HKSAR v. CHENG HIU FUNG SUNNY

CACC 59/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 59 OF 2003

(ON APPEAL FROM DCCC NO. 179 OF 2002)

____________

____________

___________________________________

REASONS FOR JUDGMENT

___________________________________

Hon Beeson J: (giving the reasons for judgment of the Court)

1. The Applicant originally faced 4 charges of Fraud and 2 of Attempted Fraud, being charges 5 to 10 on the Charge Sheet, all pursuant to section 16A of the Theft Ordinance, Cap. 210. He was tried together with two other defendants, who were separately charged, in the District Court.

2. At the conclusion of the prosecution case, the judge found the Applicant had no case to answer on charges 8 and 9, and acquitted him of those charges. At the end of the trial, he was acquitted of charge 10, but convicted of charges 5, 6 and 7, all of which were fraud charges. He applied for leave to appeal against those convictions.

3. Each charge alleged that the Applicant supplied a person named in the charge with a letter certifying, falsely, that they were employed by a company, Le Network Limited; this was done to enable the person named to make a fraudulent application to a bank to obtain credit facilities, thus causing prejudice, or a substantial risk of prejudice, to the bank.

Background

4. Lampe Berger is a long established French company selling essential oil products and burners and a Hong Kong company obtained distribution rights to its products. The Hong Kong company recruited distributors who were required to purchase goods in advance and, according to the amount purchased, move up a sales hierarchy by achieving set levels of revenue. The more recruits a distributor enrolled the greater the sales turnover and the quicker his, or her, progress through the ranks, progressively, of "Baron", "Marquess" and "Duke". A distributor was known as an "upliner"; his recruits were "downliners". Every sale by a downliner contributed to the upliner's commissions, with a different percentage for each grade, thus new recruits contributed to a team's overall turnover.

5. D1 and D3 were Barons, D3 being the present Applicant. The 2nd Defendant had a company, KS Network, at Marquess level. The Applicant and Ken Choi Ka-kit were directors and downliners of KS Network. Various courses known as "success courses" were run by Choi and 2 others. These courses aimed at signing up new recruits and pressurising them into joining the first rank as Barons. They had to buy an initial $5,000.00 worth of goods to join the scheme and were encouraged thereafter to provide $64,000.00 to buy goods to become Barons.

6. Cheng May-gee (PW 5), Wong Tang-for (PW 6), Lam Chun Jackie (PW 7) and Lee Shu-juan (PW 10) were all connected to the Appellant as distributors. They did not know one another before being recruited. Each of them gave evidence under an Immunity from prosecution. The Appellant was alleged to have supplied them with documents to enable them to obtain credit cards, in the case of PW 5, PW 7 and PW 8 and in the case of PW 6, a personal loan.

7. The persons recruited for the scheme had uniform characteristics. They were usually young, of little education, unemployed and either short of money, or insolvent. They were put under pressure to join the scheme and after that were encouraged to become Barons, the first rank of sales distributor. Those recruiting for the scheme were not concerned about how the $64,000.00 was obtained, as long as it was forthcoming. It was in that context the Applicant allegedly supplied letters to the witnesses falsely certifying they were employed and receiving salaries.

Grounds of Appeal

8. Perfected grounds of appeal were filed on 14 August 2003. Initially there were 3 grounds but at the appeal hearing, Mr Fok, who appeared for the Applicant, advised us that he was not proceeding with grounds 2 and 3.

9. The first ground was stated in this manner: "Judging from the evidence of PW 8, Lee Shu-juan, it gives rise to a serious flaw in the prosecution case which consequently could have cast doubts on the evidence of PW 5 Cheng May-gee, PW 6 Wong Tang-for and PW 7 Lau Chun, Jacky and the learned trial judge failed to evaluate the effect if any, on the aforesaid witnesses bearing in mind they all have similar pattern."

10. At the hearing, Mr Fok concentrated on various aspects arising from this ground. As we understand the expanded ground, his points are three. First, the trial judge did not pay sufficient attention to the fact that PW 8 had been granted an Immunity from prosecution and for that reason she, and probably the other witnesses PW 5, PW 6 and PW 7, were prepared to lie by saying the Applicant handed them the letters, when it was either Mr Ken Choi, (who was not before the court), or somebody other than the Applicant, who had done so.

