WONG KA MING, KEVIN v. HKSAR

HCAL 54/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 54 OF 2013

------------------------

------------------------

-------------------------

JUDGMENT

-------------------------

1. This is an application for judicial review of the decision of His Honour Judge Johnny Chan made on 28 November 2012 dismissing the applicant’s application for costs in District Court Criminal Case No 11 of 2012.

The Charge

2. The applicant was charged with one count of “Conspiracy to Defraud” contrary to Common Law and punishable under section 159C(6) of the Crimes Ordinance (Cap 200) as follows:

“WONG Ka-ming, Kevin, between 1^st day of April 2009 and the 3^rd day of August 2010, both days inclusive, conspired with CHAN Chong and NG Po-kam, in Hong Kong, to defraud AmMed Hong Kong Limited (“AmMed”), the drugs suppliers of AmMed including Merck Pharmaceutical (HK) Limited and the intermediaries of the drug suppliers including Zuellig Pharma Limited, DKSH Hong Kong Limited and others (collectively referred to as “the Drugs suppliers”), by dishonestly,

(i) placing purchase orders for drugs with the Drugs suppliers in the name of AmMed and using AmMed’s accounts, namely, A/C No. 831477, 151255029 and 151263616;

(ii) falsely representing to the Drugs suppliers that the said drugs were required and purchased by AmMed;

(iii) concealing from AmMed that they had purchased and received the said drugs, from the Drugs suppliers; and

(iv) re-selling, transferring or disposing the said drugs for their own financial gains.”

Core Facts & Contention

3. AmMed was at all material times the proprietor and operator of three medical centres.  One of these was situated in Central and had in its service the applicant, an oncologist, in the capacity of a consultant.  NG, one of the other persons named in the charge, was a dispenser at the Central clinic.  She was also responsible for overseeing the clinic’s drug supply.  All the drugs procured by AmMed must however be prescribed to AmMed patients.  The allegation was that NG, her husband CHAN and the applicant defrauded AmMed by misusing its accounts with the drug suppliers to procure drugs for resale in the Mainland.  This was denied by the applicant whose only admission was that drugs had been procured through Titus Medical Limited (“Titus”) – a company which, under the consultancy agreement with AmMed, he was entitled to operate as a separate business of his own. 

The Evidence

4. The crux of the evidence against the applicant was two-fold, CHAN and NG being absent and nowhere to be found at the time of the trial.

5. The first comprised a meeting between PW1 (a staff member of AmMed) and CHAN and NG and the applicant to investigate into the unauthorized purchases.  In it, the applicant was said to have made enough admissions to at least indicate his knowing participation in a scheme involving CHAN and that he was willing to compensate AmMed for it.

6. Second, it was an uncontested fact that the applicant had once transferred $1.25 million of his own money to a drug supplier’s bank account.  This fund was a direct match in sum and was in fact used to settle six invoices four of which were for orders placed by Titus.  The remaining two were for unauthorized purchases through AmMed.

Trial Judge’s Assessment

7. Whilst accepting the veracity of PW1’s evidence, the trial judge was less than certain as to its probative value.  This is not surprising given the detail of what CHAN and the applicant had reportedly said during the investigation meeting.

8. Starting with CHAN, he said, through NG, he had obtained drugs that he resold in the Mainland.  He started doing so in spring, 2009.  He had also asked his friend, the applicant, to obtain drugs through his account.  For his part, the applicant intimated that he agreed to CHAN’s suggestion in February 2010.  He did so for the extra profit.  He said, as a doctor, he could purchase drugs on his own rite and he had not cheated on AmMed.  He said he knew what CHAN was up to and was wrong not to report it.  He said he was willing to compensate AmMed if an exact amount could be worked out.

9. Based on these statements, the judge concluded that (a) the scheme launched in spring, 2009 to defraud AmMed cannot be understood to involve the applicant who professedly came into the picture a year later; (b) the applicant’s admission of knowledge of the scheme was not to be equated as participation; and (c) the account that the applicant admittedly used to procure drugs for CHAN was more likely to be Titus’ and not AmMed’s.  The judge also took note that according to PW1, the applicant’s expressed willingness to compensate AmMed was disingenuous.

10. Apropos the $1.25 million transfer, the judge concluded that irrespective of origin, it was probably CHAN who had ultimate control of how the money was spent.  He said so based on the sizeable number of transfer slips, including the one incidental to the transfer in question, that were seized from CHAN’s home, some of which were scribbled with notes.  It was also observed that out of more than two hundred unauthorized purchases detected, only two were paid for by the applicant - in this very instance.  The implication being the applicant was ignorant that he was purchasing drugs through AmMed’s account.

Refusal of Costs

11. Notwithstanding his acquittal, the learned trial judge refused to award the applicant costs.  In a short written ruling, it was held that the applicant had brought suspicion upon himself by (a) admitting to PW1 that he was wrong in not reporting CHAN and offering to compensate; and (b) making the transfer of $1.25 million. 

Discussion

12. It was odd for the applicant to have said that he was willing to compensate – albeit disingenuously.  On the other hand, the mistake he admittedly made was confined to not reporting CHAN.  He was adamant that he himself had not cheated on AmMed.  Taking the totality of what the applicant said in his meeting with PW1, and not focusing on just one or two of his less obvious statements, I do not share the judge’s view that the applicant had “brought suspicion upon himself” in its well defined meaning. 

13. Likewise the transfer of $1.25 million.  In all the circumstances of the case, as indeed elucidated by the judge, this act was capable of an innocent explanation.  To backtrack on this finding and to attribute it with suspicion would, in my judgment, amount to adopting a position at variance with the applicant’s acquittal: Ting James Henry v HKSAR (No 2) (2007) 10 HKCFAR 730.

14. The result might have been different had the fact had been relied on that after becoming aware of CHAN’s (previous) fraudulent scheme, the applicant nevertheless agreed (or persisted) to partner him in the business of procuring drugs for resale in the Mainland whilst (a) NG remained in the employment of AmMed hence capable of further abuse and (b) he (the applicant) maintained little oversight as to how the funds he provided were allocated.  The fact that the applicant had, I believe, remained silent to the ICAC may also be relevant: Cheng Kam Kuen v HKSAR HCAL 92/2004.

15. As it is, I am persuaded that the judge had taken into consideration factors that were irrational and/or irrelevant thus making his decision to refuse the applicant’s costs unlawful.

Decision

16. The trial judge’s decision as to costs is quashed.  The matter is to be remitted to the same or, if impracticable, a different judge in the District Court for reconsideration and decision.  The applicant will have costs in this application.