HKSAR v. LO KWOK FAI DANNY

CACC 241/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 241 OF 2001

(ON APPEAL FROM DCCC 177 of 2001)

__________________

______________

______________

J U D G M E N T

______________

Hon Stock JA (giving the judgment of the Court):

Introduction

1 The applicant was charged with two others in the District Court with conspiracy to defraud. He pleaded not guilty but, on 9 July 2001, was convicted by Deputy Judge MacKintosh. This is his application for leave to appeal against conviction.

2 The charge was that between 7 December 2000 and 20 January 2001 the applicant, with one Michael Liu Chiu-leung and a man called Ng Mong-ho and others, conspired to defraud merchants, banks and financial institutions by falsely representing that persons producing credit cards in payment for goods were producing genuine credit cards, and that credit card sale slips had been signed by bona fide holders of the credit cards whose numbers appeared on the cards.

3 The significant evidence for the prosecution at trial was provided by a man called Lau, who was an ICAC informant. The effect of his evidence was that the applicant had suggested a credit card scam, and had introduced Lau to others who would be producing, and ultimately did produce, the bogus cards, and that between 7 December 2000 and 20 January 2001 there took place a series of meetings in the course of which the details of the scam were advanced and refined. Ultimately, on 20 January, a forged card was used by Ng pursuant to the conspiracy, and Ng was arrested. The applicant was arrested the following day.

4 The judge believed the evidence of Lau as against that of the applicant, which was to the effect that whilst he was present during conversations and overheard talk about a credit card scheme, he was never party to an agreed plan; and that to the extent that he engaged in such conversations it was in the nature, so far as he was concerned, of talking for the sake of talking about this subject, amongst others.

The prosecution evidence

5 The evidence centered around a number of specified meetings and telephone conversations and, broadly, was as follows.

6 Lau ran a travel agency and, on 7 December 2000, the applicant contacted him. They had known each other for many years and, according to this evidence, the applicant told Lau that he had friends who were connected with counterfeit credit cards, and that he wanted to use a credit card reader facility which Lau's business, or former business, had enjoyed, and proposed how the proceeds of the scam would be divided between Lau, the applicant and the others involved. The applicant was to receive twenty per cent. Lau made no agreement and, instead, informed the ICAC of what had transpired.

7 On 20 December, so continued Lau's evidence, the applicant contacted Lau to arrange a meeting at Lau's office which was to be attended by Michael Liu (who was D2 before the Deputy Judge and who pleaded guilty). Lau was then fitted with a tape in order to record such conversation as would take place. The applicant arrived and, a short while later, so did D2. The conversation which followed was primarily between Lau and D2, and concerned credit cards, and their use in the travel agency's card reader and in obtaining goods from Thailand; the conversion of the goods to cash; and the splitting of proceeds, including the share which the applicant would receive. There was some risk, apparently, attendant upon the use of the reader, and so it was agreed that the scheme would require further consideration, and that the applicant would act as a go-between or contact point for Lau and D2.

8 On 22 December 2000, there were two meetings. The first was in the afternoon, though there was an issue as to who had arranged it: the applicant or Lau. Be that as it may, it was a meeting between only the applicant and Lau and it, too, was recorded by tape. They talked about the use of counterfeit credit cards, and the proceeds of the fraud, and of the possible use of an assistant general manager of a jewellery shop who would help in the use of the cards. The second meeting was in the evening at the Regal Kai Tak Hotel, attended by the applicant Lau, D2 and a man called John. It was Lau's evidence that the applicant had called him to go to the hotel for the meeting with D2. There was further discussion about splitting the proceeds of sale, and Lau said that the applicant went so far as to question the fairness of the proposed split. They discussed the manufacture of cards, and Lau talked about introducing a dishonest assistant general manager who had several shops under his control. The applicant was said to have taken part in the conversation. In the course of the conversation, D2 said that he was going to Thailand the following day to use forged credit cards.

