HKSAR v. SO KAM TIM

IN THE COURT OF APPEAL OF THE HKSAR

1997, No. 193
(Criminal)

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J U D G M E N T

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Liu, J.A.:

1. The applicant stood charged with 14 corruption offences before Deputy Judge Lung in the District Court. Of these 14 charges, five related to the award of sub-contracting drainage works from Aoki Corporation (Aoki) under Government contract DC9106. The remaining 9 charges related to the award of similar sub-contracting drainage works from Aoki under Government contract UA19. In these offences, the applicant is alleged to have paid one Wai Kok-wah (Wai), an employee of Aoki, for procuring the award of those sub-contracting drainage works to Chun Hung Engineering Company (Chun Hung). Sums ranging between $30,000 and over $125,000 were paid by the applicant to Wai, in all $300,000 paid in the first 5 charges, and over $ million in the others. The total amount involved was in excess of $800,000 from 6 August 1992 to 23 March 1995. The applicant had no lawful authority or reasonable excuse to give these kick-backs. The nature of the alleged offences is the same and I need simply set out one, Charge 8, for format reference.

8th Charge
Statement of Offence

Offering an advantage as an agent, contrary to section 9(2)(a) of the Prevention of Bribery Ordinance, Cap. 201.

Particulars of Offence

SO Kam-tim on or about ............. in Hong Kong, without lawful authority or reasonable excuse, offered an advantage, namely a .... reward ..... of $.......... Hong Kong currency to WAI Kok-wah, the Contract Co-ordinator of Aoki Corporation, as a ..........reward for ........... the said Wai Kok-wah ...... having done act in relation to his principal's affairs or business, namely causing Aoki Corporation to award sub-contracting drainage works to Chun Hung Engineering Company in relation to Government Contract No. .................

2. In each case, the sum in the charge was paid by the applicant to Wai as a reward after Chun Hung had been approved as Aoki's sub-contractor. The assistance which Wai had supposedly provided in relation to Aoki's affairs or business was in the procuration of the sub-contracting drainage works for Chun Hung. Shortly put: the applicant was charged with offering corrupt money to Wai for having caused sub-contracting drainage works to be awarded to Chun Hung. In each charge, the corrupt act was the making of an offer to pay a reward.

3. The applicant did not give evidence. He was convicted after trial on all 14 charges by the Deputy Judge. He now seeks leave to appeal against conviction.

4. The facts of this case can be summed up as follows:

In 1990 or 1991, the applicant and Wai became acquainted. The applicant was then a sub-contractor on an Aoki site and Wai a site foreman. The applicant assumed the name of Chi Wai for his then sub-contracting. In 1992, Chi Wai became a contractor of Aoki under Government Contract DC9106 but was later removed in a dispute with the Aoki management. Another company of the applicant's, Chun Hung, was the sub-contractor. Chun Hung was in turn out of the project. In mid March 1992, Wai met the applicant who agreed to let Wai obtain Aoki work for Chun Hung for an 8% kick-back on the contract price. It was discussed at the meeting that Wai "could inflate the contract price for (the applicant) so that (the applicant) would not lose out". The applicant's submitted quotation was to carry a built-in 8% for Wai. The applicant paid Wai five times for Government Contract DC9106. That formed the subject-matters of the first five charges. In November 1993, the practice was followed through without much ado when Chun Hung served as Aoki's sub-contractor under Government Contract UA19. Wai was similarly paid 9 times, and these gave rise to the remaining 9 charges.

