HKSAR v. LAW KWOK KUEN SIDNEY

HCMA50/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 50 OF 1998

----------------------

-----------------------

-----------------------

J U D G M E N T

-----------------------

1. The Appellant was convicted by Mr David Lok sitting at Eastern Magistracy on 19th December 1997 of the offence of conspiracy to defraud.

2. The particulars of the charge are that he, in October 1991, conspired together with one Thomas Chan and three other persons to defraud buyers who were interested in the purchase of units on the higher floors of Regal Crest at No.9 Robinson Road by dishonestly representing that the units had all been sold, and thereby inducing the buyers to make extra payments for the purchase of the units from non-existent first time buyers. The Appellant was sentenced to six months' imprisonment by the learned Magistrate and on the same day was granted bail pending appeal. He now appeals against the conviction and sentence.

3. The first ground of appeal advanced by the Appellant was that the learned Magistrate who heard the application for a permanent stay and who was not the trial Magistrate who convicted the Appellant, had erred in not granting the permanent stay requested. The chronology of events in this particular matter starts with the alleged meeting between the co-conspirators which occurred in October 1991. But it was not until May 1994 that PW1, who was not the subject of any investigation, approached the ICAC and gave a non-prejudicial witness statement. Following investigations by the ICAC, it was not until October 1995 that the Appellant, together with his co-defendants, were arrested by the ICAC. Almost a year later, in July 1996, the four Defendants were charged by the ICAC and the date of trial was set down for October 1996. At the trial submissions were made to Mr A. Wahab for a permanent stay of proceedings on the ground of delay and on 25th October 1996, Mr Wahab ruled that there should not be a permanent stay.

4. The Appellant subsequently applied for the trial to be adjourned on the ground that he had sustained some injuries in an accident and was not fit to stand trial. However, the application for the adjournment was refused and the Appellant was severed from the other defendants who were ordered to be tried first. The other defendants were then tried by Mr Wahab and were acquitted by the learned Magistrate.

5. After the conviction of the Appellant by Mr D. Lok, Mr Wahab was not made aware of the fact that the Appellant had lodged an appeal against his conviction which included the ground that Mr Wahab had erred in refusing the stay of proceedings. It was only after the commencement of this appeal that I requested Counsel for the Respondent to approach Mr Wahab to see if he was prepared, despite the lapse of time, to now write up his reasons for his decision to refuse the stay of proceedings. This Mr Wahab did on 25th August 1998.

6. In his Reasons for Decision, Mr Wahab mentioned that on the application to stay, two witnesses gave evidence, one of whom was the alleged accomplice Thomas Chan and the other was an ICAC officer, to explain the delay in bringing the case to Court. Mr Wahab mentioned that the evidence of the two witnesses was to show the absence of mala fides on the part of the prosecution and that the prosecution was not merely attempting to gain some technical advantage over the Defence. Mr Wahab mentioned that if either element existed, he would have easily acceded to the Defence application. Mr Wahab ruled that there had been delay in prosecuting the present case but he was not satisfied that there was the real probability of there not being a fair trial for the Defence. This is what the learned Magistrate said :

"According to Mr Thomas Chan's information to the ICAC, the meeting during which the alleged conspiracy was hatched was within a few days before the property of Regal Crest was put up for sale. It was a meeting of the staff of the residential department held in the room of Miss Virginia Wai in the office of Colliers Jardine. I thought the mention of such a back-drop would provide reasonable signposts if not memory-pegs relating to the occasion alleged."

Subsequently in his Reasons for Decision, he mentioned that the offence was a serious one and that was accepted by Defence Counsel and also that the alleged offence involved a breach of trust by employees towards their employer and perhaps even a breach of the trust of the vendors and purchasers of units in Regal Crest. He therefore considered that the public interest cried out loudly for the trial to proceed.

7. He mentioned finally that the lapses in memory on the part of witnesses would be properly assessed by the trier of fact, bearing in mind that it is for the prosecution to prove guilt beyond reasonable doubt. He said that difficulties that the Defendant might have in conducing the Defence due to the passage of time would likewise be properly considered.

