OEI HENGKY WIRYO v. HKSAR

FACC No. 4 of 2006

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 4 OF 2006 (CRIMINAL)

(ON APPEAL FROM CACC NO. 109 OF 2005)

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J U D G M E N T

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Chief Justice Li:

1.  I agree with the judgment of Mr Justice McHugh NPJ.

Mr Justice Bokhary PJ :

2.  I agree with the judgment of Mr Justice McHugh NPJ.

Mr Justice Chan PJ :

3.  I agree with the judgment of Mr Justice McHugh NPJ.

Mr Justice Ribeiro PJ :

4.  I agree with the judgment of Mr Justice McHugh NPJ.

Mr Justice McHugh NPJ :

5.  This appeal gives rise to four questions that the Appeal Committee has certified as raising points of law of great and general importance.  They are:

(a)  Where the prosecution seeks to prove a conspiracy against A and B and where B is not before the court, are documentary records:

(i) which are seized from B’s premises; and

(ii) which are not proven to have been written by B or on his instructions admissible in A’s trial for any purpose other than to prove B’s participation in the unlawful enterprise alleged?

(b) Is the co-conspirators rule the only evidential route whereby documents found in B’s possession (and not connected to A) might become admissible against his alleged co-conspirator A?

(c) Having regard to the reasoning of the House of Lords in the UK decision of R v. Montila & Others[2004] 1 WLR 3141, does a proper construction of s.25(1) of the Organized and Serious Crimes Ordinance, Cap. 455, require the prosecution to prove that the relevant funds were, in fact, the proceeds of an indictable offence or is it enough to prove simply that the defendant knew or had reasonable grounds to believe that they were?

(d) Where a person has been convicted of an offence where:

(i) there is no victim; and

(ii) he could have arranged his affairs so that he could have undertaken the same activities in a legal matter,

are these factors which should be taken into account in mitigation?

6.  The Appeal Committee also ordered that leave to appeal be granted on the ground that it was reasonably arguable that substantial and grave injustice had been done to the appellant.

7.  The appeal is brought by Oei Hengky Wiryo (“Oei”), a native and resident of Indonesia.  He appeals against his convictions by Deputy District Judge Patrick Li (as he then was) on a charge of conspiracy to commit bookmaking, contrary to s.7(1)(a) of the Gambling Ordinance, Cap. 148, and two charges of “money laundering”, contrary to s.25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455. The money-laundering charges related to the proceeds of the bookmaking.  The Deputy Judge sentenced Oei to three and a half years’ imprisonment and fined him $420,000 (in default nine months’ imprisonment) in respect of the conspiracy charge.  He sentenced him to four years’ imprisonment and fined him $250,000 dollars (in default six months’ imprisonment) in respect of one charge of money laundering and one and a half years’ imprisonment in respect of the other charge.  The sentences were structured so that Oei would serve a maximum of five and a half years’ imprisonment.  Kam Susanto (“Kam”), the person with whom Oei was alleged to have conspired, was tried separately and convicted of illegal bookmaking and money laundering.  Kam was sentenced to four and a half years’ imprisonment.

The material facts – the conspiracy charge

8.  On 1 September 2001, police officers searched the home of Kam.  When they entered the premises, Kam was sitting on a sofa.   Next to him was a writing pad entitled “Topics” (Exh. P10).  The pad contained a number of entries.  On the cover of the back page was a list of telephone numbers divided into groups using letters of the alphabet as identification codes.  Documents appearing to record betting transactions (Exh. P13) were seized from a waste bin.  From a wall unit and other areas of the room where Kam was sitting were seized four pages of photocopied hand written notes (Exhs P20 and P20a) and a booklet entitled “European Football Fixtures 2001–2002”.  The police officers also found a laptop computer, mobile phones, pens and a calculator at the premises.

9.  On 3 September 2001, police officers searched an office where Kam worked and seized documents from a desktop and a drawer of the desk in a room which he used.  From the drawer, a police officer took five pages of documents and placed them together.  Four pages appeared to record bets on soccer events: they were the originals of the photocopies (Exhs P20 and P20a) found at Kam’s flat.  They had lengthwise folding marks; they had also been folded across the middle.   The fifth page bore the name: “Mrs Yenny”; this page was folded across the middle but not lengthwise.  At the trial of Oei, the page was referred to as “the Yenny note”.  The five pages became Exhs 24 and 24a.  The police officer who seized the five pages said that, as far as he could recall, they “were folded together halfway breadthwise.”

10.  The Yenny note bore the date 27.8.2001 in the top right corner.  The second line contained the notation “ATTN MRS YENNY”.   The rest of the note was as follows:

27.08.2001        Opening Balance	HKD 5,782,856
DRAW/ - ASK YENNY	HKD  195,500 (24/8)
DRAW/ SUSANTO  A/C	HKD  943,916
MASUK/ROGER  A/C	HKD  360,868
MASUK/TRASFER HK BANK	HKD  201,000
	HKD 5,205,308

11.  The prosecution tendered evidence to prove that sums matching two of the items in the Yenny note were paid into the Oei’s account with Hong Kong and Shanghai Banking Corp. (“HSBC”) and that Kam had paid a sum matching one of these amounts into the account of an unidentified person.  Mr Rod Sutton (“Mr Sutton”), an accountant, who examined the HSBC account and another account of Oei with the Hang Seng Bank (“HSB”), testified that Kam deposited the sum of $195,500 (matching a sum on the Yenny note) into account 258-127133-888.  However, the bank documents available did not reveal the name of the account holder.  Mr Sutton could find no trace of a sum of $943,916 in the accounts of Oei or Kam.  Mr Sutton said that, on 27 August 2001, Roger Ling Kwok-Wai (“Ling”) deposited a sum of $360,870 into Oei’s account with HSBC.  Mr Sutton said that he believed that was a rounding up of the third sum of $360,868.  He also testified that a cash deposit of $201,000 was paid into Oei’s account with HSBC.

12.  In the drawer where the five pages of Exh. P24 were found was a cheque book of Oei in respect of his account with HSBC.  The cheque book contained 30 blank cheques bearing the apparent signature of Oei.  The evidence also showed that Oei had given Kam’s address to HSBC as his address in Hong Kong.  Also in the drawer was a computer printout entitled “IndoSoccer” and a number of other documents piled together.  They included invoices, bank passbooks, letters and cheque books.  In addition, the office contained files concerned with trading documents and accounting records.

13.  A police officer, Sgt Ling Sai-Kei, an expert on gambling, identified the entries in Exh. P10 (the writing pad) as those maintained by a bookmaker or “teng jai”.  A “teng jai” is a bookmaker’s agent who earns commission by passing bets on to the bookmaker.  Sometimes, the “teng jai” offers the person placing the bet worse odds than those offered by the bookmaker, giving the “teng jai” a profit in addition to commission, if the bet is successful.

14.  Sgt Ling Sai-Kei gave the following expert evidence, which the learned trial judge accepted as correct.

(i) Bookmakers betting on soccer events keep telephone numbers, names of or codes for punters, names of teams, handicaps, stakes and odds in their records.

(ii) Bets are laid on credit, the credit period varying with individual bookmakers.  The settlement of bets usually takes place by means of a transfer between the accounts of the bookmaker and the punter.

(iii) The pages in Exh. P10 were betting slips.  The first and fourth pages recorded odds.  The second, third and fifth pages recorded bets.  The second page contained six columns.  The first column showed the identity code of a bookmaker or “teng jai” or a punter.  The second column showed the team that was the subject of a bet.  The third column showed the handicap.  The fourth column showed the odds and any discount given to the punter.  The fifth column showed the stake and the identity of the party laying the bet.  One unit represented $10,000.  The sixth column showed the amount payable or receivable.

(iv) A “tick” sign by the side of a bet indicated that the bet had been calculated.

(v) The first page of Exh. P10 (which recorded the odds) had six columns.  They showed the odds of the team, the name of the team, the handicap for the team, the name of the opposition team, the odds, the total of which should add up to 190% and the kick-off time for the match.

(vi) The parties coded as “H’ and “SUN” in Exh. P10 were bookmakers, the author of the exhibit was a “teng jai” who obtained commission irrespective of the outcome of the bet, and the other groups in the exhibit were punters.

(vii) The first three pages of Exh. P20 were copies of the first three pages of Exh. P24; the fourth page of Exh. P20 (i.e. Exh. P22) was a record of calculations.

(viii) The fifth page of Exh. P24 (the Yenny note) also recorded a calculation.

(ix) One group, “KM”, was betting with the author of Exh. P24 because there was no corresponding entries for the bookmakers “H” and “SUN”.  The entry S+2145 on the fourth page of Exh. P24 indicated that the author had won that sum.

(x) The amount of actual bets transferred to the bookmakers was greater than the amount of bets by punters which indicated that the author of the documents also had bets with the bookmakers.

Sgt Ling Sai-Kei said that he had checked the timetable of the Federation of International Football Association.  It showed that the matches recorded in Exh. P10 as the subject of bets were actual matches.

15.  Kam operated several bank accounts in Hong Kong, five of which the prosecution alleged were relevant to his bookmaking activities.  There were many transfers of moneys between Kam’s bank accounts and Oei’s two accounts.  Fourteen persons had banking transactions with both Kam’s and Oei’s accounts.  Two of them – Ling and Mok Siu-Kei (“Mok”) subscribed to telephone numbers that were recorded on the back cover page of Exh. P10.   Abbreviations identifying Ling and Mok’s telephone numbers on the back cover of Exh. P10 also appeared in the “betting” pages in that exhibit.

