HKSAR v. HUNG KA KIT

DCCC 843/2018

[2019] HKDC 1237

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 843 OF 2018

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REASONS FOR VERDICT

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Charge

1.  The defendant is charged with one count of conspiracy to defraud.  He pleads not guilty.

Introduction

2.  Prosecution allege the defendant set up a company called Heskrow Limited (“Heskrow”).  He and others acted dishonestly by falsely representing that they would assist their clients to borrow money on favourable terms.  The clients were induced to pay money to Heskrow for various reasons.  Heskrow was later closed down.  The clients suffered loss.

Prosecution case

3.  Prosecutor calls nine witnesses to testify.  They are PW2 – PW9 and PW12 on the list.

4.  There are prosecution exhibits P1 – P20. P15 – P17 and P20 are admitted facts.

Heskrow

5.  Heskrow was incorporated on 18 January 2016, formerly known as Hesk International Management Asset Limited.  It changed its name to Heskrow on 14 March 2016. The presentor of documents was a secretarial service company at Kwun Tong.  On record, the founding member and sole director of Heskrow was ‘Hung Ka Kit / 洪嘉杰’. The residential address provided was the defendant’s Tai Wo Hau address.  His identity card number also appeared in the registration documents.  The appended signatures were just a single character ‘杰’.  They appeared to be written rather than signed.

6.  It is agreed between Prosecutor and Defence Counsel that no personal attendance was required to process company registration.

7.  In March 2016, Heskrow rented 11/F of AIE Building at No 33 Connaught Road Central as its office.

Tenancy

8.  Manacash Investments Ltd was the landlord of 11/F of AIE Building, which was leased to Heskrow through an estate agent called Primercial.

9.  PW7 Kenneth Wong Primercial said a man calling himself Winston Lam came to look for an office.  Lam said he did so for his boss’s son. PW7 thought Heskrow’s boss was Hung Ka Kit, as evident from the business registration documents which Lam gave him. PW7 had never seen the original of Hung Ka Kit’s identity card. 

10.  PW7 said he gave all the tenancy documents to Lam and later got them back signed. He did not see who actually signed on behalf of Heskrow.

11.  PW6 Ms Law represented Manacash Investments Ltd in the leasing. She did not witness who signed the provisional tenancy agreement with Primercial or the formal tenancy and guarantee at the solicitor’s firm.  [Those documents are purported to be signed by Hung Ka Kit. The signatures were just a single character ‘杰’.]

12.  On 22 March 2016, Lam signed the office handover form [Exhibit P12(iii)] for Heskrow in the presence of PW6.  He, however, wrote on the form the name of ‘洪家傑’ and appended a signature which appeared to be the word ‘杰’.

13.  When the tenancy was signed, Manacash received from Heskrow 2 months’ rent in advance and a deposit in the sum of 2 months’ rent.  Heskrow did not pay again and was closed down later.  Manacash’s solicitor issued claim letters to the two addresses that appeared in Heskrow’s company registration documents: The Kwun Tong address of the presentor company and the Tai Wo Hau address of Hung Ka Kit.

Victims

14.  There were five victims in this case.  They are PW1 - PW5.  The witness statements of PW1- PW4 are admitted into evidence under s.65B of the Criminal Procedure Ordinance.

15.  PW1 has passed away.  PW2 – PW5 give evidence in court.

16.  The five victims received cold calls which induced them to borrow money with Heskrow’s help.

PW1

17.  PW1 Mr Man got a call from one Mr Wong in March 2016.  A person called Sam Chan of Heskrow later contacted hm.  PW1 then went to Heskrow’s office at 11/F, AIE Building, 33 Connaught Road Central.  Sam Chan told PW1 that he could borrow 4.5 million dollars from Dah Sing Bank at low interest rate but PW1 had to pay Heskrow $165,000 as administration fee.

18.  On 8 April 2016, PW1 paid Sam Chan $80,000.

19.  On 14 April 2016, PW1 paid another $35,000 to Sam Chan.

20.  PW1 was unable to contact Sam Chan subsequently.  On 6 June 2016, he found Heskrow had been closed down. He made a report to the police.

21.  PW1 lost $115,000.

PW2

22.  In early April 2016, PW2 received a call from a man claiming himself Mr Hung of Heskrow. He claimed he could help PW2 to borrow 4.2 million dollars from Fortune Credit Limited.