11. The next aspect was that in relation to the letters the judge failed to require independent evidence of corroboration; in particular the evidence of a handwriting expert should have been presented to prove the Applicant had signed the letter given to PW 5. The third aspect on which Mr Fok concentrated his submission was that the trial judge paid insufficient attention to the effect of PW 8's evidence on the evidence of PW 5, 6 and 7. In particular, the judge failed to take into account the taint which PW 8's evidence inevitably cast on the evidence of PWs 5, 6, 7. Mr Fok submitted that because the judge was dissatisfied with the quality of PW 8's evidence and, eventually rejected it, she should have been all the more careful in assessing that of PW 5, 6 and 7; each of whom, like PW 8, had given evidence under an Immunity.

12. Mr Fok referred to the evidence of Tsui Man-lok (PW 12) who said he signed some forms for Appellant in blank but was unable to identify decisively his or Appellant's signature on letters shown to him. As there was no cogent evidence whether the apparent signatures on the letters were those of the Applicant, or of someone else, that raised a doubt, as they might be forgeries. The judge should have noted this point and having considered it, should have entered a finding of not guilty. Mr Fok submitted it was insufficient for the judge to say that she believed a particular witness; he was advocating corroboration of all evidence given under an immunity.

13. On the topic of forgery, PW 5's evidence was that she had been present when the Applicant had signed the letter and given it to her. She used the letter to obtain a loan. PW 6, 7 and 8 gave similar evidence. The judge considered the quality of their evidence, in full knowledge they were giving evidence under an Immunity from prosecution, with all the inherent dangers of that process. Her Reasons for Verdict show she assessed the evidence on that basis.

14. The essential evidence for charges 5, 6 and 7 was given by witnesses 5, 6 and 7. The judge assessed each account and commented favourably on each witness. PW 5 was an impressive witness who gave clear and honest evidence. The judge found PW 6 to be straightforward and logical and noted his agreement that Ken Choi, as well as the Applicant, was his "upliner". PW 7 was an impressive witness who gave clear and concise evidence and was not shaken in cross-examination.

15. PW 8, Lee Shu-juan, was the recipient of the letter, in charge 10. The judge overall, was unimpressed by the quality of her evidence. Three matters of particular concern were that (1) it was not clear from her evidence when PW 8 herself actually reached Baron ranking; (2) the purpose of the loan she sought was unclear; (3) she told police originally that Ken Choi had supplied her with the false employment letter and only later did she say it was the Applicant. PW 8 was very involved in the scheme. Within a very short time she became an experienced recruiter as shown by her attaining Marquess rank within a year of joining.

16. The judge's duty was to examine the evidence of each witness, taking into account their immunity status, but her finding PW 8's evidence unsatisfactory, did not require her, automatically, to rule out PW 5, 6 and 7 as reliable witnesses. Some evidence was common to all recruits who gave evidence, but the judge treated each incident separately and made individual assessments of each witness's evidence and credibility.

17. The fraud involved presenting letters containing false information about the individual named therein, so the individual named could obtain either a credit card or a loan from a bank. The prosecution case was that the Applicant supplied these documents knowing that apart from the name of the applicant, the information contained therein was false. None of the Applicants worked for Le Network Limited the company named on the letterhead. None was receiving a salary in the sum stated in the letter, or at all. It was irrelevant whose signature appeared on the letter, or whether the signature was forged or genuine. The judge was not obliged to require corroboration by a handwriting expert. She did not have to be satisfied the letters had been prepared and/or signed by the Applicant. The judge had to be satisfied that the Applicant with intent to defraud had arranged for the letter to be given to the recruit; that he knew the information was false and that he expected the letter to reap results in the form of a loan, or credit card account.

18. The Applicant exercised his right not to call witnesses or to give evidence at the trial and the judge was left with the evidence of the immunity witnesses. She assessed that evidence, was satisfied as to its quality and relied on it. She rejected the evidence of PW 8, stating her reasons for doing so, and acquitting the Applicant on charge 10.

19. The points raised by Mr Fok were rehearsed thoroughly at trial and thus were before the judge. There is no reason to interfere with this verdict. Accordingly this application is dismissed.