HKSAR v. YAU WAI HUNG AND ANOTHER

CACC 311/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL 

criminal APPEAL NO.311 OF 2005

(ON APPEAL FROM DCCC 1300/2004 and DCCC 250/2005 (consolidated))

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Reasons For Judgment

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Hon Yeung JA (giving reasons for judgment of the Court):

Introduction

1.  On 4^th of April 2006, we dismissed the applicants’ application for leave to appeal against conviction. We indicated that we would hand down our written reasons and this we now do.

Background

2.  In the months of March to August 2004, some people approached a number of accountancy firms by telephone, offering business opportunities.

3.  The victims, who were qualified accountants, tax consultants or accounting managers working in those firms, were invited by what they thought to be “potential clients” and attended business meetings in restaurants. They did not, however, get any business and instead were invited to gamble “Show Hand”, and ended up losing large sums of money, ranging from $50,000 to over $500,000.

4.  The “games” took similar patterns, with stakes, which were small at the beginning, escalating to large sums in the last games when the victims had very good cards. However, the victims lost the games as one of the other players had better cards in suspicious circumstances, namely invariably a better three of the same kind of cards.

5.  The incidents aroused suspicions in the accountancy profession and reports were made to the police, leading to a police operation and the arrest of seven defendants.

6.  The seven defendants appeared before Deputy Judge Andrew Chan (the judge) in the District Court on an indictment consisting of nine counts of cheating at gambling (1^st, 3^rd to 5^th, 7^th to 11^th charges) and two counts of dealing with property known or reasonably believed to represent proceeds of an indictable offence (2^nd and 6^th charges).

7.  The applicants, Yau Wai-hung, Benne (Yau) and Kwok Yung-kwan (Kwok) were two of the defendants. Yau faced the 1^st, 3^rd, 5^th, 7^th, 10^th and 11^th charges and Kwok faced the 1^st, 5^th, 7^th, 8^th, 10^th and 11^th charges of cheating at gambling.

8.  The applicants were convicted of all the charges and were sentenced to 12 months’ imprisonment for each of the charges. The judge ordered seven months on each of the subsequent five charges to run consecutively to the sentence on the 1^st charge, making a total of 47 months’ imprisonment.

9.  The applicants applied for leave to appeal against both conviction and sentence. On 25 November 2005, Stuart-Moore VP rejected their applications.

10.  The applicants sought to renew their application in relation to conviction only, but failed to do so within the 14-day period under rule 42(3) of the Criminal Appeal Rules Cap 221A. The applicants put the blame on their lawyers for the delay.

11.  For the purposes of the present applications and under rule 74, we had waived compliance with rule 42(3) and dealt with the applicants’ applications on merits.

The Prosecution Case and Evidence

12.  The prosecution case was that the victims were approached, not because their professional services were required, but because they were targeted by a group of professional swindlers who preyed upon the victims’ desire for job opportunities. In fact, none of the victims was offered any job.

13.  A number of people, purportedly acting for non-existing companies, approached the victims, and fake names and forged name cards were used to alleviate possible suspicions. The victims were then invited to attend business lunches and ultimately “persuaded” to take part in “Show Hand” games.

14.  The suspicious pattern of the games and the ways the victims lost huge sums of money indicated it was a well-planned swindle commonly known as “Tin Sin Kuk” or “heavenly swindle”. In the last games, the victims had very good hands, only to be beaten by better hands held by a Mr Chow who was present in all the meetings.

15.  Both Yau and Kwok used false names and false names cards to conceal their real identities. Yau was introduced as Mr Au in Charge 1, Mr Hui in Charge 3, Mr Wu in Charges 5 and 7, Mr Lam in Charges 10 and 11. Kwok was introduced as Mr Hui in Charge 1, and Mr Chan in Charges 5, 7, 8, 10 and 11.

16.  According to the victim of the 1^st charge (PW4), Yau and Kwok were both present at the lunch meeting. Yau claimed to be surname Au and produced a name card of his to that effect. Yau also introduced Kwok to PW4 as “Mr Hui”.

17.  In the course of the meeting, Yau and Kwok each claimed to be a better chess player and suggested to have a match. It was then suggested that instead of chess, they should play cards and PW4 was invited to take part.