16.  Mr Sutton gave expert evidence concerning his investigation of transactions into Kam’s accounts and the two banking accounts that Oei had in Hong Kong.  In the period 1 January 1996 to 25 May 2004, Mr Sutton identified 1012 transactions concerning amounts equal to or greater than $50,000 in Oei’s accounts.  The deposits in Oei’s HSBC account totalled about $698 million and the deposits in the HSB account totalled about $25 million.  About $139 million, representing 9.6% of the value of the transactions, concerned transactions between Oei and Kam.  Kam had also paid about $16 million to an overseas account of Oei.  Before 1 September 2001, there were 126 transactions to the value of $70 million passing from Oei to Kam through his HSBC and HSB accounts.  Only three transactions totalling $150,000 took place after that date.  Before 1 September 2001, there were 99 transactions to the value of $84 million from Kam to Oei.  There was no transaction from Kam to Oei after that date.  Cheque transactions represented 15.6% and telephone banking transactions represented 82.6% of the value of the transactions.  Mr Sutton was unable to identify the amounts in the “betting slips” taken from Kam’s home or office with transactions in the bank statements of Oei.

17.  Mr Sutton was unable to find any document supporting the transactions as legitimate business transactions; nor could he find any evidence that Oei owned any business in Hong Kong.  Furthermore, no transaction in the bank documents related to Oei’s employer, PT Bunka Panca Karya.  Mr Sutton said that he could not find any tax return of Oei from information furnished by the Inland Revenue Department.

18.  Oei did not give oral evidence but tendered three documents, none of which has any relevance for present purposes.

The trial judge’s material findings

19.  The learned trial judge found “that the Yenny note was connected with other parts of Exh. P24.  It was a record on the calculations of accounts related to bookmaking activities”.  His Honour also found that the telephone list on the back of Exh. P10 “related to bookmaking activities as revealed in Exhs P10 and P24”.  He was “sure” that Sgt Ling Sai-Kei was a reliable expert witness and accepted his evidence that the author of Exhs P10 and P24 was a “teng jai”, that is, the agent of a bookmaker.  He also found that those exhibits contained betting slips and records of odds.  His Honour concluded that the only reasonable inference to be drawn was that the author was “receiving bets from punters and transferring them to ‘H’ and ‘SUN’, the bookmaker (sic) according to” Sgt Ling Sai-Kei.  The learned judge said that “the only reasonable inference was that the author was involved in a bookmaking business”.

20.  His Honour found that the Yenny note “was connected with bookmaking activities as it was kept together with the betting slips” but that there was no evidence that Kam was the author of Exhs P10 or P24.   However, His Honour said that Kam had made “one payment of $195,500 on 24/08/01” and that “payment showed that Kam was settling the accounts linked with bookmaking”.  His Honour concluded that the “possession of betting slips and photocopies of betting slips at home and in his office, coupled with the nature of these betting slips, supported the only reasonable inference that Kam actively assisted the author of Exhs P10 and P24 in receiving and settling bets”.

21.  His Honour also found that, although there was no direct evidence that Oei had signed the 30 blank cheques found in Kam’s possession, the “irresistible inference [was] that they were signed by [Oei]”.  His Honour also found that, because some of the cheques which had been issued from that book were issued when Oei was not in Hong Kong, the “only reasonable inference was that Kam issued the cheques on [Oei’s] behalf”.

22.  His Honour also accepted Mr Sutton’s calculation that the two sums referred to in the Yenny note were deposited into Oei’s HSBC account and that “[c]oincidentally, one of the sums which was deducted from the opening balance was paid by Kam to another account”. 

23.  His Honour also pointed to the fact that, on 18 June 2001, Oei had paid $376,385 by cheque to Ling, a person whose telephone number was on the back cover of Exh. P10 which was connected with bookmaking activities and that Ling had deposited $360,870 to Oei’s HSBC account on the 27th August 2001.  Earlier, on 13 March 2000, Ling had deposited $809,532 by cheque into Oei’s account.

24.  His Honour found that documentary evidence linked six other persons with Oei and Kam.  Between September 1997 and April 2001, Leung Kin Hong, whose name was recorded with the betting activities shown in Exh. P10, had 102 transactions with Oei through his bank accounts.  These transactions showed deposits of $10 million and payments of $50 million to and from Oei’s HSBC account.  Oei had also issued a cheque in the sum of $891,900 to Mok, whose name was connected with the bookmaking activities shown in Exh. P10.  Documentary evidence also showed transactions involving large sums of money between Oei’s accounts and the accounts of persons referred to in a telephone book (Exh. P31) kept by Kam.  Thus, Oei had issued two cheques totalling $1,050,000 to Chan Wai Yip, had paid $1.9 million to and received deposits of $3.4 million from Panji Pan Putra, had paid $3 million to and received $2.4 million from Weng Xu Wen and had paid $1.7 million to and received deposits of $11 million from Wong Hong Meng.  The evidence had to “be assessed in the light that there was no evidence that [Oei] owned a legitimate business in Hong Kong”.  Nor was there any income tax return filed by Oei or any document supporting any transaction relating to the employer of Oei.

25.  His Honour found that the transactions showed “that there was very close financial link between [Oei] and Kam at the material times of the first charge.”  His Honour said that the “findings in relation to the ‘Yenny note’ showed that [Oei] and Kam were acting in concert in settling accounts in connection with bookmaking activities”.  His Honour went on to say:

“26. The various payments by [Oei] to persons linked to the telephone list on the back cover page in Exh. P10 showed that [Oei] and Kam were connected with the bookmaking activities as revealed in the betting slips in Exh. P10 and P24.  For the reasons stated in the analysis in paragraph 11 above, I reject the argument that the author of Exh. P10 and P24 was only a conduit of bets or a punter.  It follows that Kam and [Oei] cannot be so either.

27. The evidence showed that the receipt and settling of bets took place in Hong Kong.  [Oei] was settling bets for a bookmaker through his accounts in Hong Kong.  This conduct already amounted to bookmaking in law at the material time of the first charge.  The fact that the ultimate bookmaker might be overseas cannot [be] of any assistance to [Oei].  By receiving and settling bets in Hong Kong, [Oei] had committed illegal bookmaking in Hong Kong.”

Court of Appeal

26.  The Court of Appeal dismissed an appeal by Oei against the three convictions.  The judgment of the Court was given by McMahon J.   The Court said that, if Kam’s documents were produced on the narrow basis that they were the sort of records kept by a bookmaker and were part of a bookmaker’s paraphernalia, then they were not being used as proof of the truth of the matters asserted in their contents.  On that basis, no question of their use as hearsay evidence arose.  After examining the reasons of the trial judge, the Court of Appeal concluded that he had not used the documents as hearsay evidence when he came to consider the case against Oei on the conspiracy charge.  The Court said:

            “24.            In our view, it is clear from a careful reading of the judge’s comments that his detailed reference to the various matters appearing on the face of the documents such as the amount of commission and the differential in discounts, when taken in context, were simply matters taken into account by him in determining the nature of the documents and forming his view as to whether [Sgt Ling Sai-Kei] was correct in concluding that the documents were genuinely those made by a ‘tang chai’.  That is not to use the documents as proof of the truth of their contents.”

27.  The Court of Appeal noted that the judge had taken into account connections between the transactions and Oei’s bank accounts and references to persons or account numbers referred to in the bookmaking documents, including “the Yenny note”.  However, the Court held that, in doing so, the judge was doing nothing more than relying upon that evidence to show a connection between the operation of Oei’s bank accounts and the bookmaking documents.  It went on to say:

“33. Establishing a co-incidence between what is said in a document and some act of an individual (in this case, the operation of bank accounts) is evidence of a connection between that individual and the documents.  It certainly does not mean the contents of the documents are used to prove the truth of what they assert.  Rather their contents, whether true or false are, because of what is said, connected to the individual as a step along the way to establishing, perhaps, his knowledge, use or other involvement with them.”

28.  The Court said that:

“… at no stage did the judge as against [Oei], or indeed in any other way, purport to use the contents of the bookmaking documents as hearsay evidence.  For that reason, the co-conspirators’ rule quite simply never arose for consideration.” 

The prosecution case

29.  At the trial, in the Court of Appeal and in this Court, the prosecution eschewed any reliance on the documents as evidence of the truth of the facts contained therein.  The prosecution case was summarized in a document that was handed to this Court in which it relied on five matters as establishing the case against Oei.  They were:

“(a) that Kam was involved in a bookmaking business (based upon the bookmaking records and other evidence of the circumstances of his arrest and bank accounts);

 (b) that [Oei] was involved in business with Kam;

 (c) Kam had no other significant business, which could generate such a large volume of monetary transfers other than bookmaking;

 (d) [Oei] authorized Kam to make withdrawals from his HSBC bank account by giving Kam pre-signed cheques;

 (e) [Oei] was apprised of and acted upon the monetary transfers to and from his own bank accounts.”

30.  The prosecution contended that, in tendering evidence of the documents seized from Kam’s home and office, it did not breach the hearsay rule.  Nor did it need to rely on the co-conspirators’ rule.   Under the co-conspirators’ rule, the acts and utterances of an alleged co-conspirator done or made in furtherance of the common purpose of the conspiracy are evidence against another accused charged with that conspiracy if there is reasonable evidence apart from those acts and utterances that the accused was a participant in the conspiracy: Ahern v. The Queen (1988) 165 CLR 87 at 100.  The prosecution argued that, it did not have to rely on the co-conspirators’ rule because tender of the documents, as evidence against Oei, was supported by another principle expressed by the High Court of Australia in Ahern v. The Queen (1988) 165 CLR 87 at 93 where the Court said:

“In conspiracy cases a clear distinction is to be made between the existence of a conspiracy and the participation of each of the alleged conspirators in it.  Conspiracy is the agreement of two or more persons to do an unlawful act or to do a lawful act by unlawful means and it is the fact of the agreement, or combination, to engage in a common enterprise which is the nub of the offence.  This fact can seldom be proved by direct evidence of the making of an agreement and must in almost all cases be proved as a matter of inference from other facts, that is to say, by circumstantial evidence.  For this purpose, evidence may be led which includes the acts or declarations of one alleged conspirator made outside the presence of the others provided such evidence is not led to prove against the others the truth of any assertion or implied assertion made by the actor or the maker of the statement.  It may take the form of evidence of separate acts or utterances from which the fact of combination might be inferred.  Led in that way, it is not hearsay and is not dependent upon some circumstance to take it outside the hearsay rule, such as an implied authority making the acts and words of one the acts and words of the other.”

