HKSAR v. CHIU PUI WAN

CACC191/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL JURISDICITON

CRIMINAL APPEAL NO.191 of 1999

(On Appeal from DCC 1040 of 1998)

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J U D G M E N T

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Woo J : (delivering the judgment of the Court)

1. This is an application for leave to appeal against both conviction and sentence.

Conviction

2. The Applicant was convicted after trial by District Judge Chua of 34 charges of procuring the execution of a valuable security, contrary to s. 22(2) of the Theft Ordinance, Cap.210. The valuable security in each of the charges was a cheque, the execution of which the Applicant was charged to have dishonestly procured. The cheques were made out to Sing Wan Trading Company ("Sing Wan") by her employer, the China International Travel Service Hong Kong Ltd ("the Company"), by her falsely representing on the cheques verification forms that they related to a genuine contract between Sing Wan and the Company. The charges span a period between 26 August 1993, that was in respect of the 1st charge, and 8 April 1998, regarding the 34th charge.

3. The following are the facts of the case which had either been formally admitted by the Applicant pursuant to s.65C of the Criminal Procedure Ordinance, or are derived from the undisputed evidence presented in court. The Applicant joined the Company as a clerk in 1987. She worked under PW1 Mr Ma Pei-min, in the Japan department of the Company when he was seconded to Hong Kong from China in 1991. Under him, she received two promotions in 1995 and 1997. She was made manager of that department in 1995 and was responsible for making reservations of hotels and air tickets for Janpanese customers travelling to China.

4. Two of the Company's largest clients were the Japan Travel Bureau ("JTB") and Orient Network Hong Kong Limited ("ONHB"). They were permitted several months' credit to settle their account with the Company. It was part of the Applicant's duties to handle the orders from these companies.

5. Towards the end of 1997, PW2, a Miss To Han, the Assistant Accounts Supervisor of the Company's finance department, became concerned that JTB still owed the Company some $3 million. She initiated investigations with JTB. It was not until May 1998 that JTB claimed a February 1998 bill was wrongly invoiced to them by the Applicant. Further investigations showed that the Applicant had prepared, from 1993 to 1998, 135 cheque verification forms submitted to and signed by Mr Ma which were based on bogus transactions. She had submitted each of these for payment to Sing Wan.

6. The Company's cheques issued to Sing Wan based on the said forms were handed to the Applicant. These cheques were taken by the Applicant's acquaintance, one Miss Lo Wai-sheung, or by the Applicant to PW7, Chan Sin-ping, the owner of Sing Wan. He was paid $100 to $200 to process each cheque into Sing Wan's bank account and gave either Miss Lo or the Applicant a bearer cheque for a like amount. For the most part, Sing Wan's cheques were then paid into a savings account which the Applicant had opened in the name of her mother, Lam Siu-fong. It was not disputed that Sing Wan had never performed anything or provided any service to the Company.

7. The 34 charges were sample charges.

8. The Judge also dealt with the defence of the Applicant. The defence was that it was Mr Ma who asked her to employ the scheme. That was a method practised with the agreement of senior management of the Company to provide cash which could be used to provide gifts and entertain clients and travel agents of the Company that the Company did business with. The excess was distributed to all staff members of the Japan department by Mr Ma, although the Applicant never knew what each received. Mr Ma would direct the Applicant to collect cash from her mother's account which she handed to him. The scheme also kept the projected target of profits within reasonable bounds; otherwise, as the target increased yearly, it placed an undue burden on the staff to meet each new year's target.

9. While initially the thought did occur to the Applicant that such a scheme was dishonest, she later concluded that it was not because Mr Ma had told her it had the knowledge and consent of the senior management of the Company. She later became convinced this to be so, because not once in the five years she had carried on as Mr Ma had asked did anybody in the finance department query the validity of her cheque verification forms and over $4 million worth of cheques were obtained in this way.

