HKSAR v. CHENG CHIU KIN

DCCC 624/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 624 OF 2012

____________

____________

REASONS FOR VERDICT

1. The defendant pleads not guilty to one charge of conspiring together with D1, D2, D3, D4, D5, D6 and others to live on the earnings of prostitution, contrary to section 137(1), 159A and 159C of the Crimes Ordinance, Chapter 200. D1, D3, D4, D5 and D6 have pleaded guilty to the charge.

Introduction

2. Between January 2009 and October 2011 various rooms on different floors of Lok Cheong Building, 26-38 Fu Yan Street in Kwun Tong were used for prostitution. On the 27 October 2011 the ICAC, after conducting an undercover operation, raided 13 flats in Lok Cheong Building on the 2nd, 3rd, 4th and 6thFloors. 

3. The roles of the defendants varied.  In summary D1 was the owner of Flats B, C and H on the 2/F, which were subdivided into three rooms each, of which 8 rooms were rented out for the purpose of prostitution.  D2 was the girlfriend of D1 and was the one who suggested to D1 to rent the premises for prostitution and was also responsible for collecting the rent.  At various times D3 and D4 rented flats on the 4/F and 6/F which were used in the prostitution business.  D3 and D4 also acted as pimps as did D5.  D6 was a cleaner who also touted customers who came looking for prostitutes and told them the price of prostitution services.

4. The prosecution allege that D7 was involved in the running of the prostitution business in Lok Cheong Building and was therefore a party to the conspiracy. The defence submit the prosecution have failed to prove D7 was a party to the conspiracy.

Conspiracy

5. Conspiracy is an agreement between two or more persons to do an unlawful act or to do a lawful act by unlawful means with the intention of carrying it out.  A party may join a conspiracy at any stage provided the conspiracy is a single, ongoing one.  The agreement may be proved by direct evidence, or by proving circumstances from which the court may presume it.  Proof of the existence of a conspiracy is generally a matter of inference, deduced from certain criminal acts of the parties accused.

Evidence

6. There is no issue as to the existence of a conspiracy.  The facts supporting the existence of the conspiracy and the roles of the D1-D6 are the subject of admitted facts pursuant to section 65C of the Criminal Procedure Ordinance, Chapter 221 (exhibits PA172, PA172A and PA172B). 

7. In summary, with specific reference to D1 to D6, the admitted facts include ownership of flats on the 2/F by D1 and 3/F by D2 (paragraphs 1-4); the rental of flats by D3 and D4 (paragraphs 5-9); advertisements placed by D1 renting flats for prostitution (paragraph 10); the undercover operation including D3, D4 and D5 acting as pimps (paragraph 11); raiding of 13 flats on the 2/F, 3/F, 4/F and 6/F on the 27 October 2011 (paragraphs 12-17), including the arrest of D5 and D6 inside Flat H on the 2/F (paragraph 13); the finding in 11 of the flats of 13 illegal immigrants and 7 females in breach of their conditions of stay in Hong Kong (paragraph 14); seizure in different flats of various exhibits used in prostitution such as condoms and lubricants; signboards, walkie-talkies and CCTV cameras (paragraph 15); arrest of D1-D6 and seizure of exhibits including keys to various flats from D3 and D6 and mobile phones from all defendants (paragraphs 19-32). 

8. The issue to be determined is whether D7 was a party to the conspiracy. The evidence relating to D7 falls into two categories.  First the evidence of D1 and second circumstantial evidence said to link D7 with the operation of the prostitution business in Lok Cheong Building.  This evidence consists of D7’s DNA in five cigarette butts found in Room 1 of Flat D on the 6/F; the finding in D7’s residence of three keys, one to Flat D on the 6/F and two to Room 1 of that flat and four mobile phones; call records showing these four mobile phones were used to call other defendants and the movement records of D7 also showing his association with other defendants during the period of the conspiracy.

9. The prosecution called three witnesses D1 (PW1); Ho Tsz-wai (PW2), Assistant Investigator with the ICAC who seized the cigarette butts; and Lau Chi-ho (PW3), Chief Investigator with the ICAC who arrested D7.  The arrest of D7 was admitted together with the seizure of the keys and mobile phones in his home (see paragraphs 33 & 34 of the admitted facts, exhibit PA172).  The finding of D7’s DNA in five cigarette butts is also admitted (see paragraph 48 of the admitted facts), however the location where the cigarette butts were found in Room 1 of Flat D on the 6/F is not admitted.  The movement records of D7 during the period of the conspiracy were admitted (see paragraph 35 of the admitted facts) as were records of calls made and received by the mobile phones seized in D7’s home (see paragraphs 38 & 42-45 of the admitted facts).

10. D7 elected to remain silent and called no witnesses.  No adverse inference is drawn against the defendant for remaining silent.  That is his right.  This proves nothing one way or the other.  The prosecution must prove the charge beyond reasonable doubt.