31.  The accuracy of this statement of principle is not open to doubt.  Hence, it follows that the documents found in the office and home of Kam – Oei’s alleged conspirator – could be admissible against Oei to prove the conspiracy alleged and his part in it as long as they were not tendered to prove against Oei “the truth of any assertion or implied assertion made by” the author of the documents.  Whether they were admissible on this limited basis depends on whether the documents – although not themselves proving the truth of the entries they contained – in conjunction with other evidence tended to prove an issue in respect of the charge of conspiracy.

Defence submission

32.  Mr Jonathan Caplan QC, who appeared for Oei in this Court, contended that the documents seized from Kam’s possession might be admissible in an attempt to prove that Kam was a party to the conspiracy alleged but, even in that situation, the documents had no evidentiary value or relevance so far as Oei was concerned unless they had been admitted under the co-conspirators’ rule.  Mr Caplan QC contended that the documents found at Kam’s premises gave rise to a number of possibilities.  They included:

(i) that Kam and Oei and/or others were engaged in some kind of legitimate business that was not involved with gambling;

(ii) that Kam was involved with others in illegal gambling but not with Oei;

(iii) that Kam was involved with Oei and/or others in legal gambling in that bets were being accepted off-shore from persons in Hong Kong; and

(iv) that Kam and Oei were engaged in illegal bookmaking.

33.  Mr Caplan QC further contended that, even if the documents were admissible for a non-hearsay purpose, the learned trial judge had taken into account the “facts” stated in the documents – including the Yenny note – even though the Court of Appeal had held that this could not be done. 

The hearsay rule

34.  Acceptance of the defence case rests on the propositions that the documents seized from Kam’s premises had no evidentiary value in relation to Oei because, as against him, they were hearsay and were not admissible for any relevant non-hearsay purpose and that, even if they were admissible for a non-hearsay purpose, the trial judge breached the hearsay rule by making use of their contents.  The submissions of the parties raise important questions concerning the hearsay rule, the extent to which the contents of documents can be used to determine their nature and the extent to which, if at all, their contents can be used in conjunction with other facts to make inferential findings of fact.

35.  As Lord Reid pointed out in Myers v. Director of Public Prosecutions [1965] AC 1001 at 1019:

“It is difficult to make any general statement about the law of hearsay evidence which is entirely accurate.” 

However, a reasonable working definition of the hearsay rule is that an oral or written assertion, express or implied, other than one made by a person in giving oral evidence in court proceedings is inadmissible as evidence of any fact or opinion so asserted.  (Cf. R v. Kearley [1992] 2 AC 228 at 254 and 259 and R v. Sharp [1988] 1 WLR 7 at p.11, where the House of Lords approved the formulation of the rule in similar terms in the then edition of Cross on Evidence.  However, the definition in Cross did not refer to opinions or to implied assertions, both of which are capable of infringing the hearsay rule.)

36.  In many situations, the hearsay rule excludes the use of evidence that people would act on in making decisions in ordinary life.  As Diplock LJ pointed it out in Jones v. Metcalfe [1967] 1 WLR 1286: “The hearsay rule has little to do with common sense.”  Nevertheless, it is a fundamental common law rule, one of whose objects is to ensure that only reliable evidence, tested by cross-examination, is put before the tribunal of fact.  In Teper v. The Queen [1952] AC 480 at 486, Lord Normand, giving the Advice of the Judicial Committee, explained the rationale for excluding hearsay evidence, saying:

“… It is not the best evidence and it is not delivered on oath.  The truthfulness and accuracy of the person whose words are spoken to by another witness cannot be tested by cross-examination, and the light which his demeanour would throw on his testimony is lost ...”

37.  In Pollitt v. The Queen (1992) 174 CLR 558, I pointed out (at 620):

“The objection to hearsay evidence is that it is unreliable – the declarant is not subject to cross-examination and his or her truthfulness and powers of memory, recall, perception and narration cannot be tested.  Because the reliability of an implied assertion is dependent upon the material expressly stated, the grounds for excluding express assertions are equally applicable to implied assertions.  Consequently, for the purpose of the hearsay rule, implied as well as express assertions are regarded as ‘contained’ in an out-of-court statement.”

38.  A further rationale for the hearsay rule was pointed out by the High Court of Australia in Lee v. The Queen (1998) 72 ALJR 1484 at [32]:

“The concern of the common law is not limited to the quality of the evidence, it is a concern about the manner of trial.  One very important reason why the common law set its fact against hearsay evidence was because otherwise the party against whom the evidence was led could not cross-examine the maker of the statement.  Confrontation and the opportunity for cross-examination is of central significance to the common law adversarial system of trial.”

39.  To determine whether the hearsay rule has been breached, it is necessary to determine the purpose for which evidence of an out-of-court statement is tendered.  An out-of court statement, made in the absence of a party, is not necessarily inadmissible.  As long as its contents are not relied on to prove a fact recited or asserted, it will be admissible if it tends to prove a fact in issue or a fact relevant to a fact in issue.  As Mr Justice Ferguson explained in “Hearsay Evidence” (1927) 1 ALJ 195 at 196 in a passage cited with approval by Gleeson CJ and myself in Kamleh v. The Queen (2005) 79 ALJR 541 at 544:

“The hearsay rule does not forbid the proof of what somebody said out of Court.  What it does forbid is the proof of a fact by telling what somebody said about that fact out of Court, a very different matter.  Whether the evidence in any particular instance is admissible or not depends upon the question what fact it tends to prove.”

40.  In Subramaniam v. Public Prosecutor [1956] 1 WLR 965 at 970, in a passage that has come to be regarded as a classic statement of the hearsay rule, the Judicial Committee of the Privy Council said:

“Evidence of a statement made to a witness by a person who is not himself called as a witness may or may not be hearsay.  It is hearsay and inadmissible when the object of the evidence is to establish the truth of what is contained in the statement.  It is not hearsay and is admissible when it is proposed to establish by the evidence, not the truth of the statement, but the fact that it was made.”

41.  Thus, if a real estate agent sues a vendor for commission payable in respect of the sale of the vendor’s property, the hearsay rule is not infringed by evidence of conversations between the agent and the purchaser in the absence of the vendor tendered for the purpose of showing that the agent was the effective cause of the sale.  The reported cases show many examples of out-of-court statements, made outside the presence of a party, which do not infringe the hearsay rule.  In most cases, they are statements that were tendered to prove or disprove the state of mind, intention, knowledge or conduct of a person or to prove a transaction where proof of that state of mind, intention, knowledge, conduct or transaction was either a fact in issue or relevant to a fact in issue.  Often the fact inferred from the statement is used to infer another fact in issue or relevant to a fact in issue.  In all these cases, the words, figures or utterances in the out-of-court statement may be used as evidence, alone or in conjunction with other evidence, to prove another fact or facts as long as the contents of the statement are not assumed to be true in proving the fact or facts to be proved.  In some cases, however, the coincidence between “other evidence” and the words, figures or utterances may be so exact that an inference can reasonably be drawn that the words, figures or utterances are true.  In this latter class of case, the contents of the statement, but not its truth, are compared and combined with the facts established by other evidence to reach the conclusion that the only reasonable explanation of the statement and the other facts is that the contents of the statement are indeed true, if factual matters, and valid, if matters of opinion.

42.  Thus, evidence as to what is said by a party or person out of court will be admissible to prove that person’s state of mind where it is a relevant issue.  Where insanity or mental illness of the accused is an issue in a criminal trial, evidence of statements made by the accused out of court may be powerful evidence for or against the accused.  In proceedings concerned with testamentary capacity, statements by the testator are admissible to prove or disprove his or her capacity to make the will: Timbury v. Coffee (1941) 66 CLR 277 at 282, 285, 288-291.  Similarly in cases, brought under family provision legislation, evidence of statements by the testator are admissible to prove his or her reasons for making or not making provision for relatives but not evidence of the facts that they assert: Hughes v. National Trustees Executors and Agency Co. of Australasia Ltd (1979) 143 CLR 134 at 137.

43.  Evidence as to what is said to a party or person out of court will also be admissible to prove that person’s state of mind where it is a relevant issue.  A classic example is Subramaniam v. Public Prosecutor (supra) where the Judicial Committee held, contrary to the ruling of the trial judge, that the hearsay rule would not be infringed by evidence of threats made by terrorists to the accused.  The evidence had been tendered to prove that the accused had acted under duress in having illegal possession of ammunition.

44.  Evidence that a person had said that he or she was intending to meet somebody or to do something may be evidence of conduct that is relevant to an issue and therefore admissible because a statement of intention is admissible to prove that the person did the intended act.  In Walton v. The Queen (1989) 166 CLR 283 – a murder case - a majority of the High Court of Australia held that, where the accused had said that he was going to meet the deceased, evidence that the deceased had told a witness that she was going to meet the accused was admissible to prove that she had in fact met him.  As Wilson, Dawson and Toohey JJ said (at 300): “Her intention at that time was relevant because it might be inferred that she acted in accordance with her intention.”

