HKSAR v. BANERJEE EDWINA-DILAN AND ANOTHER

DCCC 931/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 931 OF 2011

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REASONS FOR VERDICT

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 D1 and D2 are jointly charged with 18 offences of "Lending money at an excessive rate". They pleaded not guilty to all charges.

2.  The 18 charges involve a total of 12 borrowers, who are Filipino domestic helpers.  The Prosecution was unable to locate the 2 borrowers involved in Charges 5, 11 and 18.  As a result, I found no case to answer in respect of those 3 charges.  Charges 5, 11 and 18 were dismissed.

The Prosecution Case

3.  At all material times, D1 was the registered tenant of and residing in a public housing unit situated at Room 523, Block 19, Shek Kip Mei Estate, Kowloon ("Location A").  Exhibit P4 is a sketch floor plan of Location A.

4.  Since about July 2008, Shop No.17, Ground Floor, Belcher Court, Nos.2-20 Sai Cheung Street, Western District, Hong Kong ("Location B") has been let to D2.  The premises contain a mezzanine. Exhibit P2 is a sketch floor plan of the mezzanine of Location B.

5.  On 4 June 2008, D2 applied for the registration of a business carried on under the name "Mabuhay Asian Corner" at Location B.  The relevant records kept and maintained by the Business Registration Office are contained in Exhibit P25A.

6.  On 5 July 2010, D2 applied for the registration of a branch business carried on under the name "Global Expert Employment Services" at Shop 1B, Ground Floor, Belcher Court, Nos.2-18 Sai Cheung Street, Hong Kong ("Location C").  The relevant records kept and maintained by the Business Registration Office are contained in Exhibit P25B.

7.  At all material times, neither D1 nor D2 was a licensed money-lender.

8.  The Prosecution called a total of 10 borrowers (PWs 2 to 11), namely BLANCO, FUSILERO, DULAY, ABENES, ACAS, TORREFRANCA, CEBALLOS, BEDUA, BELENCION and BOLA, to give evidence.  They all testified that between March 2007 and September 2010, they borrowed money from a Filipino female named Winnie (later identified as D1) sums of money ranged from $1,500 to $4,000.  In the course of borrowing money, they were required to sign an Acknowledgement Receipt ("AR"), which is effectively an IOU, and an Authorization on Keeping of Passport ("Authorization").  Based on the borrowers' evidence regarding the terms of repayment (including the amounts borrowed, the amounts actually received, the amounts repaid and the dates of repayment), the expert witness (PW15 Treasury Accountant Mr. HUNG) calculated the effective rate of interest for each loan in accordance with the Money Lenders Ordinance (Cap.163); they all exceeded 60% per annum, which is illegal.

9.  D1 and D2 were arrested by the Police at Location A about 7:00 am on 16 September 2010.  After the arrest, DPC 4879 (PW1) conducted a house search at Location A.  A total of 86 sets of loan documents were found and seized from Location A.  In particular, loan documents relating to PWs 2, 4, 5, 7, 8, 9, 10 and 11 were found thereat.  Exhibit P20 (relating to PW7 TORREFRANCA, Charge 3) was found in the 1^st bed drawer in the master bedroom.  Exhibits P10 (relating to PW2 BLANCO, Charge 7), P14 (relating to PW11 BOLA, Charge 2), P15 (relating to PW4 DULAY, Charge 1), P16 (relating to PW5 ABENES, Charge 4), P21 (relating to PW8 CEBALLOS, Charges 8 and 14), P22 (relating to PW10 BELENCION, Charge 12) and P23 (relating PW9 BEDUA, Charge 9) were found in the other bedroom.

10.  PW1 also searched Locations B and C on the same day.  From Location B, a total of 22 sets of loan documents were found.  In particular, Exhibits P13 (relating to PW3 FUSILERO, Charge 15) and P17 (relating to PW6 ACAS, Charge 6) were found thereat.  From Location C, 2 sets of loan documents, 2 foreign domestic helper employment contracts and 3 Filipino passports were found.  In particular, Exhibits P11 (relating to PW2 BLANCO, Charge 17), P26 (2 passports of PW2 BLANCO expiring respectively on 10 October 2006 and 29 August 2011) and P28 (employment contract of PW2 BLANCO for the 2-year period commencing on 10 February 2010) were found thereat.