18.  The games started off with small stake. It escalated when PW4 had three “10s”, only to be beaten by Mr Chow’s hand of three “Js”. PW 4 ended up losing $420,000. He paid cash of $200,000 and deposited $120,000 into an account; and the money was withdrawn from that account on the same day.

19.  PW5, the victim of the 3^rd charge also confirmed Yau’s presence at the lunch meeting when Yau, claiming to be surnamed “Hui”, handed out his name card with a non-existing company and a phoney address. Yau also suggested playing card game at the end of which PW5 lost $140,000. Mr Chow’s three “Js” beat his hand of three “10s”.

20.  Yau was introduced to PW2, the victim of the 5^th charge, at the lunch meeting as a Mr Hui and he handed out a name card to such an effect whilst Kwok claimed to be surnamed “Chan”. It was Yau and Kwok who then suggested playing cards. Again PW2 lost $514,000 because his three ‘9s’ was beaten by Mr Chow’s hand of a higher three of the same kind in the last game.

21.  PW7, the victim of the 7^th charge met Yau and Kwok at the lunch meeting when Yau claimed himself to be “Wu Hau-wing” and handed out his forged name card whereas Kwok claimed to be surnamed Chan.

22.  Yau and Kwok then talked about playing chess and then cards, and PW7 was persuaded to take part. PW7 lost $62,000 when Mr Chow’s three “Js” beat his three “9s”.

23.  PW10, the victim of the 8^th charge confirmed that he met Kwok at the lunch meeting when Kwok was introduced to him as Mr Chan. PW10 was again persuaded to play cards. For the first seven games, PW10 won $20,000 to $30,000. However, in the 8^th and last game, PW10 held three “9s” against Mr Chow’s three “Js” and lost $623,000.

24.  PW9, the victim of the 10^th charge also confirmed the presence of Yau and Kwok at the lunch meeting when Yau was introduced to him as a Mr Lam, the boss. Yau gave out a forged name card. Kwok then claimed to be Mr Chan. PW9 ended up losing $181,000 at the last game when he held three “9s” and Mr Chow held three “Js”.

25.  PW1, the victim of the 11^th charge was initially approached by phone and subsequently invited to attend a lunch meeting, purportedly for business discussion. By that time, PW1 had been alerted by the police and agreed to assist them. At the lunch meeting, Yau and Kwok, introduced to PW1 as Mr Lam and Mr Chan respectively, were both present.

26.  PW1 was then invited to play card games. In the first two rounds, PW1 won several hundred dollars. The stakes increased after the 4^th and 5^th rounds. However, the police stopped the game before it was finished.

27.  The gambling expert opined that such incidents were known as “Tin Sin Kuk,” wherein the playing cards had been arranged beforehand and the victims were bound to lose in the crucial games.

Defence Case

28.  The defendants, including Yau and Kwok elected not to give evidence and they did not call any witness either. It was however, suggested that the defendants won because they were just skilful players and that the victims had not been cheated.

The Judge’s Findings

29.  The judge accepted the evidence of the prosecution witnesses relating to the charges against the applicants and that they had also made a correct identification of the applicants.

30.  The judge pointed out that the charges of cheating at gambling were brought under s 16(1)(b) of the Gambling Ordinance and that the substance of the charges was that the victims were persuaded, incited or induced into taking part in gambling by the fraudulent offers of accounting jobs and not that they were cheated of money in the card games.

31.  The judge found that the defendants had practised deception on the victims by inducing them to lunch meetings, which then turned into gambling sessions on the fraudulent pretext that their accountancy services were required.

32.  The judge further rejected the suggestion that the defendants were just skilful players. He found them to be cheaters. The judge concluded that even without direct evidence of cheating and without the evidence of the gambling expert, the entire circumstantial evidence led to the only irresistible inference that fraud and false practice had been employed to defraud the victims in the card games.

33.  The judge pointed out the use of false names and false name cards, the consistent practise of persuading the victims to take part in the card games, the invariable presence of Chow and the provision of the decks of cards used in the games by the defendants.

34.  The judge also emphasized the consistent pattern of having small stakes in the first few games and then the excuses of pushing up the stakes. In particular, the judge pointed out the crucial games when the victims’ hands of three cards of the same value were out-beat by Chow’s better hands of the same with a higher value.

