R. v. LIU CHEUNG HON

M.C.A. No. 278 of 1993

H E A D N O T E

Criminal Law and Procedure - Magistrate, conviction order or determination by - Governor's Reference of whole case to High Court Judge under s. 113A(1) Magistrates Ordinance, Cap. 227 - shall be treated as appeal from magistrate - whether appeal restricted to grounds not already adjudicated upon in previous appeal.

Held: It is open to appellant to appeal on all grounds. Very unlikely that finding of Court of Appeal on ground previously argued in same case will not be followed unless finding shown to have been made per incuriam.

IN THE SUPREME COURT OF HONG KONG

(Appellate Jurisdiction)

MAGISTRACY CRIMINAL APPEAL NO. 278 OF 1993

(On appeal from Eastern Magistracy Case No. ESC505919 of 1992)

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J U D G M E N T

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1. On the 11th of February 1993, the Appellant was convicted by a magistrate on the following amended charge :

Statement of Offence

2. Offering an advantage to an agent, contrary to Section 9(2)(b) of the Prevention of Bribery Ordinance, Cap. 201, Laws of Hong Kong.

Particulars of Offence

3. LIU Cheung-hon, on a day between the 1st day of May 1991 and the 31st day of August 1991, in Hong Kong, without lawful authority or reasonable excuse, offered an advantage, namely about $63,000.00 Hong Kong currency to an agent CHAN Tat-lo, Dicky, an employee of Recio & Casas Limited, as an inducement to or reward for or otherwise on account of the said CHAN Tat-lo, Dicky showing favour to the said LIU Cheung-hon in relation to his principal's affairs or business.

4. The appellant was fined $150,000.00. He appealed against conviction and the appeal came before me on the 12th August 1993. There were then five grounds of appeal set out in a document entitled "Amended Perfected Substituted Grounds Of Appeal Against Conviction" and dated the 10th of August 1993.

5. Ground 1(i) related to the fact that the magistrate, at the close of the Crown's case, had in purported exercise of his powers under Section 27 of the Magistrates Ordinance, Cap. 227, amended the charge, which had originally alleged an offence against Section 9(2)(a) of the Prevention of Bribery Ordinance, so that it alleged instead an offence against Section 9(2)(b).

6. It was submitted by the appellant that the magistrate had misdirected himself in that he had not had power under Section 27 to substitute another offence for the original offence.

7. There was an issue as to whether Section 9 of the Prevention of Bribery Ordinance created one offence or two. After hearing submissions on all five grounds of appeal and at the invitation of the parties, I reserved the following points to the Court of Appeal :-

1.	Does Section 9(2) of the Prevention of Bribery Ordinance, Cap. 201 create two separate offences by its subsections (a) and (b)?
2. (a)	If it does not, is an adjudicating magistrate entitled to amend the Particulars of Charge of a Section 9 offence by the use of Section 27 of the Magistrates Ordinance, Cap. 227 instead of Section 32(2) of the Prevention of Bribery Ordinance, Cap. 201?
(b)	If it does, is an adjudicating magistrate by virtue of Section 32(4) of the Prevention of Bribery Ordinance, Cap. 201 or otherwise entitled to invoke Section 27(4) of the Magistrates Ordinance, Cap. 227 to amend a charge of a Section 9(2)(a) offence by substitution of a Section 9(2)(b) offence or vice versa?

I then made the following order :

"The hearing of this appeal is adjourned to a date to be fixed when the matter is remitted to this court with the decision of the Court of Appeal".