11.  On 7 June 2011, WDSPC 8158 seized 1 "Packard Bell" desktop computer (Exhibit P35) from Location A in the presence of both defendants.  Exhibit P35 was examined by PW12 PC 4098 (a computer forensic expert).  PW12 examined the hard disk of Exhibit P35 and found that it contains, inter alia, 2 files with filenames "ACKNOWLEDGEMENT RECEIP1.doc" and "ACKNOWLEDGEMENT RECEIPT.doc".  Hardcopies of both files were printed out and are collectively produced as Exhibit P24.  The file "ACKNOWLEDGEMENT RECEIPT.doc" contains in essence templates of loan documents signed by the borrower witnesses.

12.  Emma LOQUIAS (PW13) was tendered for cross-examination by defence.  It was put to her that it was she who lent money to the borrowers in this case.  It was also suggested that she took revenge against D1 because she was fired by D1 when D1 discovered her money-lending business.  PW13 denied all these allegations.

Defence Case

13.  Both D1 and D2 elected not to give evidence.  This is their right, I drew no adverse inference against them in this regard.

14.  D1 CALLED 1 DEFENCE WITNESS (VILLOCILLO ) to give evidence.  She claimed that she was working as a domestic helper in Hong Kong, but her employer rented a room in the mezzanine of Location B as her quarters.  Villocillo said she and Emma (PW13) were residing at the mezzanine of Location B.  PW13 was D1's domestic helper.  Villocillo also claimed that she had borrowed money from PW13 before and had signed an AR (Exhibit D8).  She said PW13 was usually kept busy on Sundays by her money-lending business escorting borrowers up and down the mezzanine through the shop entrance at Location B.  She has also seen PW13 using the computer at the shop to print out ARs.  PW13's employment was terminated when D1 discovered her sideshow money-lending activities.   

Assessment and Analysis of Evidence

15.  The burden of proof is on the Prosecution to prove each element of each offence beyond reasonable doubt.  Both D1 and D2 have a clear record.  I have directed myself on their good character accordingly.

16.  The evidence of this case is not complex.  The trial lasted 14 days (originally fixed for 9) and had to go part-heard because of accommodation of counsel's and court's diaries as well as the lengthy cross-examination of each borrower by D1's counsel Ms. LAI.

17.  I have carefully assessed the evidence of each witness and observed his/her demeanour in the witness box.  I have reminded myself to treat the evidence of each borrower and each charge separately.

18.  I am aware of the criticisms against the quality of the evidence of PWs 2 to 11 made by Ms. LAI in her lengthy written submissions.  I need not repeat them here.  PWs 2 to 11 all gave their evidence in a Filipino dialect, except PW8 CEBALLOS, who chose to speak in English.  In any event, it was apparent that none of them had a good command of English.  In view of their language barrier, I have allowed them some latitude in the process of interpretation.  I have not overlooked Ms. LAI's criticisms against the manners in which the Police took witness statements from some of the borrowers.  I see nothing wrong with the Police using standard phrases or paragraphs in a witness statement or even a pro forma (fill in the blanks format) when the investigation involves a large number of witnesses who have experienced more or less the same course of events (such as mass deception, major traffic accidents and borrowing money from the same lender).  I am also alive to the alleged discrepancies between the evidence of those borrowers and the statement-taker WDPC 8158 (PW14).  In my view, such discrepancies are not significant enough to affect the credibility or reliability of the borrowers' evidence.

