HKSAR v. HUNG SHI CHUNG AND ANOTHER

CACC 158/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 158 OF 2005

(ON APPEAL FROM DCCC NO. 623 OF 2004)

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J U D G M E N T

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Hon Stock JA (giving the judgment of the Court):

Introduction

1. These applications for leave to appeal against conviction and sentence arise from prosecutions in the District Court of eight defendants.  We are concerned with the first and seventh: D1 and D7.

2. The prosecution was the result of a police operation in which two particular police officers, PC 51711 and PC 34612 (PW1 and PW2 respectively) were deployed as undercover agents.  The purpose of the operation was to investigate what was believed to be an active triad group, the Wo Shing Wo operating in Mong Kok.  Each of these undercover officers was required to report to a handling officer of a higher rank and each was required to make records of their observations of the activities of various members of the suspected group.  The matter culminated on 17 March 2004 with the arrest of the various defendants.

The charges

3. The charge sheet in the District Court contained 20 charges particularised in chronological order but falling within four categories:

(1)   a number of offences alleging the offence of claiming to be, or acting as, a member of a triad society;

(2)   a charge (Charge 10) of conspiring to operate unlawful gambling;

(3)   a charge (Charge 13) of inciting another to traffic in dangerous drugs; and

(4)   a charge of conspiracy to defraud merchants, banks, credit card companies and other financial institutions by dishonestly representing that persons producing credit cards in payment for goods and services were producing genuine credit cards (Charge 8).

The prosecution evidence

4. In August and September of 2003, PW1 and PW2 separately socialised with D2 who was known to be a member of the triad society.  The two officers were viewed by him as potential recruits and he therefore arranged for them to meet a person to whom he referred as "big brother Sai Fei”.  There was a meeting on 16 October 2003 where, according to the evidence, D1 was said to identify himself, by reason of a particular gesture, as an office bearer of the society.  This formed the subject of the first charge, that of claiming to be a member of the triad society.

5. Charge 6 was the next charge in which D1 featured.  PW2 had been asked if he wished to join the society and as a result of his response he was introduced to D1 to whom he gave lai see.  D1 told him to recruit more members in order to make more money.  This charge alleged the offence of acting as a member of a triad society. 

6. Charges 7, 14, 15 and 16 were similarly designed.  There was testimony (Charge 7: acting as a member of triad society) that in December 2003, D1 called PW2 to say that he, D1, was “blowing the whistle” – a euphemism for a summons to gang members for a show of force.  This resulted in a collection of between twenty to thirty men and an eventual gang fight.  Charges 14 and 16 were in the same vein; in other words, cases in which D1 “blew the whistle”.  Charge 15 was another charge of acting as a triad member in that it was said that on an occasion in January 2004, D2 asked D1 if he, D1, was prepared to accept PW1 as his follower, and after a pledge of allegiance, D1 accepted him.

7. In relation to the conspiracy to defraud (Charge 8), the allegation was that in December 2003, D1 told the undercover officers that he, D1, had personal particulars of persons, which particulars could be encoded onto forged credit cards which could then be used to buy goods.  The suggestion was that these two officers were recruited to assist in the scheme.

8. Charge 10 related to a gambling establishment in a back alley into which business PW1 was invited as a partner by D1.

9. Charge 13 was the charge that alleged, as against D1 and D2, incitement to traffic in dangerous drugs.  The testimony of PW1 was that D2 told him that he had smuggled half a kilogram of ketamine into Hong Kong and asked him to join in the business.  In pursuance of this suggestion they went to a café to meet D1 who discussed a means to smuggle drugs into Hong Kong.  D1 said that he was able to purchase 1 kilogramme of ketamine for $40,000, and that the more drugs they could smuggle in, the more money they could make.  He asked PW1 to look for a means of transportation.

10. Of the twenty charges, two concerned D7: Charges 8 and 16.  D7 was said to be involved in the conspiracy to defraud in that he had discussed fraudulent credit cards with PW2 and had told him to find girls who looked natural and were quick-witted who would shop with the forged credit cards and would be paid to do so.  There was other evidence, this time from PW1, implicating D7 in this conspiracy.  As far as concerns Charge 16, that of acting as a member of a triad society, there was the testimony of PW1 that in February 2004, D7 was with others when D1 “blew the whistle” and that D7 responded to the call by going with D1 to Mong Kok and acted as a member of a triad society.