5. The Deputy Judge accepted that there was no direct evidence as to how the contracts became awarded by Aoki to Chun Hung or whether Wai had actually influenced Aoki or its Project Manager responsible for awarding sub-contracts. The Project Manager was not called, but evidence was led at the trial that Chung Hung were judged by their past performance for Government Contract DC91. It is not suggested that Wai was incapable of influencing the Project Manger or other Aoki personnel in the awards of sub-contracts or that he played no role at all in these awards. It is, in fact, not the applicant's case that Wai had no power, right or opportunity to influence Aoki. The Judge found that whenever tenders for a new project were called for, Wai would ask the applicant for a quotation, that the applicant would submit a quotation through Wai to Aoki for approval, that Wai would inform the applicant verbally after Chun Hung's quotation had been approved and that in each case, Aoki awarded the sub-contract to Chun Hung without signing any formal document. There was also no direct evidence of Wai inflating the contract price for the applicant as he had promised at their meeting in March 1992. After the award, Wai was paid for each sub-contract in an amount equivalent to 8% of the contract price. Every time the money was given to Wai after Chun Hung had been approved a sub-contractor of Aoki. In those circumstances, the Judge proceeded to draw an irresistible inference that Wai "had assisted Chun Hung to obtain the sub-contracts".

6. In support of Ground 1.2 of the Grounds of Appeal, Mr Wong, leading counsel for the applicant submits that it was not open to the Deputy Judge to draw such an irresistible inference if only for the possibility that both Chun Hung and their quotations could have been approved by Aoki in any event without Wai's interference. The Senior Quantity Surveyor testified that all quoted prices were properly re-visited in the assessment made after works and before payment. Without the aid of any irresistible inference, the prosecution would have been unable to sustain their assertion that Wai had actually caused any of the sub-contracts to go to Chun Hung or that Wai had ever attempted to influence Aoki at all in its awards.

7. Mr Wong S.C. argues as a central plank to this appeal that under Section 9(2)(a) of the Prevention of Bribery Ordinance, Wai must be proved to have actually caused these sub-contracts to be awarded to Chun Hung and that in this the prosecution had wholly failed. That is Ground 1.1.

Section 9(2)(a) of the Prevention of Bribery Ordinance reads:

"9. Corrupt transactions with agents

(1) .................................

(2) any person who, without lawful authority or reasonable excuse, offers an advantage to an agent as an inducement to or reward for or otherwise on account of the agent's -

(a) doing or forbearing to do or having done or forborne to do, any act in relation to his principal's affairs or business; or

(b) ....

Shall be guilty of an offence."

8. The gravamen of a s. 9(2)(a) offence lies in the making of an offer to pay a corrupt reward, and the offence is committed once the offer is made. Just as an offence of soliciting an advantage is complete at the moment when the solicitation is made, a s. 9(2)(a) offence is complete when an offer is made, regardless of whether or not the corrupt agreement will be honoured by the offeree. The guilty intent of the offeror is to be judged independently as at the time of the making of the offer, because after the offence is complete upon the making of the offer, whatever intent he subsequently forms on the offeree's action or inaction will no longer be material. The court is concerned exclusively with the offender's intent at the time of the making of the offer. That would seem to be the law in a case where the offeree is expected to perform after payment of the reward. But should the legal position be any different if the offer to pay is to be made only upon the accrual of the benefit for which the corrupt reward was agreed to be given?

9. S.9 corruption offences focus on the state of mind of the offender. It would seem that under s.9(2)(b), where an offeror offers to pay a reward pursuant to a corrupt arrangement which calls for payment only upon the occurrence of the contemplated event, once he makes an offer to pay with the corrupt purpose in mind, the offence of offering is committed.

