HKSAR v. WONG CHOU, JOHNNY

CACC 364/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 364OF 2016

(ON APPEAL FROM DCCC NO. 193 OF 2015)

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REASONS FOR JUDGMENT

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1.  The applicant, who appears in person having been refused the grant of legal aid on 15 February 2017, seeks leave to appeal against his conviction after trial by Deputy District Judge Bina Chainrai, on 28 October 2016 of a charge of fraud, contrary to section 16A of the Theft Ordinance, Cap 210. He gave notice of that application by filing Form XI with the Court on 28 November 2016. By a letter filed with the Court on 3 April 2017, the applicant purported to advance grounds of appeal against sentence. Clearly, that application is substantially out of time. Although directed by the Court by letter dated 6 July 2017, to file a supporting affirmation explaining the delay in making the application for leave to appeal against sentence, none has been received by the Court. At the hearing, the applicant indicated that he did not wish to proceed with an application in respect of sentence.

The trial

2.  There was no dispute that in November 2010, while a District Director of Manulife (International) Limited (“Manulife”), the applicant was approached by a rival company, American International Assurance Company (Bermuda) Limited (“AIA”), as a result of which he was offered the position of District Director [1].

3.  In December 2010 and January 2011, several meetings took place amongst AIA’s senior representatives, including Marcus Wong (PW 4), Stewart Lee (PW 5) and Terry Lung (PW 6), and the applicant to negotiate the terms of AIA’s recruitment package [2], including inter alia an entitlement to a ‘signing fee’, the calculation of which was required to be based on his actual income at Manulife over the two years. 

Prosecution case

4.  It was the prosecution case that the applicant submitted or caused to be submitted various documents to AIA, in proof of his purported income, which stated his income falsely.  Those documents, including various ‘statement of agent’s account’, a ‘notification of remuneration’ and a ‘statement of advisor’s account summary’, purported to be his ‘income proof’ from December 2008 to November 2010.  Those documents represented falsely that he had enjoyed a total income in the period of $5,875,702.28, whereas his actual total income was $4,074,022.84 [3].  There was no dispute that the records of Manulife were identical to the income proof documents submitted to AIA, except that all of them stipulated significantly lower levels of income.

5.  The applicant signed a Letter of Understanding (“LOU”) [4], dated 16 February 2011.  It was the prosecution case that it had been read to him on that date by Terry Lung, an employee of AIA, and that the applicant had read it himself.  In signing the document, the applicant acknowledged his acceptance of a clause in the document, which stated:

“ The Company [AIA] agrees to pay the Applicant a signing fee (“the Signing Fee”) determined on the basis of the income proof provided by the Applicant, which the Applicant hereby warrants and represents to the Company to be true, complete and accurate in all respects.  The signing fee now amounts to Hong Kong …‌ $4,406,776 only [5].” 

6.  Terry Lung testified that before the applicant signed the LOU, he had placed before him the documents provided to AIA as proof of the applicant’s income and the applicant had confirmed them to be correct.

7.  At the request of the applicant a personal loan of $2 million was approved and advanced to him, against the signing fee, by a cheque dated 30 March 2011 [6]. The balance of the signing fee after deduction of loan interest, namely $2,400,231.28 was paid to the applicant by a cheque dated 19 May 2011. 

8.  Having searched the applicant’s home in the early morning of 10 April 2013, officers of ICAC searched the applicant’s office later that morning at Unit 502, 5/F, Cornwall House, Tai Koo Place, 979 King’s Road, Quarry Bay, in the applicant’s presence and that of his legal representatives.  In the course of the search they seized various documents some of which were identical[7] to the purported ‘income proof’ documents submitted earlier to AIA.  They were found in a blue folder on top of a cabinet [8] and inside a brown envelope inside another cabinet [9].

9.  In a video-recorded interview conducted of the applicant on 10 April 2013, although he was responsive to some questions, the applicant exercised his right to remain silent in response to the questions whether he had submitted any ‘income proof’ documents to AIA.

Defence case

10.  At trial, the applicant availed himself of the right to testify and called two other defence witnesses.  The applicant was 45 years of age.  Having lived in Canada from 1985, the applicant married, Sarah Gee, his former wife, in 1995, after which they lived in Australia, returning to Hong Kong in 2002.  Then the applicant embarked on a career in the insurance industry at Manulife where he was promoted ultimately to the position of District Director in 2010.