23.  On 7 April 2016, PW2 got the loan from Fortune Credit Limited.  $1,768,000 were used to settle his existing liability. The remainder ($2,412,050) was given to PW2.  Mr Hung suggested PW2 should repay Fortune Credit Limited part of the loan first to reduce the interest amount.  PW2 agreed.  He gave 2 million dollars to Mr Hung for that purpose. 

24.  PW2 had not been able to contact Hung since 16 May 2016.  He found Heskrow had been closed down.

25.  PW2 lost 2 million dollars.

26.  Mr Hung did not give his full name to PW2.  PW2 later searched the business registration record of Heskrow. The information showed Hung Ka Kit was the sole director. PW2 thought the Mr Hung he met was Hung Ka Kit.

PW3

27.  In April 2016, PW3 got a call from one Miss Leung about money lending. He later went to Heskrow’s office.  There, he saw a man of about 20 years old. The man asked PW3 to wait for Mr Chan.  Later, someone claiming himself John Chan told PW3 that he could borrow 1.5 million dollars but PW3 had to pay a deposit of $300,000 first.

28.  In May 2016, a Mr Wong helped PW3 to borrow $200,000 from Faith Rich Finance Limited. PW3 later gave the $200,000 to John Chan at Heskrow’s office on 13 May 2016.  John Chan said the money would be used as security to help PW3 to borrow another $980,000. 

29.  John Chan did not contact PW3 anymore.  On 19 May 2016, PW3 found Heskrow had been closed down.

30.  PW3 lost $200,000.

PW4

31.  In April 2016, PW4 received a call from a Miss Wong, who claimed to be representing the Hang Seng Bank.  She persuaded PW4 to borrow money to settle his existing liability.  PW4 later went to Heskrow’s office as instructed by Miss Wong.  A lady claiming herself Jennifer Wong talked to PW4.

32.  On 5 May 2016, Jennifer Wong called PW4.  She said PW4 could borrow $300,000.  She told PW4 that her colleague would follow up his case.

33.  On 7 May 2016, someone called ‘傑仔’ assisted PW4 to borrow $300,000 from Maxcolm Credit Company.  PW4 gave the money to ‘傑仔’.  He expected Heskrow would help him to settle his existing liability.

34.  On 24 May 2016, PW4 discovered that Heskrow had not helped him to pay up his existing liability.  He also found Jennifer Wong’s mobile service had stopped and Heskrow had been closed down.  PW4 made a report to the police.

35.  PW4 lost $300,000.

PW5

36.  PW5 received a call from one Mr Wong, who said he represented 華僑永亨銀行 (OCBC).  Wong told PW5 that he could obtain an overdraft facility of $600,000.  He introduced a Mr Man to PW5 on the phone. Man and PW5 later communicated by SMS.  Man asked PW5 to contact Heskrow. He said Heskrow was an intermediary that could help PW5 to obtain the overdraft facility from OCBC.

37.  PW5 went to Heskrow’s office at 5:30 pm on 12 May 2016.  He talked to a man, who claimed himself James Hung.

38.  PW5 described James Hung as a man of around 30 years old, black hair, strong build and about 5’9” tall.  He talked to that man for about 45 minutes, mostly across a table of about 3 feet wide.  PW5 said James Hung was familiar with finance matters and procedures.  He persuaded PW5 to give Heskrow $200,000 to settle his existing liability with UA Finance first before getting him the said overdraft facility.

39.  PW5 said there was sufficient light in Heskrow’s office when he met James Hung.  He could see the face of James Hung clearly.

40.  PW5 said James Hung gave him a name card (Exhibit P11) and wrote on it ‘洪先生’, a mobile number and the amount of $199,864 which PW5 need to repay UA Finance.  PW5 told James Hung he had to consider the matter further.  Then he left Heskrow’s office.

41.  PW5 later called Mr Wong, who had claimed to be representing OCBC.  Wong said James Hung’s suggestion was alright.

42.  On 17 May 2016, PW5 told James Hung on the phone that he would pay Heskrow $200,000 to settle his UA debt in order to secure the overdraft facility from OCBC.  Hung said a Mr Lee would contact PW5.

43.  Mr Lee later called PW5.  The two arranged to meet at 4 pm at V-City in Tuen Mun.  PW5 handed $200,000 to Lee.  Lee gave him back $134 for change.

44.  PW5 later found out Heskrow had not settled his UA debt.  He could not contact Wong, Man, James Hung or Lee anymore so he made a report to the police.

