HKSAR v. WU KA FAI

[ English translation – 英譯本]

HCMA 374/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 374 OF 2008

(ON APPEAL FROM TWCC NO. 3310 OF 2007)

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JUDGMENT

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1.  The Appellant was convicted after trial on one count of “being an agent, using documents with intent to deceive his principal”, contrary to section 9(3) of the Prevention of Bribery Ordinance, Cap. 201 of the Laws of Hong Kong, and was sentenced to imprisonment for 5 months. He now appeals against conviction.

Prosecution’s case

2.  In a nutshell, the prosecution’s case was that the Appellant, being an employee of Building Diagnostic Consultants Ltd. (hereinafter “Building Diagnostic”), knowingly submitted two false invoices to his employer in order to deceive his employer.

3.  Those invoices were in connection with two surveying projects at Wan Po Road in Tseung Kwan O (hereinafter “the relevant surveying projects”) which Building Diagnostic contracted from Bolton Construction Co. Ltd. The project prices were HK$9,500 and HK$1,500 respectively.

4.  The Appellant contacted and engaged one Mr. Chan, a “freelancer”, to carry out the surveying work. The two invoices in question were issued in the name of one Heep Wah Engineering Company Limited (hereinafter “Heep Wah”), but in fact Heep Wah did not issue those invoices and indeed had nothing to do with the relevant surveying projects.

5.  The evidence showed that the Appellant resigned from Building Diagnostic by tendering a resignation letter dated 28 April 2006, and the resignation took effect on 5 May 2006 (Exhibit P2).

6.  According to the evidence of one Mr. Lam, an accounting clerk at Building Diagnostic, as he had to do the year-end closing and learnt that the Appellant would soon leave his job, he urged the Appellant to give him the documents regarding the relevant surveying projects so that he could make payments to the contractors. Before leaving the job, the Appellant gave him two quotations and invoices issued in the name of Heep Wah (Exhibits P7, P8, P15 and P16) for him to “make the closing calculations”. As to the date when the Appellant gave the aforesaid documents to Mr. Lam, Mr. Lam said under examination-in-chief that it was in early May; under cross-examination, however, he said that it was on 4 May. He pointed out that 4 May was the Appellant’s last day of work.

7.  One Madam Ko, who was one of the shareholders of Building Diagnostic, said that the company would neither allow its employees to use false documents to deceive the company nor allow them to accept advantages. She said that generally speaking, an employee who wished to resign had to give one month’s notice to the company. However, the effective date mentioned in the Appellant’s resignation letter was 5 May, which did not meet the one-month notice requirement. She said that as the Appellant was going to leave the company, she appointed one Stanley Shea, another employee of the company, to “follow up” the relevant surveying projects.

Defence case

8.  The Appellant neither gave evidence nor called any witness.

Grounds of appeal

9.  Mr Wong, SC and Mr Chow, Counsel for the Appellant, put forward two grounds of appeal against conviction:

(i) The Magistrate had failed to direct himself properly on the law regarding the elements of the offence under section 9(3) of the Prevention of Bribery Ordinance. The elements concerned included “the agent”, “receipt, account or other document” and “which to his knowledge is intended to mislead the principal”. The Magistrate had, it is submitted, failed to consider whether there was sufficient evidence to prove the aforesaid elements of the charge.

(ii) The Magistrate had failed to pay sufficient regard to some of the evidence at trial which was sufficient to cast doubt on whether the Appellant intended to deceive Madam Ko.

The law

10.  Section 9(3) of the Prevention of Bribery Ordinance provides as follows:

9(3) Any agent who, with intent to deceive his principal, uses any receipt, account or other document ―

(a) in respect of which the principal is interested; and

(b) which contains any statement which is false or erroneous or defective in any material particular; and

(c) which to his knowledge is intended to mislead the principal,

shall be guilty of an offence.

Section 2 of the Ordinance contains the following definitions:

‘principal’ (主事人) includes —

(a) an employer;

(b) ...

