HKSAR v. NG MING WING

IN THE COURT OF APPEAL

1997, No. 208
(Criminal)

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J U D G M E N T

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Mortimer, V.-P. (giving the judgment of the Court):

1. We give leave to appeal in this matter and now turn to its merits.

2. On 27 March 1997 the appellant was convicted after trial by Her Honour Judge Chua of 6 charges of accepting an advantage as an agent, contrary to Section 9(1)(a) of the Prevention of Bribery Ordinance, Cap. 201. He was sentenced to 11 months imprisonment. He applied for leave to appeal against these convictions and we have given him leave. He is represented in this matter by Mr. Macrae.

3. The prosecution evidence was this. The appellant was merchandising manager for H. Smal Limited ("Smal")who arranged the manufacture of jeans for U.S. companies.

4. Permanent Trading Co. ("Permanent"), whose proprietor was Mr. Mak, were manufactures of belts for jeans.

5. In return for the appellant recommending Permanent to the belt manufacturers, Permanent overcharged Smal for the jeans - that is compared with the price to the manufacturers of jeans - and remitted the difference to the appellant personally as bribes. Six cheques evidenced the payments and were the basis of the charges. Five of consecutive numbers were dated 12 May 1993 and one was dated 30 June 1993. All were drawn on Permanent's accounts and all (save one which was cashed) were paid into the applicant's investment accounts and, it would appear, were retained by him.

The trial

6. The evidence which was admitted by the judge at trial can be summarised as follows. First the evidence which it is conceded was admissible.

1. The 6 cheques proving payments from Permanent, a customer of Smal to the appellant, an employee of Smal.

2. The appellant had no authority from his employers to receive that money from customers.

3. The appellant resigned his post on 22nd March 1993 but remained at work to help his successor, Susanna Lau - who was PW2 in the case - until 30th June 1993.

4. The evidence of Susanna Lau (PW2) which was as follows:

(a) When she spoke to Mr. Mak of Permanent about the price of belts, he said there was a commission available to the person who took the appellant's job as the person responsible for placing orders. This, of course, was not admissible as the truth of what Mak had said but as part of the account which explained PW2's later actions.

(b) Soon afterwards, PW2 spoke to the appellant. Having explained in evidence what was meant by "overpricing", she said there were two prices, one of which was inflated. She then gave evidence of a conversation which she had with the appellant. Initially, he denied the allegation of "overpricing" on the telephone. Then PW2 spoke of "overpricing":

"A. He (the appellant) did not give the details. He only admitted that he had committed overpricing and that he had received a cash cheque.

Q. What was this? Were there any details as to what the cash cheque was about?

A. No, but he did say that after he had received the cash cheque, he presented it to Alex for him to share it. And he also said that the company did not know about it."

Alex Ng was another employee of Smal who had left in November 1992.

A little later this evidence was given by her:

"Q. So you said that, 'Echo (the appellant) admitted to me that he committed details of overpricing.' Can you give us the exact words he used?

A. He said, 'Yes, I did commit overpricing with Heng Cheung.' That means Permanent.

Q. Yes. Now just continue with - as far as you can recollect, the exact words both of you used.

A. I cannot recall how it flows but I could remember the context of it. Before that, Echo Ng had denied it.

Q. Denied what?

A. He denied he had committed overpricing with the supplier. Then I said, 'A supplier says that he had provided a commission to you.' Echo said, 'I don't know what you are talking about. Can you say it more clearly?' Then I said to him, 'A supplier, that is Heng Cheung, has told me that he had provided a commission in the form of a cash cheque to you,' and Echo asked, 'Are you talking about Mr. Mak?' I said, 'Yes.' "

A little later,

"A. Yes I did commit overpricing with Heng Cheung."

A later answer was this:

"He went on to say that in January he received the cash cheque from Heng Cheung. He also said it was calculated up to April. He went on to say, 'If you want to make a calculation, you should start from the orders from April onwards.' He also said that the company did not know about it."