11. I have carefully considered all the evidence and the submissions made and fully familiarized myself with all the documentation.  In reaching my verdict I remind myself of the burden and standard of proof and that the burden is on the prosecution throughout.  I direct myself that I must be sure of the guilt of the defendant before I can convict. 

12. I remind myself that when drawing inferences from the evidence the inference must be a compelling one and the only one that no reasonable man could fail to draw from the direct facts proved.  I now turn to consider the evidence.

Evidence of D1

13. The only direct evidence of D7’s involvement in the conspiracy is the evidence of D1.  I will therefore first summarise the evidence-in-chief of D1.  As this evidence is set out in detail in the written submissions of Mr Man and the summary of evidence annexed to the written submission of Mr Davies this summary will mostly refer to the specific evidence relating to D7.

14. In summary D1 testified as to how he came to rent Flats B, C and H on the 2/F of Lok Cheong Building for the purpose of prostitution.

Flat H

15. The first was Flat H which D1 purchased in October 2008.  The flat was subdivided into three rooms which in January 2009 were rented to Chan Pui-ha at a rent of $4000 per month per room (see exhibits PA37, PA38 and PA39 as read with paragraph 1 of the admitted facts, exhibit PA172). 

16. I note here the tenancy agreements all refer to the 3/F and not the 2/F.  This arose due to the different ways of counting floors in Chinese and English.  Where the tenancy agreements have the floor number written in Chinese the parties have admitted that the correct floor is the lower floor.  Besides Flat H on the 2/F this also applies to Flats B and C on the 2/F, Flat H on the 3/F and Flats B, C, D and G on the 6/F where the tenancy agreements state the higher floor (see paragraphs 1-4 of the admitted facts, exhibit PA172A).

Flat C

17. In November 2008 D1 purchased Flat C also on the 2/F of Lok Cheong Building.  At the time there was a sitting tenant, China Mobile, whose lease expired in May 2009.  In April 2009 agreement was reached with China Mobile for the flat to be subdivided into three rooms, with China Mobile continuing to rent one of the rooms.

18. In May 2009 D1 began the renovation of the flat into three rooms.  While the renovation work was being carried out D3 and D7 appeared at the flat.  Earlier in April 2009 when D1 went to repair a heater in Flat H on the 2/F he met D3 who said he was called “Hak Chai”.

19. This was the first time D1 had seen D7.  D3 introduced D7 as his boss.  D1 addressed D7 as “Choi Kwo”.  D7 asked D1 if he was the flat owner and what D1’s idea of renovation of the flat was.  D1 told D7 that as China Mobile still stored their equipment in the flat he would partition two rooms for leasing.  D7 asked D1 to lease the two rooms to them saying they were punctual with the rent.  D7 also said that he knew many people and that if D1 rented the rooms to him D1 would not encounter any trouble. D7 also asked for the rent to be the same as that for Flat H.  D1 however explained the flat was purchased at a higher price and that the monthly rental for China Mobile was $4,500 therefore D7 had to pay at least $500 more.  D7 replied, “So there’s no problem.  After you finish just inform us.” 

20. The renovation work took 4-6 weeks during which time D1 would go to the flat about four times per week.  D1 would see D6 cleaning Flats A and H on the 2/F and also greeting customers who went there looking for prostitutes and informing them of the price.  D1 also saw D5 do cleaning work and greeting customers.  Quite often D1 would see D7, sometimes bumping into him in the corridor of the 2/F when D7 was asking D5 and D6 to tidy up the places. 

21. When the renovation work was almost finished around mid June 2009 D1 again saw D7 when D7 together with D3 came to inspect the renovation work.  As the keys were ready to be handed over D3 gave D1 $20,000 being the deposit and rent for the two rooms. The rent was $5,000 per month, per room (see exhibit PA36 as read with paragraph 2 of the admitted facts, exhibit PA172). 

22. D1 asked in whose name the tenancy agreement would be signed.  D7 replied the same as Flat H, Chan Pui-ha.  D3 said that Chan Pui-ha was “one of their own gang, that is a family, a relative.”  D1 completed the tenancy agreement which he left on the bed for Chan Pui-ha to sign.  D1 said he would collect the tenancy agreement the next day when he collected all the tools and equipment.

Flat B

23. In August 2010 D1 bought Flat B also on the 2/F of Lok Cheong Building (see paragraph 3 of the admitted facts, exhibit PA172).  When going to look at the flat prior to purchase D1 saw D6 who asked him if he was going to purchase the flat.  Soon after D1 received a telephone call from D3 asking him to rent the flat to them if D1 purchased the flat.  Before purchasing the flat D1 also asked D3 if D7 was going to rent the flat.  D3 replied the next day saying they would rent the flat as well.

24. On the same day D1 purchased the flat he gave the keys to D3 as D3 said they were in a hurry to get some places to use.  The rent was $7,200 but no tenancy agreement was signed because D1 was told that as they were punctual in paying rent for the other flats it was not necessary to sign a tenancy agreement. 