(c) ...

(d) ...

(e) ...

(f) ...

‘agent’ (代理人) includes a public servant and any person employed by or acting for another;

Ground of appeal (1)

11.  The written submissions prepared on behalf of the Appellant discuss and analyze at great length section 9(3) of the current Prevention of Bribery Ordinance and its predecessor, namely section 4(c) of the former   Prevention of Corruption Ordinance, Cap. 215.

Agent

12.  In essence, it is submitted on behalf of the Appellant that section 4(c) was concerned with the tripartite relationship amongst the principal, agent and the third party, whereas section 9(3) is only concerned with the inter partes relationship between the principal and the agent. As section 9(3) only involves the agent and the principal, it is impossible for the principal not to know the scope of the authority of his/her agent; therefore, the term “agent” under section 9(3) cannot be taken to mean one single employee, but is to be taken to require proof that the agent (employee) has been authorized by his/her principal (employer) to handle a particular matter.

13.  It is contended on behalf of the Appellant that the Magistrate erred in ruling, on the sole basis that the Appellant was an employee, that he was an “agent”, because the Magistrate failed to consider the actual authority given to the Appellant by his principal Madam Ko. It is submitted that, on Madam Ko’s testimony at trial, on 29 April 2006 she “removed the Appellant [from the relevant project] and instructed Stanley Shea to be the person-in-charge of that project”. Therefore, in respect of the relevant project, the Appellant had no authority and was no longer an agent on 4 May 2006 (i.e. the day of the offence).

Respondent’s reply

14.  Mr Wong, Senior Public Prosecutor on behalf of the Respondent, takes issue with the Appellant’s arguments.

15.  Mr Wong submits that “agent” is defined to include “a public servant and a person employed by another or acting for another”. According to that definition, an employee must obviously be an agent of his employer. In support of the argument, Mr Wong relies on the court’s observations on the term “agent” in the case of HKSAR v. Fung Hok Cheung, CACC 368/2007.

16.  Mr Wong submits that at the time of the offence the Appellant was an employee, and hence an agent, of Building Diagnostic. His principal was Building Diagnostic, not Madam Ko. Madam Ko did not “remove the Appellant from the relevant project”; she only appointed Stanley Shea to “follow up” the work as she knew that the Appellant would soon quit his job.

Discussion

17.  The term “agent” receives a very broad definition in the Prevention of Bribery Ordinance. At the time of the offence (on or about 4 May 2006), the Appellant was still an employee of Building Diagnostic (although he had already tendered resignation). He was obviously an agent of his employer Building Diagnostic and Building Diagnostic was his principal.

18.  With respect, I disagree with the narrow interpretation of “agent” as suggested by Counsel for the Appellant. As the Court of Appeal pointed out in the case of Fung Hok Cheung, regarding the concept of “agent”, the court has to adopt a less restrictive approach in construing the concept of “agent” so as to give effect to its ordinary and natural meaning (paragraph 13 of the judgment).

19.  The prosecution did not have to prove that the Appellant was formally authorized on or about 4 May in respect of the relevant surveying projects. The Appellant’s status as an employee indicated that he must be an agent of his principal Building Diagnostic before he quit his job.

20.  Even if the prosecution had to prove that the Appellant was formally authorized on or about 4 May, the circumstances of the case showed that the Appellant was the person responsible for the relevant surveying projects. After he had tendered resignation, Madam Ko, a shareholder of his principal Building Diagnostic, assigned another employee to “follow up” his work. What Madam Ko did did not mean that the Appellant was “removed” from the relevant surveying projects. Common sense dictates that where the Appellant resigned of his own accord (as opposed to being summarily dismissed by the employer), he was required to hand over and explain to his successor the matters for which he was responsible.

21.  The accounting clerk at Building Diagnostic also had to collect all the relevant documents to perform the annual closing, and, knowing that the Appellant would soon leave the company, the clerk urged the Appellant to provide him with the relevant documents so that Building Diagnostic could make payments to the contractors of the relevant surveying projects. This being the case, the Appellant was still an agent of his principal Building Diagnostic on or about 4 May.