The witness spoke to the appellant again a few days later. This was the evidence:

"I told Mr. Mak that Echo had told me that those orders were calculated up to April. Mr. Mak said, 'No, its up to June.' Mr. Mak asked me if I could remember the last time when he saw me. It was when Echo first introduced him to me. On that occasion, Echo requested Mr. Mak to make the calculation of those orders up to June. He said that was because he was going to the United States to study. I said, 'I don't know about it. Let me clarify it with Echo when I speak to him over the phone, next time.' Then we did not talk about anything else. Subsequent of that I spoke to Echo over the phone again. Echo rang me. I said (this is to the appellant now) 'Mr. Mak told me that it was calculated up to June.' Echo replied, 'Yes if you want to make a calculation you can start from July. Echo went on to say, 'After you've made the calculation, you should print the information from the computer with a piece of blank paper, not bearing the letter head of the company.' And he went on to say, 'And before you fax it to Mr. Mak, you should ring him up first and tell him to receive the fax.' I said, 'But I don't know the difference between the two prices you made.' Echo said, 'Those before style number BT71.' "

5. There is then an interview between the appellant and an ICAC officer on 13 February 1995. He was asked about the cheques.

"Q. In what circumstance did you see these cheques?

A. At the time I had an investment account in J&K Development Limited. Mr. Mak, of Permanent Trading Company, was interested in making investments so he made out the cheques and handed them to me so that I would make an investment on his behalf, using my account.

Q. But the Bank of East Asia cheques numbers 77415 to 77417 were paid into your investment account in Infast Investment Limited. what explanation can you make?

A. Because my investment consultant transferred my account in J&K Development to Infast Investment Limited, I did not know why was transferred because I authorised the investment consultant fully to handle the matter.

Q. What is the name of your investment consultant?

A. Cannot remember.

Q. Did you or Mr. Mak's investment make any profit?

A. As far as I know, when the account was settled only a little money was left. However, I am not clear about the amount because I was not in Hong Kong at the time. I authorised my investment consultant to deposit the balance in one of my bank accounts.

Q. Have you returned any money to Mr. Mak?

A. I remember that I told him how much money was left but he said that he would wait for me to come back to handle the matter. Thus, I have not returned any money to Mr. Mak."

He went on to deny that he had inflated any prices for belts with the manufacturer.

The appeal

7. The judge admitted into evidence matters, which Mr. Macrae contends, were inadmissible. The first was conversations which PW2 had with Mak - who was not called to give evidence himself in which Mak explained the pricing system.

8. In her reasons for verdict the judge dealt with it in this passage:

"As a preliminary issue, I am satisfied the defendant's admissions to PW2 on the telephone and the receipt of the six cheques into his investment accounts constitute prima facie evidence, triggering the reception of evidence under the co-conspirator's rule.

Of PW2's testimony, 'Mak did say he had provided a commission to Head of H. Smal,' 'besides he also mentioned he had paid a commission, money for Echo in the form of a cash cheque' the first statement is admissible to show the conspiracy, but the second is narrative and not evidence against the defendant."

9. The second matter is this. Mak had produced to PW2 a document (P7) which he said had been compiled by the appellant. The judge admitted that into evidence as a document in furtherance of the conspiracy.

Inadmissible evidence

10. So far as those matters alleged to be inadmissible are concerned, Mr. DiFazio for the government did not concede the points, however, it is right to say that he was unable to argue them with any conviction.

11. Clearly, the evidence of Mak's conversation with PW2 was not in furtherance of the conspiracy. By that time the appellant had gone to the United States and any conspiracy with him had come to an end. It was hearsay and ought not to have been admitted.

12. Similarly, there was no admissible evidence that the document upon which the judge placed some reliance - P7 - was the appellant's document. This evidence was also hearsay. Had it been proved that the document was the appellant's document, it would have been powerful evidence. As it was, it was not evidence at all.

Rulings on admissibility

13. In the trial, the issue on admissibility of these matters was left in an unsatisfactory manner. Some of the conversation with PW2 was admissible - not for its truth - but simply as part of that witness's account of events which explain what she did afterwards. But the judge made no ruling during the trial on the matter - she certainly ought to have done. It is unfair not to do so.