11. Neither of these applicants gave evidence at their trial before Judge Chua and on 18 March 2005, she convicted them of all these offences.  They each now seek leave to appeal against those convictions, as well as against sentence.

Conviction: D1

12. We have before us lengthy written grounds and submissions by D1, who is unrepresented.  He sought an adjournment to renew an application for legal aid, having withdrawn his earlier application.  The reason he provided for withdrawing the application in the first place and for not seeking earlier to renew it was not credible and we refused the adjournment.

13. This applicant complains, first, that by reason of the delay between the events in question and his arrest he was deprived of a fair trial.  The suggestion is that the delay was such that he could not after his arrest and at trial reasonably be expected to recall what had happened on the days to which the testimony referred.  We do not accept this.  The applicant was arrested in March 2004 and the events in question were alleged to have taken place between October 2003 and that date, and each of the events to which the testimony related were sufficiently remarkable in themselves to expect a defendant to be in a position to answer them, should he so choose.  In fact, in this particular case, compared with others, procedural matters moved swiftly and there is nothing in the point.

14. It is then suggested that PW1 was a dishonest person and in this regard the applicant draws our attention to the fact that at the time of the events which are the subject of this charge, this particular witness was in serious financial difficulty, a difficulty that resulted in a disciplinary charge and in respect of which, so it is contended, he did not make proper disclosure when he entered into an individual voluntary arrangement with creditors.  This is a matter that was dealt with in considerable detail by the trial judge in her Reasons for Verdict.  She analysed his position, and the circumstances in which, by reason of his wife's debts, he fell into difficulties.  Having heard all the testimony that was relevant to this issue as well as the witness’s explanation, she concluded that his evidence in relation to the charge was honest and in the circumstances, this not being a court of retrial, there exists no basis for second-guessing that conclusion.  The central fact, for the purposes of this application, is that it is evident that the judge had the issue well in mind and conscientiously addressed it. 

15. Similarly, the applicant makes complaint about the method by which the undercover officers recorded the events in question, after they had occurred.  His complaint is that they did not make records as soon as was practicable, for which reason their recollections are suspect.  Again, the method of recording the events in question was addressed by the judge in considerable detail and we have no basis upon which to say that in this regard she has erred.

16. The applicant complains also of contradictions between the testimony of the two undercover agents.  Again, we notice the judge was aware of the particular matter or matters to which he draws our attention and has nonetheless accepted that the evidence was not necessarily or inherently contradictory.  In particular, she refers to a signal given by this applicant which was seen by one officer and not the other and in this regard concludes that the fact that one officer saw the sign and the other did not does not mean that the sign was not given.  We are not in a position to say that the judge was wrong about this.

The status of D8’s admission

17. There are other complaints directed specifically to the charge of conspiracy to defraud and the judge's findings in that regard.  It is in this regard that one of our number noticed a matter that caused us concern in relation to the application of both applicants and which, not surprisingly, does not feature in the home-made grounds of application; although it is a matter of some surprise that it was, apparently, not spotted by the Director of Legal Aid or counsel advising him, or drawn to our attention by counsel for the respondent who informed us that she did notice it when preparing for this application.

18. The matter arises in this way.  Put very broadly, the testimony in relation to the conspiracy to defraud, alleged by Charge 8, came from PW1 and PW2 and concentrated upon a number of meetings, mainly at a café at which D7 and D1 spoke about credit cards and items paid for with credit cards in terms clearly suggesting that the cards were forged and in circumstances suggesting direct involvement in the conspiracy alleged.  D8 was also charged with the same offence and he pleaded guilty at the outset.  There were produced at trial no goods purchased with the credit cards nor vouchers nor documentation connected with purchases effected with the forged instruments.  This, as the judge pointed out, is of itself by no means fatal to the prosecution for conspiracy to defraud because upon such a charge it is the agreement which must be proved, and the charge can be made out without any or any cogent evidence of substantive acts pursuant to the conspiracy.  Nonetheless, the question of credibility of the two prosecution witnesses, the undercover officers, was vital in this case.  Indeed, we see at paragraph 6 of their Reasons for Verdict that the judge herself said that:

“The prosecution case stands or falls on the veracity and reliability of the police witnesses, mainly PW1, PW2 and PW5.”