45.  Evidence of an out-of-court statement may also be admissible to prove a person’s knowledge of facts for the purpose of establishing that that person was in a place at a particular time.  From proof of that fact and other evidence, it may be possible to infer that another person was also at that place at that time.  In Kamleh, the High Court of Australia unanimously held that no breach of the hearsay rule occurred where, on the trial of the accused for murder, the prosecution tendered evidence that Z had told another person that the television set in the murdered persons’ apartment had been turned up to its highest volume immediately before the killing.  Evidence of this conversation was tendered to prove that the accused was also present at the killing.  To that end, the prosecution proved that, when the bodies of the deceased were found, the television was in fact turned up to full volume.  Hence, Z’s knowledge of this fact indicated that he was present in the deceaseds’ apartment that night.  Moreover, his presence also tended to prove that the accused was present in the apartment at that time because the accused had claimed that he was always in Z’s presence at relevant times on the night of the murder.

46.  Evidence of an out-of-court statement by one person may also be admissible because it gives rise to a factual inference that proves or disproves the conduct of another person.  In Ratten v. R [1972] AC 378, a husband was charged with murdering his wife.  He claimed her death was the result of an accidental shooting.  The Judicial Committee held that the hearsay rule was not infringed by the evidence of a telephone operator that, shortly before the time of the shooting, she received a call from the matrimonial home from a female who, in a sobbing and hysterical voice, said: “Get me the police, please” and that the caller had hung up.  The caller’s state of mind indicated that all was not as it should be in the matrimonial home immediately before the shooting and tended to make less probable the husband’s claim that he had been cleaning the gun when it discharged.  It also rebutted the husband’s claim that no telephone call had been made from the home that evening.

47.  Evidence of out-of-court statements by persons present on premises may also be admissible to prove the nature of activities carried on at those premises.  Thus, in Woodhouse v. Hall (1981) 72 Cr App R 39 where the appellant was charged with managing a brothel, the English Court of Criminal Appeal, upheld the admissibility of evidence from police officers that, after going to premises and posing as customers, they had been offered sexual favors in return for money.  The evidence was led to prove conduct of the occupants from which it could be inferred that a brothel was being conducted on the premises.  Donaldson LJ said (at 42) that there was “no question of the hearsay rule arising at all”.

48.  Similarly, in a number of Australian and New Zealand cases, courts have held that, on charges of conducting a common gaming house or selling drugs, evidence of statements of intending customers is admissible to show the existence of and the nature of business or activity carried on at the premises: see Davidson v. Quirke (1923) 42 NZLR 552; Lenthall v. Mitchell [1933] SASR 231; McGregor v. Stokes [1952] VLR 347; Marshall v. Watt, Struthers, and County [1953] Tas SR 1; Gorman v. Newton; ex parte Newton [1958] Qd R 169, Police v. Machirus [1977] 1 NZLR 288 and Regina v. Firman (1989) 52 SASR 391.

49.  In R v. Kearley [1992] 2 AC 228, however, a majority of the House of Lords held that evidence by police officers that persons, had telephoned or called at the premises of the defendant after his arrest seeking to be supplied with drugs, was not admissible to prove that the defendant was a supplier of drugs.  Lord Ackner said (at 253) that the requests for drugs were evidence of the state of mind of the person making the request but that person’s state of mind was not an issue at the trial.  As a result, the requests for drugs were irrelevant and inadmissible.   The majority judges also thought that admitting evidence of the calls infringed the hearsay rule because the statements of the callers contained implied assertions that the premises were used for the supply of drugs.

50.  The decision in Kearley was followed by the Court of Appeal in R v. Ng Kin-Yee [1994] 2 HKCLR 1 where that court held that evidence of telephone calls made to the defendant’s premises seeking to bet on horse races, was not evidence that he was carrying on a bookmaking business.

51.  As Lord Hoffmann NPJ pointed out in Secretary for Justice v. Lui Kin Hong (1999) 2 HKCFAR 510 at 530, the decision in Kearley has been “heavily criticized”.  It seems wrong in principle.  However, for the purpose of this appeal, it is unnecessary to decide whether it was correctly decided and whether this Court should follow it.

52.  In some cases, the contents of the statement may be compared with other facts to prove not the truth of the statement but a lie.  In Ratten v. R (supra), for example, the statement of the telephone call was used to prove that Ratten had lied when he said that no telephone call had been made from the premises that night.  In Mawaz Khan v. The Queen [1967] 1 AC 454, the Judicial Committee held that the confessions of two accused persons – although not evidence against each other – could “without any breach of the hearsay rule be used, not for the purpose of establishing the truth of the assertions contained therein, but for the purpose of asking the jury to hold the assertions false and to draw inferences from their falsity.” (at 462)  Lord Hodson, delivering the Advice of the Committee said (at 463):

“… What is found against the appellants is that the statements were concocted for the purpose of escaping from the consequences of their crime and if false are admissible to show guilt …”

Similarly, in Wong Wai Man & Others v. HKSAR (2000) 3 HKCFAR 322, this Court held that it was permissible for the prosecution to rely on differences between two confessional statements to rebut allegations that the police had concocted the confessions.

53.  The purpose of this extended discussion of hearsay cases is to show that, in a variety of contexts, out-of-court statements may be admissible in evidence, whether or not they were made in the presence of a party affected by its admission, and to show that inferences may properly be drawn from those statements both to prove a fact in issue or to provide a factual foundation for inferring a fact in issue.  In some cases, the out-of-court statement may be used alone or in conjunction with other facts or statements to disprove a fact.

54.  So the issue here is: what purpose, if any, could tender of the documents found in Kam’s premises prove that was relevant to the charge against Oei?  As I have indicated, Oei and Kam were charged with conspiracy to commit bookmaking.  Section 7(1)(a) of the Gambling Ordinance, Cap. 148, provides that any person who engages in bookmaking, whether on one occasion or more than one occasion, commits an offence.  Bookmaking is defined in s.2 of that Ordinance to mean “soliciting, receiving, negotiating or settling of a bet by way of trade or business whether personally or by letter, telephone, telegram or on-line medium (including the service commonly known as the Internet) or by any other means.”  Hence, an agreement by two or more persons to engage in bookmaking, as defined in s.2 of the Ordinance, constitutes a conspiracy to engage in bookmaking both at common law and under s.159A of the Crimes Ordinance,Cap. 200.  As s.7(1)(a) indicates, the offence under that section is committed when the person charged engages in bookmaking although he or she solicits, receives or negotiates a bet on one occasion only. 

55.  Critical to a charge of bookmaking under s.7, or conspiracy to engage in bookmaking, is the meaning of the term “bet”.  In HKSAR v. Chu Kam Yiu & Others (2002) 5 HKCFAR 591 at 601, the Court of Final Appeal accepted that the definition of a bet was that formulated in Carlill v. Carbolic Smoke Ball Co. [1892] 2 QB 484 at 490–491:

“… a wagering contract is one by which two persons, professing to hold opposite views touching the issue of a future uncertain event, mutually agree that, dependent upon the determination of that event, one shall win from the other, and that other shall pay or hand over to him, a sum of money or other stake; neither of the contracting parties having any other interest in that contract than the sum or stake he will so win or lose, there being no other real consideration for the making of such contract by either of the parties.  It is essential to a wagering contract that each party may under it either win or lose, whether he will win or lose being dependent on the issue of the event, and, therefore, remaining uncertain until that issue is known…”  (emphasis added)

56.  Hence, as the Court of Final Appeal held in HKSAR v. Chu Kam Yiu & Others (2002) 5 HKCFAR 591 at 603, a person does not engage in bookmaking merely because that person collects bets from others and passes them on to a bookmaker.  As long as the person receiving the bet is not accepting the bet as his own, he does not engage in bookmaking.  However, the Court accepted that, if a person receives the bet as the agent or employee of a bookmaking, that person would engage in bookmaking.  Thus a person who acts as a “teng jai” is engaging in bookmaking.

57.  The critical question in the present case then, is whether the tender of the documents from Kam’s home and office was evidence that alone or with other evidence tended to prove that Kam and Oei had engaged in bookmaking even though no assumption could be made or inference drawn from the documents, standing alone, that the “bets” and transactions recorded in the documents were actual bets and transactions.

58.  As the judgment of this Court in Secretary for Justice v. Lui Kin Hong (1999) 2 HKCFAR 510 shows, in determining whether a document has an evidential purpose, it is permissible to examine the form and contents of the document to determine that question.  In Secretary for Justice v. Lui Kin Hong, a relevant issue was whether the documents were admissible without more to prove that they were business records of two companies and whether their contents indicated that they satisfied the conditions laid down in s.22(1)(b) of the Evidence Ordinance, Cap. 8.  One condition required proof that “the document is or forms part of a record compiled by a person acting under a duty from information supplied by a person … who had, or may reasonably be supposed to have had, personal knowledge of the matters dealt with in that information”.  To prove this condition, the prosecution relied principally on the contents of the documents.  In giving the judgment of the Court, Lord Hoffmann NPJ said (at 521): 

“[T]he only evidence called by the prosecution was to identify the documents as having been found on the premises of GIL or Pasto and a certain amount of evidence which showed that the offices of these companies had been run by Chong and that they employed a Mr See as an accountant and a Ms Sha as his assistant.  Otherwise, the Court was invited to infer from the nature of the documents themselves that they were records compiled by persons acting in the course of their employment and that, so far as they stated any facts, the person who supplied the information about those facts could reasonably be supposed to have had personal knowledge of those facts.” (emphasis added)

59.  Lord Hoffmann NPJ said (at 526): 

“In the present case, as it seems to me, the fact that the documents were business records was plain from their contents, the circumstances in which they were found and the admissible evidence about GIL, Pasto and the nature of their businesses.  The ledgers, for example, did not contain statements that they were ledgers.  They were ledgers, even if every entry which they contained was false.  And likewise the other documents.  Mr McCoy’s superficially logical proposition that an inadmissible document cannot be used to prove its admissibility is fallacious.  The hearsay rule never makes a document as such inadmissible.  It is only inadmissible for a particular purpose, namely, as evidence that a statement which contains (sic) is true.  If it is relevant to an issue in some other way, it is admissible for that purpose.  In the present case, the question of whether the documents were records compiled in the course of employment and so forth, within the meaning of s.22(1)(b), was an issue in the case.  The form and contents of the documents were relevant to that issue, irrespective of whether anything they said was true.  Therefore the documents were admissible at common law for that purpose …” (emphasis added)