10. What is critical was the corrupt purpose of the applicant's when he made his offer to pay i.e. what his intent was at the time. The objective of the corrupt arrangement in each offence was for the procuration of a sub-contract to Chun Hung by Wai. If there was sufficient evidence in the case for the court to conclude that the applicant was offering to pay Wai with the alleged corrupt purpose in mind, the applicant could be found guilty as charged. The question is: did the applicant offer to pay with such a corrupt purpose in mind? The corrupt purpose was for Wai to influence his employer Aoki to favour Chun Hung. That was what the applicant's corrupt arrangement with Wai was all about. That was what the applicant intended to have obtained through Wai when he offered to pay with this corrupt purpose in mind. If the corrupt purpose had been successfully carried out, its object would have been attained. But whether or not the object so contemplated would be or had been brought about by Wai, the applicant acted with the same corrupt purpose in mind when he offered to pay. In other words, whether or not the target in the corrupt purpose would be or had been reached, what the applicant set out to do on purpose could not be undone. If Wai had not actually influenced Aoki's award of sub-contracts, that would not have changed the nature of the corrupt purpose in the applicant's mind when he made an offer to pay. The act was done on purpose, with this corrupt purpose in mind, whatever Wai himself had done or had not done. Evidence of Wai having actually influenced Aoki in selecting Chun Hung as its sub-contractor is not direct evidence of the corrupt purpose the applicant had in mind when he offered to pay. It is only direct evidence of the object in the corrupt purpose having been attained. Evidently, the applicant's offer was made on the basis that the object of his corrupt purpose had supposedly been achieved through Wai, but the applicant was not to be regarded as not willingly making an offer to pay unless the target of his corrupt purpose had actually been reached. S.9 offences look to the state of mind of the offender. If an offer is made to pay an amount pursuant to a corrupt arrangement with an offeree, under which the offeree would have supposedly influenced his employer to take on a sub-contractor, the offer so made with that particular corrupt purpose in mind would constitute an offence under s.9(2)(a) regardless of whether or not the offeree has actually been instrumental to the grant of the sub-contract. First of all, in truth the offeree may not be able to manipulate his employer at all as he has held himself out to be able to in the corrupt arrangement. Even after the sub-contract is approved, for a variety of reasons the offeree may not have been responsible for influencing or successfully influencing his employer in the process e.g. he has repented, abandoned his attempt, failed in his attempt or it is a sheer selection of the most agreeable candidate. All this would be beyond the offeror's control, and he is unlikely to know the facts. None of this would materially affect the corrupt purpose in the mind of the offender when he makes his offer to pay. Coming back to the instant case, even if Wai had not in fact influenced Aoki in granting sub-contracts to Chun Hung, that would not have extricated the corrupt purpose from the applicant's act and intent in the making of his offer to pay Wai on the charge date.

11. Moreover, there seems to be no good reason for not applying s.9(2)(a) consistently whether or not the object in the corrupt purpose will be or has been attained. It would be absurd for the fate of an offender charged under s.9(2)(a) such as the applicant here, saddled with the same guilty intent, to have to depend upon whether or not the offeree had successfully realised the object of the offeror's corrupt purpose.

12. Evidence of Wai having actually influenced Aoki in its award of sub-contracts would be corroborative evidence which would go towards supporting the applicant's corrupt purpose. But the prosecution would not have to establish that the object in the corrupt purpose had in fact been attained. For this proposition, I derive considerable support from what was said by Huggins, J. as he then was, in Ngan Kai-shui v.R. [1973] HKLR 161, at P.168:

"Provided that it can be shown that the receiver accepts the payment for a corrupt purpose it matters not whether the giver thinks it is being given for the same corrupt purpose or even where he thinks the purpose is corrupt at all. We are, therefore, concerned with the mind the appellant in this case." (Emphasis supplied).

13. In Cheng Kin-ping v.R. [1982] HKLR 308, P. 311, Macdougall, V.P., as he later became, elaborated thus :

"It is evident to me that the court was there concerned with a situation where either the giver had in mind a corrupt purpose different to that which the acceptor had in contemplation, or the giver mistakenly thought that he was not committing an offence when in fact he was."

14. I am further fortified in my view by what Roberts, C.J. said at p.10 in Lee Chiu-yin, Leung Kin, Law Ping-on v.R. Cr. App. No. 553 of 1979, the judgment of which was delivered on 18 January 1980 (unreported):

"It would be possible to read these passages [in A.G. v Ip Chiu and Another, Privy Council Appeal 8/79] as suggesting that , where a police officer is charged with accepting an advantage as an inducement to, or reward for or otherwise on account of, performing or abstaining from performing a particular act in his capacity as a public servant, the Crown must prove that the act or omission particularized was in fact performed or omitted.