8. A number of cases were quoted by the Appellant to support his submission that the learned Magistrate erred in refusing the stay. The principles relating to grants of stay of proceedings are well known and are fairly settled. I would wish to quote only from the case of Attorney-General's Reference (No.1 of 1990) [1992] 95 Cr.App.R. 296 where the Lord Chief Justice of England, Lord Lane, said at page 303 : -

"... no stay should be imposed unless the defendant shows on the balance of probabilities that owing to the delay he will suffer serious prejudice to the extent that no fair trial can be held : in other words, that the continuance of the prosecution amounts to a misuse of the process of the court. In assessing whether there is likely to be prejudice and if so whether it can properly be described as serious, the following matters should be borne in mind ..."

9. In Attorney-General & Anor v. Tsang Yuk Kiu [1996] 3 HKC 38, the Court of Appeal quoted from the judgment of the Privy Council in Tan Soon Gin George v. Judge Cameron [1992] 2 AC 205 at 223 :

"Stays imposed on the grounds of delay or for any other reason should only be employed in exceptional circumstances. If they were to become a matter of routine, it would be only a short time before the public, understandably, viewed the process with suspicion and mistrust. ... In principle, therefore, even where the delay can be said to be unjustifiable, the imposition of a permanent stay should be the exception rather than the rule. Still more rare should be cases where a stay can properly be imposed in the absence of any fault on the part of the complainant or prosecution."

10. The main thrust of the Appellant's argument is that because of the delay he has suffered prejudice in the following ways :

(a) he could not conduct a realistic cross-examination of the witnesses whilst events were still fresh in their minds; and

(b) the Appellant could not realistically be expected to be able to examine the possibility of an alibi.

11. In the Respondent's reply, it was submitted that amongst all the statements, caution statements of the Appellant and all available information presented to Mr Wahab, it was not mentioned by the Appellant that he intended to raise any alibi, so there was simply no evidence that he intended to raise the defence of an alibi. It was submitted that the Appellant's argument that he did not know if he had any alibi because of the passage of time would be applicable to the majority of, if not all, cases in which the commission of the offence happened some time ago.

12. It was submitted on behalf of the Respondent that the Appellant would have been alerted to the matter under investigation by the ICAC when he was interviewed under caution on 18th October 1995, which was one year and five months after the start of the investigation in May 1994. It was submitted that a defendant can similarly argue that three years is still too long because he cannot remember what happened three years ago, and similarly two years, or one year, or six months. It was rhetorically asked "where should the Court draw the line?" It was submitted by the Respondent that if this argument by the Appellant is allowed to succeed, then it becomes a dangerous precedent because any defendant in criminal proceedings can claim "his inability to remember" if he has an alibi, because of the passage of time. If that is the case, it is submitted that any delay, and not just undue delay, would then be a sufficient ground to stay on the ground that the defendant has suffered prejudice which affects the holding of a fair trial.

13. In my judgment, whether the witnesses for the prosecution and in particular the accomplice Thomas Chan, could have remembered details of their evidence was a matter for the trial Magistrate to determine, and in so determining this matter, the trial Magistrate would be assessing the credibility and reliability of these witnesses. These are not matters which per se would handicap the defendant in his defence of the case because if the witnesses for the prosecution are vague and unclear in their evidence and are unable to provide details of the matters to which they testify, then generally speaking, these are matters which could well affect their credibility and reliability as truthful witnesses. Insofar as the submission that the Appellant was, because of the passage of time, handicapped because he was unable to discover if he had an alibi defence that he could rely upon, I have to mention that the evidence given by the accomplice was such that the time when this alleged meeting between all the conspirators took place could have been narrowed down and could have been pinpointed to a matter of days. In the accomplice's evidence, he mentioned that the date of the newspaper advertisement advertising the sale of units in this complex was two or three days before the date of the actual sale. He then mentioned that the alleged meeting was either two or three days before the advertisement appeared in the newspapers, or two or three days before the sale. The legal team of the Appellant did some research into when the advertisement appeared in the newspapers and it was discovered by them that the relevant advertisement appeared on 8th October 1991. But there was no evidence how many days the advertisement appeared for.