60.  Later, Lord Hoffmann NPJ said (at 527):

“… And, as I have said, the drawing of non-hearsay inferences from the form and contents of the document is something permissible at common law…”

61.  The Court went on to hold that the entries in the documents could be used to prove the conditions necessary to make them admissible under s.22(1)(b), one of which was that they had been compiled in the course of the author’s employment.  Lord Hoffmann NPJ said (at 528):

“…I think there was ample evidence on which the Judge was entitled to find that the GIL/Pasto documents formed part of business records compiled by persons in the course of their occupations as accountants or bookkeepers for which they were employed.  Indeed, I think that any other conclusion would have been perverse.  Likewise, and particularly in view of the correspondences between the entries in those documents and all the known facts proved by other admissible evidence, the Judge was entitled to find that the information recorded in the documents was supplied by persons who might reasonably be supposed to have had personal knowledge of the facts…” (emphasis added)

62.  Similarly in HKSAR v. Or Suen Hong [2001] 2 HKLRD 669, the Court of Appeal held that documents which were identified by expert witnesses as the kind of documents that a person taking bets on horse racing and soccer would keep were admissible to show together with other evidence that the flat of the defendant “was the venue for the conduct of a business of the kind run by bookmakers.”  Stock JA said (at 677):

“A key issue was whether the applicant was in business as a bookmaker.  To show that someone is in business of a particular kind, whether it be as a bookmaker, a banker, a butcher, or a baker, it will always be probative of that fact to show that he kept records, and that they were the type of records kept by a businessman of that category.”

63.  In the present case, Sgt Ling Sai-Kei identified the documents seized from Kam’s home and office as the type of records kept by a bookmaker betting on soccer matches.  In his opinion, the documents appeared to record soccer matches, odds, handicaps and bets between bookmakers and punters and to have been prepared by a person who was a “teng jai” or bookmaker’s agent.  Sgt Ling Sai-Kei reached his opinion by reference to the form and contents of the documents – by their numbers, letters, codes, columns and arrangement.  As the decision of this Court in Secretary for Justice v. Lui Kin Hong shows, no breach of the hearsay rule occurs because a judge takes into account the form and contents of a document in determining its nature.  Nor does using the contents of the documents for that purpose make any assumptions concerning the truth or falsity of the transactions that the document purports to record.  Consequently, the learned trial judge committed no breach of the hearsay rule by adopting the opinion of Sgt Ling Sai-Kei who had taken into account the form and contents of the documents in determining that they were bookmaking documents.  Nor did Sgt Ling Sai-Kei’s opinion or the learned judge’s acceptance of it rely on the truth of their contents in determining the nature of the documents.

64.  Accordingly, the documents were admissible in evidence as against Oei because the prosecution relied on them as a circumstantial item of evidence that together with other evidence proved that Kam and Oei had conspired to engage in bookmaking, as defined in s.2 of the Gambling Ordinance.  Whether the prosecution established that they had agreed to engage in bookmaking depended on the inferences that could be drawn from other evidence because the documents themselves could not prove beyond reasonable doubt that Oei or even Kam was engaged in bookmaking.  Indeed, seldom could the possession of bookmaking records without more prove to that high standard that the person possessing them had solicited, received, negotiated or settled a bet or bets.   They might, for example, belong to someone else.  In some contexts, there may even be a high probability that the person possessing betting records was not engaged in bookmaking as defined.  They might, for example, be exhibits or copies of exhibits in a trial, props for a stage play or film, teaching materials for a course on gambling for police officers or materials for some social gambling game equivalent to Monopoly.

65.  Whatever may be the correct conclusion to draw from the bare possession of betting records in other contexts, the fact that there was no direct evidence that Kam was the author of the documents made it impossible to conclude beyond reasonable doubt that he was engaged in bookmaking merely because he had or appeared to have possession of the documents.  It is true that Kam was also in possession of other materials such as the booklet “European Football Fixtures 2001-2002”, calculators, mobile phones, a laptop computer and various pens.  Possession of those items strengthens the case for inferring that he was engaged in bookmaking but, in the absence of evidence indicating that the “bets” recorded were actual bets, I do not think that this additional evidence was strong enough to prove a criminal charge of bookmaking.

66.  Nevertheless, whether or not the prosecution was ultimately able to establish that Oei and Kam were together engaged in bookmaking, the “bookmaking documents” were admissible against Oei as well as Kam and not merely as evidence to prove Kam’s participation in an unlawful enterprise.  They were circumstantial evidence that taken in conjunction with other proved facts might lead to the conclusion, namely, that Kam and Oei were engaged in the conspiracy alleged as the only rational conclusion.  As Dixon J pointed out in Martin v. Osborne (1936) 55 CLR 367 at 375:

“If an issue is to be proved by circumstantial evidence, facts subsidiary to or connected with the main fact must be established from which the conclusion follows as a rational inference.  In the inculpation of an accused person the evidentiary circumstances must bear no other reasonable explanation.  This means that, according to the common course of human affairs, the degree of probability that the occurrence of the facts proved would be accompanied by the occurrence of the fact to be proved is so high that the contrary cannot reasonably be supposed ... the class of acts and occurrences that may be considered includes circumstances whose relation to the fact in issue consists in the probability or increased probability, judged rationally upon common experience, that they would not be found unless the fact to be proved also existed.”

67.  So here the prosecution had the burden of establishing that, when all the evidence was examined, the only rational explanation of the transactions involving Oei and Kam was that they were jointly involved in a betting business.

68.  The evidence established that very large sums of money passed between Kam and Oei.  That they had a business relationship of some kind is hardly open to doubt.  Moreover, the evidence from tax returns indicated that Kam was not involved in any lawful business that could have generated the sums of money that passed between him and Oei.  Furthermore, Oei had not filed any tax returns that indicated that he was engaged in any lawful business in Hong Kong.  Thus, the evidence proving the transfers of money between their respective bank accounts and others gave rise to the inference that Kam and Oei were probably engaged in an unlawful business of some kind.  And the betting records found in Kam’s possession pointed to it being a betting business.  Those who possess tools of trade usually work at that trade, and those who possess records evidencing the transactions of a particular class of business usually engage in business of that class.  As Stock JA pointed out in HKSAR v. Or Suen Hong [2001] 2 HKLRD 669 at 677, where the issue is whether a person engaged in a business of a particular kind it is “probative” evidence of that fact that he or she “kept records, and that they were the type of records kept by a businessman of that category.” Moreover, at the time of his arrest, Kam was in possession of a booklet entitled “European Football Fixtures 2001-2002” and the matches recorded in the betting records were actual soccer matches.  Thus, the business relationship between Oei and Kam, and the possession of betting records which related to actual soccer matches supported the conclusion that they were jointly involved in a betting business although not to the point that there was no rational explanation of their relationship other than being engaged in a betting business.  And that conclusion was strengthened by the fact that their business relationship came to an end for all practical purposes upon Kam’s arrest.

69.  However, the evidence supporting the conclusion that their business was bookmaking went much beyond the existence of a financial relationship and the possession of betting records describing betting transactions on actual soccer matches.  The expert evidence of Sgt Ling Sai-Kei showed that the records seized from Kam’s premises (Exh. P10) indicated that two parties – referred to in the documents as “H” and “SUN” – were bookmakers, the author of the exhibit was a “teng jai” and the other group in the exhibit were punters.  The second, third and fifth pages of Exh. P10 recorded bets.  As Secretary for Justice v. Lui Kin Hong shows, using the documents to draw these inferences from the face of the documents involves no breach of the hearsay rule because they do not depend on the statements in the documents being true.  In that case, Lord Hoffmann NPJ used the documents to infer that the prosecution had satisfied the condition in s.22(1)(b) that they were or formed “part of a record compiled by a person acting under a duty from information supplied by a person … who had, or may reasonably be supposed to have had, personal knowledge of the matters dealt with in that information”.  Similarly, the opinion of Sgt Ling Sai-Kei concerning the character of the various persons in Exh. P10 and that three pages of that exhibit recorded bets was based on the form and contents of the documents, not the truth of the transactions recorded.

70.  Other evidence showed that large sums had been transferred between the accounts of Kam or Oei and persons recorded in the betting records as punters.  Moreover, moneys were transferred from Oei’s accounts to punters at times when Kam had insufficient funds in his own accounts to make such payments.  The evidence concerning payments to persons recorded as punters in the betting records further strengthens, although not conclusively, the inference that Kam and Oei were engaged in bookmaking.  Despite the correspondence between the names of persons who made or received payments to or from Kam and Oei and the names of persons recorded as punters in the betting records, there is no certainty that the payments were in respect of betting transactions.  Mr Sutton was unable to find any payments in the accounts of Oei and Kam that corresponded with the bets recorded in the betting records.  It is true that it is the agreement that is the essence of a charge of conspiracy and, in a case like the present, it is not necessary to prove actual bets.  But proof of such bets where it involves two or more persons is evidence of a conspiracy to engage in bookmaking and is usually conclusive evidence of that charge.  Failing to match the “bets” with specific payments was a weakness in the prosecution case, and it is possible – although very unlikely – that the payments, despite the number of punters involved, were for purposes other than betting transactions.  The payments might have been loans or payments in respect of some other illegal transactions.  At all events, apart from the names of the “punters”, the payments were not sufficiently connected with the “bets” recorded for a court to be satisfied to the required standard that they evidenced bets to which either Kam or Oei was a party and made out a case of conspiracy to engage in bookmaking.

