HKSAR v. KWOK HUNG

HCMA 1154/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 1154 OF 2001

(ON APPEAL FROM ESCC NO. 556/2001)

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J U D G M E N T

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1. This is an appeal against an order by a Magistrate refusing an application for costs made by the appellant upon his acquittal of 10 charges of theft.

2. The facts leading up to that refusal are sufficiently set out in the learned Magistrate's 'Reason for Refusing Costs' as follows:-

"(1) The appellant came before me for trial on 24 July 2001 at Eastern Magistracy on 10 charges of theft. The appellant was represented by Solicitor. The prosecution was conducted by counsel on fiat. Upon my finding the charges not proven to the required standard and dismissing them, application was made for costs. I declined the application. The appellant appeals against my refusal.

(2) Put very shortly, this case concerned an arrangement made by the partners of a business known as "Sunrise Shower Enclosures Factory" ("Sunrise") with the appellant whereby the appellant was to collect debts from customers of "Sunrise". The appellant was to retain 25% of sums collected and deliver the balance to "Sunrise". "Sunrise" was owned and operated by PW1, Ms LUI Tan-yung, and her brother, PW2, LUI Yeuk-lung. This arrangement for the debt collecting commenced in 1998. "Sunrise" and the appellant had for a year or so before that been doing business with each other with the appellant obtaining bathroom fittings and the like from "Sunrise" in the course of his business in the decorating field. After several successful debt collections by the appellant for "Sunrise", the appellant was given the task of collecting a debt of over $200,000 from Hop Hing Plumping Company on behalf of "Sunrise". This was in March 1999. The appellant initially collected about $30,000 and properly accounted to "Sunrise" for it. However over May, June and July 1999, on 10 occasions he collected cash and cheques totalling $88,277.20 which was not passed on to "Sunrise". After attempts by PWs1 and 2 to have the appellant account for and pay over the money failed and the appellant became uncontactable, the matter was reported to the police.

(3) Most of the prosecution case was agreed. 10 cheques were produced ..... two records of interview of the appellant were produced ... admitted facts and a banker's affirmation were produced. The prosecution tendered "Brief Facts of Case (Amended)" by way of an Opening Address. In due course the matters set out in the "Brief Facts" were proven by evidence. .... I invite a reading of the Admitted Facts.

(4) The two partners of "Sunrise" gave evidence. PW1 made a poor impression. She plainly, and perhaps understandably, bore animosity to the appellant. She gave quick answers without any apparent real consideration of the question. Her attitude seemed to be that as the "facts" of the alleged thefts by the appellant were so obvious, being questioned as to detail was tiresome to her. I didn't conclude she was dishonest, just that her attitude and evidence were such I felt unable to rely on it to the degree required.

(5) PW2 was PW1's brother and made a much better impression as a witness. I was satisfied on his evidence that the appellant had misled "Sunrise" as to progress with collecting the debt from Hop Hing Company, in particular I found the appellant had falsely told "Sunrise" Hop Hing Company had not made payments to him on behalf of "Sunrise" whereas it certainly had done so and the appellant had obtained the proceeds of the subject cheques and had applied the proceeds to his own use. The appellant told a number of falsehoods to "Sunrise" to avoid, or at least delay, accounting to "Sunrise" for the sums received on it's account from Hop Hing.

(6) The appellant neither gave nor called evidence.

(7) In cross-examination of PWs 1 and 2 it was put that there had, apart from the debt collecting matter, been an ongoing business association between the appellant and "Sunrise" whereby the appellant would supply labour and "Sunrise" would supply fittings and fixtures for decoration jobs and there would be an accounting between the parties later as to the expenses and shared profit. This was agreed only in small part by the PWs but it became clear there had been something of this sort going on. However it was also clear the appellant had, on the view most favourable to him, retained the monies collected from Hop Hing Company on behalf of "Sunrise" by way of a very generous "set off" type arrangement for his benefit.

(8) In the result I felt the "flavour" of these combined business interests the parties had was such that in the absence of more detailed documentary evidence and/or clear and more detailed answers from PW1, I could not be satisfied beyond a reasonable doubt as to the appellant's dishonesty. Had the standard of proof been any lower than it is in criminal matters, the charges would have been proven.

(9) At the end of the prosecution case the matter was stood down briefly while discussions as to payment of the sum due "Sunrise" were held by the parties. I was later told it had been agreed the sum was due to be paid by the appellant but his proposed installment plan was unrealistic and unacceptable. The case continued with the defence calling no evidence but making lengthy submissions.

(10) I gave my decision dismissing the charges. I was somewhat surprised to receive the costs application but heard and considered it.

(11) I did not consider it to be an appropriate case for costs as the appellant had brought much suspicion upon himself by retaining the money and cheques from Hop Hing Company and using the proceeds for his own purposes, all of which he admitted. Also he had continually misled "Sunrise" as to the receipt of monies on their behalf from Hop Hing. This latter aspect was not admitted by the appellant but I accepted the prosecution evidence as to this and was sure that had happened, and;

(12) In deciding on the costs application I considered the relevant principles, set out most recently in Tong Cun Lin v. H.K.S.A.R. [2000] 1 HKLRD 113. It was the appellant's own conduct which led to the charges and it was a proper case to be brought to court. I found there were positive reasons for refusing costs and that the public purse should not hear the burden of paying costs incurred by the appellant."

3. The grounds of appeal against the Magistrate's refusal to give the appellant his costs are threefold as follows;-

"(1) The Learned Magistrate erred in that he took into account, in the exercise of his discretion to refuse costs, matters which were unproven and/or otherwise unacceptable.

(2) The Learned Magistrate erred in that he failed to consider that at all times this was civil in nature, and;

(3) The Learned Magistrate erred in that, notwithstanding the fact of acquittal, he accepted the evidence of PW2."

4. Mr Pickavant who settled those grounds and who appeared for the Appellant in the Magistrates Court did not pursue ground 3 above and, in my view, rightly so.

5. The principles concerned with applications for costs and the exercise of the tribunal's discretion in relation to such applications, are clear and the learned Magistrate in this case was plainly aware of them as set out in Tong Cun Lin's case.

6. There may have been some force in Mr Pickavant's argument had the appellant simply been prosecuted for what was wholly a civil debt and nothing more, and had he been acquitted without himself adding to the suspicion against him during the police investigation. But that was not the position.

7. By the appellant's conduct prior to the police investigation he had of course brought suspicion upon himself - otherwise there would never have been a reason for that investigation. But matters went further than that as the Magistrate explained in his reasons and, in particular, I note that during the course of the police investigation the appellant heightened that suspicion by giving an account of matters which directly contradicted the evidence of PW2, which evidence the Magistrate accepted and which evidence the Magistrate was perfectly entitled to accept.

8. There is nothing in this appeal against the Magistrates refusal to make an order for costs. It is accordingly dismissed.