HKSAR v. CHIU SIN HIM

IN THE COURT OF APPEAL

1997, No. MA 16

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J U D G M E N T

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Power, Ag. Chief Judge, H.C. (giving the judgment of the Court):

1. This is an appeal from a magistrate, Mr. P. Kelly, which has been referred to the Court of Appeal under s.118(1)(d) of the Magistrates Ordinance Cap.227.

2. The appellant, who was D1 at trial, faced one charge of accepting an advantage contrary to s.9(1)(a) of the Prevention of Bribery Ordinance. It was charged that he, being an agent, namely the General Manager of Holiday Resorts (HK) Limited, on or about the 6th day of April 1995, without lawful authority or reasonable excuse, accepted an advantage, namely a fee, reward or commission of $18,000 Hong Kong currency from Lau Lai-hung ("Mr. Lau", who was D2 at trial,) of Clarity Swimming Pool Sand Filter Maintenance Service, as an inducement to or reward for or otherwise on account of the said Chiu Sin-him doing or having done an act in relation to his principal's affairs or business, namely assisting the said Mr. Lau to bid for a swimming pool lifeguard services contract of the said Holiday Resorts (HK) Limited. Mr. Lau faced a reciprocal charge of offering an advantage. The appellant was convicted. Mr. Lau was acquitted. The appellant now appeals against that conviction.

3. It was the prosecution case that a contract dated 1st April 1995 was made between Mr. Lau, trading as Clarity Swimming Pool Sand Filter Maintenance Service, and Holiday Resorts (HK) Limited, under which contract Mr. Lau undertook to provide lifeguards for the swimming pool at Sea Ranch which was owned by Holiday Resorts for the sum of $30,000 per month during the summer of 1995 i.e. from 1st April until 31st October. The appellant was at all relevant times the General Manager of Sea Ranch. It was the prosecution case that the appellant sought a payment of $18,000 from Mr. Lau for helping him to get the contract and that he was paid that amount on 4th April 1995 by way of a post-dated cheque.

4. The appellant, as we have said, was convicted but Mr. Lau was acquitted. At the time of convicting the appellant the Magistrate said:

"D1, I have taken into account the evidence that you gave from the witness box. That evidence is not true. After having reconsidered the evidence that I heard in respect of the admissibility of the record of interview, I attach full weight to the first record of interview, and that is where the truth is to be found. The second statement you made was no more than an attempt to undo the damage you inflicted on yourself when giving the first statement.

Now, I have disregarded any out-of-court statement made by D2 which might contain inculpatory material against you, and in considering the evidence that he gave in the witness box, I've borne in mind that he might have been more concerned about protecting himself than speaking the truth. But even after so directing myself, I find that D2 has spoken the truth in court.

As a fact, I find that you received an advantage of $18,000. You treated that sum as a reward made to you by D2. You pretended to D2 that it was for another purpose. In particular, you pretended that it was to repay compensation to the former contractor, but the plain fact is, you wanted it for yourself. You received that sum of money in your capacity as general manager of Holiday Resorts (Hong Kong) Limited, and you received it in relation to your principal's affairs. Indeed, you solicited it on that basis. The only relationship between you and D2 was in connection with that contract, and the only inference that I can draw, is that it was solicited and received by you for assisting D2 in relation to the lifeguard contract. That was the only conceivable purpose in your mind.

For those reasons, which are not to be regarded as complete or exhaustive, I find you guilty."

5. The magistrate when acquitting Mr. Lau said:

"It was said in submissions that I must either convict or acquit both defendants because these charges are the reverse side of the same coin, but that isn't right. When you made the payments to D1, you believed, at least in part, that it was compensation for the company who had formerly performed the contract at Sea Ranch. That was the reason D1 convincingly gave to you. You were foolish and commercially na?ve, but this was, after all, your first contract. It was your misfortune to fall into the hands of one who was commercially more sophisticated. You did have suspicions as to where the $18,000 was going. Lurking at the back of your mind was the possibility that it might of being going into the pockets of D1, but at no stage were you absolutely sure about that and it was for that reason, after the money after the cheque was handed over you went to the bank to try and find out who had actually pocketed the $18,000 cash.