71.  Leaving aside the Yenny note and transactions associated with it, the evidence against Oei and Kam gave rise to the inference that they probably took bets from punters, passed them on to bookmakers and thereby jointly engaged in bookmaking.  Yet strong as was the case against them, it was, as I have indicated, not strong enough to conclude that the only rational hypothesis consistent with the evidence was that Oei and Kam were engaged in bookmaking.  However, as Lord Simon of Glaisdale noted in Reg v. Kilbourne [1973] AC 729 at 758 “[circumstantial evidence] works by cumulatively, in geometrical progression, eliminating other possibilities.”  In my view, the Yenny note and the payments made in respect of that note eliminated any reasonable possibility that Oei and Kam were innocent in respect of the conspiracy charge.  It eliminated any reasonable explanation of their activities other than they were jointly engaged in bookmaking as defined.  The Yenny note and associated payments complete the mosaic and show conclusively that the only reasonable hypothesis consistent with all the evidence was that Oei and Kam were jointly involved in a bookmaking business.  In conjunction with the rest of the evidence, the only reasonable conclusion is that the “bets” recorded in Exh. P10 were actual bets on actual soccer matches in a business conducted by Kam and Oei.

72.  The learned trial judge found that the Yenny note was a betting record.  On its face it was a settlement sheet, and, given that the judge found that it was part of the betting records, the only reasonable conclusion is that it was a settlement sheet concerning betting transactions.  It shows an opening balance of $5,782,856 and a closing balance of $5,205,308.  It also shows four other sums of money: $195,500, $943,916, $360,868 and $201,000.  If the first two sums are deducted from the opening balance and the last two sums added to the new balance, it results in the closing balance of $5,205,308.  The entries concerning the first two of these four sums are “DRAW/- ASK YENNY $195,500 (24/8)” and “DRAW/ SUSANTO A/C $943,916”.  Kam had transferred the sum of $195,500 into account 258-127133-888, the holder of which could not be identified.  On 27 August 2001, the date of the Yenny note, Ling had deposited $360,870 into Oei’s account with HSBC.  Ling’s name and telephone number appeared in Exh. P10.  A cash deposit of $201,000 had also been made into Oei’s account with HSBC.  The dates of all these transactions were consistent with the date of 27 August 2001 recorded on the Yenny note.

73.  The probability that the two transfers of money to Oei and the payment by Kam reflected the settlement sheet entries in the Yenny note is so high that the contrary conclusion cannot be rationally entertained.  In Morgan v. Babcock & Wilcox Ltd (1929) 43 CLR 163, the High Court of Australia had to determine whether the payment of a sum of money had any rational explanation except that it was a bribe paid to obtain a contract.  By majority, the Court held that there was no rational explanation of the payment except that it was a bribe, as alleged by the prosecution.  Knox CJ and Dixon J said (at 173):

“… The circumstances proved are enough, in our opinion, to support a finding that Sir James Kemnal caused £10,600 to be placed to the credit of Buckle’s account in payment of the bribe demanded by Maling.  The fact that this exact sum, one of large amount, is placed to the precise account in proper time after the request to pay it had reached Kemnal, appears to us to afford presumptive evidence that it was sent in answer to the letter from the Company’s attorney and business representative urging that it should be so paid.  The question involved largely depends upon the degree to which coincidence of events and circumstances warrants a belief in their casual connection.  An examination of hypotheses logically consistent with proved facts is the received method of testing their sufficiency to establish the conclusion.  In the end, however, the reasonableness or the probability of the occurrence of such hypotheses determines their admissibility, and when coincidence of fact and concurrence of time are relied upon, the sufficiency of the circumstances must inevitably be judged by considering whether general human experience would be contradicted, if the proved facts were unaccompanied by the fact sought to be proved.  In our opinion it would be so astonishing if the crediting of £10,600 to Buckle’s account were not the result of Sir James Kemnal receiving the letter which counselled him to pay that sum to that account, that, in the absence of further evidence, it may be inferred that Kemnal caused the credit to be made...”

The fact that the two transfers to Oei and the payment by Kam were causally connected to the settlement sheet entries in the Yenny note means that the settlement sheet – which is part of the betting records – reflects the result of actual betting transactions.  It would be an astonishing coincidence if the two transfers and the payment were not connected to the entries in the note and equally astonishing if the three sums did not represent the settlement of betting transactions.  The entries on the Yenny note referring to Ling also proves that Ling was a punter betting on soccer events with the “teng jai” and that the entries in Exh. P10 indicating that that was so are true in fact.

74.  It follows inevitably that Kam and Oei were jointly involved in settling the betting transactions recorded in the Yenny note.  And when the Yenny note and the associated payments are taken together with all the other evidence in the case, the only reasonable conclusion is that together they engaged in bookmaking and that the bets recorded in Exh. P10 reflected actual bets on soccer matches.

75.  It follows that not only were the betting records admissible against Oei but also that Oei and Kam were guilty of conspiracy to commit bookmaking.  It also follows that the first question certified by the Appeal Committee must be answered, Yes and the second question must be answered, No.

76.  Although the appeal must be dismissed in respect of the first two grounds of appeal, two points need to be emphasised.  First, the decision in Secretary for Justice v. Lui Kin Hong (supra) played a critical role in dismissing the appeal on those grounds, but great care needs to be exercised in applying the judgment in that case.  As the passages from Lord Hoffmann NPJ’s judgment make clear, the form and contents of a document, admitted for a non-hearsay purpose, may be used to draw relevant inferences including inferences concerning the nature of the document and its contents and how it was compiled.  But a court drawing such an inference must be careful that it does not slide into error by then assuming that the contents of the document are true or, in the case of opinions, valid.  What Secretary for Justice v. Lui Kin Hong permits is the drawing of inferences from the document concerning the nature of the document and its contents, not inferences from or concerning the truth of the contents.  The distinction between an inference drawn from the nature and contents of a document and an inference drawn from or concerning the truth of those contents is subtle but the distinction is fundamental and an inevitable consequence of the admission of an out-of-court statement for a non-hearsay purpose.  Second, although facts established by other evidence, when combined with the nature of the document and its contents, may establish the truth of those contents, great care needs to be taken in the context of a criminal trial to avoid drawing an inference concerning the truth of those contents that is erroneous.  When the inference to be drawn is or inevitably leads to an ultimate fact in issue, it must not be drawn unless there is no other reasonable explanation of the document and the other evidence in combination than the existence of that ultimate fact.

Substantial and grave injustice

77.  As I have indicated, the Appeal Committee ordered that, in addition to the four points of law to which I have referred, leave be granted to argue that the conviction of Oei constituted a “substantial and grave injustice”. 

78.  Mr Caplan QC contended that Oei had suffered a substantial and grave injustice by reason of two matters.  First, he contended that, although the Court of Appeal, had correctly found that the learned trial judge was not entitled to take into account the facts found in the documents in Kam’s possession, nevertheless, that Court itself took those very same facts into account in dismissing the appeal.  Second, he contended that a grave and substantial injustice had occurred because the trial judge had failed to properly analyze the evidence in determining whether the Yenny note was connected with the other pages in Exh. P24.

79.  Mr Caplan QC contended that the Court of Appeal had endorsed the trial judge’s approach “whereby he must have taken into account the contents of the documents for the purpose of seeking to establish some connection with the Appellant.”

80.  In paras 31, 32 and 33 of its judgment, the Court of Appeal said:

“31. In respect particularly to the bookmaking documents, the judge took into account connections between transactions in [Oei’s] bank accounts (proven by the facts admitted for the purpose of the trial) and references to persons or account numbers referred to in the bookmaking documents, including the ‘Yenny note’ which was an accounting document the judge was satisfied formed part of Exh. P24.

32. In adopting this approach, the judge was doing nothing more than relying upon that evidence which showed a connection between the operation of [Oei’s] bank accounts and the bookmaking documents.

33. Establishing a co-incidence between what is said in a document and some act of an individual (in this case, the operation of bank accounts) is evidence of a connection between that individual and the documents.  It certainly does not mean the contents of the documents are used to prove the truth of what they assert.  Rather their contents, whether true or false are, because of what is said, connected to the individual as a step along the way to establishing, perhaps, his knowledge, use or other involvement with them.”

81.  It is necessary therefore to examine what the learned trial judge said.  In three key paragraphs, he said:

“18. In assessing the evidence in relation to this charge, it is necessary to answer the following questions:

a. What was the role of the author of Exh. P10 and P24?  Whether there was a bookmaking business?

b. What was the role of Kam?

c. What was the role of the defendant and his relationship with Kam?

19.  In relation to paragraph 18(a) – the role of the author and whether there was a bookmaking business – I take into consideration the following:

a. I accept PW2’s evidence that Exh. P10 and P24 consisted of betting slips.  There were also records of odds.

b. I have considered the evidence of PW2 in paragraph 3(b) above.

c. I reiterate the analysis made in paragraph 11 above.  In particular the calculation of commission and the offer of odds to a punter which was different from that offered by a bookmaker.

d. There were more than one punters (sic) laying bets as shown in Exh. P10 and P24.

e. The sum total of the bets laid in Exh. P10 and P24 was about $8 million.

f. There is no direct evidence as to the identity of the author.

20. Having considered the evidence above, I am sure that the only reasonable inference is that the author was a ‘tang chai’.  He was receiving bets from punters and transferring them to ‘H’ and ‘SUN’, the bookmaker according to PW2.  Given the total amount of bets and the number of punters as shown in the relevant exhibits, the only reasonable inference was that the author was involved in a bookmaking business.”

