HKSAR v. NG TIK KI CHANEKI

CAC C 68/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 68 OF 2011

(ON APPEAL FROM DCCC NO. 1084 OF 2010)

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BETWEEN

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REASONS FOR JUDGMENT

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Hon Hartmann JA (giving the Reasons of the Court):

Introduction

1.  On 14 February 2011, after a trial in the District Court before Judge Browne, the applicant was convicted of three counts of fraud, contrary to s. 6A of the Theft Ordinance, Cap. 210.

2.  In respect of the first charge, the applicant was sentenced to two years’ imprisonment; in respect of the second charge, he was sentenced to three years and, in respect of the third charge, to a term of two years.  It was ordered that the sentences imposed in respect of the first and second charges were to be served concurrently together with one year only of the two-year sentence imposed in respect of the third charge.  This made for a total sentence of four years’ imprisonment.

3.  The applicant sought leave to appeal both conviction and sentence.

4.  Having heard submissions, we allowed the application to appeal against the applicant’s conviction of the first charge and, treating the application as the appeal itself, quashed the conviction and set aside the sentence of two years’ imprisonment.

5.  We dismissed the application for leave to appeal against the applicant’s conviction of the second and third charges and dismissed the application for leave to appeal against sentence in respect of those two charges.

6.  As the sentence imposed in respect of the first charge was to be served concurrently with the sentence imposed in respect of the second charge, there was therefore no change to the total sentence of four years imposed upon the applicant at first instance. 

7.  At the time of giving judgment, we said that we would give our reasons later. We do so now.

Background

8.  At trial, the background facts were uncontested.  They were to the following effect.

9.  In or about November 2008, the applicant began to frequent a restaurant known as the Wah Yuen Dessert Restaurant.  The owner of the restaurant was a woman by the name of Wong Na Fong.  The applicant struck up a relationship with Wong and at a later time came to be acquainted with, or at least to know of, Wong’s daughter, a woman by the name of Chan Wing Yan.

10.  Between about November 2008 and early March 2010, a period of approximately 16 months, Wong and her daughter gave various sums of money to the applicant.  No exact account was kept of the amount paid by each woman to the applicant.

11.  Wong estimated that she gave to the applicant a sum of approximately $1.598 million while Chan, the daughter, estimated that she gave the applicant a sum of between $140,000 and $150,000.

12.  The applicant admitted that he received substantial sums of money from the two women but disputed the exact amounts.  He said that he received a sum of $1.012 million from Wong, repaying her a sum of $333,000.  In respect of Chan, the daughter, he said that he received a sum of $80,000, repaying her an amount of $7,800.

13.  What was not in dispute therefore was that over the 16-month period Wong and Chan had paid substantial sums of money to the applicant.  The issue to be determined at trial was the basis upon which the applicant had been given those moneys by Wong and Chan.

The frauds

14.  Wong, a woman of very limited education and of limited financial means, testified that the applicant held himself out to be a man by the name of Ho Pak Hin.  The applicant, she said, claimed to be a surveyor and a man of substance, having a property in London, a car and driver and an office in Hong Kong’s central business district.  Significantly, he claimed that he was involved in a construction project which held out the promise of very considerable profits.

15.  It was Wong’s testimony that the applicant initially induced her to give him various sums of money on the basis that he would invest the money for her.  As she understood it, the investment was to be in the construction project.  Wong said that she paid over these initial sums in the hope of sharing in the project’s profits.

16.  Wong testified that later, however, the applicant told her that the project had run into difficulties – for example, that penalties were payable – and that unless she was prepared to invest more money she would lose all the moneys that she had already committed to the project.  As the demands for more money increased, said Wong, so she was forced to sell assets in what proved to be the vain hope of recovering her investment.  Wong spoke of being forced to sell properties she owned.

17.  Wong said that she was never able to obtain a receipt from the applicant nor was she permitted to visit the site of the construction project.