10. The Judge approached the case by assuming that the scheme as described by the Applicant existed and that both Mr Ma and Miss To were party to it. The Judge then asked the question : where did this leave the Applicant? Did the Applicant genuinely think what she did in the scheme was honest? Applying the test in R v Ghosh [1982] 1 QB 1053, the Judge concluded that the scheme would be perceived, according to the ordinary standards of reasonable and honest people, as dishonest. The Judge was also convinced beyond reasonable doubt, on the evidence presented to her, that the Applicant must have known what she was doing was, by those standards, dishonest. The Judge rejected everything said by the Applicant in her defence. The Judge then said :

" Evidence of the surreptitious way the cheques went to pay Sing Wan before the money was paid into her (that is the Appelicant's mother's) bank account, specifically opened by the defendant for the purpose, before cash was withdrawn or transferred into her own bank account, constituted compelling evidence to show, whether such a scheme existed or not, that the defendant knowingly and dishonestly acted over the five years to defraud the company. In my judgment, she took advantage of the trust Mr Ma had in her and the lax controls existed in the company to devise a way for her to obtain cheques from the company for that time. She cunningly covered up her acts by sending invoices to JTB and ONHB, companies which not only were given credit but also never queried the false invoices sent to them."

And she went on :

" I am satisfied there was no such conspiracy or scheme. The defendant acted alone, although for a time she was assisted by Lo Wai-sheung, in cashing the cheques at Sing Wan before Lo emigrated to the United States of America."

11. The Judge then dealt with the additional evidence of the Applicant's confessions. This is where the Applicant started to challenge before us. The first ground of appeal is in relation to the oral admission made by the Applicant to PW1, that is Mr Ma Pei-min, in the Company in which they worked upon the discovery of the theft.

12. The first ground of appeal reads :

"The learned trial judge erred in that she wrongly admitted into evidence oral admissions allegedly made by the Applicant, having disallowed a subsequent written confession in similar terms as being involuntary, without considering the issue of voluntariness in relation to the said oral admissions."

Regarding that, the Judge had this to say in her Reasons for Verdict :

" I am satisfied beyond reasonable doubt when the investigations pointed to the defendant Mr Ma saw her in his office on 12 May and that she had immediately admitted to him she had taken all the money. No allegation of involuntariness was made with regard to this piece of evidence, merely that she had made no such admission. I had therefore at the end of the voir dire ruled this evidence admissible.

I had, however, disallowed the written confession she wrote subsequent to this oral admission at the instigation of Mr Ma and Miss Cheong Woon-ting of the company's finance department. Both persons were persons in authority and, on Mr Ma's evidence that they more or less directed her to write it, I was not satisfied beyond reasonable doubt that the defendant felt at the time she had a choice in the matter."

13. It is wrong to say that the Judge disallowed the subsequent written confession in similar terms as being involuntary. What she said about the written confession was that she was not satisfied beyond reasonable doubt that the Applicant felt at the time she had a choice. On that erroneous basis, the Applicant argued that the Judge should have considered the issue of voluntariness in relation to the oral admission.

14. In R v Lee Fat [1969] HKLR 349, Huggins J., delivering the judgment of the Full Court, said at p.352 :

"There is no doubt that if an accused person expressly states that he does not object to the admission of a confession the judges require only a scintilla of evidence to satisfy them that the confession was voluntary. If, therefore, an objection is taken founded upon a story which is disbelieved is the judge entitled to find upon a like scintilla of evidence that the confession was voluntary? We think the answer must depend upon the facts of the particular case. Where there is nothing more on the record (nothing, that is, other than the rejected story of the accused) which tends to show that the confession was not voluntary the judge would be entitled (though not bound) to act upon the slightest evidence which could satisfy him beyond reasonable doubt that the confession was voluntary. However, where there is other evidence tending to show that the statement was not voluntary we think it is incumbent on the judge to consider it, whether it is expressly relied upon by the defence or not."