Receipt, account or other document

22.  The Appellant criticizes the Magistrate for ruling that the two invoices in question fell within the definition of “other document” when he had not directed himself on the law regarding “other document”.

23.  It is submitted that the definition of “other document” is subject to the ejusdem generis rule and is therefore limited to items similar to “receipts and accounts”, and invoices are not similar to the “receipts and accounts”. The case of R. v. Tweedie [1984] 1 QB 729 is cited in support of this argument.

Respondent’s reply

24.  Mr Wong submits that the proposition that the ejusdem generis rule applies to “other document” under section 9(3) is merely a proposition derived from Tweedie. In Tweedie the court appeared to have referred to that rule for the purpose of explaining that “other document” should be of the same nature of “tripartite relationship” as “receipts and accounts”. In HKSAR v. Leung Yat Ming [1999] 2 HKLRD 402, the Hong Kong Court of Appeal held that the aforesaid observation in Tweedie did not apply to section 9(3).

25.  Mr Wong points out that in Hong Kong there are at present no judicial authorities for the proposition that “other document” under section 9(3) must mean a document similar to “receipt and account”.

26.  Mr Wong further submits that, even if the ejusdem generis rule does apply to section 9(3), the two invoices in question are actually of the same nature as “receipts and accounts”. An invoice sets out the goods supplied and/or services provided and requests payment therefor. A receipt confirms that the relevant payment has been received. An account means in general all the accounting documents in respect of payments, debits and credits.

Discussion

27.  I first set out the statutory provisions involved in the cases of Tweedie and Leung Yat Ming, namely section (1) of the Prevention of Corruption Act 1906 (UK) and section 4(c) of the former Prevention of Corruption Ordinance of Hong Kong:

If —

(a) any agent corruptly accepts or obtains, or agrees to accept or attempts to obtain, from any person, for himself or for any other person, any gift or consideration as an inducement or reward for doing or forbearing to do, or for having after the passing of this Ordinance done or forborne to do, any act in relation to his principal’s affairs or business, or for showing or forbearing to show favour or disfavour to any person in relation to his principal’s affairs or business; or

(b) any person corruptly gives or agrees to give or offers any gift or consideration to any agent as an inducement or reward for doing or forbearing to do, or for having after the passing of this Ordinance done or forborne to do, any act in relation to his principal’s affairs or business, or for showing or forbearing to show favour or disfavour to any person in relation to his principal’s affairs or business; or

(c) any person knowingly gives to any agent, or if any agent knowingly uses with intent to deceive his principal, any receipt, account or other document in respect of which the principal is interested, and which contains any statement which is false or erroneous or defective in any material particular, and which to his knowledge is intended to mislead the principal, he shall be guilty of an offence.

28.  I have been unable to locate the Chinese version of the relevant provision. As regards section 4(c), I respectfully adopt the Chinese translation provided by the Appellant:

如果——任何人仕明知而給予任何代理人，或如果任何代理人明知意圖欺騙其主事人而使用任何收據、帳目或其他文件，對該主事人有利害關係，及在要項上載有任何虛假或錯^誤或欠妥的陳述，及該代理人明知是意圖用以誤導該主事人者，即屬犯罪。

29.  In Tweedie, the English Court of Appeal pointed out that as sections 1(1) and 1(2) concerned an employer being affected by the dishonesty between an employee and a third party, and generally “receipt” and “account” in section 1(3) meant a document between two parties (inter partes), “other document” should also refer to a document between two parties.

30.  In Leung Yat Ming, the Court of Appeal had to deal with the current section 9(3), the content of which is different from that of the old section 4(c). The appellant in that case relied on the judgment in Tweedie, but this was rejected by the Court of Appeal. The Court said (at 412E):

… the words and meaning of s. 9(3) of the Ordinance are clear and unambiguous.  There can be no warrant for reading into the section a requirement that there must be tripartite relationship subsisting and that the absence of inter partes documents on the facts of this case is fatal.