The prosecution has to prove, so that I can be sure, that you intended the payment to be corrupt. I cannot be sure that was your only objective, and you may, in part of your thinking, have thought that it was going to a third party. I have a doubt about your state of mind when you handed over the money to D1. I have to give you the benefit of the doubt, I do so, and I find you not guilty."

6. The magistrate also made a Statement of Findings in relation to the appellant, in which he said:

"On the 6 April 1995 the Appellant, then General Manager of Holiday Resorts (HK) Ltd. was paid $18000 by D2. Prior to the date of contract (1 April 1995) between D2 and Holiday Resort (HK) Ltd. The Appellant falsely represented to D2 that the sum was to be paid as compensation to the person who previously held the swimming pool contract.

The payment was an advantage to, solicited and treated by the Appellant as a reward for assisting D2 obtain the contract. He was acting in relation to his employers affairs. There were no dealings between the Appellant and D2 prior to negotiations for the contract the subject of the charge. The payment must have been received by the Appellant in relation to his principal's affairs or business. In the absence of credible evidence from the Appellant there could be no other explanation.

In submissions for the Appellant it was said that he could only be convicted of the offence if D2 was convicted. Both offences were different sides of the same coin. The Court disagreed. It believed the evidence of D2. This was his first commercial venture. He was na?ve, possibly stupid, but the Court could not be sure that he knew or believed the payment was corrupt. He did not know for certain whether the money would be used by the Appellant or the third party of whom the Appellant had spoken."

7. This appeal turns upon a relatively simple point. The Amended Perfected Grounds of Appeal read as follows:

"1. The Magistrate erred in law in convicting the Appellant as charged in that his findings as to fact and as to credibility precluded him from finding proved one of the essential ingredients of a S.9(1)(a) offence, namely, that the $18,000.00 was received .... 'as an inducement to or reward for or otherwise on account of the said CHIU Sin-him doing or having done an act in relation to his principal's affairs or business namely assisting the said LAU Lai-hing to bid for a swimming pool lifeguard services contract of the said Holiday Resorts (HK) Limited'. The findings as to fact and credibility would have supported a conviction for blackmail or obtaining property by deception but not an offence under S.9(1)(a).

2. Even if the above had been considered, any finding that the Appellant knew or believed that the Second Defendant did have the necessary belief, such a finding was inconsistent with the evidence of both the Appellant's first video interview and D2's evidence, both of which the Learned Magistrate accepted as being 'true'."

8. It is argued on behalf of the appellant by Mr. Egan, with him Mr. McGowan, that at the trial Mr. Lau gave evidence to the effect that the appellant had told him and that he had accepted that the payment required was a payment of compensation to the previous year's contractor so that that contractor would not involve himself in the current year's contract. The Magistrate in his Statement of Findings which we have read concluded that Mr. Lau was an honest witness. It was submitted that it must, therefore, follow that the belief of the appellant must have been that Mr. Lau believed that he was paying the money in the knowledge that it would be used by the appellant to pay off the competitor rather than as a bribe to the appellant. It is urged that this could not be a s.9 situation but was, at worst for the appellant, an obtaining of money by a false pretence. Given the admissions which were made by the appellant, we find some difficulty with this argument. It is certainly correct that we are concerned with the state of mind of the appellant. When looking at the evidence in a corruption trial a court always has to bear in mind that "negotiations", if they can properly be so termed, between the parties very often proceed on what has been referred to as a "nudge, nudge, wink, wink" basis. Often nothing is said about bribes or illicit payments. Money is, not infrequently, handed over for what, on the surface, is a perfectly legitimate reason when it is, in truth, a wholly corrupt payment. Whatever euphemisms may have been used in the present case, we are concerned with the state of mind of the appellant. Was he, whatever Mr. Lau may have thought, accepting moneys that he believed were given to him as a reward for a corrupt act. What this court must determine is whether there was evidence before the magistrate upon which he could properly act to be satisfied that the appellant believed himself to be accepting a reward for such an act. We do not need to review the authorities in this regard as there was no contest as to the proper test to be applied. We refer only toNgan Kai Shui v. R. (1973) HKLR 161, which authority has been affirmed in The Attorney-General v. Leung Hung-hang Application for Review No.19 of 1983, and very recently in the case of So Kam-tim v. HKSAR Criminal Appeal 193 of 1997.