15. In Thongjai & Anor v R [1997] 2 HKC 109, 116E-G, an appeal from Hong Kong to the Judicial Committee of the Privy Council, Lord Hutton said :

"... Therefore where the prosecution alleges that the defendant made an oral admission, and the case is raised on behalf of the defendant that he did not make the oral admission and that he was ill-treated by the police before or at the time of the alleged admission, two issues are raised which are not mutually exclusive. The first issue, which is for the judge to decide, is whether, on the assumption that the alleged admission was made, it is inadmissible as being involuntary. The second issue, which is for the jury to decide if the judge rules that the alleged admission is admissible in evidence, is whether the admission was in fact made."

Lord Hutton referred to the following part of the judgment of the Court of Appeal in the R v Cheung Hon Yeung [1993] 1 HKCLR 292 where Macdougall JA said at p.304 :

"Where an accused person denies that he made an oral admission at the time of arrest, and alleges that he made an involuntary written admission after the police officer concerned had made a post recording of the earlier non-existent oral admission, it is then the function of the judge to hold a voir dire to determine whether the written admission made was made voluntarily.

Although, in the process of doing so, the judge will almost invariably hear evidence as to all the circumstances leading up to the making of the written admission, including those of the making of the alleged earlier oral admission, no issue as to the voluntariness of the oral admission can arise. Since the accused contends that he did not make the oral admission he cannot be heard to say that it was involuntary. The only issues that arise in respect of the alleged oral admission are, first, whether it was made and, second, if so, what weight should be given to it. ..."

Lord Hutton commended on the cited passage in these words, at p.121 of Thongjai :

"In the context of the case where, as Macdougall JA stated, there was no suggestion by the defendant of threat or inducement or other impropriety by the police at the time of the alleged oral admission, it was correct for Macdougall JA to state that the only issue was whether the oral admission had been made, and, if so, what weight should be given to it."

16. The Judge was extremely careful and ruled out the written confession as she was not satisfied beyond reasonable doubt that the Applicant had a free choice. That apparently did not apply to the oral admission because the factual basis of the written confession, that Mr Ma more or less directed the Applicant to write it, was not present. Moreover, the Applicant did not make voluntariness of the oral admission an issue, and therefore what the Judge concentrated on was whether the Applicant did make the oral admission to Mr Ma that she had taken all the money.

17. From the cautious manner that the Judge approached the confession made by the Applicant in her Company and in the police station, she must have satisfied herself that the oral admission was voluntarily made. She said, if we may be excused for repeating, "I am satisfied beyond reasonable doubt when the investigations pointed to the defendant Mr Ma saw her in his office on 12 May and that she had immediately admitted to him she had taken all the money. No allegation of involuntariness was made with regard to this piece of evidence, merely that she had made no such admission. I had therefore at the end of the voir dire ruled this evidence admissible." We do not see that her approach and her admission in evidence of the oral admission can in anyway be faulted.

18. The second ground of appeal is this :

"The learned trial judge erred in admitting into evidence the second record of interview of the Applicant to the police (Exhibit P39), having ruled as involuntary the first record of interview of the Applicant to the police in that information obtained in the first interview was used during the course of the second thereby tainting the second interview would be voluntariness of the first."

This is an even weaker ground. On this the Judge said :

" ... there were two disconcerting matters regarding the first police interview conducted by PW8 on her arrest that influenced me to rule that record of interview inadmissible. The interview took five hours from about 8 pm. PW8 did not dispute the fact that at no time did he ask the defendant whether she would like a drink or something to eat. He also did not provide her with a notice to persons in custody till after the interview was completed.

The next interview of the defendant took place on 22 May. It was done by PW9 who was from a different team which had taken over the investigations from PW8's team. On the evidence before me, I judged that the interview was conducted fairly and properly. The prosecution having proved beyond reasonable doubt the defendant wrote her answers without any influence, coaching, coercion or inducement from PW9, I admitted it in evidence as Exhibit P39.

While I was satisfied PW9 never promised the defendant she could have bail on the completion of the subsequent interview he conducted on 23 May, I found myself not so convinced PW10, Sergeant 11739, had not mentioned bail at all to the defendant's sister in the defendant's hearing during the house search before that interview. Allowing for the possibility that this may have influenced her to co-operate, I ruled this record of interview also inadmissible.