It seems to us, however, that this would be an incorrect reading of the Board's advice, since the heart of the offence is the acceptance of an advantage in relation to a corrupt act or abstention, whether or not that act or abstention later occurs.

If, for example, a police officer were to accept a bribe of $2,000, as a reward for not prosecuting the "victim" for an alleged dangerous drugs offence, the police officer would be guilty of accepting an advantage even if, at a subsequent date, he did bring a prosecution for the dangerous drugs offence in respect of which he had been supposedly paid off. (Emphasis supplied).

Conversely, the offence of soliciting an advantage is complete at the moment when the solicitation is made. It matters not whether or not the corrupt public officer subsequently carries out the act or omission in respect of which he makes the solicitation. Evidence that he did so is corroborative of the fact of the solicitation and of the terms in which it was made, but no more."

In A.G. v. Leung Hung-hang Application for Review No. 19 of 1983. P.2: Huggins, Ag. CJ had this to say:

"We respectfully agree with the Full Court in Ngan Kai-shui v.R. [1973] HKLR 161 that in a case of an alleged acceptance of a corrupt reward, it is the state of mind of the defendant which is material and that the state of mind of the giver is normally irrelevant."

15. We have also been referred to AG v. Ling Kar Fai, [1997] HKLR D 671.

16. These are decisions on s.9(1) of the Prevention of Bribery Ordinance. Whilst s.9(1) deals with soliciting or accepting an advantage by an agent, s.9(2) prohibits a payor from offering an advantage to an agent. Both are under the same rubric "Corruption transactions with agent". There seems to be every good reason for assimilating the corrupt purpose, state of mind and guilty intent in these two sub-sections, s.9(1) and s.9(2).

17. Section 11(2) of the Prevention of Bribery Ordinance has no relevance and need not be invoked. It was not the applicant's case that Wai had no power, right or opportunity to influence Aoki in awarding sub-contracts. That disposes of the substantive argument of Mr. Wong, leading counsel for the applicant, in the whole of Ground 1.

18. The Judge in fact made no amendment, de facto or otherwise. However, whether Wai had allegedly caused Aoki to award sub-contracts to Chun Hung as framed in the charges or whether Wai had, as put by the Deputy Judge, assisted Chun Hung to obtain sub-contracts from Aoki, the semantics would not change the nature of the corrupt purpose particularised. No more need be said.

19. Turning to Ground 2.1, the applicant through his leading counsel seeks to re-open the question of admissibility of the cautioned statements. The Deputy Judge admitted them as voluntary statements. There was evidence from the applicant given at the trial, as there was evidence in the voir dire, to assist the Deputy Judge. At the trial, the Deputy Judge devoted considerable attention to the rehearsed allegations, including that of inducements when he came to assess reliability and weight. The Deputy Judge dealt specifically with the two main contentions based on these issues. A trial judge is not, in general, obliged to provide an indepth analysis of issues on or relevant to admissibility, but the Deputy Judge gave fairly extensive coverage, over three pages in his judgment, to them. Mr Wong also refers us to some problematic aspects in the evidence of Mr Chow Tat-sun (PW3). It is conceded that none of them would, by itself, be sufficient to illustrate that no court, properly applying itself to the law and facts, could have admitted these cautioned statements. It is submitted that when all the criticisms are examined globally, the Deputy Judge was plainly wrong in accepting Mr Chow as a reliable witness and admitting the cautioned statements into evidence. Nothing in the submissions of counsel has persuaded me that the Deputy Judge was plainly wrong. That disposes of Grounds 2.1 and 2.2.

20. There was evidence for the Deputy Judge to reach his conclusion that the applicant offered to pay a reward for the corrupt purpose in each charge. I would therefore affirm his convictions but on a different ground from that which was relied upon by the Deputy Judge. Relevant authorities were cited in full and the issues were extensively convassed in the skeleton arguments as supplemented by oral submissions. There is nothing counsel could possibly add. I would therefore dismiss the applicant's application for leave to appeal against conviction.