19. The defendants who pleaded not guilty did not themselves give evidence and it is obvious that the defence relied entirely on an attack upon the credibility of these officers.  To this end, we see much that is devoted to the question of the serious financial difficulties in which PW1 found himself at the time of these events and suggested dishonesty in that regard; and we have seen concentration by the defence and by the judge in her Reasons for Verdict upon suggested inherent improbabilities in the account given as to how the records of the officers were kept.  It is in the same vein that an attack was made upon the evidence of complicity of D1 and D7 in the suggested credit card scam: the point that was being made by the defence was that if the testimony of the officers was true, one might expect there to be some documentary evidence in support of what they said.

20. In this regard, there was evidence of an episode on 30 January 2004 when, so it was said, D7 turned up at a café at which D1, PW1, D8 and others were present, and showed to those gathered there mobile telephones, electric appliances and compact disc players bought, it was said, with forged credit cards.  This group adjourned to a restaurant where the meal was paid for, according to the officers’ evidence, by D8 with a forged credit card.

21. In relation to this charge several passages in the Reasons for Verdict require repetition:

“86.        It is also proper for the prosecution to include D8 in the amended charge as a named conspirator.  The prosecution may and does rely on the evidence of acts D8 participated in as evidence against D1 and D7 on the conspiracy whether done in their presence or not, which acts D8 admitted upon his plea (see exhibit P1).” 

The judge went on to say, we note, at para. 87 that: “The prosecution mainly relies on PW1’s evidence of discussions and conversations by defendants … ” on a series of dates which she there stipulates; adding that “PW2 was present on two of those occasions.” 

22. The exhibit P1 to which reference was made is in the following terms:

“Brief Facts

HKSAR v Ho Yiu-chung

Charge 8

       On 30 January 2004 D8 and Others were in the Lai To Hot Pot Restaurant in Tung Choi St Mongkok. D8 was present when there was a general discussion about the manufacture and use of Credit cards for the purchase of goods and services.  During the discussion a bag full of watches and CDs purchased with false credit cards was produced.  At the end of the meal D8 was asked to pay for the meal with false credit card and he did so.

In interview on 30 March 2004 D8 admitted being part of an operation to use false credit cards to purchase goods and services.”

It is signed only by counsel for D8 and counsel for the prosecution.  We had nothing before us to suggest that the facts contained therein were admitted as facts by counsel for either of these applicants.

23. P1, as we see, was a summary of facts.  It was prepared for the purposes of D8’s plea of guilty and the facts therein admitted by him for that purpose.   The problem that arose is that the trial judge quite clearly used D8’s admission in P1 as evidence against D1 and D7 in her consideration of Charge 8.  That much appears from the following two paragraphs of the Reasons for Verdict:

“98. In the restaurant D7, with two previously unknown males … arrived carrying three large plastic bags with mobile phones, electrical appliances and CD players.  These three informed D1, all in the bags had been purchased with false credit cards and the loot included a watch which they displayed.  The cost of the cards and wages were tallied and D1 was given his change, $640.  When dinner finished D1 asked D7 to pay for it using a forged credit card.  D1 told D8 to do this which D8 did (see D8’s admission in P1).

…

100. The defence complain that there was no follow-up evidence to prove any of the purchases were in fact paid with forged credit cards or that in fact D8 had paid for the meal with one.  Actually D8’s admission made pursuant to his plea (see Exhibit P1) corroborates PW1’s evidence against D1 and D7. Since the charge is a conspiracy, the prosecution need not prove the payments were ultimately made with forged credit cards.  The prosecution only needs to prove the agreement to effect payment with the forged credit cards.” (Emphasis added).

24. On its face, the statement that D8’s admission made pursuant to his plea corroborates the testimony of PW1 against these two applicants is, as a matter of law, fundamentally wrong and it appeared to us that the trial judge materially misdirected herself, unless the facts in P1 were admitted on behalf of D1 and D7 in the trial of D1 and D7.  That the document was itself described in the Reasons for Verdict as “P1” rather suggested that some admission of this kind had been made; but the document itself was not signed on behalf of D1 or D7.