This means there is no reason for adding “there must be tripartite relationship” and “the absence of inter partes documents on the facts of this case is fatal” to section 9(3), which is already framed in clear terms.

31.  Tweedie plainly does not apply to section 9(3).

32.  In Leung Yat Ming, the Court of Appeal did not specifically consider whether the ejusdem generis rule should be applied in interpreting the term “other document”.

33.  In my view, the court shall be particularly cautious in applying the ejusdem generis rule, because it is implicit in this rule that a word may, in order to achieve a specific meaning, not be given its ordinary and natural meaning, and this may be contrary to the legislative intent (see the judgment of Rigby J in Smelting Co. v. Inland Revenue [1987] 1 QB 175, at 182: “… ejusdem generis doctrine … is one which, I think, ought to be applied with great caution, because it implies a departure from the natural meaning of words, in order to give them a meaning which may or may not have been the intention of the legislature.”).

34.  On the facts of the present case, it is in my view unnecessary to decide whether the ejusdem generis rule is applicable. The invoices in question are plainly “accounts” documents, being documents pertaining to accounting, and therefore fall within section 9(3). Even if the ejusdem generis rule applies to “other document”, I respectfully agree with Mr Wong’s submission that the invoices are documents similar to documents of “accounts”.

Intent to deceive and intent to mislead

35.  It is submitted on behalf of the Appellant that, as section 9(3) specifically and expressly requires proof of the two elements of “with intent to deceive [the Appellant’s] principal” and “to [the Appellant’s] knowledge is intended to mislead the principal”, the legislature must have intended to make a distinction between “the agent has knowledge of a false representation” and “the agent has knowledge of [documents] being intended to mislead his principal”. Therefore, in order to establish the element of “intent to mislead”, the prosecution has to prove that the maker of the relevant receipts, accounts or other documents intends to mislead the relevant principal. If an agent knows that the representation is false, he already has the intent to deceive and there will be no need to have both of the elements.

36.  The Appellant submits that there was no evidence in the present case to prove that the Appellant was the maker of the documents in question, and the prosecution had to prove that the maker of those documents had the intent to mislead.

Respondent’s reply

37.  Mr Wong takes issue with the Appellant’s argument. He submits that the wordings in section 9(3)(c) are unambiguous, and it does not involve anyone other than the agent and the principal. There is no justification for defining the “intent” under section 9(3)(c) as “the intent of the maker of the relevant documents”. That “intent” refers to the intent of the “agent”, the offender. Even if the agent knows that the relevant document contains a false representation and uses that document, it does not necessarily follow that he has the intent to deceive/mislead his principal.

Discussion

38.  Section 9(3)(c) is cast in clear and unambiguous terms.

39.  The prosecution had to prove that the Appellant was an “agent”, that he “used” “any receipt, account or other document”, that the documents in question were “in respect of which the principal [was] interested” and “[contained] any statement which [was] false or erroneous or defective in any material particular”, that the Appellant used those documents “with intent to deceive his principal”, and that the Appellant had “knowledge” that the documents concerned were “intended to mislead the principal”.

40.  The prosecution had to prove not only that the Appellant used the documents in question with intent to deceive his principal, but also that those documents were to the Appellant’s knowledge intended to mislead his principal. Knowledge that the documents were intended to mislead the principal was the cognitive intent of the agent, not the cognitive intent of the maker of the documents.

41.  Of course, if the agent and the maker of the documents are different persons, and the latter has the intent to mislead the principal of the agent and the agent knows that the documents are intended to mislead the principal, then, if the other elements are also present, the agent will be guilty of the offence under section 9(3).

42.  If by inadvertence a document contains false, erroneous or defective statements, so that the maker thereof does not have the intent to mislead the agent’s principal, but the agent, knowing that the document which by inadvertence contains false, erroneous or defective statements will mislead his principal, proceeds to use the document, then he is taken to have knowledge that the document is intended to mislead his principal.

