THE QUEEN v. TAI CHI PING AND ANOTHER

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BETWEEN

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J U D G M E N T

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1. The appellants were convicted on the 12th September 1988 of conspiracy to offer advantages contrary to Common Law and Section 9(2) (a) of the-Prevention of Bribery Ordinance, Cap. 201, and both were sentenced to three months' imprisonment suspended for two years and fined $5,000. It is against the convictions that they now appeal.

2. The particulars of offence are:-

"TAI Chi-ping and LUI Ho-chiang, on divers days between the 1st day of January 1987 and the 30th day of June 1987, in Hong Kong, without lawful authority or reasonable excuse, conspired together and with FONG Hung-yee to offer advantages, namely gifts, fees, rewards or commissions to the said FONG Hung-yee, being an employee of Nicetime Industrial Limited ('Nicetime'), as inducements to or rewards for or otherwise on account of the said FONG Hung-yee doing or having done acts in relation to his principal's affairs or business, namely the purchases of piece goods by Nicetime from the said TAI Chi-ping and LUI Ho-chiang of Hung Hing Hong (Modern) Piece Goods Company Limited."

3. It was therefore essential for the Crown to prove inter alia that in the case of each appellant he knew that the said FONG Hung-yee was an employee of the Nicetime Co. and that at least one other of his alleged co-conspirators was aware of that fact and that he and that other coconspirator had agreed that advantages would be offered to FONG Hung-yee, in his capacity as an employee.

4. The main evidence came in the form of statement s made by each accused under caution, the other evidence not being sufficient on its own to sustain a conviction.

5. PW1, HO Kin-wah, a director of "Nicetime" had testified that FONG was in fact an employee of "Nicetime" and was not permitted to receive commissions, but he had no personal knowledge as to how Fong held himself out to others as to his position in the company.

6. PW2, KWOK Ka-hung, an accounts clerk with Hung Hing Hong, testified that the 1st appellant was manager and the 2nd appellant was a door to door salesman of the said Hung Hing Hong company. FONG was one, of two persons of "Nicetime" who made the order after which there was a meeting between the two appellants, himself and a female accounts clerk of Hung Hing Hong about whether Hung Hing Hong should carry out the transaction as "Nicetime" had failed to carry out a transaction with another fashion company. The conclusion of the discussion was that the "other party" agreed to pay cash and "we agreed to have dealings with them". He was given no instruction by the appellants. The "other party" requested for a cash discount. The 10% was to be given to FONG of "Nicetime" but was not to be included in the invoice. He was told to give the cash to FONG by the two appellants. It was to be accounted for in the company's accounts' ledger as "travelling expenses" as commission was always considered as "travelling expenses". In cross-examination, he agreed that the 10% commission was intended to be given to "Nicetime" and was handed to FONG as a representative of Nicetime and was never intended as a personal gift to FONG. In re-examination, he said the discount wasn't immediately reflected in the invoice as a request made by the other party "Nicetime".

7. The other 3 witnesses for the Crown were officers of ICAC who gave evidence on the investigation and of the holding of the interviews with the appellants.

8. The admissibility of the cautioned statements were disputed but after hearing evidence under the "alternative procedure", the magistrate ruled them all admissible in evidence as having been made voluntarily. The appellants who were represented by Mr Lawrence LOK elected to close their respective cases without giving evidence or calling witnesses. At this stage, after hearing submissions, the magistrate convicted both appellants.

9. In her statement of Findings, the magistrate sets out, in summary form, the main parts of the evidence of the first two witnesses. She then sets out the evidence of the ICAC officers and adds:-

"Perhaps if I can say at this stage that without the evidence of the cautioned statement and the contemporaneous recorded interviews, there would not have been quite sufficient evidence upon which to convict either of the appellants."

10. She then sets out what are described as "findings of fact", but these include objections, or allegations to the voluntariness of the 2nd appellant's statement and admissions made, by the ICAC. She also sets out what principles she bore in mind. She sets out a historical account of what happened, during the hearing of this issue, including a submission before the 2nd appellant gave his evidence on this issue. She summarises his evidence. Finally she says:-

"Having considered the prosecution evidence and the defence evidence relating to the admissiblity of the interviews and the cautioned statement, I was satisfied that the interviews and the cautioned statement had been made voluntarily by both the 1st and 2nd appellants."

11. She also describes what facts she took into account in coming to that conclusion, i.e. Hung Hing Hong was the first of a number of companies to be searched in which it was suspected that FONG and another man called WONG were involved; secondly, the ICAC officers concerned in this case were not the officers in the investigation so were not in a position to make decisions or offers at this early stage of the investigation; and thirdly that the 1st and 2nd appellants were cautioned and apparently understood the nature of the caution.

12. She then records that neither appellant gave evidence on the general issue and adds:-

"I considered all the matters that I had considered in determining the admissibility of the interviews and the cautioned statement. I also found the prosecution witnesses, particularly the ICAC officers, to be truthful and honest witnesses. I also found they gave a believable account."

13. She then sets out where she found some support for this conclusion.

14. Finally, she says "I therefore found the appellants guilty of the charge as put". That's all there is in the Statement of Findings.

15. It can be seen at once that although it is called a Statement of findings and although there is a sub-heading "findings of fact", there are in fact very few findings of fact set out.

16. The finding that the prosecution witnesses, particularly the ICAC officers, were truthful and honest witnesses suggests that somehow the ICAC officers stood out in this way, and that the other two prosecution witnesses were not so outstanding in this way.

17. The magistrate sets out none of the findings of fact which form the essential ingredients of this offence.

18. There is no finding of fact of any meeting between the appellants and FONG or of any agreement between any of the alleged co-conspirators to do anything, let alone do what it is alleged in the charge. There was no finding of fact that either of the appellants knew that FONG was an employee in the Nicetime Company. There simply was no finding of fact upon which the magistrate was entitled to draw the final conclusion of guilt in respect of either appellant.