25. In December 2010 D1 agreed with D3 to partition the unit into three rooms.  D1 therefore got back the keys so the flat could be renovated.  Whilst doing the renovation D1 met D4 together with D3.  D4 made suggestions with regard to the decoration.  D1 also saw D7 when during a casual chat D7 mentioned he needed to pay an inspection visit to Lok Cheong Building everyday in order to set his mind at ease and that even if he did not go he was still able to see what was going on at Lok Cheong Building from the outside.  D1 believed D7 was able to do this via the internet and a video camera. 

26. When the decoration work was about to finish D1 saw D7 who commented that the decoration was quite nicely done.  D7 also discussed the rent with D1 asking for the rent to be the same as Flat C.  D1 said there was no problem.  After the renovation work was finished D1 left the room keys in the door and gave the key to the main door to D4.

Increase rent

27. In December 2010 D1 told D3 as the tenancy for Flat H was about to end the rent would be increased to $6,000 for each room.  D3 did not give a reply at that time.  After the tenancy ended and without signing a new tenancy agreement D1 drove D2 to collect the new rent.  D2 went to collect the rent whilst D1 remained in the car.  Five minutes later D1 received a call from D3 who passed the phone to D7.  D7 said the increase was unreasonable.  Agreement was then reached over the phone for rent of $5,500 for each room, which rent D2 then collected.  The increased rent applied to all eight rooms on the 2/F.

28. D1 also testified that on one occasion whilst renovation work was going on D7 had a casual chat with D1 when D7 said his business was not good and that he would like to find out if this is due to the poor quality of girls or his staff in greeting customers.

29. D1 also gave evidence that on about 10 occasions he received prostitution services at Lok Cheong Building from girls introduced to him by D3, D5 & D6, with the first time being around December 2010.

30. Mr Davies submits that D1 should be considered as a dishonest, incredible and unreliable witness, whose evidence should not be accepted or relied upon (see paragraph 15 of the written submission of Mr Davies).  The basis of this submission is that D1 had good reason to fabricate evidence against D7 and second the discrepancies and inconsistencies in his evidence (see paragraphs 5-14 of the written submission of Mr Davies). 

Motive to fabricate evidence against D7

31. At the commencement of the trial D1 also pleaded guilty to a further charge of conspiracy to live on earnings of prostitution concerning premises in Tak Wah Building in the New Territories (charge 2).  D2, the girlfriend of D1, pleaded guilty to one charge of being the tenant permitting premises (Kin Ming Building also in the New Territories) to be used for prostitution (charge 3).  D1 confirmed in court that he was aware of a proposal made by his counsel that if he pleaded guilty to charges 1 and 2; D2 pleaded guilty to charge 3 and he gave true and full evidence against other defendants the prosecution would not proceed against D2 on charges 1 and 2.

32. In addition although D1 has not said in evidence that one of the reasons he is giving evidence is the hope of a reduction in sentence, this is something I cannot overlook. 

Discrepancies and inconsistencies

33. D1 when first interviewed by the ICAC on 27 October 2011, the day of his arrest, made no mention of D7 either by his name Cheng Chiu-kin or the nickname “Choi Kwo”.  The next day when the ICAC further interviewed D1 they specifically asked him if he knew Cheng Chiu-kin.  D1 replied he heard of this name for the first time when he was arrested and the allegations were read to him.  The ICAC then asked if he knew “Choi Kwo”.  D1 replied he had met “Choi Kwo” once when he went to Lok Cheong Building to collect rent.  D1 said he saw “Choi Kwo” passing by when people called him “Choi Kwo”.  D1 concluded by saying he had no idea who “Choi Kwo” was. 

34. In cross-examination D1 explained when he was arrested he was very frightened because he thought he had nothing to do with the case.  When the ICAC put questions to him concerning “Choi Kwo” he became more frightened because “Choi Kwo” was someone with background. Therefore he told the ICAC he met him only once in order to distance himself from “Choi Kwo” so as to give an impression he did not know “Choi Kwo” very much and was therefore unable to provide any information.

Other inconsistencies

35. At paragraphs 8-14 of his written submission Mr Davies lists further reasons why D1’s evidence should not be accepted or relied upon.  These do not all specifically relate to evidence directly implicating D7, which is mainly covered in paragraph 10, which deals with D1’s conversations with D7 over the rent of Flats B and C on the 2/F and the increase in rent of Flat H on the 2/F. 

36. Briefly Mr Davies submits in respect of Flat C that D1’s evidence of the rent was inconsistent as between his non prejudicial statement (NPS), his evidence-in-chief, the summary of facts admitted by D1 when pleading guilty to the charge and the tenancy agreement, exhibit PA36. 

37. In respect of Flat B Mr Davies refers to the inconsistency between D1’s evidence-in-chief and cross-examination with regards to the discussions with D7 over the amount of the rent.  Complaint is also made by Mr Davies at paragraph 12 that D1 could not explain why the tenancy agreement was in the name of Li Kam-wo.

