CACC44/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 44OF 2007

(ON APPEAL FROM DCCC NO. 1041 OF 2005

AND DCCC NO. 111 OF 2006)

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REASONS FOR JUDGMENT

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Hon Barnes J (giving the judgment of the Court) :

1. The two applicants—D2 and D9 respectively in the consolidated charge—faced one count of conspiracy to defraud each (Charge 1 and Charge 3).  They were both convicted after trial before Deputy District Judge A. Wong.  They both sought leave to appeal against conviction.  We dismissed their applications and now give our reasons.

THE FACTS

2. Both counts concerned what is commonly know as a Loco London Silver (“LLS”) scam.  Charge 1 related to a company called Henneson Consultants Limited (“Henneson”) and Charge 3, Speed Win International Consultants Limited (Speed Win).

3. The basis of the prosecution case was succinctly set out by the judge :

“The basis of the prosecution case in each charge is that the two companies in question were both sham and operated for the sole purpose of luring victims, having engaged them ostensibly for different types of work, to part with their money by investing in bogus deals in silver trading.

Further, the prosecution alleges that [the two applicants and one other defendant not involved in this application] had respectively knowingly played certain roles in the two companies in furtherance of the above said fraud.  In other words, each of them had had a responsibility within the conspiracy.”

4. While the prosecution was put to strict proof in relation to the 1^st limb above, it can be said that the evidence adduced proved beyond any doubt that both Henneson and Speed Win were indeed sham companies involved in an LLS scam.  The real issue before the judge was whether the prosecution was able to prove beyond reasonable doubt the 2^nd limb above against each of the defendants (i.e. D2, D9 and D11).

5. As far as D2 was concerned, three witnesses (i.e. PW1, PW4 and PW8) called in relation to Henneson identified him.

6. PW8 attended two identification parades, on the first occasion he identified D2 as Manager Chu, on the second, he identified D2 as Manager Wong.  The judge found the identification by PW8 unsafe.

7. PW4 identified D2 as someone who performed minor clerical work in Henneson who had not taught her how to invest, nor persuaded her or others to invest.  The judge accepted her evidence.

8. PW1 was the only witness incriminating D2.  PW1 described how he responded to a newspaper advertisement and applied for a job at Henneson, and how he eventually opened an investment account.  It was his evidence that after he opened the account, he was under the supervision of Manager Wong, and that he discussed with managers of Henneson, including Manager Wong, when he sustained losses.  When PW1 finally had no more money, Manager Wong told him he [PW1] still owed the company $15,000.  PW1 left Henneson after working there for about one month and Manager Wong called him twice to chase for the money after his departure.  PW1 identified D2 as Manager Wong.  The judge accepted his evidence.

9. In relation to D9, three witnesses (i.e. PW12, PW16 and PW17) called in relation to Speed Win identified him.

10. PW12 described how he joined Speed Win as an accounts clerk and how he received training together with a woman and a man named Jack about how to invest.  PW2 lost all his money.  He identified D9 as the Jack he had referred to during a formal identification parade.  His evidence did not incriminate D9.

11. PW16’s evidence was to the effect that he received days of training with three other new recruits when he successfully applied for a job at Speed Win in September 1999 after responding to a newspaper advertisement.  One of the new recruits was a man called Jack.  PW16 was later encouraged by a Manageress Lai to start investing to gain experience.  PW1, together with Jack and another woman then made investment under the guidance of a Manager Chan.  PW16 said he made a profit initially but was then told by Manager Chan he needed to put more money into his account.  PW16 described his frustration and discussion with Jack.  PW16 put in more money later and again on four more occasions in similar circumstances.  PW16 left the company on 25 October.

12. PW16 also testified his initial loss was caused by Jack making a transaction for him without asking him though he endorsed it later.  PW16 agreed he did not mention this in his witness statement as he was not asked in detail.

13. PW16 identified D9 at the office of Speed Win as the Jack who was in his team.  There was no formal identification parade held.  The circumstances of the identification were subject to attack during the trial.  The judge admitted the evidence after holding a voir dire.  We will come back to this issue in greater detail later.

14. The judge accepted the evidence of PW16.

15. PW17 told the court he became an assistant manager of Speed Win and he attended a course with three other new recruits.  PW17 identified D9 as “a person looking at the machine” during the informal identification at the office of Speed Win.  Again, PW17’s evidence did not incriminate D9.

