HKSAR v. TANG KING CHIU AND ANOTHER

DCCC 715/2018

[2019] HKDC 1706

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 715 OF 2018

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Reasons for Verdict

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1.  The two defendants here face charges of common law conspiracy to defraud.  Both defendants face the 1st count, which occurred between 1 October 2017 to 16 December 2017 and D2 alone faces the 2nd count which occurred between 31 July 2017 and 13 November 2017. 

2.  A brief summary of the prosecution case is that the 1st defendant who has already pleaded guilty to a number of offences was the prime mover in both conspiracies which involved making the various fraudulent representations particularised in the charges to induce people to give money to him and other co-conspirators with a promise they would get low-interest loans.  The payments made by the victims would collateralise those loans. 

3.  It is said that the 2nd and 3rd defendants involved themselves in these conspiracies, the 2nd defendant by acting as a driver to the 1st defendant and also doing odd jobs such as collecting money and documents from some of the persons who were defrauded. 

4.  The 3rd defendant is said to have induced one victim to enter into a fraudulent arrangement which formed one of the averred acts of the Count 1 conspiracy.  It was not argued that the charged conspiracy did not exist.  Ample evidence was provided of their existence and operation.  There was plenty of evidence as to evidence the existence of the conspiracies. 

5.  The 2nd defendant said in his defence he was merely the 1st defendant’s driver.  He was specifically employed in that role.  He was unaware of the fraudulent nature of the 1st defendant’s activities.  Nothing he did was either dishonest or part of any agreement to defraud any other person.  In fact, by the time he met people, they had already been defrauded and the offence itself had been completed. 

6.  The 3rd defendant says that evidence of his involvement relies on a single victim and is entirely dependent on an unsupported identification of him.  It is said that the identification cannot be relied upon.  It is not said that the victim was not defrauded. 

7.  The 3rd defendant says it was not him who did the defrauding and says the only real inference that can be drawn is it was the 1st defendant who did the defrauding in that case.

8.  I will deal with the prosecution case in a little bit more detail but as no issue is taken with their existence, I do not see much purpose in dealing with it in any great detail.

9.  The 1st defendant was the prime mover.  In relation to both conspiracies, there is unchallenged evidence of the dishonest means used by the 1st defendant and others and that can be seen from the prosecution witness statements which have been agreed and read under the various provisions of the Criminal Procedure Ordinance.

10.  The various false representations made to induce victims to part with funds believing they would enable and collateralise low-interest loans which would be offered to the victims by local registered banks.  The victims provided the 1st defendant with security moneys, however, no loans were ever applied for.  The whole set-up was entirely fictional and fraudulent. 

11.  Insofar as the case against the 2nd defendant is concerned, various victims identified him as accompanying the 1st defendant as a driver.  It is on the basis of these acts that the prosecution are saying that the defendant must have been involved in a dishonest way in the original agreement pleaded in the charge.  Various victims dealt with the 2nd defendant and, in reality, the 2nd defendant does not really contest any of their evidence.

12.  The first prosecution witness was called to identify the 2nd defendant as the driver who had collected some $20,000 from outside the Jockey Club branch in To Kwa Wan on an afternoon in December 2017, and the first prosecution witness had spoken to the 1st defendant on the telephone in front of the 2nd defendant asking the 1st defendant that she have give this cash over to the 2nd defendant.

13.  The second prosecution witness also identified the 2nd defendant as the driver of a Tesla car on 3 October 2017.  He had been collected by this car, taken to obtain a loan.  He had to obtain some money from a bank of the 2nd defendant.  In fact, queued up for him for a while and then driven him back home. 

14.  On 10 October, the 2nd defendant had taken both the 1st defendant and driven them in and the victim in the car and the victim had gone to buy goods with his credit card in Mong Kok which is another way of raising cash.

15.  Now, the upshot being that the 2nd defendant had been asked by the 1st defendant to take the slips, the credit card slips back to the 1st defendant’s office. 

16.  And on 19 October, the 2nd defendant had brought some documents from the second prosecution witness’s home for him to sign.  There seemed to be some ambiguity, unclarity about what those documents were.  And also that he had further driven this victim again on 20 October.

17.  The third prosecution witness had said that the 2nd defendant was the driver in November, 29 November.  He was driven to meet the 1st defendant whose the victim’s flat was to be mortgaged.  It was said that there were conversations in the car and a large amount of money, $960,000-odd, had been handed to the 1st defendant in the presence of the driver. 

18.  This witness also said that he had seen the 1st defendant on 5 December 2017.  His evidence has ultimately become confused as to who was, in fact, the driver on either 27 November or 5 December, because it would appear that somebody else had driven the car in relation to these matters as well.

19.  There was also evidence of the 2nd defendant’s presence in and around the time that the 1st defendant had been arrested at what would appear to be the 1st defendant’s residence. 

20.  The 2nd defendant himself admitted he drove the car for the 1st defendant.  He had been employed from 2 October.  Prior to that he was a delivery worker and he called evidence to establish this and, as I said earlier, the 2nd defendant’s evidence does not effectively contradict the prosecution witnesses.