43.  Another scenario is where a document does not contain any false, erroneous or defective statement. Take the following example: an engineering company has two projects (A) and (B). A contractor only takes up project (A) and has nothing to do with project (B). The contractor submits an invoice regarding project (A) to the engineering company and the content of the invoice is perfectly correct. However, an employee (agent) of the engineering company secretly makes a photocopy of the invoice concerning project (A) issued by the contractor and claims to his principal that the invoice is issued by the contractor regarding project (B). In these circumstances, the maker has no intention whatsoever to mislead the agent’s principal, but the agent still has knowledge that the photocopy that he is using is intended to mislead his principal.

44.  Therefore, no matter who the maker of the document which contains false, erroneous or defective statements is, the agent must be proved to have knowledge that the document containing false, erroneous or defective statements is intended to mislead the agent’s principal.

45.  I have to point out that the aforesaid examples are used solely for the purpose of illustrating how section 9(3) works. It is clear from the facts of the present case that no matter who the maker of the invoices in question was, the invoices were false — simply because Heep Wah had neither carried out the surveying projects nor issued the invoices in question.

46.  There is indeed no evidence in the present case to show that the Appellant was the maker of the invoices in question. However, in view of the facts of the case — that it was the Appellant who contacted the “freelancer” who then took up the relevant surveying projects; that Heep Wah had nothing to do with those projects, nor did it issue the invoices in question; and that the Appellant, before quitting his job, tendered the invoices in question upon the request of the accounting clerk, so that his principal could make payment to the contractor — the only irresistible and reasonable inference is that the invoices containing false statements were to the Appellant’s knowledge intended to mislead his principal and he used those invoices with intent to deceive his principal.

47.  It is worth noting here that the English version of section 9(3)(c) refers to the principal as “the principal” whereas the Chinese version uses “his principal” (「其主事人」). That said, looking at their context, I do not see any real difference between “the principal” and “his principal”.

48.  This ground of appeal fails.

Ground of appeal (2)

49.  In essence, the Appellant contends that the findings of fact made by the Magistrate were not sufficient to support the Appellant’s conviction and that there were doubts in the prosecution’s case.

50.  I intend to only adumbrate the Appellant’s submissions instead of  setting them out in detail.

51.  It is submitted on behalf of the Appellant that he had already tendered resignation and on 29 April Miss Ko assigned another person to handle the relevant projects; that the Appellant had no motive to deceive his principal and had not received any gain; that although the documents in question were false, the matter was not reported to the police and Mak Chun Wah (麥俊華), the Appellant’s immediate supervisor, proceeded to ask the accounting clerk to pay Heep Wah at a discounted rate; and that there was no evidence to show that the Appellant was the maker of the false documents; and so on.

Discussion

52.  The facts as found by the Magistrate were that before the Appellant left his job, he tendered the false documents to the accounting clerk because the clerk had to do the year-end closing and payment had to be made to the contractor of the relevant surveying projects. The Appellant was well aware that the surveying work under those projects was done by the “freelancer” whom he had contacted and that Heep Wah had nothing to do whatsoever with such work. This being the case, the only irresistible and reasonable inference was that those false documents were to the Appellant’s “knowledge” intended to mislead his principal and that he used those documents in order to deceive his principal. His conviction was not put into doubt by questions regarding his motive, whether he had received any gain and whether his supervisor was involved.

53.  It has been suggested that, as there was no evidence as to whether the false documents in question were put inside an envelope, the Appellant might have no knowledge of the matter. The evidence shows that the accounting clerk urged the Appellant to provide him with the documents and the Appellant did so before he quit his job. In the absence of relevant evidence (particularly when the Appellant exercised his right not to give evidence), it was not for the court to speculate whether those two false invoices could possibly have been put inside an envelope.

54.  This ground of appeal also fails.

Judgment

55.  For the above reasons, the appeal is dismissed and the Appellant’s conviction is affirmed.