38. In respect of Flat H Mr Davies refers to the inconsistency between D1’s evidence-in-chief regarding the agreement with D7 over the phone that the increased rent was to be $5,500 per room and the tenancy agreement, exhibit PA40 which states the amount was $15,000 for three rooms.  Mr Davies at paragraph 13 further criticises the explanation given in cross-examination by D1 for this inconsistency.

39. At paragraph 11 Mr Davies refers to the evidence relating to the increase of rent and inconsistencies between D1’s evidence and his NPS regarding whether the increase related to all the flats and not just Flat H on the 2/F.  At paragraph 8 Mr Davies refers to the evidence relating to Chan Pui-ha and how this contrasts with what D1 said in his video interviews. 

40. I accept there are inconsistencies in the evidence of D1, which inconsistencies I will address later in my verdict.

Evidence given by an accomplice

41. D1 is an accomplice.  The court as a matter of law is no longer required to direct a jury of the dangers of acting on the uncorroborated evidence of an accomplice. Whether or not such a direction is necessary is a matter of discretion for the trial judge.  This will depend on the circumstances of the case, the issues raised and the quality of the witness’s evidence.

42. In R v Makanjuola [1995] 2 Cr App R 469 the court said that if the witness has been shown to be unreliable a judge may consider it necessary to urge caution before acting on the unsupported evidence of a witness.  Where a witness is shown to have lied a stronger warning may be thought to be appropriate and that it would be wise to look for some supporting material before acting on the impugned witness’s evidence. 

43. Taking into account that when arrested D1 gave a different account to the ICAC with regards to the role of D7; D1 has an apparent motive to fabricate evidence against D7 and the inconsistencies in his evidence, I am satisfied such a warning is necessary and that I should look for supporting evidence before placing reliance on D1’s evidence. 

44. I therefore turn to consider the circumstantial evidence and the submission of Mr Man made at the end of his oral submission in court that even without the evidence of D1 there is still sufficient circumstantial evidence to draw the only and irresistible inference that D7 conspired with others to run the prostitution syndicate and conspired to live on the earnings of prostitution in Lok Cheong Building. 

Circumstantial evidence

45. As noted earlier the circumstantial evidence consists of D7’s DNA in five cigarette butts found in Room 1 of Flat D on the 6/F; the finding in D7’s residence of three keys, one for the main gate of Flat D and two to Room 1; call records showing four mobile phones seized in D7’s home were used to call other defendants and the movement records of D7 also showing his association with other defendants during the period of the conspiracy.

DNA

46. The finding of D7’s DNA in five cigarette butts is admitted (see paragraph 48 of the admitted facts, exhibit PA172).  The location where the cigarette butts were found is not admitted.

47. Assistant Investigator Ho Tsz-wai (PW2) testified that on the 27 October 2011 between 22:06 and 22:11 he seized six cigarette butts from a red ashtray on a table inside Room 1 of Flat D on the 6/F of Lok Cheong Building.  D7’s DNA was found in five of these cigarette butts. 

48. Ho arrived at Lok Cheong Building around 11:25 on the 27 October and together with other ICAC officers was responsible for searching Flats A, B, C, D and G on the 6/F.  The search started at 11:25 and finished the next day at 01:15.  On entering Flat D no one was inside.  The situation was as shown in photographs L3 and L4, exhibit PA171, from which one can see the red ashtray on the table.

49. Ho drew a sketch the same day (exhibit PA173) in which he marked the cigarette butts as being found in the toilet of Room 1, Flat D and not on the table shown in the photographs.  Ho explained that as time was tight he made an error when drawing the sketch.  Subsequently on the 4th February this year Ho drew another sketch (exhibit PA174), marking the cigarette butts as being found on the table.

50. In cross-examination when Ho agreed that at the time he drew the first sketch he was clear in his mind where the items were seized Mr Davies suggested to Ho that when he drew on the sketch the cigarette butts were found in the toilet this was probably accurate.  Ho disagreeing with the suggestion was then asked by Mr Davies to explain why.  Ho repeated his explanation that time was tight and that he had many things to do and therefore he made a drawing mistake. 

51. Ho confirmed he made two witness statements.  The first was on the 25 November 2011 in which there was no mention of where the cigarette butts were found.  The second statement was made on the 30 April 2012 in which a copy of the first sketch was attached.  Again no mention was made of where the cigarette butts were found save by reference to the sketch. 

52. When asked by Mr Davies why he suddenly realised in February this year that he had made a mistake in the first sketch Ho explained that on that day he became aware he was to give evidence in relation to the search and operation and therefore read the relevant documents and exhibits.  When reading the sketch he discovered the mistake and therefore drew the second sketch.  Ho disagreed he was making this evidence up and disagreed when Mr Davies put that he knew perfectly well the cigarette butts were found in the toilet.