35.  The judge also pointed out the readily availability of people to accompany the victims to their offices and banks to collect their “winnings”, an indication that the defendants’ group was confident of winning in the games.

Grounds of Appeal Against Conviction

36.  Mr Philip Wong, for the applicants, put forward four grounds of appeal against conviction. The 1^st ground related only to the 11^th charge whereas the other grounds related to all the charges.

37.  Mr Philip Wong submitted that the judge erred by saying that it was irrelevant whether PW1, the victim of the 11^th charge was cheated.

38.  Mr Philip Wong emphasized that cheating under s 16(1)(b) of the Gambling Ordinance meant an effective deception and that because of the prior police intervention, PW1 was in effect not deceived to take part in the gambling session as he had been forewarned by the police and was simply assisting the police in their investigation. Mr Wong suggested that the deception practised on PW1 was ineffective and there was, therefore, no causal link between the alleged deception and PW1’s participation in the card game.

39.  Mr Philip Wong argued that the conviction on the 11^th charge was unsafe and unsatisfactory.

40.  Mr Philip Wong suggested in his ground 2 that the judge had failed to consider if Yau and Kwok did participate in the deception alleged against them. He suggested that the judge had, in any event, failed to give adequate reasons for convicting the applicants.

41.  In his ground 3, Mr Philip Wong argued that the evidence adduced by the prosecution was insufficient to prove that the victims had been deceived into joining the gambling albeit that they had been deceived to go to the lunch meetings by the promise of job opportunities.

42.  Mr Philip Wong’s ground 4 suggested that the judge was wrong to take into consideration the evidence relating to the actual cheating in the card games, including the evidence of the gambling expert. He suggested that the applicants had suffered prejudice because of it.

Discussion

43.  As the judge rightly pointed out, the charges against the applicants were brought under s 16(1)(b) of the Gambling Ordinance and the allegation against them was that they were parties to the concerted effort to persuade, incite or induce the victims to take part in the gambling by fraudulent misrepresentation of job opportunities.

44.  There was no dispute that the applicants were acting in concert with the other players to persuade the victims to gamble. Apart from identity issues in relation to some of the charges, the defence case at trial simply was that there was no actual cheating in the card games (emphasis added).

45.  Mr Loftus, counsel for the defendants at trail, emphasized that the card games were bona fide gambling sessions and that the defendants, including the applicants, won because of their “skills”. He put his argument as follows:

“the mere fact that the money was lost doesn’t mean that it was in fact cheating. There may be reprehensive behaviour – misrepresentations to get these gullible people to play – but it doesn’t follow like night follows day that there was in fact cheating.”

46.  There was ample evidence to support the conclusion that the applicants were acting in concert with the other defendants who initially approached the victims ostensibly for professional services and then invited them to lunch meetings, which evolved into gambling sessions.

47.  There was clearly evidence of fraudulent conduct on the parts of the defendants in purportedly making offers of job opportunities to the victims. The evidence gave rise to the irresistible inference that the offers of jobs were deception.

48.  As the judge quite rightly pointed out, the only real issue was whether the victims had been “directly or indirectly persuaded, incites or induced” to take part in the card games.

49.  PW1, the victim of the 11^th charge, was fully aware that the police was monitoring the meeting he had with the defendants. He was already warned, and he must have been aware that the card game was in fact a “Tin Sin Kuk”.

50.  PW1 frankly admitted under cross-examination that “he did not go there with a view to obtaining some work” and that “he went to play cards at the request of the police and did not go with a view to obtaining work …as an accountant.”

51.  PW1 agreed to take part in the card games because he was assisting in the police investigation and not because of the misrepresentation made to him.

52.  However, PW1 was told over the telephone that his services were required. Moreover, when he attended the lunch meeting, he was told that the defendants belonged to Suprema International Ltd and he was asked questions relating to the setting up of a new company. There was clear evidence of a fraudulent offer, by the defendants, of job opportunities as a means to persuade, induce or incite PW1 to take part in the card games.

53.  In support of his argument that the deception practised on PW1 must be effective, Mr Philip Wong relied on para 22-142-144, Archbold HK 2005 and the cases referred thereto, in particular R v Laverty [1970] AER 432.

54.  With respect, those authorities related only to the offence of Obtains by deception, and “obtain”, according to The Shorter English Dictionary, means “prevail, succeed”. A deception that fails to “prevail or succeed” simply does not constitute the offence of “obtains by deception”.