9 We move next to 25 December. Lau said that the applicant telephoned him, and asked Lau to contact D2 in Thailand, and to go to Thailand to collect their shares of D2's fraudulent use of cards there. Lau called D2 who told him not to come to Thailand, and Lau said that he then contacted the applicant, and told him what had transpired.

10 There were some contacts between Lau and the applicant thereafter, but the next meeting, according to the evidence, did not take place until 8 January 2001. D2 had returned from Thailand, and at the New Astor Hotel, at that meeting, were the applicant, Lau, D2 and the man called John. They confirmed the division of proceeds, and when the assistant general manager would be introduced. D2 is alleged to have said that counterfeit cards had been brought back by John from Thailand.

11 The 'assistant general manager' was in fact an ICAC agent posing as the manager of a chain of shops, and D2 apparently met that agent on 10 January. The applicant was not present, but it was Lau's evidence that the applicant had said that he could not attend, but that he would speak to D2 about the proposed meeting. The applicant had, according to this evidence, told Lau on the telephone that he was not satisfied with the current arrangements for the sharing of proceeds: he wanted to receive his share directly from D2, and not from the assistant general manager.

12 According to Lau, there were further contacts made by the applicant over the telephone after 8 January in which the applicant and he talked about the cards.

13 On the evening of 18 January the undercover 'assistant general manager' met D2, and D2 told him that the cards would be ready for use on 20 January. On 20 January, cards were in fact used, although the applicant was not present and, as we say, arrests then followed.

The applicant's case

14 The applicant did not deny that he attended meetings at which credit cards were discussed, but his evidence departed from that of Lau in material aspects. According to the applicant, it was Lau who contacted him in early December, and there was talk about credit cards but nothing about false credit cards. Indeed, it was not until 20 December that he, the applicant, heard any suggestion about counterfeit credit cards. He did say that he would introduce D2 to Lau, but only as someone who needed air tickets for Thailand. As for the meeting or meetings on 20 December, he went along, but he did not know what the meetings were to be about, and when there was conversation about false cards, he, the applicant, just went along with what was said, not intending to partake in any serious discussion; indeed, he tried to change the subject. The talk, according to him, was all in the nature of inconsequential chatter.

15 The meeting of 22 December at the Regal Kai Tak Hotel was one, he said, which he attended after persistent demands by Lau that he should go there. He said that he took no part in the conversation, and read a magazine.

16 He also went to the meeting at the New Astor Hotel on 8 January and, again, his evidence was that he read a newspaper when conversation turned to counterfeit cards. Then, for the first time, at that meeting, he realized that what was being discussed was being seriously discussed, and he decided to have nothing more to do with the others in relation to the scheme.

The judge's approach

17 The Deputy Judge's reasoning is commendable for its common sense analysis of the evidence, of inherent consistencies and of improbabilities, and for its attachment to how one would expect persons to behave in given situations; a contrast to incantations about demeanour, and to bland statements of belief and disbelief. The evidence of Lau was believed. It lacked exaggeration where exaggeration was possible. It was supported in material aspects by other evidence, such as the tapes. The fact of a report to the ICAC sat well with the account given by Lau, but did not sit at all well with the applicant's account of the purpose of his initial discussions - innocent discussions, he said - with Lau about credit cards; so that the falsity of Lau's report to the ICAC, had it been false, would immediately have been exposed by the tapes. There was inconsistency between the suggested shock that the applicant said he felt when he heard talk of the use of forged cards, and yet his continued engagement in meetings and suggested inconsequential discussions. And there was the text of the applicant's contributions to the conversations themselves. All these were indeed, in the context of this case, good tests of where the truth lay; and the judge has, in his Reasons for Verdict, paraded one sound reason after another for believing Lau, and for disbelieving the applicant.

18 The judge found that there was a concluded agreement for the use of counterfeit cards. All that remained throughout the meetings that progressed was detail, which culminated in due course, that is, in late January 2001, in the substantive criminal act. That the applicant was party to the agreement was not, as far as the judge was concerned, in any doubt, as evidenced by the applicant's arranging of meetings, and by the conversations to which he was a talking party. He was "the introducer, the facilitator and the orchestrator", as the judge put it, even if not a major player. The judge was satisfied that the applicant had at no time withdrawn from the conspiracy and, accordingly, he convicted the applicant.