53. Mr Davies submits that this evidence is not reliable and that the prosecution have therefore failed to prove the chain of evidence regarding where the cigarette butts were found (see paragraphs 21-23 of the written submission of Mr Davies).  In this regard Mr Davies also relies on the photographs L3 and L4 submitting that they show less than six cigarette butts in the red ashtray on the table (see paragraph 22 of the written submission of Mr Davies) thereby casting doubt on the evidence of Ho. 

54. The photographs are far from satisfactory.  Clearly someone thought of the potential importance of seizing cigarette butts but appear not to have directed close up photographs to be taken of where these cigarette butts were found.  There is also no photograph showing the whole of the toilet, only part in photograph L11.  Photographs L3 and L4 whilst showing the red ash tray do not show the whole of the inside of the ash tray.  Although one can clearly see two cigarette butts there may well be others underneath these or to the left side of the ash tray.  Without a close up of the ash tray I find it is not possible from the photographs to say how many cigarette butts there were in the ashtray.  The photographs do not undermine the evidence of Ho but equally do not support his evidence either. 

55. I accept the evidence of Ho that he found the cigarette butts inside Room 1 of Flat D on the 6/F.  I note Mr Davies never put to Ho they were not found inside Room 1.  All that was put was that the sketch was probably accurate and Ho knew full well the cigarette butts were found in the toilet (see paragraphs 50 & 52).  Whilst mistakes are easily made especially under pressure of what was clearly a very extensive search one would still expect an investigator to get correct, important details, such as where items were seized, in particular considering the sketch was drawn the same day.  What gives me cause for concern is that Ho did not realise his error when making witness statements in November 2011 and April 2012 and only when he knew he was going to give evidence in February this year, over 15 months after the raid, did he realise.  In these circumstances I find I cannot rule out the possibility that the cigarette butts may have been found in the toilet as indicated in the sketch drawn the same day by Ho.

56. Mr Davies further submits it is possible that D7 left the cigarette butts in the toilet when using the toilet on the 27 October 2011 (see paragraph 24 of the written submission of Mr Davies).  The evidence relating to whether D7 went to the toilet comes from Chief Investigator Lau Chi-ho (PW3), who arrested D7 (see paragraph 33 of the admitted facts, exhibit PA172).  Ho cannot assist in this regard as he did not spend any time with D7 and did not know if D7 went to the toilet. 

57. Ho did however confirm in cross-examination that D7 arrived at Flat D on the 6/F at 15:35 hours and left the 6/F at 21:20 the same day, during which time D7 also went to other flats being searched on the 6/F.  Lau said that he arrived with D7 at Lok Cheong Building at 15:38 when D7 was escorted to Flat D on the 6/F. Lau left Lok Cheong Building with D7 at 21:20, which I note was before Ho seized the cigarette butts between 22:06 and 22:11. In cross-examination Lau agreed he was with D7 the whole time and that he went with D7 to other flats on the 2/F, 3/F, 4/F and 6/F.  Mr Davies is therefore in error when he states at paragraph 24 that D7 stayed in Flat D from 15:38 to 21:20 hours.  Mr Davies does however state the evidence correctly in his summary of evidence annexed to his written submission at paragraphs 89, 90 & 100.

58. Lau testified that in his recollection D7 used the toilet in Room 1 of Flat D when he needed to urinate.  Lau believed D7 spent no more than one minute in the toilet during which time D7 did not smoke.  Lau also did not notice any cigarette butts in the toilet.  In cross-examination Lau said that D7 did not close the toilet door.  Lau did not record the number of times D7 went to the toilet and agreed that he could not remember when D7 went to the toilet and the number of times he went to the toilet. In re-examination Lau said that that no matter how many times D7 went to the toilet the door was open every time.  This was because D7 was an arrested person and therefore Lau had to make sure D7 was always within his sight.  Lau again said that D7 never smoked inside the toilet.

59. I have no hesitation in rejecting the submission that it is possible D7 left the cigarette butts in the toilet when using the toilet on the 27 October 2011.  I accept the evidence of Lau that D7 did not smoke when using the toilet together with his explanation given in re-examination (which is not included in the summary of evidence annexed to the written submission of Mr Davies).  The fact Lau never made any record of D7 going to the toilet or the fact female investigators may have been in the flat at the same time do not cause me to doubt Lau’s evidence.

Keys to Flat D on the 6/F

60. The DNA evidence is not the only evidence linking D7 to Flat D on the 6/F.  During the search of D7’s residence three keys to Flat D were found; one for the main gate of Flat D, one for the metal gate of Room 1 and one for the wooden door of Room 1 (see bullet point 5 of paragraph 34 of the admitted facts, exhibit PA172). 

The nature of Room 1 Flat D on the 6/F

61. I know turn to consider whether the finding of D7’s DNA in Room 1 of Flat D and that keys to that flat were found in D7’s residence is sufficient to prove D7 was a party to the conspiracy.  In considering this I take into account that D3 rented Room 1 for a period of 2 years commencing in July 2011 (see paragraph 8 of the admitted facts, exhibit PA172). 