19.  The ARs and Authorizations signed by the borrowers are extremely strong corroboration of the borrowers' evidence.  Ms. LAI tried to attack the reliability of such documents by complaining that there are gaps or lack of clarity in their contents (such as loan amounts, repayment dates and unfilled blanks).  In my view, such gaps were filled satisfactorily by the evidence of the borrowers.  The ARs and Authorizations are concrete and cogent evidence that the borrowers have borrowed money from someone; or otherwise, why would they sign those documents? I agree with prosecuting counsel Mr. WAI's observations that measures were adopted by the lender(s) to conceal the criminal nature of the lending of money and the identity of the lender(s).  Such measures were, however, pathetically childish.  Leaving the Lender's name blank and not mentioning the interest rate and the actual amount the borrower received on the ARs was obviously an amateurish ploy towards that end.  Stipulating in the Authorizations that the borrower was leaving the passport and employment contract "for safe-keeping and not because of any loan" was another such amateurish ploy.  As a juror, I accept the evidence of the borrowers whenever their evidence is supported by an AR.

20.  In her cross-examination and final submissions, Ms. LAI alleged that it was Emma LOQUIAS (PW13) who conducted the lending business at Location B.  I simply find this suggestion impossible.  If the evidence of VILLOCILLO (DW1) is true, D1 had to be deaf and blind by not having noticed the borrower traffic on Sundays in the mezzanine of Location B.  I reject the evidence of DW1.  Based on the evidence of some borrowers, I accept that PW13 might have assisted Winnie with her money-lending affairs, but merely as Winnie's agent.  Furthermore, if PW13 was running a money-lending business behind D1's back, why would she leave or store the related documents at all 3 Locations?

21.  Ms. LAI has also attacked the calculation of the interest rate on the basis of unclear or unknown repayment dates.  According to the evidence, PW5 ABENES and the lender seem to have agreed to leave the repayment date open in Charge 13.  I accept that without an agreed or actual repayment date, the interest rate cannot be calculated.  Although PW2 BLANCO and PW3 FUSILERO have not repaid their loans in Charges 17 and 15 respectively, their evidence clearly shows that they and the lender have reached an agreement on the respective repayment dates.  It is common sense that subsequent failure to repay the loans does not affect the original loan agreements.  In other words, the repayment dates for Charges 17 and 15 are still certain.  All other loans were repaid by the borrowers, thus leaving no variables unknown, thereby enabling PW15 to calculate the effective rate of interest with certainty.

22.  Ms. LAI has in the trial objected to the dock identification of D1 made by all borrowers except PW11 BOLA and PW6 ACAS.  PW10 BELENCION is the only borrower who did not make a dock identification of D1 because she was handled by Emma (presumably PW13) when she went to Location B to borrow money.  However, her loan was transferred to PW9's (BEDUA) account from D2's Hang Seng Bank account.  When she repaid the loan, PW10 personally handed the money to Winnie, who thereupon returned the passport and employment contract to PW10.  In my view, there is no question about identity because many loan documents and the computer were seized from Location A (D1's home).

23.  In conclusion, I accept the evidence of all borrowers whenever supported by ARs.  ARs and Authorizations were signed for one and only one purpose－borrowing money.  ARs and Authorizations were seized from Locations A to C.  A desktop computer which contains the files of templates of ARs and Authorizations was seized from Location A (D1's home).  All such evidence leads to one and only one conclusion－D1 was the Winnie who lent money to the borrowers.  Regarding interest rates, apart from Charge 13, I accept the calculations made by PW15.

24.  Charges 10, 13 and 16 are not supported by any ARs, therefore I give the benefit of doubt to defence.  I also accept that the interest rate in Charge 13 cannot be calculated.

25.  Based on the reasons stated above, I am satisfied that the Prosecution has proved beyond reasonable doubt Charges 1 to 4, 6 to 9, 12, 14, 15 and 17 against D1.  Accordingly, I find her guilty of the respective charges.

26.  Regarding D2, the evidence against him is superficial.  Only his name was mentioned in some Authorizations and his bank account was used on a few occasions to effect payment to the borrowers and to accept repayments of the loans.  In my view, without further evidence and given the relationship between D1 and D2, it is possible that D1 had put D2's name on the Authorizations and used his bank account without D2's knowledge.  On this basis, I am not satisfied beyond reasonable doubt that D2 had committed the offences.  Accordingly, I find him not guilty of all the charges he faces.