21.  He had, he said, driven the 1st defendant’s clients. He had heard mention of Compass Capital, one of the companies involved in the fraud.  He queued at banks, taken documents to clients’ homes, although he had no idea what the documents were.  He had also taken payment slips for the 1st defendant.  He said he had no idea as to the 1st defendant’s business.  He was partially deaf.  This, again, was established in the evidence.  He was not aware of the nature or content of the conversations between the 1st defendant and his clients.  The issue, effectively, is can an inference be drawn from the prosecution evidence that the defendant must have both known and been involved in the agreements particularised.

22.  As far as the case against the 3rd defendant is concerned, it is entirely reliant on the identification made of him by, I think it was PW4 in the trial, but PW15 on the papers.  On one date at the end of November 2017, this victim went to the 27th floor of World-Wide House in Central.  He was received by a man that he identified in an identification parade in January the next year as being the 3rd defendant who said he was a “Kim Cheung” from Universal Industrial Limited.

23.  Inside that office for about 15 minutes there ensued discussion between Kim Cheung and the victim as to how Kim Cheung could help him secure a lower interest loan and remortgage whereby a finance company would take over the existing mortgage.  The victim was, he said, entirely sure of his identification of the 3rd defendant being this Kim Cheung.  The 3rd defendant simply denies it was him.  He said he was not Kim Cheung.  He was not at that office on that day.  The witness is entirely mistaken, he says, at to his identification.

24.  As far as the legal position is concerned in respect of these two defendants, they do face charges of conspiracy to defraud and the offence is constituted if they become a party to an agreement with another or others to use dishonest means with the purpose of causing economic loss to or putting at risk the economic interests of another with the realisation that the use of those means may cause loss or put such interests at risk.  Naturally, this must be proved beyond all reasonable doubt.  The burden of that proof remaining on the prosecution throughout the case.

25.  The prosecution rely on an inference being drawn in relation to, I think it is two aspects of this case.  Firstly, that the evidence that they have called in relation to the agreed evidence, the non-contested evidence, they have called, proves that the conspiracies existed.

26.  Secondly, they must rely on an inference to establish the 2nd defendant’s guilt, as far as an inference is concerned, it is a conclusion that is reached from circumstantial evidence.  Like all facts at a criminal trial it has to be proved beyond reasonable doubt.  It must be the only conclusion that can be reasonably drawn from the proved facts.

27.  Applying those principles to the cases I have before me, as far as the 3rd defendant is concerned, the issue I am faced with in his case is one of identification.  The courts must consider the matters contained in what is known as the Turnbull direction.  Courts have to approach issues of identification with caution, otherwise, honest witnesses can be mistaken.

28.  I will turn to the resolution of the issues in the 2nd defendant’s case.  As it is clear from the evidence, there is no direct evidence the 2nd defendant made any of the alleged false representations contained in the particulars of the two conspiracy charges.  The prosecution must be drawn to saying that the defendant aided and abetted the conspiracies by providing the service of driver and other minor ancillary services to the 1st defendant.  In order to succeed at this, the prosecution must rely on an inference to be drawn that the 2nd defendant knew the nature of the business the 1st defendant was conducting, knew it was dishonest and agreed to assist with it.

29.  There is also in this case basically unchallenged evidence that the 2nd defendant worked for Samki Magazines from 1 January 2017 to 30 September 2017. 

30.  Realistically, the 2nd defendant could not have participated in any of the conspiracies until after that date at the earliest. As I have already set out, the prosecution relies on D2’s presence as a driver, collection of moneys, standing in bank queues, holding of credit card slips and the collection of unidentified documents as establishing his knowledge of the details of conspiracy, notwithstanding that the fraudulent misrepresentations to victims had already been made at a time before the 2nd defendant came into contact with them.

31.  For my part, I do not find the acts of the 2nd defendant, which are mainly undisputed, take the prosecution case beyond establishing as a probability that the 2nd defendant was involved in something.  They cannot amount to proof beyond reasonable doubt.  The charges against him will be dismissed.

32.  As far as the 3rd defendant is concerned, I now have to resolve the issue in respect of him.  As I have already explained, the issue is simply one of identification.  This is no fleeting glimpse case, but reference to the Turnbull direction is still appropriate. 

33.  We know that Mr Chan called up the victim and said he met the 3rd defendant at Compass offices in World-Wide House at the end of November, I believe it was 30 November 2017.  We know from the other victims that the conspiracy at that point or the agreement was in full swing.

34.  We know that the later identification parade that Mr Chan, the victim, said that the person who dealt with him was the 3rd defendant. 

35.  At the premises, he says that the 3rd defendant introduced himself as “Kim Cheung.”  There was a female receptionist at the premises, he never spoke to her.  He said that they went straight to the meeting room.  They spent 15 minutes in the meeting room and this is in the morning.  They were the only two people in the meeting room.  He said that he did pay attention to the appearance of Kim Cheung.  He said that Kim Cheung wore a T-shirt.  This was examined in cross-examination where he said it was a long sleeve top with sleeves folded once.  He said that Kim Cheung used a whiteboard and he was right-handed.  He described in detail that Kim Cheung was a Chinese man who was 35 years old, some 1.75 metres tall with, what he said, “Black hair and looked gentle”.