62. Room 1 is described by Mr Man as the control room (see paragraph 25 of the written submission of Mr Man).  In my view this is an apt description.  Found in Room 1 were five monitors shown in photographs L3 & L4, exhibit PA171.  Three of the monitors could display images captured by CCTV cameras installed at the rear staircase near to the rear entrance of Lok Cheong Building; the outside of Flat H on the 2/F and on the 6/F outside Flat D (see bullet point 1, paragraph 16 of the admitted facts, exhibit PA172).  The CCTV cameras were also seized from the 2/F and the 6/F (see paragraph 15 of the admitted facts as relates to the seizure of exhibits from 2/F Flat H, items (vii-ix) and 6/F Flat D, item (ii)).  I note other CCTV cameras were seized in respect of other flats as well.

63. 14 walkie-talkies were also found in Room 1 (see paragraph 15 of the admitted facts as relates to the seizure of exhibits from 6/F, Flat D, item (i)).  Walkie-talkies were also found in Flats D and H on the 2/F (see paragraph 15 as relates to the seizure of exhibits from these two flats).

64. Three mobile phones (exhibits PB116-PB118) were found on a table inside Room 1 (see the last bullet point, paragraph 16 of the admitted facts).  These three mobile phones were used to communicate with other conspirators during the period of the conspiracy.

65. According to the call records of mobile phone number 9631-3750 (exhibit PB116) between the 1 May 2011 and 29 October 2011 166 calls were made to two mobile phones seized during a search of D3’s residence; 156 calls were made to a mobile phone seized from D4; 169 calls were made to a mobile phone seized from D5; and 108 calls were made to a mobile phone seized from D6 (see paragraph 43 of the admitted facts as read with paragraphs 28, 29 30 and 32 relating to the seizing of the mobile phones of D3, D4, D5 and D6).  I note the subscriber name for this phone was Yeung Oi-sin (who is not named as a conspirator) with a registered address in Tseung Kwan O (see paragraph 7.1 of the computer certificate, exhibit PA162).

66. According to the call records of mobile phone number 9351-8763 (exhibit PB118) between the 20 September 2011 and 20 October 2011 1 call was made to one of the two mobile phones seized during a search of D3’s residence; 1 call was made to the mobile phone seized from D4; 1 call was made to the mobile phone seized from D5; and 4 calls were made to the mobile phone seized from D6 (see paragraph 41 of the admitted facts).

67. There are no call records of mobile phone number 5306-5401 (exhibit PB117). However according to the call records of mobile phone number 6030-6305 (exhibit PB121), seized from D6, 1 call was made to 5306-5401 on the 14 May 2011 (see paragraph 44 of the admitted facts and the call records, exhibit PA 167). 

68. I note the number of calls as between different phone records do not always match for example call records of mobile phone number 6030-6305 show 21 calls received from 9631-3750 whereas the call records of mobile phone number 9631-3750 show 108 calls were made to 6030-6305.  Having looked at the call records this appears to be as a result of the receiving call records categorising many of the calls as call forwarded.

69. Also found in Room 1 were 8 keys giving access to Room 1 of Flat H on the 2/F, Flat H on the 3/F, and Flats B and G on the 6/F (see bullet point 2, paragraph 16 of the admitted facts); cash in the sums of HK$337,780 and RMB13,040 (see bullet point 3); and letters, four tenancy agreements and rental receipts relating to flats on the 4/F and 6/F (see bullet points 4 & 5).  Cash in the sums of HK$124,940 and RMB11,326 was also found in Room 2 (see paragraph 17 of the admitted facts).

70. I am satisfied so I am sure that the finding of the monitors together with the walkie-talkies and mobile telephones, in particular mobile phone number 9631-3750 which during the last 6 months of the conspiracy was used to make 599 calls to mobile phones seized from D3, D4, D5 and D6; the keys giving access to flats on the 2/F, 3/F and 6/F and substantial amounts of cash in both Rooms 1 & 2, the only inference to draw is that Room 1 of Flat D on the 6/F was the control room at the centre of the prostitution business. 

71. I find inherently improbable that anyone would be allowed into this room unless they were a party to the prostitution business.  Equally I am satisfied by the very nature of the room, notwithstanding there was a bed and a large quantity of condoms were found, that it would be inherently improbable the room was used for prostitution services whereby a customer would be able to gain access to this room.  I note in this regard that when the ICAC searched 13 flats they located in 11 of those flats a total of 20 female mainlanders who were either illegal immigrants or visitors in breach of their conditions of stay.  No females were found in Flat D on the 6/F (see paragraph 14 of the admitted facts, exhibit PA 172).