82.  It is difficult to escape the conclusion that, in referring to “the total amount of bets and the number of punters” and in drawing an inference that the author “was involved in a bookmaking business”, the learned trial judge must have acted on the basis that the recorded bets were actual bets.  There could be no criticism of these conclusions if the judge had made them after considering the whole of the evidence.  But they were made early in his consideration of the evidence and before he had considered the financial transactions in detail or analysed the significance of the Yenny note.  Indeed, with the possible exception of the reference to “total amount of bets”, his Honour seems to have reached these conclusions solely by reference to the evidence of Sgt Ling Sai-Kei.  I think the better view of his reasons is that his Honour did use the contents of the betting records as evidence of their truth in concluding that the author was involved in a bookmaking business.  I do not think that it is possible to read para.20 of his Honour’s reasons as merely saying that the records showed a bookmaking business.  The reference to “the total amount of bets and the number of punters” indicate that he was finding as facts that there were bets, punters and a bookmaking business.  It is also consistent with the question his Honour asked in paras 18 and 19 as to “whether there was a bookmaking business”, a question which indicates that the judge was determining a fact external to the betting records and not merely commenting on the documents.

83.  The structure of his Honour’s judgment supports this view.  Much of what followed in the rest of his Honour’s judgment was based on the fact that the author of Exh. P10 “was involved in a bookmaking business” and that the bets recorded in that exhibit were actual bets.  Thus, the learned trial judge said:

“26. The various payments by [Oei] to persons linked to the telephone list on the back cover page in Exh. P10 showed that [Oei] and Kam were connected with the bookmaking activities as revealed in the betting slips in Exh. P10 and P24 ...” (emphasis added)

84.  Insofar as the Court of Appeal found that “the judge was doing nothing more than relying upon that evidence which showed the connection between the operation of the applicant’s bank accounts and the bookmaking documents”, it erred.

85.  However, for the reasons that I have given, no judge, correctly applying the law to the evidence, could have come to any other conclusion than that Oei and Kam were guilty of the charge of conspiracy to commit bookmaking.  In those circumstances, no miscarriage of justice has occurred.  Nor does any question of applying the proviso arise.  The appellant has simply failed to make out the ground of appeal alleged.  As the judgment of this Court in So Yiu Fung v. HKSAR (1999) 2 HKCFAR 539 at 542–543 shows, the phrase “substantial and grave injustice” in s.32(2) of the Hong Kong Court of Final Appeal Ordinance, Cap. 484, was taken from the Privy Council’s decision in Re Dillet (1887) 12 App Cas 459.  In order for an appellant to succeed on this ground, he or she must show “that there has been to the appellant’s disadvantage a departure from accepted norms which departure is so serious as to constitute a substantial and grave injustice.”  In the present case, there was “a departure from accepted norms”, but since Oei’s conviction was inevitable on the correct application of the law to the evidence, that departure has not resulted in any injustice or miscarriage of justice in so far as the judge used the contents of the documents in the way that he did.  In other words, the departure is not one of which Oei can legitimately complain.

86.  As Mr Caplan QC pointed out, the Yenny note was the most important single piece of evidence in the case.  He contended that the real issue before the trial judge was “whether there was a link (as opposed to mere proximity by virtue of its location in the drawer) between the Yenny note and the other four pages of the exhibit.”  Mr Caplan QC submitted that DPC Wong Chi Cheong (“DPC Wong”), the officer, who found the pages, gave contradictory evidence in cross-examination and re-examination concerning the folding marks in the Yenny note and in the other four pages.  Mr Caplan QC contended that the judge did not acknowledge that the contradiction existed and did not attempt to assess the impact of the contradiction on the reliability and weight of the officer’s recollection on this issue.

87.  However, the learned trial judge had the great advantage of seeing and hearing DPC Wong give evidence.  Moreover, he saw him demonstrate how the Yenny note was found both while he was being cross-examined and while he was being re-examined on that subject.

88.  In cross-examination, DPC Wong was asked:

“Q. Yes.  If you look at the fifth page, that appears to have been folded only across the middle.

A. Yes.

Q. So it does not appear to have been folded together with the other four pages.

A. Yes.

Q. Right.  So can we take it then, the only connection between the first four pages and the fifth page was your belief that the fifth page had something to do with soccer — settling bets?

A. I agree.”

89.  In re-examination, the witness was asked:

“Q. What do you mean by that — the five pages were piled together?  Can you tell us more details?

A. Piled together like this.

COURT: Witness demonstrated — you mean — can you describe?

A. The four pages were together and then all of them were folded into half like this.  The four were on top and the other one was, I believe, with them.

COURT: So five pages were together but folded halfway.

A. Yes.”

90.  In his judgment, the judge noted that the police officer had said that the Yenny note was connected to the other four sheets because the note was found together with some betting slips.  As a result, the officer “was of the view that it was connected with gambling.”  Later, the judge noted that the principal dispute concerning documents “was whether the ‘Yenny note’ was found together with the other suspected betting slips in the upper drawer of Kam’s desk.”  He noted that the police officer had “rejected the suggestion that these five pages were folded together after he seized them.  It was until (sic) re-examination that he demonstrated how the five pages were folded breadthwise in the middle.”  The judge said that he had examined the folding marks on the five pages in question.  However, he did not think that “the folding marks were decisive to the issue.”  His Honour rejected “the argument that the relevant answer should not be relied on.” (the relevant answer seems to be a reference to DPC Wong’s answer in re-examination.)  His Honour said that he accepted his evidence and then said:

“Given that the note was folded together with other betting slips, I am of the view that the ‘Yenny note’ was connected with other parts of Exh. P24.  It was a record on the calculation of accounts related to bookmaking activities.”

91.  Mr Caplan QC complained that the Court of Appeal had held “that the Judge was entitled to find that there was a physical connection between the Yenny note and the other betting documents despite the contradictory answers given in cross-examination and re-examination, and to conclude that there was a connection between the Yenny note and the bookmaking documents merely on the basis of physical proximity.”  Mr Caplan QC argued that “it was logically impossible for the Court to come to any finding that there was a connection, other than mere proximity, between the Yenny note and the other documents to which it had been connected by way of an exhibit.”

92.  However, it is clear from the learned trial judge’s judgment that he acted on the evidence given by DPC Wong in re-examination when he said that the Yenny note was folded with the other papers in Exh. P24.  Moreover, the Court of Appeal did not think that there was a connection between the Yenny note and the bookmaking documents “merely on the basis of physical proximity”.  In its judgment the Court said (paras 50–51):

“50. So far as the evidence of PW1 was concerned, we cannot accept that it was so inherently flawed as to make either the judge’s understanding of it or his reliance upon it unsafe.  If there was any confusion in PW1’s evidence in cross-examination, his evidence as to the physical nexus of the pages of Exh. P24 was made sufficiently clear in re-examination.

51. This was a matter of weight.  The judge cannot be criticised for regarding PW1 as a reliable witness and concluding that the Yenny note was found in close physical proximity to the other pages and so connected to the bookmaking documents.”

93.  With great respect to the submission of Mr Caplan QC, the only possible criticism of the learned trial judge’s reasons was that he did not say expressly why he preferred the evidence of DPC Wong in re-examination to his earlier answers in cross-examination.  However, the very purpose of re-examination is to clarify answers given in cross-examination.  Counsel for the prosecution sought to do that in re-examining DPC Wong.  The learned judge, who had the advantage of seeing and hearing the witness and watching a demonstration in re-examination was entitled to conclude that the evidence in re-examination was the true account of what the witness had found.  Paragraphs 7 and 8 of the learned trial judge’s judgment also make it clear that, although defence counsel requested him to refuse to accept the answer of DPC Wong in re-examination, the judge did accept it.

94.  In these circumstances, it is impossible to hold that a substantial and grave miscarriage of justice has occurred.

95.  Accordingly, the two grounds relied on in support of the argument that there has been a substantial and grave injustice fail.

The proceeds of the offence ground

96.  Section 25(1) of the Organized and Serious Crimes Ordinance, Cap. 455, provides:

“… a person commits an offence if, knowing or having reasonable grounds to believe that any property in whole or in part directly or indirectly represents any person’s proceeds of an indictable offence, he deals with that property.”

In HKSAR v. Wong Ping Shui and Another (2001) 4 HKCFAR 29, the Appeal Committee held that, in a prosecution under this section, the prosecution does not have to prove that the property represents the proceeds of an indictable offence.  The Appeal Committee held that the actus reus of the offence is dealing with property.  The status of the property is only an element of the mens rea of the offence.

97.  Since the decision of the Appeal Committee in Wong Ping Shui, however, the House of Lords in considering similar legislation has decided in R v. Montila and Others [2004] 1 WLR 3141 that under that legislation the prosecution does have to prove that the property represented the proceeds of crime or drug trafficking.

98.  Mr Caplan QC contends that Montila should be followed in this Court and that the two convictions of Oei of money laundering should be quashed.  Once it is accepted, as the trial judge accepted, that the sums of money that went through Oei’s bank accounts were the basis of the charges of money laundering and represented either directly or indirectly the proceeds of bookmaking in Hong Kong, the appeal by Oei on this point must fail whether or not Montila represents the law of Hong Kong.  However, as the Court heard full argument on the matter, it is right to say that I see no ground for concluding that Wong Ping Shui was wrongly decided.

99.  As Ribeiro PJ pointed out in Wong Ping Shui (at 31), s.25(1) “does not define the actus reus as dealing with the proceeds of an indictable offence.  It defines it as dealing with ‘property’ which the defendant knows or has reasonable grounds to believe represents the proceeds of an indictable offence.”  The quality of the property “being such proceeds is therefore an element in the mens rea but not the actus reus.”

100.  The construction which the Appeal Committee gave to s.25(1) of the Organized and Serious Crimes Ordinance is the natural and ordinary meaning of the sub-section.  The terms of the sub-section stand in sharp contrast to the language, context and history of s.93C(2) of the Criminal Justice Act 1988 and s.49(2) of the Drug Trafficking Act 1994 which were the sub-sections considered in Montila.  Section 49(2) of the Drug Trafficking Act declared:

“A person is guilty of an offence if, knowing or having reasonable grounds to suspect that any property is, or in whole or in part directly or indirectly represents, another person’s proceeds of drug trafficking, he …”

Under s.49(2), the property concerning which the person charged must know or have reasonable grounds to suspect was property that “is, or in whole or in part, directly or indirectly represents, another person’s proceeds of drug trafficking”.  That is, no offence was committed under s.49(2) unless the property was in fact or in whole or in part, directly or indirectly, represented another person’s proceeds in drug trafficking.  It is only in respect of property which answered that adjectival description that the accused had to have knowledge or reasonable grounds to suspect. 