45.  In an identification parade that took place at the police station on 1 August 2016, PW5 identified the defendant as James Hung.  PW5 said he recognized James Hung’s face, height and build.  He said he was sure the defendant was James Hung though he then had a different hair style.  PW5 said he had deep impression of James Hung’s nose and eyes.  He said James Hung had ears, eyes, nose and mouth all bigger than those of a normal person.

46.  PW5 agrees under cross-examination that he told the police that James Hung was of medium build.  He explains in court that James Hung was not that strong but merely stronger than a medium-build person.  PW5 disagrees he misidentified the defendant as James Hung.

Arrest and house search

47.  The defendant was arrested by PC19147 on the street on 24 July 2016.

48.  Later that day, the police searched the defendant’s house.  They found on a desk a claim letter from Manacash’s solicitor dated 7 June 2016 (Exhibit P7) that was sent to the defendant’s address at Tai Wo Hau. 

Interview

49.  When the defendant was arrested on 24 July 2016, he told the arresting officer he did not know why he was wanted by the police.

50.  In a video interview on the same day, the defendant said he was a delivery worker.  His company was in Kwai Fong.  He lived in Tai Wo Hau.  He had never received any business or company registration documents at that address.  The defendant said after he had received the solicitor’s letter (P7), he tried to reach the solicitor twice but failed.  The defendant denied he knew or had anything to do with Heskrow or the five victims.

Identification parade

51.  The identification parade took place on 1 August 2016.  PW1 – PW7 were invited to make identification. Only PW5 identified the defendant. He is sure the defendant was the James Hung he met for about 45 minutes on 12 May 2016.

52.  Defence Counsel objects to the identification evidence.  He says the parade was not properly conducted in the sense that some actors were clearly shorter than the defendant and some looked young and had longer hair than the defendant.

53.  The officer-in-charge of the case Inspector Ip (PW9) says he did have concern of some actors’ hair-length on 1 August 2016.  He spoke to the person-in-charge of the actors’ company, who said he had already tried his best to get suitable actors. 

54.  PW9 did not think the arrangement was so unfair. Nevertheless, he mentioned his concern to CIP Nip (PW8), the officer-in-charge of the parade. It was PW8 to decide what to do.

55.  PW8 says he cannot recall if PW9 had discussed with him about the actors’ hair-length.  PW8 himself did not see that as a problem.  He disagrees some actors were apparently shorter and younger than the defendant.  PW8 says the arrangement on 1 August 2016 was fair and the parade should proceed.

56.  Since there is a dispute of the admissibility of the identification evidence, a special issue hearing is held by way of alternative procedure.  The defendant gives evidence.

57.  The defendant says he always stood at Position 4 in the parade.  The actors in Positions 2, 5 and 8 had long hair while those at Positions 1, 2, 6 and 8 were young and looked like students. The defendant admits he did not raise any objection to PW8 during the parade.  He did not feel the arrangement was unfair then but he realizes that now because many witnesses now say the culprits looked matured.

Final submission on special issue

58.  Prosecutor says the identification parade was conducted in a fair manner.

59.  Defence Counsel submits the parade arrangement was undesirable in that some actors were obviously shorter than the defendant; some looked like teenagers and some had longer hair than the defendant.  Counsel says the defendant did not realize then he should raise objection.

Ruling on special issue

60.  I have heard the evidence of PW8 plus PW9 and that of the defendant on the special issue.

61.  I have looked at the video record of the identification parade.  Though the images are not very clear, it can still be seen the actors at Positions 1 and 2 were indeed shorter by a few inches than the defendant.  I can see no obvious difference in the participants’ hair-length.  The faces of the actors were not clear so I cannot say if any actor looked too young when compared with the defendant, who was aged 22 then.

62.  PW8 was the officer-in-charge of the parade.  He did not find particular problem with the appearance of the eight actors in the parade, after discarding the ninth one.  The audio record reveals he had asked the defendant if any correction was required.  The defendant replied there was no need.  He raised no objection. 

63.  In court, the defendant frankly admits he did not feel the parade was unfair then.  He only feels so now because the witnesses point their fingers at some elder suspects.

64.  I find as I am sure the identification parade on 1 August 2016 was conducted in a fair and proper manner.  Such evidence is admissible.