8. The case came before the Court of Appeal on the 21st of December 1993 and it was by then common ground that subsections 2(a) and (b) of Section 9 of the Prevention of Bribery Ordinance relate to two ways of committing the same offence, so that the only remaining question to be decided by the Court of Appeal was my point 2(a) above. In a reserved judgment delivered on the 6th of January 1994, the Court of Appeal answered the question in the affirmative, but instead of remitting the case to me so that I could deal with the other grounds of appeal the Court, evidently being under the mistaken impression that the whole appeal had been referred to it, proceeded to dismiss the appeal. It was counsel's duty to make the position clear to the Court of Appeal at the outset. My order adjourning the hearing until the case was remitted would not necessarily have been before the Court of Appeal. I have been told by Mr. Ma that counsel were present when the Chief Justice read out the judgment of the Court of Appeal before handing it down and at that time, although it must have been apparent to counsel that a problem had arisen, it appears that nothing was said to the court. It was counsel's duty to point out to the court that there were unresolved issues and had they done so, a great deal of time and trouble might well have been saved.

9. On the 21st of February 1994, His Excellency the Governor on the advice of the Attorney General and in exercise of his power under Section 113A(1)(a) of the Magistrates Ordinance referred the whole case to me. The relevant part of Section 113A(1) is in the following terms :-

"(1) where any person has been convicted by a magistrate of any offence (including an indictable offence triable summarily) ... the Governor may, if he thinks fit, at any time thereafter either -

(a) ... refer the whole case to a judge and the case shall then be treated as an appeal to that judge by that person ..."

10. Mr. David Chan, Crown Counsel, appearing for the Crown, Mr. David Ma, counsel for the appellant and Mr. Benjamin Chain appearing as amicus curiae expressed the unanimous view that notwithstanding the dismissal of the appellant's appeal by the Court of Appeal, this court now had jurisdiction to decide upon the outstanding grounds of appeal.

11. Mr. Chan for the Crown submitted that I could not retry the issue which had already been decided by the Court of Appeal, but Mr. Ma and Mr. Chain pointed to the plain words of Section 113A(1)(a) which speak of referring the whole case to a judge. My attention was drawn to the case of Cunningham and another v. The Queen [1977] HKLR 302 where the Court of Appeal entertained a reference to it by the Governor under Section 83P(1) of the Criminal Procedure Ordinance, Cap. 221 in circumstances where it had previously dismissed an appeal against conviction. I must confess that I did not find it easy to understand the judgment in that case. It appears that the terms of reference to the court were framed as a specific question as to whether certain matters rendered the conviction unsafe and unsatisfactory. That looks like a reference under Section 83P(1)(b), in which case it would appear that all the Court of Appeal had to do was answer yes or no. The court, however, assumed that it was hearing an appeal against conviction, which it would seem would only have been so if the whole case had been referred to it under Section 83P(1)(a). Yet the court said this :-

"It is agreed by both parties that though this reference is to be dealt with as if it was an appeal by the appellants, it is not an appeal against the appeal (sic) of the appellants which was dismissed by this court on July 13th, 1976. Matters which were decided in that appeal cannot be reopened here. We are restricted within the limits of our terms of reference."

12. The court at no stage indicated whether the reference was under paragraph (a) or (b) of subsection (1) of Section 83P. There appears to have been no argument as to the effect of subsection 1(a) and I did not find the case of any assistance in deciding the question whether in the present case I was precluded from considering ground 1(i).

13. Counsel also referred me to two judgments of the English Court of Appeal in the case of R. v. Berry. The first is reported at [1991] 1 WLR 125 and has been referred to in this court, for convenience as "Berry 1". The second, is a transcript of an unreported judgment, no. 517/SI/92 delivered by a different division on the 3rd of April 1992. That has been referred to for convenience as "Berry 2".

14. In Berry 1, the court consisted of Walkins LJ, Anthony Lincoln and Tucker JJ. Mr. Berry had appealed on a number of grounds against conviction. The Court of Appeal had allowed his appeal on one ground and refrained from deciding upon the others. The prosecution went to the House of Lords, which restored the conviction, without deciding upon the other grounds. Mr. Berry applied to the Court of Appeal to relist his appeal on the undecided grounds, but his application was refused on the ground that the determination of the House of Lords was the final judgment in the appeal and there was no jurisdiction to relist it for further consideration of the grounds unresolved by the Court of Appeal.