16. Neither D2 nor D9 give evidence.

17. In relation to D2, the judge found, on the evidence he accepted, that D2 gave PW1 the impression that he was rich; that D2 was the manager who played a very active role in the case of PW1, especially after PW1 had started to make investment; that D2’s act to PW1 was intended to induce or encourage PW1 to continue with the investment when no genuine trading had ever taken place; and that D2 played along with the scheme knowing full well that it was a fraud.

18. In relation to D9, the judge found, on the evidence he accepted, that D9 was not just another ordinary team member like PW16; that an irresistible inference to be drawn was that D9 was party to the conspiracy and played the role of what was commonly described as an agent, giving encouragement to others to engage in investment.

GROUNDS OF APPEAL

D2

19. In his home-made grounds of appeal, D2 said he was assigned odd jobs by a Manager Chan in Henneson and he did not know the internal affairs of the company.  D2 highlighted the evidence of both PW4 and PW8, who did not say that D2 had assisted in the investment.  D2 also referred to the mistaken identification by PW8.

20. D2 said the only person who had identified him as the person who assisted in the investment was PW1.  However, PW1 had not said any such thing in his first witness statement.

21. D2 said he had been opening doors for people and PW1 had talked to him.  He further said that he had telephoned PW1 on the instruction of a Mr Siu from the company, asking PW1 to bring money back to settle the debt.

22. Before us, D2 basically reiterated his written grounds, but added that PW1 acted out of revenge to incriminate him in court as a result of being chased for repayment of the debt when D2 called PW1 on the instruction of Mr Siu.  D2 also mentioned discrepancies between the evidence of police and civilian witnesses in relation to the identification parade attended by PW1.

23. In a nutshell, D2 said that PW1’s evidence was not reliable and that he had been mistaken as someone involved in the scam when he was an innocent lowly worker in the company.

D9

24. Mr Paul Leung, counsel for D9 (who was also D9’s counsel during the trial) advanced basically two grounds of appeal to say the conviction was unsafe and unsatisfactory.  The 1^st ground relates to the identification of D9 by PW16.  Mr Leung submitted that the judge wrongly admitted the identification evidence; alternatively, the judge wrongly placed weight on such evidence.  The 2^nd ground relates to the testimony of PW16.  Mr Leung submitted the judge had wrongly accepted the evidence of PW16.

DISCUSSION

D2

25. The points raised by D2 had been considered by the judge.  The judge very carefully and meticulously set out the evidence and the reasons why he accepted the evidence of PW1.  In doing so the judge was fully aware of the non-incriminating evidence of PW4.  The evidence showed that PW1 left the company on 13 October 1998 while PW4 was at the company for two weeks and made an investment on 26 November 1998.  In other words, PW1 and PW4 were not at the company within the same period.  The judge found the observation by PW4 of D2’s activities in the company created an inconsistency more apparent than real.

26. The judge was aware of the fact that PW1 did not mention in his first witness statement anything about the advice given by Manager Wong; or that Manager Wong was the supervisor of the his group; or that Manager Wong told him action would be taken in relation to the outstanding sum he owed the company.  The judge accepted the explanation given by PW1 as to the omission, i.e. PW1 did not think it necessary to put in such details and the police officer did not ask him in such a way as counsel did, leading him to recall his memory.

27. The judge set out in great detail the evidence of all those involved in the identification parade and noted certain discrepancies among witnesses.  He concluded there were no material irregularities nor was there anything improper practised on the witnesses.  The judge found that PW1 had not been coached or given hints and that PW1 did the identification freely and independently.

28. The judge was also aware of and did consider the time lapse of 8 years when the trial took place, and that the identification took place 4½ years after the incident.  The judge was very careful in his consideration of the quality of the identification evidence.  The judge concluded PW1 had correctly identified D2 as Manager Wong who had frequently given PW1 advice over a period of two weeks.

29. D2 elected not to give evidence.  There was no evidence before the court that D2 opened doors for people and spoke to PW1 while doing so.  There was no evidence that D2 was asked by Mr Siu to chase PW1 for the outstanding debt.  As properly pointed out by Mr Eddie Sean, counsel for the respondent, it is hard to envisage why a man doing odd jobs would have been asked by the company to chase after a debt.  There was also no evidence that PW1 acted out of revenge.

30. D2’s conviction was neither unsafe nor unsatisfactory.  D2’s application for leave to appeal against conviction was therefore dismissed.