9. We turn then to the statements made by the appellant himself to see whether there was evidence to establish what was in his mind at the time when he accepted the $18,000.

10. He was questioned at length by an officer of the I.C.A.C. We first turn to Question 131:

"Q. But it's you who talked with him, right? When you talked with him, did you believe that you could enable Mr.Lau to get the contract?

A. I dare not say I could do that, but there was such a chance. It's because there was nobody else applying for that except he. There wasn't anybody else. There wasn't any competitor. There was his application only. Since no lifeguard was recruited after he placed advertisements in the newspapers. In fact, we mainly wanted to recruit lifeguards. No lifeguard was recruited after advertisements were placed in the newspapers. The place was easily accessible for those from Cheung Chau. The pay we offered was quite good. However, we still failed to recruit lifeguards. Therefore, I think even if I didn't say anything, I didn't say anything, Mr. Lau would still have the chance to get the contract.

Q. So that is to say, if he was willing to give money to you, that is to say even if he couldn't get, that is even if he didn't give money to you, you believed that you could, you would introduce him, but --- if you --- if he was willing to give money to you, you would be more willing to do it. Shall I put it this way.

A. Er, you may say so. It's correct to a certain extent. Since even if he didn't give such a sum of reward to me, as the opening time of the swimming pool was drawing near, I would, you know, right? I got to look for somebody to manage it, right? I think I would still introduce him to the board.

Q. Mm. Okay. Well, you have said just now that, well, er, you made an excuse to ask for such a sum of money from him, right? But as what you have told me just now that it's impossible, well, for you to tell him that it's you who wanted the money. And you said, you have said just now that three thousand dollars was to be deducted --- And Mr. Lau was told: 'Well, it would be better to give that sum of three thousand dollars to me.' That's what you have told me just now. So it seems that what you have said at the very beginning It's not sensible for me to say that to him.' That is, it's impossible to ask him to give money to you, right? So you now what happened actually.

A. Well, concerning that sum of three thousand dollars, I surely would not say I wanted that sum of three thousand dollars. Therefore, I said, the former contractor -- in fact, there was a contractor in the past; there was a contractor in the past --- now you replace the former contractor. So you give the former --- every --- give this sum of three thousand dollars to the former contractor.'' That's how it is. In fact, that's, that's, that's given to me.

Q. You didn't state clearly that would be given to you, did you?

A. I didn't.

Q. That means, you didn't tell Mr. Lau, right? I didn't. I didn't. I didn't. I didn't. Therefore, Mr. Lau has thought all along that you gave the money to the contract above.

A. Would it be possible that he actually knew it? We, we all should have a tacit understanding of it, right?" (Emphasis supplied.)

We then turn to the passage which commenced with Question 147:

"Q. Okay. Okay. Well, perhaps let me roughly tell you again in brief what we said in the interview just now. Well, you agree that you once, well, you admit that you yourself really accepted a sum of $18,000. (A:Yes) from Mr. Lau Lai-hung from a company called Clarity Swimming Pool Sand Filter Maintenance Service, accepting a sum of $18,000 from this company for letting Clarity handle the contract for the swimming pool. Do you agree.

A. It's not let him do it, but helped him --- (Q. That is, helped him.) I helped him. Er, but I didn't guarantee anything. (Q: Huh. Simply helped him, right? Yeah. Yeah. Simply help him. It's not that, it's not that, it's not that (Q: That means, you helped ---) it's not that I guaranteed that he could get it."

11. We appreciate that these passages occur during a long and at times rambling set of questions and answers. We again stress that it is our task to ascertain whether there was evidence before the magistrate upon which he could properly convict. Given the passages which we have just read we have no hesitation in holding that there was evidence upon which the magistrate could properly act to find that the appellant, to use his own words, accepted the $18,000 as "a sum of reward" for having "helped" Mr. Lau to get contract and that this was an act in relation to his principal's business. That being so the appeal must be dismissed.