15. In Berry 2, the court consisted of the Lord Chief Justice, Lord Lane, Macpherson and Judge JJ. In relation to the same Mr. Berry, the Secretary of State had referred to the court under Section 17(b) of the Criminal Appeal Act 1968 the question whether the court's decision that it was functus officio was a matter which precluded him from referring the matter to the court under Section 17(1)(a) which reads :-

"... the Secretary of State may, if he thinks fit, at any time ... refer the whole case to the Court of Appeal and the case shall then be treated for all purposes as an appeal to the court by that person ..."

16. Our Section 113A is the Hong Kong version, mutatis mutandis, of Section 17 of the Criminal Appeal Act 1968.

17. The Court of Appeal said :-

"It seems to us that that subsection is designed for just this sort of situation where the court, bound as it is by statutory rules would like to have reheard the case, but finds itself unable to do so. The Secretary of State is empowered under that subsection to refer the case to the court whereupon it becomes in every respect an appeal .... Accordingly it is open to him to refer this case to the Court of Appeal. If and when he does so, it will become an appeal and will be heard as though it were an ordinary appeal by the ordinary process of this court."

18. I respectfully adopt those words, substituting "The Governor" for "The Secretary of State" as stating the law applicable to the present case. Nothing was said, however, as to whether the ground already decided by the House of Lords in that case could be considered afresh.

19. In R. v. Chard [1984] AC 279 (HL) it was held that on a reference under Section 17(1)(a) it was the "whole case" which was referred and it was open to the appellant to raise any matter of fact or mixed law and fact whether or not it was included in the reference. The court in that case said that :-

"where it is sought to argue grounds of appeal which have been unsuccessfully relied on in a previous appeal the court hearing the reference and having before it the judgment of the Court of Appeal in the previous appellate proceedings will be very slow to differ, unless it is persuaded that some cogent argument that had not been advanced at the previous hearing would, if it had been properly developed at such hearing, have resulted in the appeal being allowed."

20. In the light of the decisions to which I have referred, I held yesterday that it was my duty to accept the reference to me of the whole case under Section 113A(1)(a) and thus to treat it as an appeal by Mr. LIU Cheung-hon as the appellant. I further held that it was open to the appellant to raise any ground of appeal including that which had been decided upon by the Court of Appeal, but I indicated that I would be most unlikely not to follow the decision of the Court of Appeal unless it could be demonstrated that it had been made per incuriam.

21. The next stage was to enquire of the appellant what grounds he wished to argue. Mr. Ma then informed me that he would rely upon all the grounds originally argued before me, save ground 1(i) upon which the Court of Appeal had given its opinion.

22. Counsel for appellant and respondent having adopted and added to the arguments put forward on the 12th of August 1993, I shall now proceed to decide the outstanding issues.

23. Ground 1(ii). This ground is that the magistrate misdirected himself that the appellant "would not be unfairly prejudiced" by the amendment of the charge.

24. It was submitted for the appellant that the magistrate should have been considering the question of injustice rather than prejudice, for Section 27 of the Magistrates Ordinance requires him to be satisfied that no injustice would be caused by the amendment. At the trial, Mr. Ma had submitted that there would be injustice because on the evidence as it stood, there was a real chance of acquittal on the charge as originally framed. In fact, Mr. Ma used the terms injustice and prejudice interchangeably when addressing the magistrate. He was submitting that it was unfair to allow the prosecution to change its ground at such a late stage in all the circumstances.

25. It is clear from the magistrate's minutes that he considered with great care the possibility that the amendment might cause difficulties for the defence in cross-examining PW4 on the contents of his witness statement. He even looked at the excluded statement under caution in order to see the full extent of the evidence upon which the Crown had sought to rely in support of the original charge. It is clear that he formed the view that no injustice would be caused to the appellant by amending the charge and I find that his decision cannot be faulted.

26. Ground 2. This ground reads "The Learned Magistrate erred in taking into consideration the contents of a caution statement which he had ruled inadmissible and which he had said he was 'well able to ignore'".