The grounds of appeal

19 We have been addressed today by Mr Egan on behalf of the applicant. He has adopted and endorsed the points made in his skeleton argument, and has developed some of them further. The first ground of appeal is that the judge erred in finding that there was any settled agreement on the part of the applicant and that there was any intention by him to join the conspiracy. The second ground is that the judge was wrong to make certain findings of fact, and it is said that the judge ignored contradictions and omissions in the evidence of Lau. Finally it is contended that the verdict was against the weight of the evidence, and is unsafe and unsatisfactory.

20 Mr Egan has put the matter in this way in his written argument: that no reasonable tribunal directing itself "could ever have been satisfied of the guilt of the applicant beyond reasonable doubt". Given the tapes of the conversations to which the applicant was a party, given the applicant's own evidence that he was present and took part in conversations about forged credit cards, this submission is itself quite an extraordinary one, and of the type with which this Court should not be troubled. We intend to say nothing more about it than that it is not a point that appeals to us.

21 Mr Egan then suggests that in a case where the main prosecution witness is a person of previous poor character, and an informant to boot, and the defendant a person of previous good character, the evidence of the informant "is virtually required to be flawless before a court can safely rely on it". This is neither a helpful nor a realistic approach. The correct approach, the obvious and mature approach, is that a court should rely on evidence which is shown to be truthful, and reject evidence that is untruthful or, in the case of prosecution testimony, about which the court is unsure. That is what is required; and in assessing whether the evidence was in this case truthful, the judge took into account the characters of both witnesses, and conducted an assessment which was, as we say, entirely sensible. It is the assessment that was flawless and, for current purposes, that is quite enough.

22 We have been presented by Mr Egan with an extensive catalogue of suggested defects in Lau's evidence to which it is said that the trial judge displayed insufficient regard. We have examined each one, an examination which has necessitated going to references in the transcript - and indeed extensive transcripts have been prepared and collated as part of the appeal bundle - and then by going to the judgment, and then seeing what the respondent has to say about it. Whilst we have no intention of dealing with each suggested defect - though each has been examined - we will mention some.

23 We record one wherein Mr Egan complains that in cross-examination Lau spoke of a slang expression which the applicant used during the first telephone conversation, an expression to be taken as a reference to false credit cards; the point apparently being that the expression was not averred to in the witness statements, or in evidence in-chief. We have read the evidence where this emerged. It emerged quite naturally, and there is nothing surprising about it. Evidence emerges in this way all the time. It was not a dramatic development which one would have expected necessarily to have emerged at an earlier stage; but it was a point, and it was made by counsel in cross-examination and, one assumes, in his address to the judge, and the judge has noted it, and has no doubt taken the view, with which one is bound to agree, that it is a point of scant significance in the overall context of the case. But be that as it may, it finds itself as part of the catalogue in this application.

24 Then counsel tells us that of 211 comments or statements made by parties at the meeting on 20 December, only 16 were made by the applicant of which 4 are suggestedly inane, so that the applicant made only 12 of any significance. According to Mr Egan the judge has "ignored the significance of this". This is another submission which we are sorry to see put before a court as a serious submission. Proof of involvement in a conspiracy is not dependant on some count of the number of comments made by an alleged conspirator. It depends on all the facts of the case, the role of the alleged conspirator, and the nature of the comments which he is proved to have made. We have read the transcript of the conversation in issue, a conversation at which the applicant was present, and which consisted of ideas expressed about counterfeit cards, how they could be used, how the goods obtained could be sold, and how the profits of the crimes split; conversation which clearly shows the applicant as the person who had introduced D2 to Lau, and was sitting back leaving them to sort out the details, yet contributing occasionally when the situation so required, and contributing in a way which overwhelmingly gives the lie to contentions of idle chit-chat.