Association with other defendants

72. Besides the finding of D7’s DNA in Room 1 of Flat D on the 6/F and keys to Flat D and Room 1 of Flat D in D7’s residence there is in addition evidence showing D7’s association with other conspirators.  Four mobile phones (exhibits PB112-PB115) were also found in the residence of D7 (see bullet points 1-4 of paragraph 34 of the admitted facts, exhibit PA172).  Call records detailed below show these four mobile phones were used to communicate with D3, D4, D5 and D6 during the last six months of the conspiracy.  I note however none of these four mobile phones were used to communicate with the three mobile phones found inside Room 1 of Flat D. 

73. Only the call records of mobile phone number 9714-3256 (exhibit PB115) have been produced. These show between the 1 June 2011 and 29 October 2011 that 6 calls were made to the two mobile phones seized during a search of D3’s residence; 1 call was made to the mobile phone seized from D4; 4 calls were made to the mobile phone seized from D5; and 3 calls were made to the mobile phone seized from D6 (see paragraph 43 of the admitted facts).

74. Whilst there are no call records for the other three mobile phone numbers the call records of mobile phone numbers seized from other defendants show phone calls were made and received from the mobile phones seized in D7’s home.

75. The call records for mobile phone number 6411-6835 (exhibit PB123), which was seized from D4, show that between 29 April 2011 and 27 October 2011 calls were made to two of the phones.  253 calls were made to mobile phone number 5342-9633 (exhibit PB112) and 11 calls were made to mobile phone number 5102-9135 (exhibit PB113). 1 call was also received from this number (see paragraph 38 of the admitted facts). 

76.  The call records for mobile phone number 5198-6191 (exhibit PB119), which was one of the two mobile phones seized during a search of D3’s residence, show that between 1 June 2011 and 29 October 2011 calls were made to the same two phones. 103 calls were made to mobile phone number 5342-9633 and 12 calls were made to mobile phone number 5102-9135 (see paragraph 42 of the admitted facts).

77. The call records for mobile phone number 6030-6305 (exhibit PB121), which was seized from D6, show that between 1 May 2011 and 27 October 2011 calls were made again to the same two phones.  197 calls were made and 1 call received by mobile phone number 5342-9633 and 40 calls were made to mobile phone number 5102-9135 (see paragraph 44 of the admitted facts). 

78. The call records for mobile phone number 6222-5285 (exhibit PB124), which was seized from D5, show that between 1 June 2011 and 26 October 2011 calls were also made to the same two phones.  36 calls were made and 2 calls received by mobile phone number 5342-9633; and 2 calls were made to mobile phone number 5102-9135 (see paragraph 45 of the admitted facts). 

Movement records

79. Mr Davies submits there being no proof of the ownership of the mobile phones or that D7 was the subscriber it is just as likely the mobile phones belonged to his wife (see paragraph 19(ii) of the written submission of Mr Davies).  I have no hesitation in rejecting this submission.  The telephone records show association with D3, D4, D5 and D6 between 29 April 2011 and the day of arrest. This is not the only evidence showing association between D3, D4, D5 and D6 with D7. 

80. The movement records (exhibit PA169 as read with paragraph 35 of the admitted facts, exhibit PA172) show that throughout the whole period of the conspiracy D7 on a number of occasions went to China together with either D3, D4 or D6 and usually returned together.  Also in December 2009 D3, D5 and D7 went together and in June 2010 D3, D4 and D7 went together.  Mr Man has set out the common movements of the defendants in an annex referred to in paragraph 37 of his written submission.  I would only add that in respect of the entry for the 10 and 11 April 2009 that both the departure and arrival should be with D3 and D4.  D4 left on the 10 April at 22:57:58 which was 23 minutes later than D3 and D7.  D3 returned on the 11 April at 02:56:01 which was four minutes earlier than D4 and D7.  

81. Whilst the movement records in themselves prove only association when considered in combination with:

(i) the telephone records which show that in the last six months of the conspiracy there were 672 calls between the mobile phones seized in D7’s residence and the mobile phones seized from D3, D4, D5 and D6;

(ii) the nature of Room1, Flat D on the 6/F being the control room of the prostitution business in Lok Cheong Building;

(iii) the finding of D7’s DNA in that room; and

(iv) the finding in D7’s residence of keys to Flat D and Room 1

I am satisfied so I am sure the only inference to draw is that D7 was a party to the conspiracy to live on the earnings of prostitution in Lok Cheong Building.

82. In reaching my findings I have carefully considered everything said by Mr Davies both individually and collectively, including that the keys could have been left in D7’s residence by a visitor or D7’s wife.  Nothing said by Mr Davies causes me to doubt the only inference to draw is that D7 was a party to the conspiracy. 

83. In addition I am satisfied that the circumstantial evidence also supports D1’s evidence implicating D7.  In reaching this finding I have reminded myself of the need to approach D1’s evidence with utmost caution.  I accept the explanation given by D1 as to the reason why he did not tell the ICAC about D7 when given the opportunity to do so in the second video interview.  To say he saw “Choi Kwo” once when passing by in the street when people called him “Choi Kwo” simply does not have the ring of truth about it.  I accept D1 tried to distance himself from D7 in that interview. 

