HKSAR v. LEE WING KEE

CACC 126/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 126 OF 2002

(ON APPEAL FROM DCCC Nos. 13 of 2001 and 322 of 2001)

____________

____________

_________________________________

REASONS  FOR  JUDGMENT

_________________________________

Hon Lugar-Mawson J (giving the judgment of the Court)

Introduction

1.  On 2 November 2004 we allowed the Applicant’s appeal against conviction and quashed his conviction.  We now set out our reasons for our decision

Background

2.  The Applicant was one of twenty defendants who were tried before Deputy Judge Thomas in the District Court in early 2002 on a 20 count charge sheet.  This charged the defendants, in various combinations, with offences of conspiracy to defraud and theft in relation to the operations of four companies each of which purported to be involved in futures trading.  The frauds were of the type commonly known as “Loco-London Gold” or “Loco-London Silver Frauds” in which gullible persons are induced to work for a fraudulent investment company where they are swindled out of substantial sums of money by false representations by the conspirators that their money has been invested and then lost in futures trading.

3.  The Applicant faced four charges, the 5^th charge of conspiracy to defraud and the 16^th, 17^th & 18^th charges, which were all theft charges.  He was convicted of the conspiracy to defraud charge and acquitted of the theft charges.  He was sentenced to serve 4 years’ imprisonment for his offence.

Prosecution case

4.  The 5^th charge concerned the activities of a company called Victoria King Petroleum Development Ltd (Victoria King) which purported to be in the business of trading in petroleum futures. 

5.  It was the prosecution’s case that Victoria King had no legitimate purpose.  It had been set up by Tony Siu (D1), who was the mastermind of the whole scheme, for the sole purpose of cheating members of the public out of large sums of money.  He and other of the defendants at trial had formerly run two other bogus companies Stadium Consultants Limited (stadium) and Honour Century Consultants Ltd (Honour Century) which purported to be in the business of dealing in gold futures. 

6.  Tony Siu stopped operating Stadium and Honour Century in January 2000 as a result of a police investigation into their operations.  Victoria King was set up in late February 2000.  It operated out of the same offices in Cameron Plaza, Tsim Sha Tsui that Stadium had used.  These offices were decorated with photographs of oil tankers and oil refineries and the conspirators scoured the Yellow Page Telephone Directories for names of companies engaged in the oil industry.  They then used them to prepare a large number of impressive, but fraudulent, documents purporting to evidence the existence of flourishing petroleum futures investment company.  Expert witnesses from the oil industry gave evidence that trading in petroleum futures could not be conducted in the manner Victoria King claimed to operate.   

7.  The victims were recruited through advertisements appearing in local newspapers offering attractive salaries for relatively straightforward positions, varying from administration clerk to senior clerk and from shipping supervisor to customer relation’s officer.  These advertisements attracted a substantial number of applications and the jobseekers were then interviewed.  The purpose behind the interview was not to find the most suitable candidate for the job advertised, but to find those persons who would be most susceptible to fall for the scam.

8.  Once the victims had been offered employment, they were set to work doing meaningless office tasks and then deceived into paying money for apparent investments in petroleum futures trading.  There were no investments and the victims’ payments went straight into the conspirators’ pockets.  The victims were then told that all their money had been lost in trading.  They were then either dismissed for incompetence, or left the company of their own accord.

9.  The various conspirators played their own particular roles in deceiving the victims and perpetrating the fraud.  Some acted as ‘supervisors’ who purportedly held training courses for the victims.  Some were ‘special agents,’ their job was to pose as new recruits to the company, befriend the victims, mollify their concerns and then induce them to ‘invest’ their money in the purported trading activities of the company.

10.  A large number of victims gave evidence about the operations of each of the four fraudulent companies and the deceptions perpetrated on them.

11.  The prosecution’s case against the Applicant was that he was the principal interviewer of the applicants applying for work with Victoria King.  He carried out these interviews not at Victoria King’s offices in Cameron Plaza, but at a separate office at the New Mandarin Plaza.  After the applications had been processed they were sent over to the Cameron Plaza offices.  According to D8, who testified on behalf of the prosecution, the Applicant carried out most of the interviews. 