18.  Chan, the daughter, testified that she first became involved in or about October 2009 when the applicant telephoned her, informing her that, unless she too was able to invest moneys, the mother’s entire investment would be lost.  Chan said that she spoke to her mother who, as she understood it at the time, had no more money left to give to the applicant.  She said that her mother was very frightened.

19.  Chan, who at the time was 24 years of age, working as a clerk in the Labour Department, testified that she borrowed $8,000 in cash from friends and paid that money to the applicant at her mother’s shop.  She said that over the next few months she made 20 or more further payments to the applicant.  The applicant, she said, would not give her a receipt nor any form of IOU.

20.  Chan testified that the applicant came into possession of an ATM card that belonged to her and which she normally left in the care of her mother.  The applicant, she said, told her to deposit funds into the account so that he could use the card to withdraw those funds.  She said that she agreed to do so because she was afraid that, if she did not, her mother would lose her entire investment.  She said that she paid the moneys in the vain hope that her mother would be able to recover her investment.

21.  The three charges of fraud arose out of these allegations.

22.  The first charge related to an early payment of $3,000.  It alleged that the applicant falsely represented to Wong that his name was Ho Pak Hin, that he was a surveyor of a construction company and that he would invest the moneys given to him by Wong.  By this deceit, the applicant induced Wong to pay to him a sum of $3,000.

23.  The second charge related to the sum of $1.598 million which Wong said she had paid to the applicant over the 16-month period.  It alleged that the applicant falsely represented his name and occupation to Wong and further falsely represented to her, first, that he would invest moneys provided to him by her and, second, that if she failed to make further investments, she would lose all the money she had previously invested.  By this deceit, the applicant cajoled Wong to pay him the sum of $1.598 million.

24.  The third charge related to the sum of $99,300 which Chan, the daughter, said that she had paid to the applicant.  It was to the same effect as the first two charges, alleging the falsehoods as to name and occupation and further alleging that the applicant had falsely represented to her that if she failed to invest further then both she and her mother would lose all the moneys they had previously invested.

The defence case

25.  At trial, it was not disputed that, when the applicant was arrested for an offence of criminal intimidation, he informed the arresting officer that he had only borrowed the money from Wong and Chan “for investment”.

26.  In his testimony, the applicant denied that he had given a false name to either woman, this despite their evidence that they did not come to know of his true name until after his arrest.

27.  The applicant denied that he held himself out as a surveyor and businessman of substance – although he admitted that he had at one time worked as a surveyor or clerk of works.  To the contrary, he said, he had all along let it be known to Wong that he was unemployed and in debt in a sum of more than $1 million.  It was his evidence that he and Wong became friendly and that she offered to help him out.  He testified that he agreed to accept her help on two conditions; first, that she should only make payments if she could afford them and, second, that he would repay her with interest.  There was no evidence as to what the interest was to be.

28.  The applicant agreed that none of the moneys paid to him over the 16-month period, despite the fact that, on his own admission, they exceeded $1 million, were evidenced in writing, that is, by way of receipts or IOUs.  The applicant said that he had at one time made a record of the moneys received but that the book had become wet and he had thrown it away.

29.  It was the applicant’s case that, as with the mother, the moneys that he received from Chan were loans which were to be repaid with interest.  Again, of course, there were no receipts or IOUs.

The first charge

30.  The first charge related to a single discrete payment of $3,000 made fairly early in the relationship by Wong to the applicant.  As with the other two charges, the essential nature of the first charge of fraud was that the applicant induced Wong to pay the money to him on the basis that he would invest the money on her behalf. 

31.  The evidence, however, was not to this effect.  On more than one occasion in the course of her testimony, Wong confirmed that the applicant had asked to borrow the money from her on the basis that he would repay her the following day.  Wong testified that the money was given to the applicant on this basis and no other.  This particular payment, therefore, was not made on the basis of any representation that the money would be invested on Wong’s behalf.  As such, an essential element of the fraud was not proved.