25. We canvassed this point with counsel for the respondent and asked her to make inquiries of those counsel who had appeared at trial to ascertain what evidential status P1 had at the trial of D1 and D7.  She managed to speak to counsel who had acted for one of these two applicants and her understanding was that P1 had been admitted as evidence in the trial of these applicants: in other words, that the facts within P1 had formally been admitted at their trial.  If that were so, that would have resolved our concerns, although that resolution would not favour the applicants.  Given that the applicants were unrepresented and that counsel for the respondent had managed to speak to only one counsel about events that took place some time ago, we thought it desirable that further inquiries be pursued and that counsel examine relevant parts of the transcript.  To this end we adjourned the matter.

26. The result of that adjournment has been a flurry of correspondence with various reports from counsel concerned, for which we are grateful.  We have read that correspondence, we have read the relevant parts of the transcript and we have also listened to a recording of the delivery of the relevant parts of the Reasons for Verdict.  We have also had the benefit of the presence at the recent adjourned hearing of counsel who prosecuted at trial.  From these various sources, it has become clear what happened.

27. P1 was prepared for the purpose of the sentencing exercise in relation to D8.  For reasons which we cannot fathom, the trial judge, of her own motion, assigned an exhibit number to the document.  The case itself occupied some 31 hearing days and it would appear that within the welter of evidence that emerged, counsel for the prosecution as well as the judge came somehow to assume that P1 was part of the evidence in the case against the other defendants.  But it never was.  Unfortunately, in her closing submissions, prosecuting counsel prayed in aid of the prosecution's case on Charge 8 the admission made by D8 that he paid for the 30 January meal with a false card.  The judge adopted this approach in her Reasons for Verdict.  Counsel who then prosecuted quite properly accepts that neither the exhibit nor its content was ever intended to be used as evidence against these applicants.  All that was intended was that the oral evidence of prosecution witnesses about such acts of D8 as those witnesses had observed was some evidence of the conspiracy with which these applicants were charged.  P1 was never intended to prove anything in the trial of D1 and D7.  This accords with the recollection of counsel who acted for D1 and D7 at trial, though why neither raised the matter after the delivery of the Reasons for Verdict remains a mystery.

28. At the end of the day, the issue to be addressed is straightforward: were the facts asserted in the brief facts admitted for their truth on behalf of these applicants at the trial of these applicants?  Merely putting the document in as an exhibit was meaningless unless the facts asserted were admitted.  If they were admitted as facts on behalf of the two applicants, one would expect to see a signed document to that effect, a formal admission in other words under section 65C of the Criminal Procedure Ordinance, Cap. 221.  No such document exists.  If, alternatively, an oral admission was made, one would expect to see such an oral admission in the transcript.  There was none and it is clear that none was ever intended.

The effect on Charge 8

29. The question is whether in the event the misuse of P1 affects the safety of the conviction in relation to Charge 8.  It may very well be that the judge in any event accepted the testimony of these two officers as against these two applicants in relation to the facts that supported Charge 8, and that her mention of P1 as corroborative of their testimony was but an aside.  The fact that counsel for these applicants took no issue with what the judge said at the time might well be said to support such an assessment.  Furthermore, the event to which reference is made in P1 is but one incident of several that were relied upon by the prosecution in respect of this charge.  That said, it is impossible to ignore the fact that in relation to Charge 8 the judge has on several occasions chosen to make express reference to D8’s admission.  That she relied on it at all in relation to this charge was a material self-misdirection and we do not think it appropriate to apply the proviso in relation to Charge 8, despite the factors to which we have made reference.  Accordingly, we grant the applicants leave to appeal against conviction and treating the hearing as the appeal, we allow the appeal in relation to Charge 8 and set aside that conviction, as well as the sentence for it.

The effect on other charges

30. That leaves the question whether the convictions in relation to the other charges can properly be separated from the effect of this misdirection.  We are satisfied that they can.  A study of the layout of the Reasons for Verdict and of the reasons given by the trial judge in relation to each charge show clearly that the use of P1 was restricted to Charge 8.  Well before there is any analysis of Charge 8, there is a close analysis of the credibility of the police witnesses and of their reliability.  That is conducted both in general and also in relation to specific charges.  So, for example, without any reference at all to P1, the judge makes favourable comments about the credibility of PW1 at para. 14; is satisfied that there was no collusion or fabrication by the officers in relation to the compilation of reports (para. 20); and makes specific findings in relation to each of the charges as to the truthfulness and reliability of the officers’ evidence in relation to the events that go to those particular charges.  Again, as an example, we see at para. 39 and in relation to Charges 5, 6, 12 and 15, she concludes by saying that: “I have no doubt the two officers have given truthful and reliable evidence.”