12.  During the police investigation, the Applicant was seen twice at the New Mandarin Plaza offices, on 29 May 2000 and on 8 June 2000.  On the second occasion, he gave a witness statement to the police.  In it he claimed that he had been interviewing jobseekers and had conducted between 3 or 4 to as many as 10 interviews a day.  The Applicant also told the police that he did not know if any of the applicants he had interviewed had been offered employment.

13.  Two of the victims identified the Applicant as the man who had interviewed them.

Defence case

14.  The Applicant did not give evidence.  His case as disclosed in cross-examination is that he was unaware that he had been caught up in a fraudulent enterprise.

Grounds of Appeal

15.  The grounds of appeal contend, firstly, that the Judge failed to direct himself fully, or at all, in relation to the inferences of fact which could be properly and safely drawn against the Applicant.  Secondly, that the Judge erred in making the following findings: that no one in the Applicant’s position could possibly have thought that such manner of recruitment could have been innocent.  That the Applicant was aware that a large volume of recruits was “…the life blood of the criminal enterprise”, and that the fact the Applicant was living with Tony Siu’s mother would have made him aware of Siu’s lack of expertise in the petroleum business and, thirdly, that the Judge failed to consider the Applicant’s good character.

Discussion

16.  The Judge’s findings against the Applicant are set out in two separate sections of his Reasons for Verdict.  This was a lengthy document of 103 pages.  The first section reads as follows, the Judge is speaking of Victoria King:

“Again, the pattern of organization was similar to that at Stadium Consultants Limited and Honour Century Consultants Limited. The advertisements for employment were put out and jobseekers attended at the office at New Mandarin Plaza. It appears that at first, there was a westerner who interviewed the jobseekers. There was also evidence from the jobseekers that one or more women were also involved in the interviewing.  However, AW1 confirmed that D18 did much of the interviewing. AW1 also said that D18 was the boyfriend of the mother of D1.  Indeed during the course of police investigations, D18 was arrested at the home of D1’s mother.  PW 160, Sergeant 4406 Soo Chi fai gave evidence that he had seen D18 on two occasions at the office at New Mandarin Plaza. On the second occasion on the 8^th June 2000, D18 gave a witness statement.  During the course of the statement taking D18 told PWI60 that he had been interviewing jobseekers and that he had interviewed three or four to ten persons a day. PW 108, Ms Tam Yung Lin appeared to have been interviewed by D18 in May 2000.

The prosecution produced a mass of documentation in which the details of jobseekers was set out.  In particular details of their savings and the date of termination of their last jobs were set out. D18 told the officer that he did not know whether or not any particular jobseeker was taken on.  However, the sheer volume of jobseekers for basic jobs would have made anyone in the position of Dl8 pause and consider.

When the jobseekers were sent along to Victoria King Petroleum Development Limited at Cameron Plaza no training was given to them.”

17.  The second section reads as follows:

“I have set out the role of D18 at Victoria King Petroleum Development already. In my judgment the fact that D18 dealt with such a huge volume of applicants for apparently menial jobs in a small company meant that no one in the position of D18 could possibly have thought that such a manner of recruitment could have been innocent. It is clear that D18 knew that the people he was sending to Victoria King Petroleum Limited at Cameron Plaza were to be taken on in some fashion. Clearly, a large volume of new recruits was the life blood of the criminal enterprise and I am satisfied that the prosecution has proved that D18 was aware of this. I am satisfied that the only conclusion that anyone in the position of D18 was that he was taking part in a criminal enterprise. The fact that he was living with the mother of Tony Siu provides a positive link with D1 and I am satisfied that D18 would have known of the lack of expertise of D1in the field of oil trading. I am satisfied so that I am sure, beyond a reasonable doubt, that the prosecution has proved, therefore, that D18 is guilty of the offence in charge 5.”