19. Thus the third ground of appeal submitted by Mr. Plowman, who appears for both appellants at the hearing of this appeal, is that the magistrate made no finding of fact sufficient to support a conviction of either appellant in relation to the offence charged (the findings of fact at pages 85 to 87 being limited to the issue of whether or not the appellants' statements were admissible).

20. I can only say that this ground of appeal is unchallengable. Mr Saunders, who appears for the Crown, has bravely tried to support the magistrate's decision, by submitting that the admissibility of these statements was the only real issue in the court below. But with respect to him, unless, there was a subsequent admission that the contents of the statements, were true or partly true, that could never have been the sole issue.

21. Once the statements of an accused person are admitted into evidence, then the magistrate has to make up her mind whether the contents of the statements are true or false or partly true or partly false bearing in mind her conclusions as to the circumstances in which they were made.

22. This is no less important when the statements contain exculpatory material.

23. The fact that the statement of the 2nd appellant contained exculpatory material forms the main contention in the 2nd appellant's .first ground of appeal.

"Ground 1. On behalf of Second Appellant

There was insufficient evidence to establish that the second appellant knew that Fong Hung-yee was an employee of Nicetime Industrial Ltd. having regard to the following evidence:

(a) the evidence of PW1 to the effect that when Fong joined the, company in January of 1987 he was one of the partners, sharing in both the profit and the loss (pages 8-9 of bundle)

(b) the evidence of PW1 that he had no knowledge as to how Fong held himself out to the others (page 13 of bundle)

(c) the evidence of PW2 to the effect that the payment of 10% was intended to be given to Nicetime Ltd, and was never intended as, a personal benefit to Fong page 18 of bundle)

(d) the evidence of PW2 to the effect that Nicetime Ltd (and not Fong personally) requested that the discount not be immediately reflected in the invoice (page 18 of bundle)

(e) the contents of the second appellant's cautioned statement (Exhibit P6 at pages 108-117 of bundle)."

24. In particular, in the 2nd appellant's cautioned statement, Exh. P6, it is pointed out that nowhere in that statement did the 2nd appellant admit that he knew that FONG was an employee of the Nicetime Company.

25. In question 20 he was asked whether the commission was given to FONG or "Nicetime" and replied "I do not know whom they were going to. It was said that (commission) had to be given. So (it) was given." And when asked in question 21: "Do you know whether Mr Fong and Mr Wong were proprietors of Nicetime?", his, reply was "No idea. Mr Fong said that he was the person in charge of Nicetime."

26. Later, at question 32, he was asked "Did you know that you might commit an offence by giving rebates to him in this way?" to which he replied "In this trade we do not refer the sums as rebates but regard it as paying commission. I did not know whether he was the proprietor. I also did not have the responsibility to ask him whether he was the proprietor or who the proprietor was. I could give commission to him only because he led a customer to purchase goods."

27. It seems clear that the 2nd appellant was not admitting that he knew that FONG was an employee of "Nicetime" and was asserting that he did not know what his relationship was.

28. Mr Saunders has suggested that whether or not the 2nd appellant knew FONG was an employee of "Nicetime", it is clear he knew he was an agent of that company.

29. With respect, the charge relates to a conspiracy to offer advantages to FONG being an employee of "Nicetime". Further, I do not think that the inference which Mr Saunders seeks to draw is the only reasonable inference having regard to the passages in the caution statement to which I have referred.

30. The 1st appellant's cautioned statement also contained exculpatory material which is referred to in Ground 2 which is now set out:-

"Ground 2. On Behalf of First Appellant

That having ruled the statements of the first appellant admissible (Exhibit P,7 and P.8) the learned Magistrates :

(a) made no finding as to whether or not the contents of those statements represented the truth, either in whole or in part.

(b) failed to resolve, either adequately or at all, the inconsistencies which arose between the contents of those statements and the evidence of the prosecution witnesses at 1(a), (b), (c) and (d) above, particularly in relation to the issue of whether or not the first appellant knew that Fong was an employee of Nicetime Ltd (she having found at page 87 that all the prosecution witnesses were truthful and honest)

(c) failed to consider that taking the contents of the first appellant's statements at their highest, there was no evidence of a conspiracy as between the first appellant and D2, in relation to those payments made by the first appellant after he discovered that Fong was an employee."

31. It is clear that in the 1st appellant's statements he does admit that he became aware of the fact that FONG was an employee of "Nicetime". He stated in Exh P.7 that when FONG and another stranger came to look at piece goods, FONG introduced then as partners and he assumed they were proprietors all along. Only after 5 or 6 transactions had been conducted did he know that FONG and WONG were employees instead.

32. However, as Mr Plowman has pointed out in Ground 2(c), there was no evidence of any agreement between the 1st appellant and the 2nd appellant in relation to the payments made by the 1st appellant after he discovered that FONG was an employee. Further there was no evidence that the 2nd appellant had also discovered that fact. Neither was there any evidence to show that there was any agreement with FONG after the 1st appellant discovered this fact. For all anybody knows, FONG might have been labouring under the mistaken belief that he had been obtaining money by deception (a deception that he was the proprietor) and might have thought his deception was continuing eventhough in fact the 1st appellant was aware of his true position.

33. This possibility cannot be lightly dismissed because of the evidence of PW2 that the system of paying a discount was used with other companies and that on occasion his company was asked by purchasers not to include any discount in an invoice in order that a higher price could be obtained by the purchasers from its customers. He also stated that the discount was intended for "Nicetime" and not as a personal benefit to Mr Fong.

34. For these reasons, I allow the appeal and quash the convictions.