27. The suggestion is that the magistrate relied upon an excluded statement under caution when he decided upon the general issue. In fact, the magistrate made it perfectly clear that he looked at the statement only for the purpose of considering whether in the light of its contents an amendment of the charge would be unjust. He said: "Further, this is not before a jury. I am well able to ignore the admissions I have read in an involuntary cautioned statement ...". Later, when convicting, he said "As a result of my consideration of all of the admissible evidence I find myself compelled to conclude that the payment was made and intended to be made as a general sweetener." At page 2 of his Statement of Findings, he says that he did not consider its contents in relation to the general issue. There is no merit in ground 2.

28. Ground 3. This reads: "The Learned Magistrate failed to make any specific finding in relation to the mens rea of the offence and failed to direct himself that the prosecution must prove beyond reasonable doubt that the appellant had the necessary "guilty intent" ".

29. Here the appellant relied on a passage in page 12 of the Statement of Findings (page 111 of the Appeal Bundle) where the magistrate says: "These circumstances (the circumstantial evidence), were only consistent with the possibility that the defendant had a guilty intent in regard to what was a secret commission and on those findings I was forced to conclude that the Crown had discharged its heavy onus." Later in the Statement of Findings, the magistrate said "At the end of the day however the Crown case permitted no other inference to be drawn than that the defendant had corruptly and intentionally given a secret commission".

30. I have no doubt that this professional magistrate was well aware of the standard of proof required of the prosecution in a criminal case and that all he was intending to convey was that the inference he drew on the basis of the circumstantial evidence was the only reasonable inference. It is absurd to suggest that he convicted on the basis that guilt was no more than a possibility.

31. Ground 4 reads: "The Learned Magistrate erred in holding that for the amended charge under S. 9(2)(b) of Cap. 201, the evidence of Mr. Dicky Chan (PW4) was sufficient to prove beyond reasonable doubt :

(i) that the appellant had paid the sum to Dicky CHAN as a "general sweetener"; and

(ii) the causal connection pleaded in the Particulars of Offence, namely, that the payment was for Dicky CHAN shewing favour to the appellant "in relation to his principle's (sic) affairs or business" ".

32. It was submitted that the evidence of PW4 upon which the Crown relied fell far short of proving the charge.

33. The following facts, among others, were admitted at the trial pursuant to Section 65C of the Criminal Procedure Ordinance.

34. When the Bank of America Corporation ("BAC") entered into a design, building or renovating contract, it would employ a Design Architectural Consultant who would liaise between the Corporate Real Estate Asia Division ("CREA") of BAC and the contractor. That consultant would invite tenders from contractors, advise on appropriate materials and fittings, ensure that the work was carried out by the contractor in accordance with the contract and process the contractor's invoices; before certifying them and sending them to the CREA office with a recommendation for payment to be made to the contractor.

35. The Design Consultant, Recio & Casas Ltd. ("RCL") acted as an agent of BAC.

36. On the 24th of January 1991, the BAC appointed RCL as its Design Consultant Company to co-ordinate the refurbishment work which was to be carried out on the 4th floor of the Bank of Tokyo ("BOT") Building in Kowloon.

37. The tenders for the contract were opened on the 21st of May 1991. On the 24th of May, a firm called JLP Interior Contracting Company, owned by the appellant, was recommended to BAC by RCL for the contract. It had submitted the lowest tender. Two tenderers were unsuccessful and one firm failed to respond to an invitation to tender.

38. On the 25th of June 1991, a service contract for the BOT work was signed between CREA, RCL and JLP. The contract sum was $1,886,592.00. There was evidence that the work might have started before the contract was signed and an invoice dated the 31st of May 1991 was recommended by PW4 for payment. It was a further admitted fact that BAC made four payments by cheque to JLP in respect of the work done by JLP on the 4th floor BOT refurbishment project, as follows :

39. There was evidence from Mr. Jose Recia that Mr. Ricky CHAN (PW4) was a partner in RCL, as was Mr. Recia. He said that PW4 was responsible for assessing tenders and drafting a recommendation which Mr. Recia would review with him before recommending acceptance to the client. One such tender was that for the 4th floor BOT project. PW4 inspected that tender in detail. It was his job to prepare a recommendation to CREA and the recommendation in that case, which had been reviewed by Recia, was signed by PW4.