14. In my judgment, those matters would have pinpointed the date of the meeting sufficiently to enable the Appellant, if in fact he could avail himself of the defence of an alibi, to take steps to discover if that defence was open to him. Even if the witness had been able to mention a specific date of the alleged meeting of the conspirators, it could still result in the Appellant being unable to discover if he could rely on the defence of an alibi because unless a witness can pinpoint the precise time when the meeting took place, and how long it carried on for, the Appellant could just as easily say that because the specific time is not mentioned, he is unable to discover whether he has an alibi. It would appear from the evidence that during the days prior to the sale when the alleged meeting took place, the Appellant was not on holiday but was at work in the office. If he was at work in the office, unless the precise time was mentioned, and unless he was keeping a detailed daily diary of his activities, he could just as easily be unable to discover if at the time in question he was elsewhere other than at the meeting with the co-conspirators. In the event, he gave evidence before the trial Magistrate and mentioned that he did not take part in any such meeting with the alleged co-conspirators.

15. In my judgment, the Appellant, if in fact he has an alibi defence, could have ascertained enough facts about the prosecution case to determine if that defence was available to him. In my judgment, therefore, the Appellant has not suffered any prejudice as a result of the delay and the learned Magistrate who heard the application for stay was correct in refusing the stay application.

16. The second ground of appeal is that the learned Magistrate Mr A. Wahab did not give reasons for dismissing the application for permanent stay and therefore failed to compile a statement of his findings of the facts and other grounds on which he based his decision in accordance with s.114(b) of the Magistrates Ordinance, Cap 227. As I mentioned earlier in this judgment, this ground of appeal has been overtaken by events because during the time when this appeal was adjourned until it subsequently resumed, the learned Magistrate did write up his Reasons for Decision which I have already considered above. It was submitted that because Mr Wahab did not record his reasons for his decision, the learned trial Magistrate Mr D. Lok was deprived of the opportunity to direct himself on how important issues arising from the stay application had affected the issues he had to decide, such as the Appellant's inability to examine the possibility of an alibi.

17. However, in his Statement of Findings, Mr D. Lok did mention that he had carefully considered all the submissions of Defence Counsel but in the end decided that it did not affect the conclusion that he had arrived at in relation to the case. When Defence Counsel made his final submission to the trial Magistrate, he did mention the possibility of the defence being handicapped in ascertaining whether it could run the alibi defence because of the passage of time since the occurrence of the events.

18. The instant appeal is quite different from what had happened in R. v. Holgate [1996] 3 HKC 315. In Holgate, the appeal was allowed and the conviction was deemed by the Court of Appeal to be unsafe and unsatisfactory. In Holgate, the accused had been convicted of being a Crown servant maintaining a standard of living above that which was commensurate with his official emoluments. He therefore had the burden of satisfying the trial Court on a balance of probabilities that he had not maintained such a standard of living and that any assets belonging to him had been acquired other than by corrupt means. The Court of Appeal held that because the accused was a man of unblemished character upon whom rested the burden of establishing his innocence in the absence of a potentially important witness, it was necessary for the judge to demonstrate that the accused's evidence had been fairly evaluated with these matters in mind and that his trial was fair. As the trial judge in that case had failed to address the issue arising from the unavailability of the accused's wife, the Appeal was allowed. It was said that there was nothing in the reasons given by the trial judge which indicated that he had considered the extent to which the Appellant might have been handicapped by the wife's absence at the trial. It was said that the trial judge should have directed his mind as to how the unavailability of the wife affected the issues that he had to decide.

19. In the instant Appeal, the defence relied upon by the Appellant and upon which he himself gave evidence was not one which could have been strengthened by the presence of another witness who, because of the passage of time, had gone missing. In the instant Appeal, it was simply a question of whether the Appellant was relying on the defence of alibi. He himself gave evidence and simply denied that he had attended any meeting with any alleged co-conspirators when anything improper was discussed. It was then a matter for the learned trial Magistrate to evaluate the evidence of the prosecution and also to evaluate the evidence given by the Appellant.