Power, V.-P.:

21. I have had the opportunity of reading my brother Liu's judgment which fully sets out the facts of this matter and wish only to make the following observations.

22. Ground 1.1 of the Perfected Grounds of Appeal alleged a material irregularity in that the Deputy District Judge

"made de facto amendments to the Particulars of Offence in respect of each charge by substituting 'assisting Chun Hung to obtain the subcontracts' for '.... causing Aoki to award sub-contracting drainage works to Chun Hung Engineering Company ...'."

This ground arises out of the following finding of fact:

"Under the circumstances, I find that on the evidence before the court, there is an irresistible inference to be drawn that WKW had assisted Chun Hung to obtain the subcontracts of the two projects in question. He had submitted the quotations for Chun Hung to Aoki for approval and informed the defendant that approval had been given."

23. The argument appeared to be that as there was no express finding in the words of the charge, i.e. that the applicant caused "Aoki to award subcontracting drainage works to Chun Hung Engineering Company", the judge must tacitly, for it certainly was not done openly, have amended the charge to substitute "assisting Chun Hung to obtain the subcontracts" for the words "causing Aoki to award subcontracting drainage works to Chun Hung". The submission is plainly wrong. There was no amendment to the charge. Either the charge as framed was proved or it was not. Ground 1.1 must fail.

24. Counsel for the applicant goes on to argue in Ground 1.2 that the judge :

"... wrongly applied the provisions of Section 11(2) of the Prevention of Bribery Ordinance Cap.201 to convict in that the applicant had at no time relied upon or alleged that the said Wai Kok-wah had 'no power, right or opportunity' to cause Aoki to award sub-contracting drainage works to Chun Hung Engineering Company."

The judge said that if he was wrong to draw the inference that Wai Kok-wah assisted Chun Hung to obtain the subcontracts, then section 11(2) of the Prevention of Bribery Ordinance could be called into play. This section provides:

"If, in any proceedings for an offence under any section in this Part, it is proved that the accused offered any advantage to any other person as an inducement to or reward for or otherwise on account of the other person's doing or forbearing to do, or having done or forborne to do, any act referred to in that section, believing or suspecting or having reason to believe or suspect that such other person had the power, right or opportunity so to do or forbear, it shall be no defence that such other person had no such power, right or opportunity."

The judge went on:

"Under the above section even if (Wai Kok-wah) had not caused the subcontracts of the two projects in question to be awarded to Chun Hung, this will be no defence for the defendant if he had offered money to (Wai Kok-wah) in consideration of (Wai Kok-wah's) assistance in obtaining the subcontracts for the two projects, believing that Wai Kok-wah, as site agent of Aoki, had such power to influence Aoki to award the subcontracts of the two projects in question to him. It therefore follows that it is not incumbent upon the prosecution to prove that by offering the money to (Wai Kok-wah), (Wai Kok-wah) had in fact caused the subcontracts of the two projects to Chun Hung."

The judge, when drawing the inference and when calling s.11(2) into play, appears to have been proceeding upon the basis that it was incumbent on the prosecution to prove that Wai Kok-wah had influenced Aoki to award the subcontracts. He found this to be proved by his inferential finding that Wai Kok-wah had assisted Chun Hung to obtain the subcontract, which, I am satisfied, was, in the context of the totality of the evidence, simply another way of saying that Wai Kok-wah had influenced Aoki to award them. The judge then went on to say that, if he was wrong to draw the inference, the prosecution could fall back on s.11.

