R. v. TSE SUN WAH

IN THE COURT OF APPEAL

1996, No.489

(Criminal)

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J U D G M E N T

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Power, Ag. C.J. (giving the judgment of the Court):

1. We are concerned here with one charge of dealing with the proceeds of an indictable offence under s.25(1) of the Organized and Serious Crimes Ordinance, Cap.455. As particularized it reads:

"Tse Sun-wah did between the 24th January 1995 and the 29th June 1995 open and operate a bank account at Hang Seng Bank account No.352-1-018253 which was used to received for and on behalf of Tam Sin (also known as "Sap Yee" or 'Ah B') proceeds of an indictable offence namely lending money at an excessive rate of interest contrary to section 24(1) of the Money Lenders Ordinance Cap.163 knowing or having reasonable grounds to believe that it would be used for such purpose."

The applicant was convicted after trial before Judge Whaley in the District Court and was sentenced to imprisonment for two months. He now seeks leave to appeal against that conviction.

2. The applicant gave no evidence at trial and the only evidence against him was that he had opened the account referred to in the particulars of the charge on 21st January 1995, and that moneys had been paid into that account which were repayment by victims of a loan sharking operation. The account was closed by him on 29th June 1995. It appears that its only use had been to receive those moneys. The evidence was that they were not paid at his direction but at the direction of the money lender. There was no evidence as to the frequency of the payments or as to the dates on which they were made.

3. The trial judge found:

"In my view a compelling or irresistible inference arises from these facts to the effect firstly that the defendant knew what Ah B's business was, namely lending money at excessive rates of interest, and secondly that the defendant had entered into an arrangement with Ah B thereunder the defendant consented to Ah B using his account for the purpose of his borrowers making interest payments into it and that the defendant gave Ah B the necessary particulars of the account and control of it, including the ATM card, to enable Ah B to achieve this purpose.

There is no reasonable possibility in my view, that the defendant entered into this arrangement with Ah B ignorant of what Ah B was up to, namely, that he was loan sharking. Nobody opens a bank account, as the defendant did, and then immediately puts it at the disposal of another person without a very particular reason for doing so. It is an irresistible inference that the defendant knew that Ah B required to use this account of the defendant's for the purpose of having his victims make their interest payments into it, rather than using his own account, precisely because he was up to no good, namely, he was loan-sharking and using somebody else's account, such as the defendant's, was a means of trying to conceal or distance his involvement in such an activity from the public eye.

I am satisfied beyond a reasonable doubt that the defendant knew, or had reasonable grounds to believe, that the monies in question which were paid into his bank account - I refer to the interest payments by Ah B's victims - were the proceeds of loan-sharking on the part of Ah B."

The judge then went on to convict.

4. Mr. Dykes, who appears for the applicant today, submits that, upon the facts proved, the conclusion drawn was neither irresistible nor the only one which a reasonable man might draw. He argues that an important matter that was not established was whether the applicant ever exercised any personal control over the account after it was opened. There was, he submits, no such evidence and no evidence of knowledge by the applicant of the operation of the account. He argues that the opening of account cannot of itself amount to dealing with property representing the proceeds of an indictable offence because at the time of opening there would have been no transactions concerning that property. He submits that without evidence that the applicant was in some way involved in the management of the account after it was opened, it cannot be established that he knew or had reasonable ground to believe that the transactions effected represented the proceeds of loan sharking. He submits that the facts while they may be, as he puts it, collectively suspicious, do not admit only of the inference drawn by the trial judge.

5. Mr. Veltro, who appears today, is unable to advance any substantial argument to support the conviction. It was for the Crown to show that the applicant was aware of the alleged purpose to which the account was to be put as charged. This was not shown.

6. We are satisfied that there was not sufficient evidence safely to support the irresistible inferences drawn by the judge. The application is allowed and the appeal must succeed.

7. The hearing of the application will be treated as the hearing of the appeal and will be allowed.