31. We have already noted that counsel acting for the applicants took no issue with the judge's treatment of P1.  Whilst that may suggest that we have been generous to the applicants in our assessment of its impact on Charge 8, it seems to us inconceivable that had the tenor and scheme of the judgment in the court below hinted that P1 somehow impacted upon any charge other than Charge 8, that would have escaped counsel’s attention.  This provides support for our own reading of the matter.  We are satisfied that the error in relation to P1 does not impact upon convictions other than that for Charge 8.

32. In relation to D1 therefore, his appeal against conviction in relation to Charge 8 succeeds but it fails in relation to the other charges upon which he was convicted.

Conviction : D7

33. We also have written grounds and submissions by D7.  In his case, our conclusion in relation to Charge 8 must be the same as it is in the case of D1.

34. In his home-made grounds of appeal, he says that the evidence against him was insufficient and that “I might have touched on subjects of a high profile and a touchy nature which gave rise to their misunderstanding about me.”  He, like D1, raises questions about the method by which the witnesses recorded their recollections to their handling officer, and complains about the judge's reliance on the testimony of these officers.  We see nothing in these particular points that we have not already addressed in relation to the application of D1.  This particular applicant makes a further point, namely, that various videotape and audiotape recordings were not produced in court.  The answer to this complaint is that these were all made available to those acting for the applicant as unused material and could have been used by the defence had they shown anything of benefit to this applicant.

35. There is nothing in his case that suggests that the conviction in relation to Charge 16 is unsafe or unsatisfactory and, whilst his appeal against conviction in relation to Charge 8 succeeds, it fails in relation to Charge 16.

Sentences

36. Since in the case of each applicant the conviction in respect of Charge 8 is quashed, it follows that the sentence of 3 years and 6 months’ imprisonment for that charge is in each case set aside.  There remains however in the case of each applicant an application for leave to appeal against sentence in respect of the remaining charges.

37. It must be remembered in the case of D1 that the offences with which he was charged were many, and some of them of a quite different character from others; and that the totality at which the judge arrived was one that incorporated a degree of concurrency between some of the terms imposed to take into account, and properly so, the term of three years and six months’ imprisonment imposed in relation to Charge 8.  We must therefore revisit the appropriate totality in relation to the convictions that remain.  In this regard, we note the provisions of section 83B of the Criminal Procedure Ordinance:

“(1)   This section applies where on an appeal against conviction on an indictment containing two or more counts, the Court of Appeal allows the appeal in respect of part of the indictment.

(2)   The Court of Appeal may in respect of any count on which the appellant remains convicted pass such sentence, in substitution for any sentence passed thereon at trial, as it thinks proper and is authorized by law for the offence of which he remains convicted on that count.”

38. D1 was aged 41 years at the date of his conviction.  He has a number of previous convictions including blackmail and claiming to be a member of a triad society.  His longest sentence was imposed in 1996 for an offence of wounding with intent to do grievous bodily harm, for which he was sentenced to 18 months’ imprisonment.  In relation to Charge 1, the judge sentenced him to a term of 12 months’ imprisonment; and in relation to Charges 6 and 15 (acting as a member of the triad society) she sentenced him to a term of 15 months’ imprisonment on each charge, but ordered five months of the term imposed in respect of Charge 15 to run consecutively to the rest, the balance to run concurrently, making a total thus far of 20 months’ imprisonment.  Then, in relation to Charges 7, 14 and 16 (the “whistle-blowing” offences) she sentenced him to a term of 15 months’ imprisonment upon each ordering, however, that 9 months of the term in relation to Charge 7 should run consecutively to the rest and that 3 months of the terms imposed in relation to Charges 14 and 16 should each run consecutively to the rest; a cumulative total thus far of 35 months’ imprisonment.  For the conspiracy to defraud (Charge 8) she imposed a sentence of three years and six months’ imprisonment, ordering two years and three months to run consecutively to the rest.  For the conspiracy to operate unlawful gambling (Charge 10) she imposed a sentence of eight months’ imprisonment, ordering three months to run consecutively to the rest; and, finally, for the incitement to traffic in dangerous drugs (Charge 13) she imposed a term of four months imprisonment, ordering three months to run consecutively to the rest.  The total sentence of imprisonment in relation to him was five years eight months’ imprisonment.