32.  In respect of the first charge, it was for this reason that leave was granted to appeal conviction.

The grounds of appeal in respect of the second and third charges

33.  Applicant’s counsel, Ms Peony Wong, advanced seven grounds of appeal in respect of the applicant’s conviction of the second and third charges.  They were all interrelated and, as Ms Wong accepted during the course of submissions, amounted in effect to two grounds.  They were, first, that the judge did not address material inconsistencies in the prosecution evidence, that is, in the evidence of Wong and her daughter, and, second, that the judge did not give reasons for rejecting the applicant’s evidence.

Determining the grounds of appeal

34.  The judge, who had the benefit of hearing the evidence, conducted a careful analysis of that evidence.  In rejecting the applicant’s defence, it is implicit in the Reasons for Verdict that he found it to be inherently improbable.  It was in truth an incredible version of events.

35.  In respect of that defence, at no stage was it suggested that an intimate bond developed between the applicant and Wong nor did such a bond develop between the applicant and Wong’s daughter.  There was no suggestion therefore that emotion drove events.  Nor at any stage was it suggested that either Wong or Chan held themselves out to be persons of wealth.  To the contrary, as the judge noted, Wong, who ran a small restaurant, was a woman of relatively limited means while her daughter was employed as a clerk in a Government department.

36.  Yet in light of these matters, if the applicant was to be believed, when he confessed to Wong that he was unemployed and in debt in a sum of over $1 million, Wong agreed to help him, not by giving him some relatively modest payment in the hope that it would assist him and perhaps be repaid, but by advancing him a series of payments which, on the applicant’s own admission, exceeded $1 million. She did this, so the applicant asserted, on the basis that she must have been hoping for an unspecified but nevertheless generous rate of interest, this from a man who, on his own case, spoke of no skills or ability to turn a profit and thus earn a generous return.  More than that, if the applicant was to be believed, Wong’s daughter, just 24 years of age, was also prepared to advance him large sums of money on the same basis – including giving him her ATM card – even though, on all the evidence, there was no suggestion that she had any independent means to finance her largesse.

37.  As to the money obtained by the applicant, there was no evidence of it being put into any form of investment.  It was spent by the applicant for his own purposes.

38.  The applicant’s evidence, on any objective evaluation, was inherently incredible. It is not surprising that it was rejected by the judge who said:

“… I did not believe the evidence of the defendant as to the circumstances in which he obtained the money from PW1 and PW2 [Wong and Chan]. I was sure he was lying about these matters. I was sure he lied to the victims about his identity, his occupation and what the money was required for.”

Considered in this context, while we accept that it would have been better if the judge had expanded on his reasoning, it cannot be said that his rejection of the applicant’s evidence was arbitrary, that is, that it was unreasoned. It arose out of a careful analysis of the applicant’s version of events and its inherent improbabilities.

39.  Even though he rejected the evidence of the applicant, the judge reminded himself that this of itself was no proof of guilt.  It remained for the prosecution to prove its case.

40.  The prosecution case rested on the credibility of Wong and her daughter.  The fact that each woman gave the applicant what for them were very substantial sums of money was never in dispute.  The only issue was why.

41.  In coming to a determination of that issue, the judge was entitled to take into account, as he did, that the payments made by Wong and her daughter were made on numerous occasions over extended periods of time.  He was further entitled to take into account, as he did, that there were no formal records held by either of the women, or indeed the applicant, as to those payments.

42.  As to his assessment of Wong, the judge said that, in his view, she was –

“… a foolish, highly excitable, gullible, naïve and greedy lady. There were many inconsistencies in her evidence in chief as regards what was said on particular occasions, the amounts of money changing hands, when such exchanges took place. This was exacerbated when she was cross-examined. This is hardly surprising given the number of transactions involved, their frequency, the time period, and the complete lack of any supporting documentation. I also bore in mind that PW1 [Wong] is very angry about what happened and views the applicant with great hostility. On any view, she has lost what for her is a considerable amount of money.”