20. In my judgment, there was no need for the learned trial Magistrate to refer to the possible handicap which the Appellant might have suffered because of the passage of time. The defence of alibi was either raised or it was not raised. As I said earlier in the judgment, there was sufficient material in the prosecution's case for the date of the alleged meeting to have been fixed. The evidence of PW2, Thomas Chan, under cross-examination was that the meeting took place a day before the advertisement on the sale of flats in Regal Crest appeared in the newspapers. The evidence by Chan was that the advertisement appeared on 8th October and therefore, the meeting occurred on 7th October 1991. In my judgment, therefore, this ground also fails.

21. The third ground of appeal is that the learned trial Magistrate misdirected himself that the Appellant, as a man of clear record, had a high propensity to commit the offence with which he was charged, for the reason that : (a) he was an estate agent in a position of trust; (b) the conspiracy was difficult to be revealed; and (c) the huge profits involved in the project for sale of units in a block was sufficient to induce the Appellant to commit the offence.

22. What had happened was in the learned Magistrate's Statement of Findings, he gave himself a Berrada and Vye direction and said that that was in relation to both the credibility of the evidence of the Appellant and the propensity and possibility of the Appellant in committing the case. He then said that concerning the former, the Court had given full consideration to the evidence of the Appellant and rejected that evidence to be the truth of the case. He then said :

"Obviously for a person with a previous unblemished record, such as the Appellant in this case, he would also withhold the truth from this Court in an attempt to exonerate himself from a criminal act."

The learned Magistrate then continued :

"In relation to the propensity and possibility of the Appellant committing this offence, this court finds that a person without any previous criminal record like the Appellant would also be extremely likely to commit this offence for the following three reasons. ..."

23. It was submitted by the Appellant that these directions were a serious assault on the presumption of innocence and that the Appellant merely by the fact that he was an estate agent in a position of trust and that he was the accused person, was treated as a suspect witness. It was submitted that by the use of the phrase "would also be extremely likely" by the learned Magistrate, he was completely overhauling the Berrada and Vye principles which had the effect of denying the Appellant a fair trial. However it must be remembered that these reasons were stated by the Magistrate on 14th January 1998 when he was writing up his Statement of Findings. The conviction was on 19th December 1997.

24. What, to my mind, is more important is what the learned Magistrate said when he gave his oral reasons for the verdict on 19th December 1997. He had given very detailed reasons for his verdict and he had gone through the evidence adduced by the prosecution. He then summarised the Appellant's evidence, and he then said the following :

"Therefore I do not accept the defendant's version as the truth. I am of the view that the defendant had said and fabricated such evidence in the hope of exculpating himself. The defendant is of a clear record and so the court had to direct itself to the guidelines set out in the case of Berrada to the credibility of the defendant's evidence and the probability of the defendant committing the offence. In respect of credibility, the court has just made an analysis, and I did not accept that you have told the truth. The court is of the view that you are only protecting yourself, you said this in the hope of exculpating yourself."

He then said that he believed that even people with clear records under this kind of material temptations, given the unlikelihood of the activities being revealed, are quite likely to commit this kind of offence.

25. In my judgment, what the learned Magistrate did was that after having applied the Berrada direction and reminding himself of it, he went on to consider and analyse the background of the case in the light of the direction in order to arrive at a conclusion whether to accept the evidence of the Appellant. The background materials considered by the Magistrate were (1) the Appellant was in a position of trust; (2) he had access to information only known to estate agents like himself and not to the victims; (3) the conspiracy was difficult to be revealed; and (4) the huge profits that could be made.

26. In my judgement it was against these factors that the trial Magistrate concluded that even if a person had a clear record, he might still likely be tempted to commit this type of offence under the circumstances. The Magistrate then went on to consider a special feature of this case as revealed by the Appellant himself, namely that it was the first time that the Appellant was put in charge of the sale and purchase of the flats of an entire building. It was after having considered this important piece of evidence that the Magistrate concluded that even if a person did not have a criminal record, there was a chance for him to have committed such an offence under the circumstances of the case. After having heard and evaluated all the evidence, the learned Magistrate then decided to reject the Appellant's testimony in the witness box. The evidence adduced by the prosecution against the Appellant was, in my view, overwhelming. The accomplice witness, Thomas Chan, not only gave evidence about the agreement reached at the meeting, but also about receiving the sum of $70,000 from the Appellant as his share of the profit and that he had received this money on two different occasions, each time from the Appellant. There was also the evidence of PW3, Ku Wai Kui, who described how he, together with the Appellant, opened a joint bank account at the International Bank of Asia at the request of the Appellant and how he subsequently withdrew the total sum of $270,000 in cash and passed it on to the Appellant. There was also the banking evidence which supported PW3's evidence about the opening of the joint bank account and the fact of the $270,000 being withdrawn from that account. In my judgment, therefore, this ground of appeal also fails.