25. Mr. Ching Wong S.C. submits that the judge was wrong both to draw that inference, and, there being no evidence to support it, to call s.11(2) into play, it having no application to the instant circumstances. It is not necessary for me, given the conclusion to which I eventually come, to rule on either of these submissions. In the course of argument we raised with Mr. Wong whether the prosecution was required to prove that Wai Kok-wah had actually influenced Aoki. It was only then that the basis of the defence that had been run below and what was, in fact, the real question in issue in this appeal became apparent. The primary contention of the defence, which seems to have been accepted by the judge below, was the submission that the prosecution could only succeed if it proved that Wai Kok-wah had caused Aoki to award subcontracting drainage works to Chun Hung. Mr. Wong submitted that there was clearly no direct evidence to prove that issue as the judge found:

"It is correct that there is no direct evidence as to how the subcontracts were awarded by Aoki, nor was there direct evidence to prove that (Wai Kok-wah) had influenced the project manager, Mr. Inami, who was wholly responsible for awarding subcontracts to the subcontractors (and who) was not called as a witness by the prosecution."

Mr. Wong submits that if the judge was wrong to draw the inference and to call s.11(2) into play that is an end to the matter as a failure to prove Wai Kok-wah caused Aoki to award the subcontracts is fatal. It is his contention that an offer of reward is only corrupt if there be a corrupt intention on the part of the offeror and, the acceptor having done the act for which the reward is given, a reciprocal corrupt intention on his part. His argument, to use his words, is that:

"for a true bribery situation where the accused is charged as the payer there is always the common corrupt intention. This is so because clearly one of the elements of the s.9(2) offence is that ...... if it was money paid as a reward, it could only be a corrupt payment situation if the money was accepted, and at the time of the acceptance, the acceptor had done the act contemplated."

His submission placed in the context of the words used in s.9(2)(a) is that it cannot be a reward for having "done an act" unless the act has been done and that, if the act for which the acceptor is being rewarded has not been proved to have been done, there has been a failure to prove that the payment has been given "as a reward". In his submission it matters not that the offeror intended or believed it to be a reward.

26. Mr. Chan, who appears for the prosecution, submits that there is no requirement for the prosecution to prove the existence of a common corrupt intention between the offeror and the acceptor of the advantage. He submits that such an intention is not an ingredient of a s.9 offence, whether the offence be one of solicitation or of offering of an advantage and that what must be looked at is the state of mind of the person alleged to have committed the offence. He submits that it was quite unnecessary for the judge both to have drawn the inference and to have called s.11(2) into play.

27. There are no authorities directly upon the present point. Is it enough, when a person is alleged to have offered a reward for an act done, simply to prove that that was his intention without proving the acceptor performed the act for which the reward is offered? The position seems to be clear as regards acceptance and solicitation. It was held in the judgment of Sir Alan Huggins in Attorney-General v. Leung Hung-hang, Application for Review No.19 of 1983:

"We see no distinction in this respect between an acceptance and a solicitation case: it is irrelevant in both cases that the person from whom an advantage is obtained or sought may have thought that there was to be no advantage if the recipient has a guilty mind, although there must, of course, be something which is capable or being regarded as an advantage."

In Attorney-General v. Ling Kar-fai (1997) HKLR D 671 Litton V.-P. as he then was, held, dealing with an offence under s.9(1)(b) of the Prevention of Bribery Ordinance, that the Ordinance "looks to the state of mind of the agent accepting the advantage. That is what the section - and the charge - says". In the present case does the section look to the state of mind of the person offering the reward? We are satisfied that that must be so. The argument advanced for the applicant overlooks the fact that the section is concerned with the "offering" of a reward. The situation with which the section is dealing is placed in better focus if the parties involved are described as "the offeror" and "the offeree" rather than as "the offeror" and "the acceptor" which were the terms used in argument before us. In the present case, whether or not the offeree had done anything, there was clear evidence that the applicant, the offeror, was offering him a reward. The offering of a reward is the evil at which the section is aimed. To establish the charge it is not necessary to prove that the offeree has done the act for which the reward is being offered.

28. I agree with the judgment of my brother Liu in which he holds that there is nothing material in Grounds 1.1 or 1.2. I concur also with his reasons for holding that Ground 2 must be dismissed.

Yeung, J:

29. For the reasons given by Liu, J.A., I would also dismiss the application.

Power, V.-P.:

30. For the reasons given, the application is dismissed.