43.  But, while recognising the shortcomings in Wong’s evidence, the judge was nevertheless sure that he could accept the core of her evidence, namely that she had been defrauded by the applicant.  In this regard, the judge said:

“I took into account all the inconsistencies and discrepancies in her evidence. I found PW1 [Wong] to be a reliable and credible witness. I was sure the defendant told PW1 that his name was Ho Pak Hin and that he was a surveyor. I was sure he told her that the money was required for a construction project and that she would be handsomely rewarded for her investment. I was sure that after the initial payments by PW1, the defendant cajoled her into paying further sums on the basis that if she did not, she would be unable to recover the initial payments.”

44.  The judge came to a similar finding in respect of Chan.

45.  For the applicant, it was said that the judge fell into error in failing to identify a number of material contradictions and inconsistencies in the evidence of both women and stating how it was that he was able to resolve them in coming to his conclusion that they were witnesses of the truth.  One example of such a failing was said to be the fact that Wong complained in the course of her testimony that she had been forced to sell properties in order to meet the demands of the applicant, a fact that she had not mentioned in any of her witness statements.

46.  There will of course be times when inconsistencies and contradictions must be addressed by the judge and when a failure to resolve them in a rational way will undermine any findings of fact that are made.  But each case will depend on its own circumstances.

47.  In the present case, the judge recognised that there had been contradictions and inconsistencies in the evidence of both women.  He did not ignore those failings.  He concluded that there were a number of reasons which explained those failings, the lack of records and the like.  In respect of Wong, he concluded that there were also a number of reasons personal to her, particularly the fact that she was highly excitable and deeply embittered towards the applicant.  A tendency to distort was implicit in that recognition.  The judge did not shy away from that.

48.  But the issue before the judge was more fundamental, it was not an issue that went so much to accuracy of recollection, it was whether, despite the marked failings in the evidence of both women, he could nevertheless be sure that the payments that were admittedly made and received, had been made because they had been defrauded by the applicant in the manner set out in the second and third charges.  Of that, the judge had no doubt.

The application for leave to appeal against sentence

49.  In sentencing the applicant to a total of four years’ imprisonment, the judge described him as a glib confidence trickster who had inveigled his way into the lives of Wong and her daughter so that he could prise money out of them.  The judge estimated that the applicant had defrauded the two women of a sum of almost “$1.6 million”.

50.  On behalf of the applicant it was submitted that the sentence was manifestly excessive.

51.  Criminal frauds take on an almost infinite variety of shapes, seeking to inflict all manner of harm.  Often, as in the present case, they involve the exploitation of the victim’s trust.  For such reasons, in respect of crimes of fraud, there is no sentencing ‘tariff’ as such.

52.  That being said, in Secretary for Justice v Dank & Another [2008] 4 HKC 483, this Court said that in respect of sentencing in frauds involving breach of trust, of which this is one, the guidelines are those referred to in R v Clark [1998] 2 Cr App 137 as adopted in Hong Kong in HKSAR v Cheung Mee Kiu [2006] 4 HKLRD 776.

53.  In HKSAR v Ng Kwok Wing [2008] 4 HKLRD 1017, the guidelines in HKSAR v Cheung Mee Kiu were adjusted.  In cases involving a loss of between $1 million and $3 million, the sentence should be three to five years’ imprisonment.

54.  In the present case, on a strict adherence to the guidelines, this would suggest a sentence of about three years and six months’ imprisonment.  But guidelines are intended to assist the court in arriving at the correct sentence; they do not purport to identify the correct sentence itself: see R v Millberry [2003] 1 WLR 546, 556 per Lord Woolf CJ.

55.  In the present case, there were a number of aggravating features which we are satisfied entitled the judge to impose a sterner sentence, one that nevertheless remained within the guideline band.  First and foremost, the fraud perpetrated on Wong ran for approximately 16 months.  During that extended period of time, after Wong had paid what she considered to be her ‘investment’ to the applicant, a man in whom she clearly reposed implicit trust, she was then placed under pressure to contribute further payments on the basis that, if she failed to do so, her entire investment would be forfeit.  Wong was then prevailed upon to let the applicant contact her daughter, Chan, in order to obtain yet more moneys from her.  The applicant was thereby able to profit further by exploiting family bonds.

56.  In the result, we were satisfied that the sentence of four years’ imprisonment was not manifestly excessive.