D9

31. As the major ground of appeal centres on the identification evidence of D9 by PW16, it is useful to set out briefly such evidence.

32. PW16 and PW17 were invited to make identification at Speed Win when the police raided the premises.

33. Senior Police Inspector Philipson (“PW13”), the officer-in-charge of the operation, testified that he decided to adopt such an identification exercise with a view to ascertaining which of the persons present at the company should be arrested.  PW13 was not present at the premises.  The most senior officer at the scene was a station sergeant.  He was not called to give evidence.

34. There were 25 people inside a room.  There was no clear evidence whether the people participated in the exercise had given their consent.  It was unclear what the station sergeant had said to the participants.  Two lawyers were present but there was no evidence whose interests they were there to protect.  The lawyers were given time to see the persons inside the room prior to the identification and no objection was raised afterwards.

35. PC49805 (“PW15”), the officer who drew a sketch of the position of each person being identified and recorded who had been identified and what role that person had played, failed to recall much of the details.

36. PW16 and PW17 were kept together prior to viewing.  They also had a conversation about being cheated by the company.  Eventually the two of them identified the same 12 persons.  The identifying witness made the identification right in front of the person identified and spelled out the role that person played.  The identified person was not asked to make any response.

37. In the end all 25 persons were arrested and not just those who had been identified.  PW13 could not explain why that was so as he was not present.

38. The judge noted that the exercise was not a confrontation as such.  He found PW13 a credible and honest witness though he did not agree with PW13’s opinion that a formal identification parade was not practicable.  The judge found on the whole of the evidence, that the identification exercise was conducted in good faith, and that there were no material irregularities on the part of the police.  The judge bore in mind that a formal identification was the most satisfactory way to make identification, referring to authorities submitted by the parties including the South Australian Court of Appeal case R v. Hamood [1987] 27 A.Crim.R. 184.  The judge was of the view that it was a matter of weight rather than admissibility and admitted the evidence.

39. The judge assessed the identification of D9, in particular the evidence of PW16.  The judge was sure that PW16 made the identification freely, independently and honestly.  The judge noted the discrepancy in PW16’s description of “Jack” in his witness statement with the actual person.  The description was “a man of 25 years of age and 5’4” tall”, in fact D9 at the material time was 19 years old and 5’8” tall.  The judge took into account that PW16 and the person named Jack were close working partners, and that their encounter was plentiful and in satisfactory observation environment.  The identification by PW16 was made three months after his departure from the company.  The judge was sure PW16’s identification of “Jack” was accurate and reliable even though there were two Jacks in existence.

40. Mr Paul Leung submitted that the manner of the informal identification was highly unsatisfactory.  He relied on matters already submitted to the judge: the two witnesses were taken to the premises in the same police car and had the opportunity of conversing about the case; it was unclear whom the two lawyers present represented.

41. Mr Leung placed reliance on the dictum of King CJ in Hamood and submitted that a formal identification parade should have taken place.  He listed out the benefit and safeguards of a properly conducted identification parade and complained that there was no grouping of those present inside the room by similarity of appearance.  Mr Leung particularly point to the evidence of PW16 when the latter testified that there was no one in the room looking similar to D9.

42. Mr Sean, in response, submitted that the identification process was more a recognition process than an identification of a suspect in the normal sense, where the suspect had only briefly been seen by the victim. The lack of a formal identification parade did not, he suggested, affect the reliability of the informal identification.

43. Mr Sean relied on the authority of HKSAR v Chu Man Fai, CACC372/2004, also a LLS scam case, in support of his submission.

DISCUSSION

44. The judge found that it was not impracticable to hold a formal identification parade.  With respect, we cannot agree with his finding, in this regard.  25 people were found inside the premises raided.  The police did not know how many of them were culprits and how many were not.  In our view, the opinion and decision of PW13 to hold the informal identification was correct.  It could not have been practicable to hold identification parades for all the 25 persons present.