84. I have also carefully considered all the various criticisms made of D1’s evidence by Mr Davies in paragraphs 5-18 of his written submission.  In paragraph 10 Mr Davies submits there are differences in the evidence as to the conversations D1 said he had with D7 over the rent of the three flats B, C and H on the 2/F. 

85. Mr Davies submits in respect of Flat C the evidence of D1 that he rented the flat to D7 at a rent of $4,500 contrasts with that of the tenancy agreement, exhibit PA36, which says the flat was rented to Chan Pui- ha for a total of $10,000 for the two rooms.  As seen earlier the evidence of D1 in chief was that the agreed rent was $5,000 based on $500 more than China Mobile were paying (see paragraphs 19 & 21). The basis of this submission is that D1 in his NPS made no mention of the rent being $500 more than what China Mobile were paying and that in the Summary of Facts agreed on plea D1 agreed the rent was $4,500 (see paragraphs 40 & 41 of the summary of evidence prepared by Mr Davies).

86. I accept D1’s explanation that he omitted to mention the rent was $500 more than what China Mobile were paying.  D1 further explained that as he intended to plead guilty he did not pay attention to the details of the Summary of Facts. Whilst this is explanation is somewhat surprising I do not find this discrepancy over the amount of the rent causes me to doubt D1’s evidence that D7 was involved in the discussions over the rent of this flat. 

87. Nor does the fact the rental agreement was in the name of Chan Pui-ha cause me to doubt D1’s evidence implicating D7.  Again as seen earlier the evidence of D1 was that he was told by D7 that the name of the tenant shall be Chan Pui-ha, who D3 said was one of their gang (see paragraph 22).  At paragraph 8 Mr Davies also refers to the evidence relating to Chan Pui-ha and how this contrasts with what D1 said in his video interviews.  Accepting there are discrepancies this is not at all surprising. Considering D1 made no reference to D7 in his video interviews there are bound to be some inconsistencies and discrepancies in his evidence.

88. In respect of Flat B Mr Davies refers to the inconsistency between D1’s evidence-in-chief and his NPS with regards to discussions with D7 as to the amount of the rent.  Again accepting there is inconsistency in D1’s evidence as to this conversation this does not cause me to doubt D1 had a conversation over the rent of Flat B with D7.  Nor does the fact that D1 was unable to explain why the tenancy agreement for Flat B (exhibit PA35), which D1 said was for record purpose, was in the name of Li Kam-wo, who was a former staff of D1’s company.

89. In respect of Flat H Mr Davies refers to the inconsistency between D1’s evidence-in-chief regarding the agreement with D7 over the phone that the increased rent was to be $5,500 per room and the tenancy agreement, exhibit PA40 which states the amount was $15,000 for three rooms.  In cross-examination D1 explained that the tenancy agreement was for record purpose only and had not been mutually consented and signed by both parties.  This explanation is in turn criticised by Mr Davies at paragraph 13 of his written submission. 

90. I note the tenancy agreement, unlike when Flat H was first rented out (exhibits PA37, 38 & 39), was not sent for stamping.  I also note the identity card number of Chan Pui-ha is written differently to the way in exhibits PA37, 38 & 39. Whilst somewhat unusual to keep a tenancy agreement with the wrong details as to rent and the fact that D1 wrote Chan Pui-ha’s name as though it was the signature of the tenant I find these matters do not cause me to doubt D1’s evidence that he had discussions with D7 over the increase of rent.  Nor do the criticisms made at paragraph 11 of Mr Davies written submission referring to inconsistencies between D1’s evidence and his NPS relating to the increase of rent.  Whether or not the increase in rent referred to all the flats does not cause me to doubt D1’s evidence that he discussed the increase of rent with D7.

91. At paragraphs 16-18 of his written submission Mr Davies complains that D1 has never given a description of D7.  Having told the ICAC he only met him once when passing in the street it is not at all surprising D1 was not asked to give a description.  Whilst D1 could have given a full description in his NPS this would have served no real purpose for as Mr Davies points out D1 had sufficient opportunities of meeting D7 in the ICAC office and in court. The fact that D1 has at no time given a description of D7 does not cause me to doubt his evidence implicating D7. 

92. Having carefully considered the evidence of D1 and all the criticisms made of his evidence by Mr Davies I find, notwithstanding the apparent motive for D1 to give evidence against D7 and the inconsistencies in his evidence, that I am satisfied so I am sure he is telling the truth when implicating D7.  Nothing said by Mr Davies causes me to doubt this finding.

93. I am satisfied so I am sure there are no material and significant discrepancies, improbabilities or omissions in the evidence, which cause me to doubt the findings I have made.  I am satisfied so I am sure the prosecution have proved all the elements of the charge beyond reasonable doubt.  The defendant is convicted as charged.