HKSAR v. CHUNG WING MING AND ANOTHER

HCMA247/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO.247 OF 1998

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

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

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

J U D G M E N T

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

1. This is an appeal against conviction by the 1st Appellant (originally the 1st Defendant) and the 2nd Appellant (originally the 4th Defendant) in a case in which five defendants were charged with conspiring together and with one Chui Fung Sin (PW1) to defraud the Protection of Wages on Insolvency Fund (the "Fund") by making false representations to the Commissioner for Labour that the 2nd defendant to the 5th defendant and PW1 were entitled to apply to him for ex gratia payments in respect of wages owed to them and to cause the Commissioner for Labour to make such payments.

2. The prosecution's case was that this conspiracy was entered into by all the defendants and PW1 some time in June or July 1996. At the trial of this case before the learned Magistrate, all five defendants were represented by solicitors. Much of the prosecution's evidence was agreed and put before the learned Magistrate by way of admitted facts under s.65C of the Criminal Procedure Ordinance, Cap. 221. Only one prosecution witness was called to give oral evidence, namely, Miss Chui Fung Sin.

3. From the admitted facts, there is no dispute that the 1st Appellant was the owner of two companies, namely, the Treasure Island Button Industry Limited ("TIBIL") and the Treasure Island Button Industry (HONG KONG) Limited ("TIBIL(HK)"). During May 1996 until 12th June 1996, all the other defendants, including the 2nd Appellant and PW1, were employees of TIBIL, after that date and until beyond August 1996, they had continued on the same employment terms with TIBIL(HK).

4. On 12th June 1996, TIBIL entered into liquidation as a result of a creditor's petition for winding up filed in May 1996, and that TIBIL(HK) had, by 6th June 1996, already been formed in anticipation thereof. On 13th June 1996, the 2nd to the 5th defendants and PW1 claimed from the Labour Department arrears of wages owed to them by TIBIL for the month of May 1996, as well as for the wages for 1st to 12th June 1996, and wages in lieu of notice for their dismissal by TIBIL. Declarations in support of their claims were signed by all of them either on 26th June 1996 or on 1st July 1996.

5. On 12th July 1996, the 1st Appellant verified to the Commissioner for Labour those information on the declarations by the others and supplied a statement of wages. On 26th July 1996, ex gratia payment cheques were issued to the 2nd to the 5th defendants as well as to PW1. These cheques were issued by the Fund as a result of such claims by them. PW1 received $9,849.03 for wages and $1,586.67 for wages in lieu of notice. The 2nd defendant received $24,622.58 for wages and $17,000 for wages in lieu of notice. The 3rd defendant received $8,690.32 for wages and $6,000 for wages in lieu of notice. The 2nd Appellant received the same amounts as the 3rd defendant, and the 5th defendant received $6,952.26 for wages and $4,800 for wages in lieu of notice. In each of these cases, the payment for wages covered the period from 1st May 1996 to 12th June 1996, and the total amount of ex gratia payment thus obtained amounted to over $94,000.

6. In the case of the 1st Appellant, there were six records of interview made by him under caution; and in the case of the 2nd Appellant, there were four records of interview made by her under caution. None of these cautioned records of interview were challenged before the learned Magistrate as to their admissibility into evidence. Indeed by consent of both the prosecution and the defence, all these cautioned statements, as well as those made by the other defendants were put into evidence before the learned Magistrate.

7. It was not disputed that the 1st Appellant had paid sums to each of PW1 and the 2nd to the 5th defendants from his own personal account in June 1996. The one issue before the learned Magistrate was whether such sums paid by the 1st Appellant to each of PW1 and to the 2nd to the 5th defendants were personal loans by him to them as contended for by the defence, or whether these payments were the salaries for May 1996 as alleged by the prosecution. It was in respect of this issue that PW1, Chui Fung Sin, was called to give evidence.

