HKSAR v. TANG LAM PIU AND ANOTHER

HCMA 1237/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 1237 OF 2004

(ON APPEAL FROM ESCC 3650/2004)

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J U D G M E N T

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Introduction

1.  The Appellants were jointly charged with a common law conspiracy to defraud.  The particulars were that they together with a man called Wong Yiu-tong, who gave evidence for the prosecution (as PW5) and other persons unknown conspired together to defraud an insurance company, MassMutual Asia Limited by dishonestly and falsely representing that one of its insured a woman called Wong Oi-lin, had been struck by lightening at Guazhou PRC on 19 August 2002 and been killed.

2.  Having denied the offence they were tried over the course of 5 days in November 2004 by Miss Julia Livesey at Eastern Magistrates’ Court.  In a reserved decision on 26 November 2004 the learned Magistrate found the charge proved against both Appellants and sentenced each of them to a term of 15 months imprisonment.  They now appeal against both their conviction and sentence.

The Nature of the offence as alleged by the Prosecution

3.  Both Appellants have extensive experience of the insurance industry having worked in it for many years.  PW5 also had been involved in it for some months prior to the events which give rise to this matter and so he was reasonably well-versed in the insurance business.  The Appellants and PW5 had previously been known to each other.  The prosecution case was that sometime between March and April 2002, the Appellants suggested to PW5 that they should arrange to have two women, Xiong Xianghong and Mo Xiaohong, the former being the 1^st Appellant’s girlfriend and the latter a former employee of PW5 on the Mainland, insured in Hong Kong (the policies being life insurance policies) and subsequently submit false claims on those policies by making false declarations that the women had died in accidents on the Mainland.  The Appellants asked PW5 to register himself as the brother of one of the insured so as to qualify as beneficiary under the policy of insurance.  The amounts paid out under the policies would then be shared by the three of them.  In order that the insured might be able to come to Hong Kong to take out their respective policies, which they had to do under assumed identities, it was alleged that this was facilitated by the 1^st Appellant with the assistance of a corrupt named former official of the Public Security Bureau (“PSB”) in Qingxin City, Guangdong who was able to provide fake identity papers for the women in the name of Huang Ailian [in Cantonese Wong Oi-lin], who is the relevant individual in this charge, and Deng Shaochan.

4.  The 2^nd Appellant was able to use his contacts in the insurance business to enable the policies to be taken out and, in due time, for the claims to be approved.  In order not to draw attention to himself he used a business partner Lee Yan kit, who was unaware of the background, to act as the insurance agent.  On 14 July 2002 the two women accompanied by the corrupt former Mainland official arrived in Hong Kong using their false identities of Wong Oi lin and Deng Shaochan.  At the direction of the Appellants, Mr Lee Yan-kit made out the application forms for the policies of insurance in which, on the relevant policy for the purposes of this appeal, PW5 was said to be the brother and therefore a qualified beneficiary under the policy of Wong Oi-lin.  To support the applications, the false identity documents, two way permits and citizenship identity cards were also lodged.  Wong Oi-lin’s policy for $700,000 was underwritten by MassMutual.  The other policy was not accepted and so I need say nothing further about it.

5.  In August 2002, both Appellants made a number of journeys to the Mainland in order to bring their fraud to fruition by obtaining all the documents that would be required to support the falsehood that Wong Oi-lin had been struck by lightening and killed.  These were available on payment to corrupt officials.  They included a death certificate from the local hospital, a false declaration from the woman’s employer confirming the death, certificates from the PSB attesting to the cancellation of her residency registration following her demise and confirming the brother and sister relationship between the “deceased” woman and PW5.  They went as far as obtaining a receipt and certificate of burial from a local undertaker showing that the deceased had been cremated.

6.  On 3 December 2002 PW5, accompanied by the 2^nd Appellant and by Mr Leee Yan-kit submitted the claim to the insurer which purported to say that the insurer Wong Oi-lin had been killed by lightening on 19 August 2002, furnishing as proof the false documents which I have referred to in the previous paragraph.  The truth of the matter was that the real Madam Wong Oi-lin was and is alive and well and employed as a teacher in QingXin and unaware of these matters.

7.  Fortunately, the insurer became suspicious, declined to pay out and the matter was reported to the ICAC who arrested PW5.  He was charged with this and other matters, on the strength of overwhelming evidence against him, and later on close to his guilty plea in court for this offence  he decided to tell the ICAC of the part allegedly played by the Appellants who were then arrested and charged.

The shape of the trial

8.  The ICAC, as one can readily imagine, took a very detailed statement from PW5.  He was the only witness called by the prosecution whose evidence could convict the Appellants.  He could and did provide a very detailed account at the trial of what the three of them had done in setting up the fraud and very nearly bringing it to a successful conclusion.  Part of the claim against him is that his evidence, rather than being a spontaneous account was in fact a word for word recital of his witness statement which was exhibited so that the Magistrate could made a comparison.  This was contrasted, and the same point is now taken before me on appeal, with his inability to answer questions effectively, or at all, when taken to peripheral matters which did not relate to what appears in his witness statement.  The point has been made that he appears to have memorized ‘parrot fashion’ an account that he invented, which a truthful witness who was speaking of events that he was truthfully recollecting, would have given a less wooden account of, and in a more spontaneous and natural manner.