55.  The operative words in s 16(1)(b) of the Gambling Ordinance are “persuades, incites or induces by deception”. The word “persuade” may connote a sense of “successfully urge to do”; neither “incite” nor “induce” can be said to carry such connotation.

56.  Mr Vincent Wong, on behalf of the respondent, drew our attention to DPP v Armstrong [2002] Crim LR 379 and R v Coventry Magistrates’ Court [2004] Crim LR 948 and suggested that “‘incitement’ is committed irrespective of proof of any impact on the incitee”.

57.  Mr Vincent Wong also pointed out the following sentence in Blackstone’s Criminal Practice [2006] at para A6.5 that “incitement can be committed even if the incitee refuses to act”.

58.  The particulars of the charge alleged that the defendants “fraudulently and by deception, namely by falsely representing that there was an employment opportunity,…directly or indirectly persuaded, incited or induced the victim to take part in the gambling”. The deception was the false representation of an employment opportunity, and the purpose was to persuade, incite or induce the victims to gamble.

59.  We were satisfied that the offence was completed when the defendants fraudulently made the misrepresentation with the view to persuade, incite or induce PW1 to gamble. The fact that the fraudulent misrepresentation did not cause the intended result was not material. Clearly the defendants intended the fraudulent offer of job opportunities as a means to persuade, incite or induce PW1 to gamble, which was the substance of a charge under s 16(1)(b) of the Gambling Ordinance.

60.  The judge was clearly right to conclude that the applicants had the necessary mens rea and actus rea in that they were parties to the attempt to deceive PW1 with the fraudulent promise of job opportunities in order to persuade, induce or incite PW1 to gamble. We were satisfied that the applicants were properly convicted of the 11^th charge.

61.  The judge had properly identified the issues involved in the case. He pointed out that persons, who purportedly sought professional services on accountancy matters, approached the victims, who were then invited to lunch meetings purportedly for further in-depth business discussions.

62.  At the meetings, the applicants were introduced to the victims as genuine businessmen with the use of forged names and forged name cards carrying fake company names and addresses.

63.  The judge had set out the roles of Yau and Kwok in each of the meetings, acting in concert with the other defendants, how they misrepresented their true identities, and how the victims were induced to take part in the card games.

64.  The judge also found that the victims had been induced into taking part in gambling. The judge expressly found that, but for the fraudulent offers of job opportunities, the victims would not have attended the lunch meetings and would have refused to take part in the card games.

65.  It was not difficult to appreciate that the victims would be reluctant to do anything that might offend the defendants for fear of jeopardising the job opportunities that they had been offered. The suggestion that there was no causal connection between the offers of job opportunities and the victims’ willingness to take part in the card games was completely unfounded.

66.  We failed to see how AG v Tse Hung-lit [1986] 3 AER173, Ng Yin Han v The Queen CACC 903 of 1980, or Ko Wong Shuk-Chu v The Queen HCMA 58 of 1984 can be of any assistance to the applicants’ case.

67.  Grounds 2 and 3 had not been made out. There was certainly no proper foundation for those grounds in view of our decision on ground 1.

68.  It was true that the judge need not be concerned with the issue of whether the victims had in fact been deceived at the card games as the charges were brought under s 16(1)(b) and not s 16(1)(a) of the Gambling Ordinance. The judge had made that clear in his reasons for verdict.

69.  The judge dealt with the issue of “cheating” partly because “counsel for the (defendants) submits …that the prosecution fails to prove cheating…”

70.  In any event, it was part and parcel of the prosecution case that the defendants had practised fraud on the victims in the card games and the prosecution was certainly entitled to present such relevant evidence to demonstrate that the entire “scheme” was a fraudulent one. This was certainly a relevant issue for the purpose of sentence.

71.  The judge was clearly entitled to conclude as he did that the defendants were cheaters in the card games and that they did not win because they were skilful players, and it was in fact not argued otherwise.

72.  We did not find any unfairness or prejudice to the applicants in the judge’s treatment of the issue of cheating in the games.

73.  None of the other grounds put forward by Mr Wong caused us any concern.

74.  The application for leave to appeal against conviction was devoid of merit and was accordingly dismissed.