40. After the award of the contract, RCL had to ensure that the contractors fulfilled all the obligations within their tender. Payments were based on progress invoices, reviewed by RCL without whose recommendation payment would not be made. It was PW4's job to recommend payment. Mr. Recia thought that this was the first tender by JLP for a job with BAC.

41. Mr. Dicky CHAN (PW4) gave evidence under an immunity given by the prosecution. After confirming Mr. Recia's evidence, he said that he knew by the end of May who would be the successful tenderer. He notified the appellant that he had been successful.

42. PW4 said that he did the overall project supervision. He recommended the payment of invoices of the appellant's firm. The witness had previously invited the appellant to tender for BAC projects but the appellant had not previously been successful.

43. During the work, he met the appellant once a week to discuss progress. They had a normal working relationship. Pausing here, I would observe that on the basis of experience and common sense, it can be said that a person in PW4's position is just the type of person who would be regarded by a contractor as someone whom it might be wise to "keep sweet". PW4 said that the appellant in May or June had asked him out to have tea and they had met at the Pearl City Cafe. The appellant gave him some money and the appellant said to him: "Thank you very much". At that time, the project was underway and the witness "interpreted that the money might be related to the 4th floor, Bank of Tokyo". I pause again to note that the important question was not what was in PW4's mind but what was in the mind of the appellant. The money handed over was in $1,000.00 and $500.00 notes and amounted to over $60,000. The appellant did not owe the witness any money.

44. The witness said that the appellant's company and RCL had worked together on quite a lot of projects both before and after the 4th floor contract.

45. Before the BOT project, the witness had introduced some clients to John Liu for some residential decoration work unconnected with RCL.

46. Before the BOT project, the witness had done some freelance design work for Mr. Liu and his friends. It was very simple work consisting of drawings requiring very little effort. They were minor jobs which he did as a favour for the appellant and his friends. He was never paid for those minor jobs.

47. As a designer in 1991, he was able to charge about $700.00- $1,000.00 per hour.

48. The witness said in cross-examination that he never expected payment from the appellant. Payment was not discussed. Some reliance was placed by the appellant on the following question and answer :-

Q. Having looked back, would you be surprised if he thanked you for the previous jobs to him and introduction of clients to him?

A. No.

The magistrate rightly noted that if the appellant had intended the payment as a reward for matters unconnected with PW4's principal, he could have said so to PW4 at the time, but he did not.

49. The witness agreed that he had earlier given evidence in the trial of another person, described in the magistrate's minutes as a Mr. Chiu, but Mr. Ma has informed me that the person concerned was Mr. Chu Tat, to whom reference will be made later in this judgment. The witness said that after giving evidence in that trial and shortly before testifying in the present trial, he was approached by ICAC officers who said that when he gave evidence in court against Chu and talked about the payment of the money, he should have specifically related the payment to the project. He had that in mind when he gave evidence against the present appellant.

50. In re-examination, the witness said that he had been doing drawings for John Liu once in every month or two without payment since 1990. He regularly introduced clients to the appellant's firm because of its good performance.

51. The finding by the magistrate that the payment by the appellant was a general sweetener is consistent with the evidence and he was entitled to make the inference which he did from the admitted facts and the unchallenged evidence. Though it had been established that PW4 had done some minor drawings for the appellant without thought of payment and that he had introduced clients to the appellant's firm, there was no evidence to show that the large sum of money paid by the appellant had anything to do with those matters. In view of the timing of the payment in relation to the contract, the position of PW4 in relation to that contract and the amount of the payment, accompanied only by the words "Thank you very much", it was open to the magistrate to conclude that the only reasonable inference was that the payment was a corrupt one, intended as a general sweetener. He was entitled to conclude that it was not reasonable in all the circumstances to infer that the payment was for anything else.