18.  Those are the sum total of the Judge’s findings in respect of the Applicant.  Mr. Delaney argued that, given the large number defendants in this case, the Judge should have made it clear how and why he was satisfied that the primary facts led to an inescapable conclusion that the Applicant was party to the conspiracy charged in the 5^th charge.

19.  As Mr. Delaney pointed out, no adverse inference could be drawn against the Applicant based on his relationship with Tony Siu’s mother.  Even if, by reason of that relationship, the Applicant knew that Siu had no experience in the petroleum business, that could not lead to an inference that the Applicant knew that Siu was engaged in a criminal enterprise founded and managed by Siu.

20.  Mr. Delaney accepted that although the large number of job applications he dealt with might require the Applicant, or indeed any man, to “…pause and consider”, there was no evidence and no finding that Applicant ever made any enquiries about this.  He was not obliged to do so and the Judge made no suggestion that he deliberately chose not to do so.  Further, the Judge appears to have given no consideration to the Applicant’s claim in his witness statement (which was adduced by the prosecution) that he did not know if any particular applicant had been offered employment after he had completed the interviews.  Neither did the Judge draw a distinction between the interviewing of candidates and offering them employment.  There was no evidence that the Applicant ever offered any of the persons he interviewed employment with Victoria King, the evidence was only that he interviewed candidates and that after interview the interview record forms were passed to the Cameron Plaza offices where the selection of potential victims was made.

21.  We note also in this connection that apart from D8’s evidence that the Applicant carried out “…much of the interviewing”.there was no evidence that he conducted all, or the majority of, the interviews.  Although many interview record forms were produced in evidence, there was no handwriting evidence to show that the Applicant had completed them.

22.  As Mr. Delaney pointed out, the Judge made no reference in his Reasons for Verdict to the fact that there was no evidence of the Applicant having any connection with either Stadium or Honour Century.  The finding that he was aware of Victoria King’s criminal purpose appears to be based almost entirely on the large number of candidates that he interviewed.   Further, no consideration appears to have been given to the fact that the Applicant was working in an entirely separate office from Victoria King’s main office in Cameron Plaza, or to the fact that he continued to attend the Mandarin Plaza offices as usual after he had given a witness statement to the police on 8 June 2000 in the knowledge that the police had earlier arrested his colleagues, which, as Mr. Delaney commented, is hardly the action of a guilty man.

23.  We considered that Mr. Delaney’s points were well made.  Put simply, this was a case where the evidence against the Applicant was weak.  It amounted to no more than a claim from an accomplice witness that he had conducted “…much of the interviewing” of applicants for positions in Victoria King, coupled with direct evidence from two victims that he had interviewed them and the Applicant’s own claim that he had interviewed three or four to ten persons a day.  The fact that he had been seen twice in the Mandarin Plaza offices and that he had a relationship with Tony Siu’s mother was not evidence supportive of the charges against him.  Properly analysed, the evidence was insufficient to support an irresistible inference that the Applicant was a knowing party to the conspiracy charged in the 5^th charge.  We were therefore of the view that the Applicant’s conviction was unsafe and unsatisfactory.

24.  There was, however, no substance in Mr. Delaney’s ground of appeal relating to the lack of a good character direction in the Judge’s Reasons for Verdict.  The point is well settled, in R v. Lin Kae Tzong [1995] 1 HKCLR 116, this Court held that there was no rule that in cases of previous good character a ‘Berrada direction’ (see: R v. Berrada (1989) 91 Cr App R 131) had to be given by a District Court judge or a magistrate.  The failure to give such a direction where an accused properly presented himself as of good character would not result in the court quashing a conviction.  The court would only interfere if it concluded that in all the circumstances the conviction was unsafe and unsatisfactory.

25.  As we were of the view that the Applicant’s conviction was unsafe and unsatisfactory we granted him leave to appeal against conviction and treating the hearing of the application as the hearing of the appeal allowed his appeal and quashed his conviction.