8. Her evidence was that she joined TIBIL in March 1996, and it was only on 12th June 1996 that she realized TIBIL was to be wound up when officials from the Official Receiver attended her workplace. On 6th June 1996, before she knew of the impending winding up, her salary cheque for May 1996 was given to her by one Cindy Wong, a clerk in the accounts department and she signed for it in the normal way as she did on other months. She agreed that the cheque was drawn on the 1st Appellant's personal account rather than on TIBIL's bank account, and agreed that it was for an amount of $6,686.70 rather than for $6,800, which was her monthly salary. She explained that from time to time there would be deductions from her salary when she took sick leave. She refuted suggestions made to her in cross-examination that her salary cheque had been paid to her as a personal loan by the 1st Appellant, or that she had asked the 1st Appellant for a loan in respect of the non-payment of her salary, or that the 1st Appellant had ever mentioned that her salary could not be paid because the company account had been "frozen".

9. She was adamant that some time later the 1st Appellant had addressed her and the other employees, including the 2nd to the 5th defendants, telling them to make claims on the Fund for their May and June wages. She said she agreed to do so even though she knew it was wrong because she wanted to keep her job with the 1st Appellant. After that, she had accompanied the other defendants, i.e. the 2nd to the 5th defendants, to make claims from the Labour Department for unpaid wages for the months from 1st May to 12th June 1996. As a result of such claims, they later made declarations in support thereto. Eventually, as a result of such claim, she received a cheque for $11,435.70. After its receipt, she gave evidence that the 1st Appellant spoke to her and the other defendants, telling them that they should pay to him everything they received after deduction of their respective salaries for July 1996. She also told the Court that she did not receive any payment of salary for July except what she had deducted from the ex gratia amount. That was done at the request of the 1st Appellant.

10. The learned Magistrate found PW1 to be a frank and truthful witness and accepted her evidence as being reliable generally, although her memory was not at times, in relation to details. Neither the 1st Appellant, nor the 2nd Appellant, nor for that matter any other defendants, gave evidence, and no witnesses were called by the defence. The learned Magistrate considered the explanations given by the 1st Appellant in his six cautioned statements and found not only were his answers prevaricated and explanations delayed, but also there were numerous contradictions in many of his answers. The learned Magistrate came to the conclusion that the 1st Appellant's answers were calculated to avoid the truth and quite unreliable. Ultimately, the learned Magistrate came to the conclusion that the version of events contained in all of the 1st Appellant's records of interview did not cast any doubt as to the truth of PW1's evidence.

11. Insofar as the 2nd Appellant's records of interview are concerned, she made a confession in her first interview and stated that it was the 1st Appellant who had taught her and the other staff to deceive the Fund. She knew that it was wrong but was afraid of being dismissed. She went on to admit in her first interview that the 1st Appellant had already paid her and her colleagues their salaries for May, but after the liquidation of TIBIL had been announced, he had told them to claim against the Fund. After the first interview which was on 27th May 1997, the 2nd Appellant attended the Police Station on 2nd June 1997 to retract what she had stated in the first interview. She stated that what she had said before was wrong for the payment to her in June 1996 was not as salary payment but a loan from the 1st Appellant.

12. The learned Magistrate found as a fact that what the 2nd Appellant stated in her first interview to be the truth, and it confirmed PW1's evidence insofar as it related to the 2nd Appellant. Ultimately, the learned Magistrate found the following facts proved beyond reasonable doubt :

(1) the wages of the 2nd to the 5th defendants, including the 2nd Appellant and that of PW1, had been paid to them for the month of May 1996 by the 1st Appellant on behalf of the employer;

(2) each of them, knowing this to be the case, the 2nd to the 5th defendants as well as PW1, at the suggestion of the 1st Appellant, had agreed to make claims for unpaid wages for May 1996 against the Fund;

(3) the learned Magistrate found that the 2nd to the 5th defendants had approached the Commissioner for Labour and made their individual claims resulting in payments being made to them in August 1996;

(4) the learned Magistrate also found as a fact that the 1st Appellant had supported these bogus claims when he was interviewed by the Labour Department;

(5) the learned Magistrate found also that in August 1996, the 2nd to the 5th defendants, as well as PW1, had each returned to the 1st Appellant, at his request, an amount exceeding their respective wages for May 1996 from the sums fraudulently received by them from the Fund; and

(6) the learned Magistrate found that the 1st and 2nd Appellants had agreed together and with other defendants and PW1 to fraudulently claim wages already received knowing what they had agreed to do was unlawful.