I see no reason not to give full weight to the admissions that she made to Mr Ma and the admissions in Exhibit P39. I regard them as true, including the method she dishonestly employed to obtain the company's cheque (see Exhibit P39)."

19. We accept the submission of Mr Wong, for the Respondent, that if an arrested person had been assaulted or threatened to make a confession, and on those grounds the confession is ruled inadmissible, it is always open to the Court to find a subsequent confession tainted by the impropriety as found. The first police interview was excluded not because of involuntariness but rather on the ground that the Judge was not satisfied with the related officer having fully compiled with the spirit of the Rules and Directions for Questioning of Suspects issued by the Secretary for Security, wherefore she exercised her residual discretion to exclude the evidence.

20. The record of the third interview was excluded because the Judge was not convinced that there was no mentioning of bail by PW10 as a possible inducement to make the evidence admissible.

21. The circumstances surrounding the making of the records of the first and third interviews were quite different from and had no connection whatsoever with the basis upon which the record of the second interview was ruled voluntary and admissible. The first interview was conducted by PW8 but the second interview was made by PW9, an officer from a different team which had taken over the investigation from PW8's team. The Applicant argued that since the information obtained in the first interview was used during the course of the second interview, the involuntariness of the first tainted the second. This argument is fallacious on its factual basis because the record of the first interview was only excluded for failure to comply fully with the Rules and Directions, not for involuntariness. While the District Judge was satisfied beyond reasonable doubt that the second interview was conducted fairly and properly, and the Applicant made her confessions during that interview voluntarily, whether part of the information used during the second interview was derived from the first interview does not, in all the circumstances of this case, matter, for the Applicant was found to have given further information in the second interview voluntarily.

22. Moreover, the Judge did not appear to have solely relied on the oral admission or the confession made in the second interview to convict the Applicant. She described these confessional statements as "Additional Evidence of the Applicant's Admissions". It is apparent from her verdict that there was sufficient evidence for her to convict without the confessional statements.

23. It was not disputed that the cheques, the subject of the charges, had been drawn by the Company as arranged by the Applicant. Her case was that it was Mr Ma who asked her to do so. She was but carrying out a scheme instigated by Mr Ma and what she did was with the agreement of the senior management of the Company. The only real issue at the trial was whether she was dishonest in those transactions. The Judge was satisfied that there was no such conspiracy or scheme. She applied the test in R v Ghosh and concluded that there was compelling evidence to show "whether such a scheme existed or not, that the defendant knowingly and dishonestly acted over the five years to defraud the company." The Judge reached the same conclusion even when she approached "the case by assuming, for the moment, that such a scheme existed as the defendant contends, and that both Mr Ma and Miss To were party to it."

24. In the circumstances, all the grounds of appeal against conviction fail. The application for leave to appeal against conviction is dismissed.

Sentence

25. Now we turn to sentence. For each of the charges of which the Applicant was found guilty, the Judge imposed a sentence of four years' imprisonment. Taking a global view of the 34 offences, she ordered that all the sentences to run concurrently.

26. The complaint about sentence is that the Judge did not take into account, for mitigation, the possible repayment of the money by the Applicant to the victim. The Judge said :

"After her conviction, sentencing was adjourned to arrange the sale of the properties or transfer, so as to make restitution to the company, which would go by way of mitigation today. Mr Paul WU who appears for her has submitted a draft consent order in connection with the civil High Court case. This is yet unsigned."

"... any intention to make restitution seems to come late and still has not been done. She made her admissions to Mr Ma, her immediate superior on 12 May 1998 and took no step whatsoever in that direction."

27. There is now evidence adduced by way of an affirmation of the Applicant that on the date of sentence, 17 March 1999, the draft consent order had been signed and it was perfected on the same day in the High Court under the civil proceedings in which the employer sued the Applicant for the sums stolen by her. The information now available before us, which was not before the Judge, showed that the Applicant was attempting to make amends to her employer by way of consenting to the order and allowing the cash in all her bank accounts to be paid over to the employer. She has further allowed her two properties to be sold in order to reduce the balance of the judgment sum in the civil action.