14. There were submissions touching upon the admissibility of evidence even during the final addresses. This should not happen. The judge referred to this in her reasons for verdict in this passage:

"Mr. Andrew Macrae, who appeared for the defendant, did not make a submission of no case to answer for the defendant. This is pertinent to the question of receivability of evidence which would otherwise be hearsay on the co-conspirator's rule, as we shall see. No objection to the admissibility of evidence was made by Mr. Macrae during the presentation of the prosecution evidence. It is accepted that if I found the evidence submitted conditionally breached any admissibility rules, I would not rely upon them."

She was wrong in saying that Mr. Macrae had not taken objection to the admissibility of the evidence. He certainly had if it was to be accepted as evidence of the truth.

15. We should make it clear that rulings on admissibility must be made by judges in the course of the trial and even if evidence is admitted de bene esse, at the latest such rulings should be made at the end of the prosecution case so that these matters are not left in the air. Further, it must be said that counsel should ask for rulings and prosecuting counsel, particularly, should be careful not to seek the evidence to adduce into evidence that which is not admissible.

Error of law

16. As it is, inadmissible evidence was admitted and this was an error of law by the judge. Her findings were expressed in this way:

"I found PW2's recollection of the defendant's admissions to her during the two telephone conversations to be clear, convincing and reliable. While she may have pretended to both Mak and the defendant that she was joining in the conspiracy for the commissions, she is not an accomplice. However, then of the defendant's admissions and incriminating statements to her regarding how the commissions were calculated, together with the evidence of the receipt of money of odd amounts into his investment accounts, constitutes to my mind, sufficient convincing evidence to found a conviction on the charges."

Later, having considered inadmissible evidence, she said this:

"I find that his admissions in the record of interview, P1 (the appellant), that no money has been returned to Mak, to be true. I reject his other protestations of ignorance and innocence. Nor do I accept as true his claim to PW2 that he only took a cash cheque in January and passed it onto Alex. I infer from all the receivable evidence that the said six cheques were corrupt commissions to Mak paid to him to recommend the jeans manufacturers to purchase belts from Permanent. As I said, even without P7, I would have arrived at the same conclusion based on the admissions he made to PW2 without the need to call in aid Section 21 of the Prevention of Bribery Ordinance."

The reference to s. 21 of the Bribery Ordinance is puzzling. No one had suggested that any reliance should be placed upon that provision.

17. Mr. Macrae submits that the inferences, which the judge said she was prepared to make, may have been affected by the inadmissible evidence upon which she placed some reliance. Also, that her statement that she would have convicted without the questioned evidence ought to be examined with care. On that we agree. When such material matters are wrongly admitted in evidence, there is an error of law of such proportion that it seems to us the appeal must be allowed subject to whether this Court must apply the proviso.

The proviso

18. It is to that that we now turn.

19. The issue for our determination is this: would any judge, faced with the admissible evidence and relying upon it only, have inevitably convicted the appellant of these offences?

20. The fact that the judge says that she would have done so is, of course, not conclusive. But it is a matter that we can bear in mind. She was the seeing and hearing judge.

21. We consider the evidence against the appellant to be wholly conclusive. It amounts to this. He received money into his account from a customer of his employer. None was returned. He had no authority from his employer to receive that money. He admitted overpricing to that customer. He said that he had only received a cash cheque which had been handed to or shared with Ng who left in November 1992. However, he also said that Mak had accounted for these matters up to June and that if Miss Lau was going to continue the arrangement, she should make calculations thereafter. This, of course, covers the period of the cheques.

22. Then, his explanation for receiving and handling the money in all the circumstances was bordering on the ridiculous. The judge herself rejected that explanation having considered it.

23. The applicant gave no evidence to refute any inference that might be drawn from those matters. The inference that those cheques were received by the appellant as bribes and as an inducement to, or reward for, or otherwise on the account of his doing or having done an act in relation to his principle's affairs or business, namely, the purchase of belts from Permanent, is, it seems to us, overwhelming. In those circumstances, it is our duty to apply the proviso. We do so. The appeal is dismissed.