Upon these facts as found by the learned Magistrate, he convicted, inter alia, the 1st and 2nd Appellants of the charge they faced.

13. The 1st Appellant now appeals against his conviction on the grounds that there is no sufficient evidence upon which to found such conviction. In this context, he submitted that the amount paid by him by his personal cheque to the defendants and PW1 was a loan, and that the evidence of PW1 was not reliable.

14. Dealing with this point first, whenever there is conflicting evidence put before a Magistrate, it is always upon the Magistrate to resolve that conflict by making a finding of fact. It is a matter for the Magistrate what evidence he accepts or what evidence he rejects and which witness he believes after hearing and seeing all the witnesses. In this case, the learned Magistrate had taken into consideration all the matters that he properly should have considered before he arrived at the conclusion that PW1 was an honest and truthful witness and her evidence reliable. Based on that evidence, he made the finding that the payment to the other defendants and PW1 by the 1st Appellant, using his personal cheque in June 1996, was a payment for their salary for the month of May 1996.

15. On appeal, an appeal court would be slow to interfere with findings by the trier of facts. In this case, having gone through the entire record myself, I can see no reason for my upsetting the finding of the learned Magistrate.

16. A further point submitted to me this morning by the 1st Appellant was that even the staff of the Labour Department had told the defendants and PW1 to make a claim to the Labour Department for their wages. Based on the finding by the learned Magistrate, the difference between the staff of the Labour Department asking defendants and PW1 to make the claim and the 1st Appellant asking them to make a claim must be that the 1st Appellant well knew that their wages for May 1996 had been paid but not so the staff of the Labour Department. That underlines the difference between the 1st Appellant knowing that their wages for May 1996 having been paid, that action of his must be fraudulent.

17. Insofar as the 2nd Appellant is concerned, her appeal today is based on the grounds that her first record of interview under caution was not signed by her willingly. In her submission to me this morning, she had put forward that this statement was written out by the police and she was asked to sign without having a chance to read it before signing, and that only when she read it through again at home, having been given a copy of it, had she found out the content to be entirely wrong and suspected that it was concocted by the officers based on the evidence of PW1. That was in respect of her first interview statement. As a result, she returned to the Police Station to retract that statement.

18. However, when I look at her third interview statement, i.e. the one given on 17th June 1997, when asked at the very end of that interview why she had given conflicting versions on different occasions to the police in her first and second interviews, she answered :

"At that time, I was very frightened and I forgot or wrongly recollected many things. For this reason, what I had said was inconsistent. I recalled clearly afterwards."

That answer does not support what she submitted to me this morning to be the case. But quite apart from that, having, through her solicitor, admitted the admissibility of all four cautioned statements by her at the trial into evidence, it is not open for her now to dispute the admissibility of her first statement.

19. One further point that both Appellants this morning submitted was that their solicitor had not done the best for them in the defence of their case. However, at the same time, they agreed that they had accepted and followed the advice given to them by their solicitor at the trial before the learned Magistrate. That being the case, I cannot see that to be a ground of appeal.

20. Ultimately, having gone through the entire transcript and the Reasons for Findings as well as the verdict given by the learned Magistrate, I am of the view that the learned Magistrate had directed himself correctly and properly on every aspect of the law in his judgment. I can see no reason to interfere with that judgment.

21. Accordingly, the appeal by the 1st Appellant is dismissed, and likewise the appeal by the 2nd Appellant is dismissed.