11.  The applicant said that he relied heavily on his personal assistants in conducting both his professional and personal affairs.  At or around the time he was approached by AIA, Sarah Gee was one of his personal assistants.  She handled his personal financial affairs and was solely responsible for gathering all the ‘income proof’ documents to be submitted to AIA.  They separated in August/September 2011 and were divorced in May 2015. 

12.  The applicant acknowledged that in his negotiations with AIA he had been asked to provide ‘income proof’ documents.  He knew that they would be used for AIA to assess the financial package to offer the applicant.  However, he testified that he had never handed such ‘income proof’ documents to AIA.  It was suggested in the defence case that Sarah Gee had submitted those documents to AIA.  For his part, he did not know that those documents were false.  The applicant accepted that the income stated on the ‘income proof’ documents submitted to AIA did not reflect the income that he had actually earned at Manulife.

13.  The applicant denied signing the LOU on 16 February 2011.  Rather, he had signed it at his home on the evening of 15 February 2011, to which it had been brought by Marcus Wong (PW 4) a District Director of AIA, who told him that the LOU was not a legally binding document.  As a result, he had read the document very quickly.  He did not notice that Clause 7 of the document stated that his “Annual Income HK$2,937,851.14 (had been) determined on the basis of the income proof provided by the Applicant”.

14.  Ms Hilda Fung (DW 2) confirmed that the applicant delegated all his administrative work to one of his three assistants, of whom she was one and Sarah Gee another.

15.  Mr Dicky Poon (DW 3) testified that he was a former employee of Manulife.  Having been approached by the applicant, he changed employers and joined AIA in October/November 2011, where he worked in the applicant’s team.  Having been told by the applicant that documentation would be required to facilitate the new employment, he said that Sarah Gee told him specifically that ‘income proof’ documents were required.

Grounds of appeal

16.  Attached to Form XI, filed with the Court on 28 November 2016, was a handwritten document in which the applicant asserted simply that the “conviction is unsafe and unsatisfactory”.

17.  By a letter filed with the Court on 3 April 2017, the applicant set out what he stated were “initial grounds of appeal”, namely:

Conviction:

1)   that the Trial Judge had not considered whether the Defense case can be true even if the Court did not believe the Defense case positively: HKSAR v Mosen [2011] 1 HKLRD 45;

2)   the Trial Judge did not consider the Defense case in light of the evidence of Defense Witnesses, which the Court do not reject; and

3)   there was a lurking doubt in the circumstances.

18.  By a 13 page letter filed with the Court on 26 June 2017, the applicant advanced grounds of appeal against conviction.  By Ground 1, it was argued that the ‘false’ documents seized in his office had been seized from an unsecured place.  There was no evidence to show that the applicant physically dealt with the false documents or knew of their falsity.  Further, he was not the sole beneficiary of the ‘fraud’.  AIA benefited from the higher sales figure generated by his ‘district’.  Marcus Wong and Francis Wong, both prosecution witnesses at trial, received promotion opportunities.

19.  By Ground 2, the applicant asserted that no witness testified that he or someone on his behalf had submitted ‘false’ documents to AIA.  Next, he said that the ‘income proof’ documents submitted to AIA and relied upon by the prosecution had not been signed certifying that they were true.  That was in contravention of Clause 13 of a document entitled “Defensive Recruitment Package (LOU) for Experienced Agents and Wealth Management Elites.” [10] AIA had a duty to check all ‘income proof’ documents submitted in his case to ensure that they were genuine.

20.  By Ground 3, it was argued that the judge refused wrongly to accept that the applicant’s yearly income was $3 million.  The judge confused “annual income” with “average annual income”.  The former was the term used in the LOU.  Finally, it was contended that the judge erred in relying on the evidence of Terry Lung (PW 6) in respect of the meeting with the applicant at which the LOU had been signed.  There was no such meeting with Terry Lung.

21.  By Ground 4, the applicant referred to HKSAR v Mosen [2011] 1 HKLRD 45 to support the proposition that in analysing the evidence the judge was required to give herself a Liberato direction, namely that even if she did not positively believe the evidence of the defendant, she could not find an issue against him contrary to that evidence if that evidence gave rise to a reasonable doubt as to that issue.  In the present case, it was possible that someone else had fabricated the false documents and submitted them to AIA without his knowledge.  It was also argued that the judge failed to sufficiently consider the testimony of defence witnesses which she did not positively reject.  In his oral submissions, the applicant invited the Court to note that Ms Hilda Fung had said that the applicant did no administration work in the office [11] and that the applicant’s former wife, Sarah Gee, was responsible for handling sensitive confidential personal information.[12] It was argued that, having regard to all the circumstances, there was a lurking doubt in the case. 

