29. We were told that the appellant's licence had expired and when she applied for renewal, it was refused on the ground that there was this conviction and that the appeal was still pending. Now that her conviction is quashed, she may or may not apply again to renew her licence and even if she applies, the Estate Agents Authority may or may not accept her application. There are provisions in the Ordinance on the granting and refusal of a licence and the grounds for doing so together with an appeal procedure. There are further provisions conferring powers on the Estate Agents Authority to institute an investigation or disciplinary proceedings against a licensed estate agent in accordance with a comprehensive procedure. No doubt the appellant or the Estate Agents Authority will consider taking whatever action they think is appropriate.

30. Having regard to the circumstances of this case, in particular, the uncertainty as to the evidence which may be available against her at a re-trial and the fact that the appellant had already served her sentence, we do not think that public interest would be served by ordering a retrial and we refuse to make such order.