Case to answer

65.  Defence Counsel makes no submission at the mid-stage.  I rule the defendant has a case to answer on the charge.  He elects to give evidence.  He also calls his girlfriend and a Chinese writing expert to testify.

The defendant

66.  The defendant is aged 25 now.  He says he had not finished Form Three and had little knowledge of financial matters.  He is a delivery worker now. In 2016, he also worked as a delivery worker.  His parents lived in Tai Wo Hau but he lived with his girlfriend between May and September that year in a rented place in Kwai Chung close to his working place.  The defendant produces a tenancy (Exhibit D2).  He says he finished work after 4 - 5 pm each day. He usually went back to his Kwai Chung home straight away. The journey only took about ten minutes.

67.  The defendant says he returned to his rented place before 5:30 pm on 12 May 2016 (a Thursday) and only left home the next morning for work.  He remembers that day because he had adopted a puppy on the previous day, i.e. 11 May 2016.  The defendant produces a video (Exhibit D3) to show he and his girlfriend played with the puppy in the early hours of 12 May 2016.

68.  The defendant says he had nothing to do with Heskrow.  He had never set up the company or allowed anyone to use his personal particulars to set up the company.  He had never signed the company registration documents and the tenancy documents.  The defendant says he never had the name James.

69.  The defendant says he had provided his personal particulars and a copy of his identity card online to several finance companies in 2015 when he applied for loans.

70.  The defendant says he had received the letter (Exhibit P7) from Heskrow’s solicitor chasing for rent.  He called the solicitor twice to find out what the matter was but nobody answered his calls.

The defendant’s girlfriend

71.  Ms Rakkaew confirms the defendant’s claim that he usually returned to their Kwai Chung home around 5:30 pm.  She remembers the defendant also came home shortly after 5 pm on 12 May 2016 and did not leave the place again that day. They had adopted a puppy on the previous day.  She slept late that night and used her mobile phone to take a photo of herself and the defendant, who was sleeping then (Exhibit D4).  Later, she woke the defendant up to feed the puppy.  She shot the video D3.

Professor Cheung

72.  Professor Cheung is an expert in Chinese handwriting comparison.  His expertise is not in dispute.

73.  Professor compared the word ‘洪’ written by James Hung on the name card (Exhibit P11) with the word ‘洪’ in the defendant’s name written by him at several places in PC19147’s notebook (Exhibit P19).  

74.  Professor Cheung opines all those ‘洪’s were written naturally, i.e. without intentional twisting or pretence. He says a person may be able to write in more than one natural style but the differences in the penmanship, style and stroking intensity show that word ‘洪’ on the name card was not written by the person who wrote in the PC19147’s notebook, i.e. the defendant.  Professor Cheung says he is sure about that.

75.  Professor Cheung also compared the defendant’s signatures ‘杰’ in PC19147’s notebook (Group 1 signatures) to those appended in the defendant’s own tenancy (Exhibit D2) (Group 3 signatures) and those appearing in Heskrow’s company registration records/tenancy documents (Group 2 signatures).  He opines Group 1 signatures and Group 3 signatures were made by the same person (the defendant) but Group 2 signatures appeared to be different from Group 1 signatures and Group 3 signatures. Professor Cheung says a person can have more than one form of signature so he cannot conclude on the authorship of all the said signatures.

Final submission

76.  Prosecutor and Defence Counsel have made written submission.

77.  Prosecutor says PW5’s identification of the defendant is reliable.  The alibi raised by the defendant and his girlfriend is untruthful.

78.  Prosecutor says Professor Cheung’s evidence is of no significance because it might not be the defendant signing Heskrow’s company registration and tenancy documents.

79.  Defence Counsel submits PW5’s identification of the defendant as James Hung is unreliable. The identification parade was conducted in unsatisfactory circumstance because some actors looked quite different from the defendant.  Counsel says PW5 is mistaken though honest.

80.  Counsel says the defendant’s alibi is credible and well corroborated by his girlfriend’s evidence.  Professor Cheung’s finding also supports the defendant’s testimony. The professor’s analysis shows that James Hung who wrote on the name card and gave it to PW5 was not the defendant.

Discussion

Heskrow’s company registration, business registration and tenancy documents

81.  While the defendant’s name and personal particulars appeared in many places in the documents, there is no evidence the defendant personally dealt with Heskrow’s company registration and tenancy or allowed someone to deal with the documents on his behalf.