25 There was a dispute about who initiated the meeting on 22 December; the applicant or Lau. Records of calls made on one of the applicant's mobile telephones that day showed that the first calls made by the applicant to Lau from that telephone were made after the ICAC were aware that the meeting was to take place that day; the suggestion being that this demonstrates that the first contact must have come from Lau, and that that in turn supports the contention that the applicant was not making moves for these meetings, but was instead being set up by Lau. This, says Mr Egan, was important evidence which the judge has ignored in a dismissive manner. In the sense that the judge has dismissed the defence argument as of no probative force, he has indeed been dismissive; quite rightly so, because, as he records, it was common ground that the mobile telephone on whose records so much reliance is placed was not the only telephone used by the applicant to contact Lau. If by 'dismissive' it is suggested that the judge has not addressed the point, then the suggestion is self-evidently ill founded.

26 Then it is argued that the tape of the second conversation, the one on 22 December, shows that Lau talked much more than did the applicant, so demonstrating, according to this argument, that Lau was the initiator, and that the applicant was uninterested or ambivalent. What we in fact see in the second conversation is the applicant taking a full and active and obviously serious part in discussions about counterfeit cards. That is all that matters. There was nothing ambivalent in the conversation, or in the attitude of the applicant, who was, for example, talking about how the proceeds of the credit card fraud might be split, and what to do with credit cards held in the names of foreigners.

27 The suggestion which is also made is that the judge was not in a position to appreciate how Cantonese speakers might engage in idle chatter, presumably meaning idle chatter about committing crime. This is a point which, against the evidence in this case, not only lacks substance but is bereft of common sense.

28 Mr Egan moves on to the suggestion that on 8 January 2001 credit cards were for the first time produced at the meeting of that day, that that was the day on which there could be no doubt but that the talk of credit card fraud was serious, and that it is common ground that after 8 January the applicant did not attend further meetings. He says that the telephone records show that there were from then on no telephone calls made from the applicant to Lau - although we note that it is not suggested that there was no contact at all between them, or that in the course of such contact as there clearly was, the applicant disassociated himself from the events which had already taken place. The point argued by Mr Egan is, again, to ignore the evidence that telephone contact from the applicant to Lau was not restricted to this one mobile telephone, the records of which have played such a prominent role in the applicant's submissions. The submission is also to ignore the evidence of Lau, accepted by the judge, that although the applicant did not attend meetings after 8 January, there were calls by him to Lau discussing details of the upcoming fraud. Nor was there any suggestion by the applicant that he communicated to the others any suggested withdrawal from the conspiracy.

29 Mr Egan makes much of the evidence of Lau, which emerged at the end of cross-examination for the first time that, after 8 January, the applicant called him on a number of occasions to discuss the progress of the credit card plan; Mr Egan arguing how significant was this new evidence. Lau explained its newness by saying that he had not previously been asked about it. Mr Egan says that the judge has failed to accord to this the significance it should carry in destroying Lau's credibility. The judge has dealt with the matter, and dealt with it fully. He was aware of the point, accepted Lau's explanation, noting too that the applicant himself accepted that there was contact between the two of them after 8 January, and that credit cards were mentioned, albeit not by him. We have seen the transcripts, we have studied the judgment and the care with which the judge has approached this case, and the point raised gives us no concern whatever.

Conclusion

30 We have, perhaps, accorded to the arguments raised more space than they deserve, but it was worth recording those we have recorded - and those we have omitted to deal with specifically are no more meritorious - in order to demonstrate the type of case for which the provision of section 83W of the Criminal Procedure Ordinance, by which time in custody might not be reckoned as part of the term of the sentence, was no doubt intended. This application has not a trace, not the faintest wisp, of merit. It has nothing that could properly be said to be even barely arguable. None of these grounds ever had any prospect whatsoever of success. They were, in effect, in our judgment, frivolous, and are, emphatically, grounds which counsel should not be advancing before this Court. This application for leave to appeal against conviction is dismissed.

31 The applicant was sentenced to three years' imprisonment. Exercising our powers under section 83W of the Criminal Procedure Ordinance, we order that three months of the time spent by the applicant in custody pending this hearing shall not be reckoned as part of that sentence.