9.  This criticism of PW5 formed part of the central theme of the defence case against him, that he was a tainted witness with every motive to lie firstly, in order to get a reduced sentence for himself in respect of this matter and secondly, because of bad blood that now existed between him and the Appellants, because they had not turned up at court to support him following his arrest for this offence, and in the case of the 2^nd Appellant, because of a business relationship between them in the Middle East which had gone sour.

10.  The learned Magistrate, in a comprehensive statement of findings, has summarized the evidence for the prosecution and that given by the 2^nd Appellant, the 1^st Appellant having elected not to give evidence, and in doing so she has, it seems to me, demonstrated a proper understanding of the facts which were going to be material to her verdict.  What emerges particularly clearly is the fact that the crucial prosecution evidence was coming from an accomplice who had pleaded guilty and also was hoping, provided a conviction was secured based on what he told the Magistrate, to thereby receive a further discount beyond that which would follow his guilty plea.  She was also acutely aware of the bad blood between PW5 and the two men in the dock before her and that PW5 had a motive to see if he could get the Appellants convicted.  Further, although there were pieces of evidence which may have served to confirm the accomplice’s account in some respects, that evidence did not have the telling effect of providing corroboration of his account that they too were guilty of the offence with him.  Accordingly, she held that this was a case where there was in fact no corroboration of the accomplice’s evidence.  The law of course does not require corroboration before a conviction can be entered.  In this matter it is very clear from a reading of the statement of findings that the learned Magistrate was very conscious of the lack of corroboration, as she was of the danger of convicting on the evidence of an accomplice such as this.  Ultimately, having gone through that exercise with the care that she so obviously brought to bear on her task she expressed herself satisfied so that she was sure that PW5 had told the truth.  In doing so she rejected the evidence of the 2^nd Appellant.  She of course had the undoubted benefit of seeing the witnesses and of thereby getting a real sense of their worth as witnesses of truth.  I do not have that advantage.  This is one aspect but, it is not the only one.  An appellate court is bound to look at the matter in the round and to judge the correctness of the verdict by also considering the inherent likelihood of a witnesses’ evidence being truthful having regard to its content judged against the whole background of the evidential contest, the issues that arise from that contest, the evidence that bears on those issues, for and against the prosecution and the defence, and the internal logic, if any, that comes from that evidence.  The appellate court will then need to see how the trial Magistrate addressed those issues in providing reasons for accepting and/or rejecting a particular piece of evidence.

11.  In this case the Magistrate has provided perfectly cogent reasons for accepting the truthfulness of the accomplice’s evidence and for rejecting the 2^nd Appellant’s account.  That would dispose of any suggestion which is made, in a general way, that she was wrong to have convicted on the evidence of an accomplice such as this particular witness.

Specific Grounds of Appeal

12.  Notwithstanding this, it is still necessary to go through the several distinct grounds of appeal which Mr Beel, who appears for the 1^st Appellant, has advanced in a very measured and therefore persuasive way.

Bias

13.  He begins with a ground which must usually be difficult to sustain unless clearly made out, which is that the Magistrate demonstrated bias against the 2^nd Appellant and his case, or that at least gave the appearance of bias having regard to one aspect of the 2^nd Appellant’s case which in turn must have redounded to the detriment of the 1^st Appellant, who was jointly charged, with him.  To sustain that submission on behalf of the 2^nd Appellant is difficult but, to seek to do so by means of a perceived knock-on effect, against the 1^st Appellant must be significantly more testing.  The matter comes about in this way.  The 2^nd Appellant was in the course of giving evidence [transcript page 166] and explaining how he decided to keep Mr Lee Yan-kit on, because he had pity on him.  Mr Lee was in the process of having to go bankrupt and it was he who had been asked to act as insurance agent to have the policy processed.  The 2^nd Appellant was in the process of explaining to the Magistrate that he had decided to keep Mr Lee on as a partner after the policy had been processed.  In the course of providing an explanation as to why he kept him on as a partner she interrupted to observe:

“Magistrate: Yes.  I still don’t know why you put him on as a partner.  You have this terrible man who has nothing positive to give except to act as a glove, and you put him as a partner.

Mr Beel: Well with respect, why is he a terrible man?

Magistrate: Well no, what I mean by “a terrible man” is he has … he is going to be made bankrupt, he has vast quantities of …

Mr Beel: Well a lot of people are made bankrupt and it does not mean that they are terrible.

Magistrate: There are no positive aspects as to why he should be made a partner of this Company.  I want to know why in particular.  Merely being a clerk is not.  All right?”

Then the exchange came to an end and the evidence continued.  Mr Beel submits that the Magistrate’s comment was inappropriate and in circumstances where it is said that she had found that the 2^nd Appellant had lied on an aspect of his evidence which went to bolster the credibility of PW5’s evidence, to which I will need to make specific reference in a moment, this must therefore give rise to a reasonable apprehension of bias which may have clouded or coloured the Magistrate’s assessment of the evidence.