101.  Similarly, s.93C(2) declared:

“A person is guilty of an offence if, knowing or having reasonable grounds to suspect that any property is, or in whole or in part directly or indirectly represents, another person’s proceeds of criminal conduct, he …”

Again, the only property caught by the sub-section is property that is or “represents, another person’s proceeds of criminal conduct”.

102.  Given the terms of the legislation, it is not surprising that the House of Lords held that, in a prosecution concerned with offences under s.93C(2) and s.49(2), the prosecution must prove that the property is or represented another person’s proceeds of criminal conduct or drug trafficking. 

103.  The House of Lords thought that a number of other considerations pointed to the construction that it gave to the sub-sections. 

104.  Mr Caplan QC pointed out that four matters on which Lord Hope, who gave the leading speech in Montila, relied also apply to the Hong Kong legislation.  First, one of the international instruments on which Lord Hope relied (at 3146 C-H) was The United Nations Convention against Illicit Traffic in Narcotic Drugs and Physotropic Substances (the Vienna Convention), an instrument to which Hong Kong is a party.  Second, the United Kingdom legislation contained the phrase “knowing or having reasonable grounds to suspect” while s.25 of the Organized and Serious Crimes Ordinance has the reasonably similar phrase “knowing or having reasonable grounds to believe”.  In respect of the term “knowing”, Lord Hope said (at 3149 C-D):

“A person cannot know that something is A when in fact it is B.  The proposition that a person knows that something is A is based on the premise that it is true that it is A.  The fact that the property is A provides the starting point …”

Third, Lord Hope noted that there was no defence if the property which the accused was alleged to have known or had reasonable grounds to suspect was another person’s proceeds turned out not to be such proceeds (at 3149 E-F).  Fourth, Lord Hope found the headings and side notes to the relevant sections instructive.  The long title to the Organized and Serious Crimes Ordinance declares, inter alia, that it is:

“An Ordinance to create new powers of investigation into organized crimes and certain other offences and into the proceeds of crime of certain offenders; provide for the confiscation of proceeds of crime; make provision in respect of the sentencing of certain offenders; create offences relating to the proceeds of crime or property representing proceeds of crime; and for ancillary and connected matters.”

Mr Caplan QC relied particularly on the words that I have emphasized.

105.  The Vienna Convention and other Conventions or instruments relevantly dealing with the confiscation of the proceeds of crime lay down legislative baselines to which parties to those Conventions and instruments must comply.  But they do not attempt to dictate the form that each country’s legislation should take. It is a matter for each signatory to the Convention or instrument whether or not it wishes to enact domestic legislation that is harsher or more extensive in reach than the baselines.  In the United Kingdom, for example, the legislation considered in Montila used the phrase “having reasonable grounds to suspect” while the Organized and Serious Crimes Ordinance requires the prosecution to prove the higher standard of “reasonable grounds to believe”.  Nothing in the Vienna Convention provides any ground for departing from the construction which this Court placed on s.25(1) in Wong Ping Shui.

106.  There is considerable force in Mr Caplan QC’s submission – invoking Lord Hope’s reasoning – that “one cannot know that property represents any person’s proceeds of an indictable offence” unless it does represent it.  But powerful as the argument is, it cannot overcome the structure and the plain words of s.25(1).  Furthermore, the attractiveness of the submission must be weighed against the fact that, where the prosecution relies on the “reasonable grounds to believe” limb of s.25(1), then on Mr Caplan QC’s argument, it would also have to prove as part of the actus reus that the property did in fact represent a person’s proceeds of an indictable offence.  That is because the term “property” when it is used to describe the actus reus of the offence must have the same meaning whether the prosecution is relying on the first or second limb of s.25(1).  This would result in the section being inoperative in cases where the prosecution had no more than reasonable grounds for believing that the property was the proceeds of an indictable offence and could not prove that the property was in fact the proceeds of an indictable offence.  Hence, although the accused had reasonable grounds to believe that the property represents the proceeds of an indictable offence, the prosecution could not prove the charge.  It is impossible to believe that the legislature intended the sub-section to have this effect.  Moreover, in practice, it is likely that the first limb of s.25(1) – the “knowing” limb – can seldom be used unless the prosecution proves that the property did in fact represent a person’s proceeds of an indictable offence.  But that is a different matter from requiring the prosecution to prove in all cases brought under that section that the property did in fact represent a person’s proceeds of an indictable offence.  Accordingly, although there is force in the argument of Mr Caplan QC on this point, it cannot overcome the meaning that this Court thought the words and structure of s.25(1) required.

107.  Unlike the United Kingdom legislation, s.25(2) provides a defence to a charge brought under s.25(1).  It provides that it is a defence if the defendant proves that he “intended to disclose to an authorized officer such knowledge, suspicion or matter as is mentioned in s.25A(1) in relation to the act in contravention of sub-section(1) concerned” and that “there is reasonable excuse for his failure to make disclosure in accordance with s.25A(2)”.  Consequently, one of the reasons that led Lord Hope in Montila to require the prosecution to prove that the proceeds were in fact the proceeds of crime or drug trafficking is inapplicable in Hong Kong.

108.  Finally, nothing in the long title of the Organized and Serious Crimes Ordinance provides any ground for departing from the construction that the Appeal Committee placed on s.25(1) in Wong Ping Shui.  That construction is in no way inconsistent with the long title.  As construed in Wong Ping Shui,the sub-section creates an offence “relating to the proceeds of crime or property representing proceeds of crime”.

109.  It follows that the arguments on behalf of Oei concerning the construction of 25(1) must fail.  The reasoning in Montilais not applicable to that sub-section.

Sentence

110.  The fourth ground of appeal raises the issue whether, when a person is convicted of an offence, there is no victim and that person could have arranged his or her affairs so as to undertake the activities constituting the offence in a legal manner, both these factors should be taken into account in mitigation of sentence.  Mr Caplan QC contended that there were no victims in this case and that it was not open to the prosecution to argue that the punters were victims because of their gambling activities.  He pointed out that, in recent years, the courts “have paid great and sympathetic attention to the effect on victims of crimes” when considering the appropriate sentence.  The other side of the coin, he argued, was that the absence of a victim should have an ameliorating effect on the sentence to be passed, particularly where the crime was not inherently evil.

111.   In response, Mr Gavin Shiu for the prosecution, said that it misstated the prosecution’s argument to say it contended that punters were victims simply because they had an opportunity to bet with the conspirators.  He pointed out that illegal gambling provides punters with opportunities to gamble on credit and this is contrary to Hong Kong legislative policy which has restricted gambling to outlets at the Jockey Club where gambling on credit is not allowed.  Furthermore, those permitted outlets publicize the dangers of gambling and advertise contact details for advice groups who will assist persons with gambling problems.  In breach of Hong Kong policy, the activities of the conspirators in the present case were based on credit gambling.  Furthermore, Mr Gavin Shiu contended that the credit debts of illegal gamblers were often collected by triad members with often injurious results for those gamblers.   

112.  It is, of course, true that there are no victims in the present case in the sense of persons being defrauded or injured or physically threatened.  But, for the reasons pressed by Mr Gavin Shiu, the soccer punters were victims in a real sense because they were given opportunities to gamble beyond their means and ran the risk of having their unpaid debts enforced by violent or other harmful means.  Accordingly, it is not correct to say that relevantly this is a case of victimless crime.

113.  Mr Caplan QC also argued that, at the time of the conspiracy, it was legal for overseas bookmakers to receive bets from Hong Kong because the Gambling Ordinance did not have extra-territorial effect.  It was only in May 2002 that the Gambling Ordinance was amended to make it an offence for a person outside Hong Kong to receive or settle bets placed from Hong Kong.

114.  Mr Caplan QC argued that, because Oei was a resident of Indonesia, he could have settled bets for a bookmaker in Indonesia, free of the criminality that has attached to him for doing that in Hong Kong.  Mr Caplan QC contended that Oei could have carried out his part in the conspiracy in a legal manner and that it was a mitigating factor which should be contrasted with a case where the conduct is inherently unlawful.

115.  However, the fact that Oei could have settled bets for bookmakers by operating from Indonesia is not a fact that is relevant to his sentence.  Those who come into a jurisdiction are responsible for their actions in that jurisdiction and are obliged to act in accordance with the law of that jurisdiction in carrying out their activities.  The fact that an activity is lawful in another jurisdiction and could have been done there is no excuse for carrying out that activity in a jurisdiction that prohibits it.  Nor is it a mitigating factor on sentence.  Oei was convicted because he carried out activities in Hong Kong which were prohibited by the law of Hong Kong.  It is not a relevant factor on the issue of sentence that he could, if he wished, have carried out the activities in a way that was not a breach of the law of Hong Kong or another jurisdiction.

116.  Finally, Mr Caplan QC contended that Oei had suffered substantial and grave injustice because the arguments concerning sentence that he put to this Court were put in the District Court and the Court of Appeal but were not taken into account by those courts as mitigating factors.  As these matters are not mitigating factors, this ground could not be established.   

Orders

117.  I would answer the four questions certified by the Appeal Committee as follows:

(a) Yes.

(b) No.

(c) No.

(d) No.

I would also hold that no substantial and grave injustice was done to Oei in respect of any of the charges on which he was convicted and sentenced.  Accordingly, I would dismiss the appeal. 

Chief Justice Li :

118.  The Court unanimously dismisses the appeal.