52. The appellant chose not to give evidence in order to offer some innocent explanation. In the case of The Queen v. Shung Shui Sing [1962] HKLR 587 at p. 592 appears the following passage in the judgment of the Full Court delivered by Hogan CJ :-

"No accused is under any compulsion to give evidence on his own behalf or, in any but the most exceptional circumstances, to shoulder the onus of proving his innocence, but where the prosecution have established facts from which a tribunal might reasonably infer a fraudulent intent, it does not lie in his mouth to complain if such an inference is made and if this inference is reached more readily because of his decision not to offer the tribunal the benefit of his version of his intentions. In this connection, reference may be made to R. v. Shampal Singh [1962] 2 WLR 245 when the Privy Council said :-

"This is the sort of case in which a not incredible explanation given by the accused in the witness box might have created a reasonable doubt. But there is no explanation; and the prisoner's silence is emphasised by his consequent conduct. How did he come to squeeze his wife's throat?

When the prisoner, who is given the right to answer this question, chooses not to do so, the court must not be deterred by the incompleteness of the tale from drawing the inferences that properly flow from the evidence it has got nor dissuaded from reaching a firm conclusion by speculation upon what the accused might have said if he had testified."

53. That case was referred to by the Court of Appeal in LAM Tsz-wah v. The Queen [1984] HKLR 54 at p. 63 where the court said :

"... since the applicant chose not to go into the witness box to explain the circumstances ... he cannot complain if a proper inference is drawn, and if it is drawn more readily in view of his election."

54. In this connection, I am reminded of the case where on an appeal from a conviction by me in the District Court the case of The Queen v. TSOU Shing-hing, the Court of Appeal said :

"In coming to the conclusion that Tsou had a guilty mind, the trial judge was also entitled to take into account the relationship between the giver and recipient in the context of the renovation contract and the absence of any plausible explanation as to why this large sum of money was offered and received."

55. Complaint has been made of inconsistency in the Statement of Findings. At page 100 of the bundle, the magistrate said that the appellant was convicted on the basis that the sum was paid as a general sweetener rather than as a reward or inducement for any particular act of assistance. At page 110, he says that the appellant had paid the money to PW4 as an agent, intending it to be a corrupt inducement for a service or for favours already done by CHAN as well as for unspecified favours contemplated in the future - a general sweetener. There is no conflict there. The latter words are merely intended to define a general sweetener and make it clear that the magistrate was not tying the payment to any particular, actual or contemplated favour.

56. It was made clear in the judgment of McMullin J. (as he then was) in Attorney General v. Chung Fat-ming [1978] HKLR 480 that a keeping sweet situation was one where money was solicited or accepted as a general earnest of good relations, and such a situation would cover cases where a general goodwill payment had been made without specific intention in relation to specific acts or abstentions.

57. It is obvious that when the magistrate found that the payment was made to PW4 as an agent it must have been "in relation to his principal's affairs or business" as alleged in the amended charge.

58. Ground 5. This alleges that the conviction was unsafe and unsatisfactory, on the basis that there must be a lurking doubt.

59. In this connection, some reliance was placed upon the fact that in R. v. Chu Tat, M.A. No. 277 of 1993, Woo J. set aside two convictions based upon the evidence of Dicky CHAN (PW4) on the basis that he felt a lurking doubt. The facts of that case were different from the facts of the present case and I do not derive any assistance from the decision of Woo J. which was based on those different facts.

60. In the present case, the magistrate made it very clear that he was conscious of the fact that PW4 was an accomplice giving evidence under an immunity. The salient facts were either admitted or the subject of unchallenged evidence. The live issue was whether an irresistible inference of guilt could be drawn from the admitted facts and unchallenged evidence.

61. The magistrate was entitled to draw the inference he drew as the only reasonable inference in all the circumstances and I find no basis for saying that there is a lurking doubt.

62. The appeal is therefore dismissed.

63. It only remains for me to thank counsel for their assistance in this case and I am particularly indebted to Mr. Benjamin Chain who appeared yesterday to act as amicus curiae in relation to the reference which I am told is the first reference of its kind in Hong Kong.