In this regard, as he has in respect of all of these submissions by Mr Beel, the 2^nd Appellant has adopted this as a ground of appeal in his case.

14.  A ground of this sort needs to be judged against the whole tenor of the Magistrate’s conduct of the case over five days and having regard to her Statement of Findings.  Whilst it was a criticism of the 2^nd Appellant’s decision to keep Mr Lee on as a partner this was more than adequately countered by Mr Beel at the time and from the transcript it appears that the Magistrate was not minded to press on with this criticism.  I can’t imagine how this little exchange can properly give rise to the appearance of bias on the part of the court.  This point must therefore fail.

Co-conspirator rule

15.  The Magistrate has correctly set out the meaning and effect of the co-conspirator rule [page 49 Bundle] as to acts of one conspirator being admissible against the other.  Nevertheless, says Mr Beel, it is first necessary for the prosecutor to establish prima facie evidence of the existence of the conspiracy charged and at least prima facie evidence that the particular defendant is a party to that conspiracy, established by independent evidence of his participation, before the rule can operate against him.

16.  Mr Beel submits that there was no independent evidence to show that the 1^st Appellant [and the 2^nd Appellant] were parties to the conspiracy.  Mr Beel relies on the fact that there was no evidence to corroborate PW5 with the result that independent evidence was therefore lacking.

17.  This submission, in my judgment, is a misunderstanding of how evidence of a co-conspirator’s participation can be led.  It certainly does not need to be independent of an accomplice co-conspirator.  This evidence had clearly been led from the accomplice.  It was then up to the Magistrate to assess it.  It is very clear from her findings that she found that a conspiracy of the type alleged and charged existed and that the Appellants were parties to it.  I am afraid to say that this point is unarguable.

PW5’s Credibility/Insufficient evidence

18.  I can take these points together.  As to PW5’s credibility I have had careful regard to everything that Mr Beel has said and put in his written argument.  These were matters that were very much for the trial Magistrate to evaluate which she did in a very careful way.  I have already considered this court’s approach, in assessing the correctness of the trial court’s conclusion on the evidence of the witnesses that it has heard and seen.  The Magistrate was alive to all of these arguments and her conclusions on the evidence are one’s that she was fully entitled to arrive at.  As to the sufficiency of the evidence, Mr Beel complains that once the ICAC had their witness statement from PW5 their investigation stopped at that point.  They did not attempt to investigate further.  In respect of some matters it was said at the trial that they could not take some aspects any further because such additional enquiries would have proved inconclusive.  They chose to rely on what they had.  It was for the Magistrate to decide whether that was sufficient.  She was addressed on all of this and decided that the evidence was sufficient to convict.

Lies direction

19.  In this regard Mr Beel for the 1^st Appellant seeks to rely on what he says is a misdirection or non-direction of herself in respect of lies in the 2^nd Appellant case to impugn the conviction of his client the 1^st Appellant.  He says that there is cross infection because those lies which she found were used to bolster the credibility of PW5 who of course gave evidence against both accused.  I have looked with care at her statement of findings in this regard and I do not see how it can be said that she has fallen into error.  The reality of these passages is that all that the Magistrate was saying was that she disbelieved the 2^nd Appellant in certain respects of his evidence and where that evidence differed from that of PW5 in material respects she accepted PW5’s evidence so that she was sure that PW5’s evidence was correct.  She expressly disavowed the notion that these lies provided corroboration of PW5’s evidence nor provided evidence of the 2^nd Appellant’s guilt.  All she was doing was to perform her obligation as the trial Magistrate of deciding who was telling the truth and who was not. It is not open to the circumstances, for Mr Beel to dress up the matter as an error of law which should render the verdict unsafe.  There has been no error in the Magistrate’s treatment of lies by the 2^nd Appellant.  This point must therefore also fail.  In such circumstances the 1^st Appellant’s appeal must stand dismissed.

The 2^nd Appellant

20.  He has, very wisely, adopted what Mr Beel has said and also made a statement in support of his appeal.  These additional points do not add anything to what Mr Beel has addressed to me and accordingly his appeal against conviction must also stand dismissed.

The appeal against Sentence

21.  15 months for men in their 40’s who are of previous good character is a severe penalty which will come as a hard blow to them.  But it needs to be shown not that the sentence is too severe but that it is one which is wrong in principle or manifestly excessive.  What needs to be remembered is that this was a very well planned enterprise with a number of arrangements that needed to be made both here and over the border.  It drew in a number of people, some corrupt and guilty, others innocent tools of the Appellants and of PW5.  The reward was to be substantial.  Insurance companies are vulnerable to such frauds.  They need to be protected.  If they suffer losses in this way, they will need to recoup these by raising premiums and so we all suffer.  Given the premeditation and planning that went into this it cannot be said that 15 months is manifestly excessive – it is certainly not wrong in principle to impose such a sentence for something on this scale, even on persons of previous good character.  This part of the appeal therefore must also stand dismissed.