82.  It is agreed by both parties that the defendant’s personal attendance was not required in Heskrow’s registration.  There is no witness seeing the defendant sign on the registration and tenancy documents. Even Prosecution cannot be sure if the defendant himself made all those signatures ‘杰’ in the documents.

83.  Defence Counsel suggests the defendant’s identity was stolen for illegal use and the defendant was a scapegoat. 

84.  The defendant says he had submitted his personal particulars and a copy of his identity card to several finance companies in 2015 when he applied for personal loans.

85.  It is possible that one’s identity was stolen and misused by others. Things of that kind do happen. That Heskrow’s company registration and business registration and the tenancy documents all bore the defendant’s particulars is not as incriminating as it seems. One also has to ponder why the defendant, if he was acting dishonestly with others, would use or allow his name and identity number to be recorded in the registration documents and tenancy documents. 

The letter from Manacash’s solicitor

86.  Police found the letter from Manacash’s solicitor (Exhibit P7) at the defendant’s home in Tai Wo Hau.

87.  Again, this is not as incriminating as it seems.  The defendant’s address was stated in the company registration documents.  Manacash’s solicitor certainly would send a letter to Heskrow’s sole director as recorded in the documents to chase for rent.  Again, one should ponder why the defendant, if he was acting dishonestly with others, would use or allow his Tai Wo Hau address to be recorded in the company registration documents.  And why should he keep the solicitor’s letter to leave behind any trace of crime if he had really conspired with others to defraud through Heskrow? 

88.  Again, why should the defendant reveal his real surname Hung to PW5 instead of coining a false one? 

89.  That Mr Lam signing on the office handover form [Exhibit P12 (iii)] as ‘杰 ‘for ‘洪家傑’ is telling – everything was made to be related to Hung Ka Kit, the name used to register Heskrow and to rent the office.

Identification

90.  The whole case turns on whether PW5 correctly identified the defendant as James Hung, who he met for 45 minutes on 12 May 2016.

91.  The defendant was identified by PW5 in the identification parade. Defence Counsel said the parade was not conducted fairly and properly.  I have heard the evidence as to what happened in the parade.  I have seen the video and audio record of the process.  While the actors might have some variance in their appearance, the situation was not so unsatisfactory as to make the parade unfair and thus inadmissible.

92.  PW5 says James Hung was strong and tall. He alleges James Hung also had eyes, ears, mouth and nose bigger than those of normal people.

93.  The defendant is tall and of between medium and strong build.  However, his eyes, ears, mouth and nose are not bigger than those of normal people.  His features are not really spectacular or special.

94.  Another witness PW2 met Mr. Hung of Heskrow four times for an hour on each occasion. He says Mr. Hung was definitely not in the parade.

95.  A further witness PW4 met ‘傑仔/ Kit Chai’ of Heskrow for at least half an hour on 7 May 2016.  He is sure ‘傑仔/ Kit Chai’ was not in the parade.

96.  The defendant testifies he was never called James and he had nothing to do with Heskrow.

97.  The defendant says he was at his rented place with his girlfriend sometime after 5 pm on 12 May 2016 till the next morning.  He usually went home directly after work.  He can remember that was the case on 12 May 2016 because he and his girlfriend had adopted a puppy on the previous day.

98.  The defendant’s alibi is supported by his girlfriend’s evidence.  There is only one discrepancy: the defendant says he called food delivery that evening while Ms Rakkaew says the defendant brought the food home for dinner.

99.  The discrepancy may be due to a failure of memory of either one.  On the whole, I find the defendant and his girlfriend credible.

100.  Furthermore, Professor Cheung confirms that the one who wrote ‘洪’ on the name card which James Hung gave PW5 on 12 May 2016 was not the same person who wrote in PC19147’s notebook, i.e. the defendant.  He says although one can write differently but the penmanship, style and stroking intensity of the examined writings were very different.  He is sure the writers were different people.

101.  There is nothing from Prosecution to rebut Professor Cheung’s finding, which I accept as credible and reliable. Professor Cheung’s evidence supports the defendant’s claim that he was not that James Hung who wrote on the name card and gave it to PW5.

102.  Defence Counsel says an honest witness can be mistaken.  He is right.  PW5 is mistaken of his identification of the defendant as James Hung.

103.  Prosecution have not proved beyond reasonable doubt that the defendant had anything to do with Heskrow in defrauding PW1 – PW5. The defendant is acquitted of the charge.