The respondent’s submissions

22.  In his written submissions, Mr Phil Chau invited the court to refuse the application for leave to appeal against conviction.  In his oral submissions, he said that it was the prosecution case that the ‘income proof’ came into the possession of AIA either from the applicant directly or from someone acting on his behalf.  In the respondent’s written closing submissions it had been acknowledged “Quite how Terry Lung came by these documents is not quite clear as Marcus Wong, Francis Wong and Stewart Lee were not able to say definitively how or who receive these documents.” [13]  In those circumstances, the respondent had submitted:[14]

“ The only reasonable conclusion is that the defendant either gave those documents to AIA or at the very least had someone pass the same to AIA, bearing in mind the security required to at least access and print the financial information from Manulife’s computer system.”

23.  He submitted that the judge’s concluding determination in her reasons for verdict was to be viewed in that context:[15]

“ I am satisfied beyond all reasonable doubt that the defendant submitted these falsified documents in order that a larger signing (fee) would be paid to him, and in doing so he falsely represented to AIA that the contents of these documents were true and correct.”

24.  Mr Chau submitted that the only prosecution witness with whom real issue was taken was Terry Lung.  He was an important witness, whose evidence was accepted by the judge.  He testified that at a meeting with the applicant on 16 February 2011 he had explained the LOU to the applicant, who had signed the document on every page.  The applicant’s signature on the first page was immediately beneath clause 5(a), in which it was stated that the signing fee which the company agreed to pay to the applicant had been “determined on the basis of the income proof provided by the applicant, which the applicant hereby warrants and represents to the company to be true, complete and accurate in all respects.”  The importance of that clause was the fact that this signing fee to be paid to the applicant was stipulated to be HK$4,406,776.

25.  By contrast, the applicant testified in his evidence‑in‑chief that he had signed the LOU on 15 February 2011, after it had been brought to his home in the early evening by Marcus Wong.  He said that when he signed the LOU beneath clause 5(a) he did notice the signing fee was stipulated to be $4,406,776.  However, he said he did not know how the figure had been calculated.[16]  In cross‑examination, he said that he had read the document very quickly because it was not very important.  Far from having checked the ‘income proof’ documents he had never even seen the documents before.[17]

26.  Of the date on which the LOU signed, Mr Chau invited the Court to note that it was an admitted fact that “The Defendant signed a letter of understanding on 16^th February 2011”.[18]

A consideration of the submissions

27.  In her reasons for verdict, the judge said of the witnesses called for the prosecution:[19]

“ I found the prosecution witnesses to be honest credible witnesses, who each gave their evidence simply and directly. Where they were unsure and did not remember, they said so. PWs 3 to 7 were honest in recounting to the best of their abilities the events that had occurred in 2010 and 2011.”

28.  The judge went on to determine:

“ I found the prosecution witnesses were all honest and reliable witnesses and I accept the testimony in its entirety.”

29.  By contrast, she determined of the applicant:

“ I did not believe the defendant’s testimony. I rejected his evidence. I found his account inherently incredible. He was also very evasive when answering questions, sometimes quite simple and direct questions.”

30.  Of the issues between the prosecution and the applicant, the judge said:[20]

“ As I understood it, the defence was not challenging the honesty and integrity of PW1, or those of any other prosecution witnesses, except PW6. The only issue was the reliability of their evidence.”

31.  In her recitation of the evidence of Terry Lung, the judge said of his testimony:[21]

“ Exhibit P18, the LOU, was shown to PW6 – he confirmed that he had signed his initials on each page of the 13 page document above ‘company’. The Defendant had signed on each page above ‘applicant’ and he had signed the document in PW6’s presence. Before the Defendant signed, PW6 had explained the entire document to the Defendant and the Defendant had also taken the document and appeared to read it himself.”

32.  Of the issues taken in cross-examination on behalf of the applicant, the judge said:[22]

“ Under cross-examination, he said he confirmed with the Defendant that the signing fee was calculated with his average annual income over 2 years × 150%, and he repeated the figures of the annual income he had used and the Defendant had confirmed that the figures were correct, the same figures as appeared on Exhibit P2. The Defendant was also shown the income proof documents he had submitted, and after confirming that it was correct, he signed on the LOU. It was put to PW6 that the Defendant had not signed the LOU Exhibit P18 in his presence nor had he explained to the Defendant how the signing fee was calculated nor did he show the Defendant the income proof documents upon which he had based his calculations, but PW6 disagreed.”