27. Ground four of the appeal is that the conviction is unsafe and unsatisfactory and for this contention, the Appellant relied upon the matters which are the subject matter of grounds one, two and three which I have already dealt with. In the circumstances, the appeal against conviction is dismissed.

APPEAL AGAINST SENTENCE

Date of hearing (on Appeal against sentence): 16th October 1998

Date of delivery of judgment: 16th October 1998

28. The Appellant was sentenced by the learned trial Magistrate to six months' imprisonment and he now appeals against that sentence.

29. The contention of the Appellant in the appeal against sentence is that the sentence imposed was manifestly excessive, having regard to the fact that the case is a stale one, and the fact that the other defendants were acquitted by the Magistrate who heard their case. It was also submitted on his behalf that the option of a suspended sentence was not considered or duly considered by the learned trial Magistrate. It was said that the Appellant has been under the strain of these proceedings since October 1995 when he was charged with the offence.

30. What had happened was the learned Magistrate had adopted the starting point of 12 months' imprisonment but then gave a discount of three months for the Appellant's clear record and another three months' discount for the grievance that the Appellant faced for having to face a series of court actions. Part of the series of court actions was the fact that Mr Paul Kelly had granted a permanent stay of proceedings but this decision was successfully appealed against by the prosecution.

31. Conspiracies to default are very serious offences. Conspiracies to default normally carry upon conviction an immediate custodial sentence. The conspiracy here is particularly serious since it allegedly involved five members of the staff of a reputable real estate agent company. This particular estate agent had been commissioned to sell a whole complex, Regal Crest, which was situate at a very posh part of the city in Robinson Road. The time of the conspiracy is October 1991. The conspiracy is that the conspirators would deceive potential buyers of units on the higher floors of this complex that all those units had been sold when in fact they had not, and thereby inducing the potential buyers to pay extra money to purchase them from fictitious people who had allegedly bought those upper floors of the complex.

32. The property boom had started in fact in July 1991 when the Memorandum of Understanding on the new airport was signed between the British and the Chinese Governments. By October 1991, the rise in property prices had begun and this boom in the property market continued from that time on until October last year when prices began to decline. In the heyday of the property market, there were a lot of people who were genuine end users or who were speculators who were interested in buying units in complexes situate in good locations in Hong Kong. These potential purchasers had to depend entirely on the integrity of real estate agents because they had no knowledge about which units were available and what the asking prices were. In relation to a new complex like Regal Crest, potential buyers of course also had to rely on the integrity of the real estate agents because they had no idea which units had been sold and which had not been sold. In the heyday of the property boom, there was always a demand for higher floors because of the better view from those floors. It was in reliance upon that desire by buyers to buy units on the higher floors that this conspiracy was hatched.

33. The full extent of the conspiracy may not have been revealed by the evidence adduced at the trial but the evidence did show that two purchasers were duped into paying an extra total of $270,000 to buy two units from fictitious people who had in fact never bought those units.

34. The offence is admittedly a stale one, but it must be remembered that it was only in 1994 that information was first given to the ICAC about this alleged conspiracy. And as has been pointed out by the Respondent, this Appellant was exercising his right to plead not guilty to the charge and that was one of the reasons why there was the series of court actions.

35. In my view, the learned Magistrate had given due consideration to the matters that he should have given a discount for. In my view, despite the staleness of the offence, a suspended sentence would not have been appropriate for this offence. In my view, the sentence of six months' imprisonment imposed is neither manifestly excessive nor wrong in principle. The appeal against sentence is dismissed.