45. Having said that, we respectfully agree with the observations of the South Australian Court of Criminal Appeal in Hamood (per King CJ at pp.184-185)

“The courts have emphasised that the formal identification parade is the method of identification which should be used wherever that is practicable and have frequently drawn attention to the defects of other methods of identification.  If it is not practicable to arrange an identification parade at a particular time, but the suspect indicates a willingness to participate in such a parade when it can be arranged, the police should generally refrain from arranging or permitting other forms of identification which might prejudice the formal identification parade.  There will be cases in which there are substantial grounds for apprehending that the suspect may abscond or that he may change his appearance and some other form of identification may therefore be imperative.  Such alterative forms of identification should not be resorted to, however except for substantial and defensible reasons.  The reasons advanced in the present case were accepted by the trial judge as justifying the course adopted in the circumstances and I am prepared to uphold the learned judge’s view.  The decision should not be regarded by police officers, however, as a precedent justifying dispensing with the formal identification parade simply because of the impracticability of arranging such a parade at the time when the suspect is interviewed.”

46. In our view, there was nothing improper with the informal identification held at the premises of Speed Win.  Quite apart from the impracticality of holding separate formal identification parades for each of the 25 people present, PW16 came to know “Jack” in the office of Speed Win and had close encounters with “Jack” in the same office. We agree PW16’s identification had more to do with recognition than with the identification of a stranger. This is an important aspect of the identification evidence which in our view rendered it safe. Identifying “Jack” in that office when “Jack” was mingled or blended with another 24 people was a sensible and practicable way of separating the suspects from the innocent.  There is no question of such identification evidence being inadmissible, the only issue before the judge was the weight thereof.

47. We would like to point out here that the circumstances of identification in the case of Chu Man Fai relied upon by Mr Sean did not assist us here.  That case involved a victim recognizing a culprit some months after the event at a restaurant and reported to the police.  No formal identification parade was ever held.

48. As to the weight to be attached to such evidence, the judge was aware of the two witnesses being kept together and said this fact alone did not cause him much concern; there was nothing to show there had been undue influence upon each other on identification.  Indeed there was nothing to show any undue influence.  The witnesses only made a general reference to being cheated by the company.  We could not see how such communication between them could have had any bearing on their later identification of the same 12 people.

49. The trial judge had the benefit of the witnesses giving evidence before him, he was fully aware of the discrepancy in the description of “Jack” with D9.  On the evidence before him, he was entitled to come to his findings that PW16’s identification was correct.

50. In relation to the other ground of appeal, Mr Leung referred to the failure of PW16 to mention in his witness statement that his first loss was incurred as a result of what Jack had done.  As PW16’s loss ‘began to snowball’ as a direct result of Jack’s action in causing the initial loss, the failure to mention this ought to have caused great anxiety on the part of the judge, Mr Leung submitted.  Mr Leung also suggested that PW16 had not told the court the whole truth.  The modus operandi mentioned by PW16 was quite different from that suggested by the prosecution and admitted by the defence in the admitted facts, and from the evidence of witnesses such as PW12 and PW17, in that PW16 described a form of teamwork among the team of three.  It was argued that PW16 might have embellished his evidence and that it was unsafe for the judge to accept his evidence.

51. The judge accepted PW16’s explanation as to why he did not mention in his witness statement Jack’s role in causing him the initial loss.  The judge carefully and meticulously analysed the evidence of PW16 and found him an honest and credible witness.  Despite Mr Leung’s submission, we are not persuaded that the judge’s reasoning and findings were flawed.

52. One must not forget on the evidence before the court that PW12 also picked out D9 as “Jack”. This particular witness did so during a formal identification parade.  The real question, in our view, was not whether D9 was “Jack”, but what D9 had done.  On the evidence accepted by the judge, D9 was clearly not just another person in the team as in the case of PW16.  D9 acted without PW16’s permission resulting in PW16’s initial loss.  This is an important piece of evidence as it is very hard to envisage an “innocent recruit” acting in such manner.  D9 played a very active role in engaging PW16 in the investment.  Further, the evidence before the court showed that all those who had been cheated left the company within a short time after losing considerable amounts of money.  Had D9 been an innocent recruit just like PW16, it is hard to envisage him still being around months after PW16 had left.  His presence at the premises of Speed Win could not be an innocent one, it is too much of a coincidence to suggest D9 just happened to be there when the police raided the place.

53. On the evidence accepted by the judge, he was entitled to conclude the irresistible inference to be drawn was that D9 was a party to the conspiracy to defraud and played the role of an “agent”, giving encouragement to others to engage in the bogus investments.  We cannot fault the drawing of such an inference.  The different modus operandi of teamwork in the case of PW16 did not cause us any concern either.

54. The conviction was neither unsafe nor unsatisfactory and D9’s application for leave to appeal against conviction was dismissed.