33.  In that context, the judge summarised the differences in the evidence of Terry Lung and the applicant in respect of the circumstances in which the LOU had been signed.  Of that, she said:[23]

“ The signing fee was set out in the letter of understanding, LOU (Exhibit P18). How it was calculated was also set out in the document, including that calculation of his average annual income over the previous 24 months. The Defendant confirmed that he had signed it. But the circumstances under which he said he signed it differed from the testimony of PW6. PW6 testified that he had read over the entire document to the Defendant as well as showing him the supporting income proof documents that had been submitted. This all took place on 16 February, 2011, the date shown on the document. The Defendant himself had read it as well.

The Defendant said that the document was brought to his home at 7 a.m. on 15 February, 2011 by PW4.  He just glanced at it quickly.  He confirmed the handwritten date 16 February 2011 under his signature was written by him.  His explanation for dating it 16 February, 2011 although it was signed on 15 February, 2011, was that perhaps 16 February 2011 was a lucky date or because PW4 had to return to the office to get a stamp to affix on the document – he could not remember the reason.  It was never put to PW4 that the document was signed on 15 February, 2011.  It was PW4’s testimony that this was on 16 February, 2011 and this was an admitted fact as well.”

34.  Of her resolution of the conflicting testimony, the judge said:[24]

“ I did not believe the Defendant’s account of how he came to sign on Exhibit P18. I am satisfied beyond all reasonable doubt that PW6 explained Exhibit P18 to the Defendant and showed him the income proof documents he had used to calculate the signing fee as he described to the Court.”

35.  Of the significance of those findings, the judge went on to say:[25]

“ He signed on it voluntarily, accepting all the terms and conditions. In Clause 5(a) the Defendant warranted and represented to AIA that the income proof he had provided to AIA ‘was true, complete and accurate in all respects’. The income proof documents that were submitted by the Defendant that resulted in the calculation of the average annual income over 24 months were also referred to in Clause 7 of the LOU. In clause 21(h)(iv) of the LOU, there is again a declaration and warranty by the Defendant that ‘any proof of income that he provides to the Company is true, complete and accurate in all respects’. Clause 22 sets out the action that can be taken by the Company in the event of fraud, dishonesty or breach of trust or breach of any of the warranties including the warranty in clause 21(h)(iv).”

36.  Of the applicant’s evidence that he had “left all financial matters to his ex-wife Sarah” the judge said:[26]

“ I do not believe that he would not himself have checked through the income proof documents to be submitted to AIA. The Defendant had worked his way up the ranks to the position of District Director at Manulife, through his hard work. One of the reasons for his promotions must be the business he generated for Manulife for which he was paid as well. How much business he generated and how much he earned would obviously be a matter of some concern to him. More so when he was thinking about changing to work for another insurance company.”

37.  Of the point made in favour of the applicant that the internal AIA guidelines for the making of an LOU required that the income proof documents be submitted and signed and certified by the applicant and the AIA recruiting manager, the judge acknowledged that the false documents received by AIA were not signed and certified.  Of that she said:[27]

“ But there was evidence that AIA were very keen to recruit the defendant to join AIA - they were even prepared to advance the sum of $2 million to him from the signing fee before he actually joined AIA.”

38.  In the result, the judge concluded “I am satisfied beyond all reasonable doubt that the defendant submitted these falsified documents in order that a larger signing (fee) would be paid to him”. It is clear that the context in which that finding is to be understood is by regard to the position taken by the prosecution in its closing speech, namely that the uncertain evidence did not permit a finding that the applicant himself had handed over the false documents to AIA, but that it was the prosecution position that at least the applicant had caused that to be done.

39.  As Mr Chau submitted, the important finding of the judge was her acceptance of the evidence of Terry Lung and the rejection of the applicant’s evidence of the circumstances in which the LOU was signed on 16 February 2011.  Clearly, the judge was accepting that the income proof had been discussed with the applicant in that meeting, in the context of the statement in Clause 5(a) that the applicant “warrants and represents” them to be “true, complete and accurate in all respects.”

Conclusion

40.  In all the circumstances I was satisfied that the applicant had not advanced any reasonably arguable grounds of appeal against conviction.  Accordingly, I refused the application for leave to appeal against conviction.

41.  The applicant is advised that he has the right to renew his application for leave to appeal against conviction to the Full Court, but is informed that if he does so, and the Full Court determined that the renewal is without justification, the Full Court may order that some of the time that the applicant spent in custody pending the determination of his application shall not be reckoned as part of the term of his sentence.