39. In his grounds of application for leave to appeal against sentence, D1 makes a number of points.  In so far as he was convicted of claiming to be a member of Shing Wo, he says that there was no evidence of ill intention.  For the five offences of acting as a member of a triad society, he says that no offensive weapons were prepared for the affrays and none used nor was anyone severely injured.  Nor, he says, did he take the initiative in inviting others to join the society.  We pause to say that in relation to the triad related offences, this applicant occupied a relatively senior position in the society, or so he represented and, beyond that, he was obviously in a position to, and in fact did, call out others on more than one occasion to go fighting.  This was a conviction after trial of a person who has a previous similar conviction.  It cannot in our judgment be said that a total term of imprisonment for these various offences of 35 months’ imprisonment, which was the effect of the terms imposed for the six triad related offences, is excessive, let alone manifestly so.

40. The offence of conspiring to operate an unlawful gambling establishment (Charge 10) took place in January 2004.  The sentence of 8 months’ imprisonment was certainly not too high.

41. Of considerable concern to us however is the sentence of four months’ imprisonment for the offence of incitement to traffic in dangerous drugs.  On Charge 13 it will be remembered that the testimony of PW1 was that D2 had told him that he, D2, had smuggled half a kilogram of ketamine with him.  They then went to a café to meet D1 and others and there D1 said that he wanted a means to smuggle drugs into Hong Kong as he was able to buy 1 kg of ketamine at $40,000.  The more drugs they could smuggle in, the more money they could make and he asked PW1 to look for a means of transportation.  Not only was the quantity of drugs involved very substantial but there was the aggravating feature that the drugs were to be smuggled out of the Mainland into Hong Kong.  In sentencing in relation to this charge of incitement, the judge referred to HKSAR v Leung Chun Fung [2003] 2 HKLRD 282.  But that was a case in which the amount of ketamine involved was 0.56 grammes and the sentence said by the Court of Appeal there to be appropriate was three months’ imprisonment.  The court used the same guideline as that set for ecstasy.  If we talk in terms of trafficking in ecstasy, the sentence that ought to have been imposed for a quantity envisaged in this case would have been in excess of eight years’ imprisonment.  We have not examined what differences, if any, in principle there might be for the purpose of sentencing, between incitement, on the one hand and, on the other, conspiracy and, indeed, this aspect of the case has been somewhat buried for the purpose of this appeal; so much so that there has not even been an application by the Secretary for Justice for a review of this particular sentence.  That said, we did raise the point and have given this applicant an opportunity of addressing us as to why we should not increase the sentence.  We simply cannot understand how the judge reached the sentence she did.  It is a sentence that is dramatically inadequate.  We will substitute for the sentence of four months imprisonment, a sentence of three years’ imprisonment, although, given the very unusual circumstances in which this matter falls for our consideration, that sentence is not be taken as in any way indicating the uppermost range for an incitement to traffic in this quantity of drugs.

42. We shall order that two years of this three year sentence shall run consecutively to the other sentences imposed, the remainder to run concurrently.  Given that the sentences for the triad offences make a total of 35 months (a total we shall not disturb) and that there is an extra three months in respect of the gambling offence, making a total of 38 months save for this drug incitement offence, the effective total in the case of D1 thus becomes five years and two months’ imprisonment.

43. D7 also seeks leave to appeal against sentence.  For the conspiracy to defraud, he was sentenced to a term of three years and six months’ imprisonment; and for acting as a member of the triad society (Charge 16) he was sentenced to nine months’ imprisonment, six months of which was ordered to run consecutively, the rest concurrently, to the term imposed in relation to the conspiracy to defraud offence.  This made a total of four years’ imprisonment.  Since the sentence for the fraud conspiracy falls with the quashing of that conviction, all that remains is a sentence of nine months’ imprisonment with which we shall not interfere.  His application against that sentence is dismissed.  Since he has served that term, he can now be released as far as this charge is concerned.