36.  There was also a statement for the Compass office receptionist, Ms Lam.  She was referred to as PW17.  Her evidence was that she knew the 1st defendant as “Kim Cheung”.  She had seen the 1st defendant use the meeting room alone and with other persons.  Usually if a person arrived, they would say they were looking for Mr Kim and she would inform Kim by telephone and take them to the office.  

37.  There was a meeting record and she record the time in and out of the various clients who attended the office.  Now, on the day in question, the No 3 meeting room was reserved for 9.30 to 10.30.  The in-time would be 9.30 and the out-time is 11.21 and the person occupying the room was referred to as being Kim Cheung.  There was no signature.  The defence, of course, submits this the identification is not one that the court can rely on. 

38.  The 3rd defendant, Mr Chiu, gave evidence.  He was at the time of giving evidence 25 years old.  At the time of his alleged involvement with this offence he would have been only 23.  He was single.  He said he had never been involved with any crimes of dishonesty. 

39.  He worked as a renovation worker.  He said he had a number of tattoos.  He gave evidence of these.  He said they were of such a nature that they would have been seen by anybody who came into contact with him.  He said he had these for a number of years.  Tattoos such as a scorpion on the back of his hand and a tattoo that looked like a bracelet on his left wrist, a dollar coin on his right middle finger, a cross on the back of his neck.  In total he evidenced about seven tattoos and also produced photographs taken back in 2012, 2015 showing the scorpion tattoos. 

40.  As far as his involvement in any alleged conspiracy was concerned, he said he did not know the 1st defendant, had never seen him before this case, never met the 2nd defendant before the case, never heard of Compass Capital before this case, and had never been to the 27th floor of World-Wide House Central. 

41.  He never met the victim on 30 November at Compass’s offices.  He said at about the relevant time he was probably sleeping at home.  He did say that at the identification parade everyone held their hands behind their backs and also, they had their hair covered and parts of their clothes were covered in plastic.

42.  He had no explanation as to why he may have been picked out in the identification parade other than that the victim himself must be mistaken. 

43.  From the evidence, the disparities I have to deal with are the disparity in age.  The victim did seem Mr Chan as being around 35 when he, in fact, was 23, that is if the identification is accepted. Furthermore, the victim was not able to say or certainly did not see any of the tattoos, including the scorpion tattoo on the back of the hand.  The actual date of the identification parade was 16 January. 

44.  I also had to consider the evidence of the lady at World-Wide House who was PW18.  She, however, said that she had no recollection of who actually used the room on 30 November 2017.  The defence say, however, it was clear that this witness knew and recognised the 1st defendant.  They had met on several occasions and he had been introduced as “Kim Cheung”. 

45.  They say that the record of Kim Cheung using the room on the relevant date must at least mean or at least introduce the possibility that this lady was aware of the 1st defendant’s presence and signed the 1st defendant in at 9.30 and on departure at 11.21 signed the 1st defendant again.  And that, it is said, must provide at least a reasonable doubt as to the victim’s personal observations.

46.  The only evidence in respect of identification comes from the victim.  It is correctly conceded that there is no evidence capable of providing confirmation of the identification. 

47.  I note that it was, in fact, the evidence of the receptionist that she did not recall who ushered the client into the meeting room or how many persons were present or who they were on that date.  The victim said it was only a short time had elapsed and he could clearly recognise Kim Cheung at the identification parade.

48.  The parade was conducted in such a way as to give all advantages it could be reasonably given to those on the parade.  They wore shower caps, they had their clothes partially covered and had their hands behind their backs. 

49.  The victim was in the meeting room for some 15 minutes.  He said he had a clear and unrestricted view in good light and that his basis for identification must be surely a recognition of the features and physical make-up of the person identified.  This is clearly an identification based on recognition and a recognition based on a full-face meeting in good light from close by.

50.  It is recognised that an honest witness may be mistaken but this is no fleeting glimpse.  It is a fairly lengthy meeting that enabled the victim to present a detailed and precise recollection of any person who was present. 

51.  I find that this identification clearly passes the relevant test and is clearly on its own capable of proving beyond reasonable doubt that the 3rd defendant was the person who met the victim and make the representations to him on 30 November 2017 at Compass Capital.  It cannot be disputed that these representations do form part of the averred facts, the pleaded acts of the relevant conspiracy.

52.  This agreement has clearly been proved to be a conspiracy to defraud and the only conclusion that be drawn from a person making those representations in the circumstances which the 3rd defendant made them is that he was a party to that conspiracy with full knowledge of its dishonesty and its ultimate ends. 

53.  Having reached that conclusion, then the 3rd defendant must be convicted of the charge. 

54.  I do note that his involvement is simply confined to this incident.  A person can join and leave a conspiracy and the only evidence of the 3rd defendant’s involvement is in respect of this incident on what was on 30 November 2017.  However, that is nevertheless sufficient to establish his guilt under the charge and I convict him accordingly.