28. In R v Kwok Lai-ling [1989] 1 HKLR 408, Macdougall J. (as he then was) delivering the judgment of the Court of Appeal said at p.420D-F :

" ... we do not consider the judge was under any obligation to take [an offer made before sentencing date to make restitution] into consideration for the purposes of sentencing. The significant fact was that restitution had not been made. A mere promise to make restitution may be broken as easily as it is made. However, actual restitution made voluntarily before criminal proceedings have commenced, or while they are in their earlier stages, may have some relevance to sentencing as evidence of remorse. On the other hand, where it appears to have been made merely in the hope of obtaining a reduction in sentence, it can no longer be seen in that light. The courts do not make bargains with the convicted which have the effect of allowing them to buy themselves out of the penalty for their crimes."

29. In R v Choi Sze Fai, Cr App No.192 of 1994 (31 March 1995, unreported), the former Chief Justice said as follows :

" As to sentence, the applicant added a further point that full restitution had been made but we are of the view that the judge was right in giving little consideration to that factor because restitution was made at the very last minute."

30. Mr Matthews referred us to R v Yip Muk Kan [1998] HKC 868, where Macdougall J. gave judgment on an appeal from a Magistrate's decision. After referring to the above cited passage from Kwok Lai-ling, he said at p.870D-G as follows :

" During the course of the present hearing I was informed by counsel that the appeal had originally come before another judge, but had been adjourned in order to enable the appellant to attempt to raise funds to make restitution. The appellant has taken advantage of the opportunity afforded to him and has now made restitution in full to the victim.

Although the judge did not actually tell the appellant that if he succeeded in making restitution his appeal would receive favourable consideration, the very adjournment of the hearing to enable him to do so necessarily gave rise to that unmistakable implication. With the greatest of respect to the judge this implicit bargain should never have been struck.

The fact is, however, that the appellant has carried out his part of a bargain sanctioned by a court. In my view it would be wrong and would give rise to a justified sense of grievance if the appellant's reasonable expectation that his appeal wold receive favourable consideration were not fufilled."

31. The Judge made clear that she sentenced the Applicant only for the 34 charges of which she was convicted. These 34 charges represented something over $2 million, spanning a period of nearly five years, from 26 August 1993 to 8 April 1998. There were in fact 135 occasions when the Applicant submitted cheque verification forms to obtain cheques from her employer, and the total involved was $4,448,866, which was the subject of the civil claim made by the employer against her.

32. The fraud perpetrated by the Applicant, even confined as it must be for the present purposes to a dishonest gain involving approximately $2 million, was by no means small. With the ill-gotten gains, she had purchased two flats, one in Hong Kong and one on the Mainland. The totality of the sentences passed by the Judge on the basis of a serious case of fraud and breach of trust of four years' imprisonment cannot, in any sense, be said to be excessive. However, bearing in mind that the consent order was, unbeknown to the Judge, in fact perfected on the very day on which sentence was passed, and that the Applicant was all along dealing with the civil claim that had been brought by the employer against her earlier than the trial before the Judge in a co-operative manner in order not to cause trouble or delay to the employer, we are of the view that all these circumstances are indicative of remorse. Although the cash that had been paid over to the employer by the Applicant and the value of two properties now to be sold for offsetting the judgment debt would not fully pay for that debt, we are of the view that what the Applicant has done regarding the civil action demonstrates that she has gone some way towards making restitution possible. While no criticism can be made of the Judge in the Court below for having made no adjustment of sentence in the light of what must have appeared to be late promises of restitution, we are prepared to extend some credit to her as a result of her co-operation. We consider that a total term of imprisonment of three years and eight months would be appropriate.

33. We therefore grant leave to the Applicant regarding sentence and treat it as an appeal against sentence. We allow the appeal and set aside the sentences imposed by the Judge and substitute therefor a sentence of imprisonment of three years and eight months for each of the 34 offences, to run concurrently with each other.