HKSAR v. CHAN MAN NA AND OTHERS

DCCC 583/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL ACTION NO 583 OF 2015

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REASONS FOR VERDICT

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INTRODUCTION

1.  The defendants, D1 to D3, are jointly charged with one charge of blackmail, contrary to s 23(1) and (3) of the Theft Ordinance, Cap 210 (Charge 2), to which all of them plead not guilty.  

2.  Originally, D1 and D2 were also jointly charged with another charge of blackmail (Charge 1). However, at the commencement of the trial the prosecution offered no evidence against them on Charge 1 and they were accordingly acquitted of that charge. 

3.  Therefore, the present trial concerns all defendants on Charge 2 only. 

THE PROSECUTION’S CASE

4.  The prosecution’s case against the defendants is that they had acted in a joint enterprise to reinforce a demand made to Madam Lau Pui Pui (PW1) for a sum of $100,000, such sum being the handling charge for cancelling a loan which she had applied for, but not taken up, from the defendants’ employer, Merchants Wealth Management Advisors Limited (“Merchants Wealth”), the business of which was to act as an intermediary between borrowers and lenders.  

5.  The prosecution says that the demand, which was allegedly made by D2 and D3 on 8 July 2014 inside a meeting room in the office of Merchants Wealth in Tower 2 of Metroplaza in Kwai Chung, was unwarranted because it was reinforced with malice, namely that PW1 was threatened and was told in a ferocious manner that if she did not pay, she, her son (Mr Lam Tsang Ming, PW2) and her son’s girlfriend (Ms Yung Mei Lan, PW3) would not be allowed to leave and that the title deeds of PW1’s residence, which PW1 had previously left with Merchants Wealth for the purpose of the loan application, would not be returned to her.  The prosecution also goes further and says that Merchants Wealth was not entitled to be paid any handling charge at all.  This was because D3 had allegedly told PW1 in his meeting with her on 4 July 2014 that if she eventually did not borrow any money, she would not need to pay anything.  Alternatively, the prosecution says that even if Merchants Wealth was entitled to be paid any handling charge by virtue of the terms of the loan agreement (P11) which PW1 had signed, the handling charge should only be limited to $75,000 rather than $100,000, basing on the loan amount of $300,000 which she said she had agreed to borrow.  Furthermore, the prosecution says that in furtherance to the blackmail as alleged above, when PWs 1-3 later went down to a branch of HSBC at Metroplaza to withdraw money, D2 and D3 escorted them with a view to make sure that the money was withdrawn and that the matter would not be reported to the police.  After the withdrawals were made, the five of them went back to Merchants Wealth and met D1.  D1 returned the title deeds to PW1, obtained the $100,000, issued to PW1 a receipt of the money (P12) and gave her the cancellation agreement (P14) to sign saying that she voluntarily paid Merchants Wealth the handling charge in order to terminate its service. 

6.  There is no dispute as to what had happened later on that day.  After the PWs had left Merchants Wealth, PW1 dialled 999 in Metroplaza and made a report to the police.  Whilst PW1 was relating what had happened to a police officer summoned to Metroplaza to investigate, the defendants happened to walk past on the ground floor. There and then, PW1 to PW3 pointed out to the police officers the defendants who were intercepted for enquiry. 

THE ISSUES

7.  The major factual issues at the trial include the following:-

(a) how much PW1 had eventually agreed to borrow, if any, from Merchants Wealth;

(b) whether Merchants Wealth was entitled to any handling charge from PW1 and if so, how much;

(c) whether either D2 or D3 had threatened PW1 in any way and why they went to the bank with PWs 1 to 3; and

(d) what the role of D1 was, if any, in the episode, what her state of mind was.

8.  Depending on the factual findings, the court will then have to decide (i) whether D2 and/or D3 had committed the blackmail as charged; and (ii) whether D1 had acted in a joint enterprise with D2 and D3.

RELEVANT LEGAL PRINCIPLES

9.  I bear in mind that the burden is on the prosecution to prove the charge beyond reasonable doubt.  Moreover, the case against each of the defendants is to be considered independently and separately.  The defendants are not required to prove anything.  In the present case, none of the defendants chose to give or call any evidence.  It is their right and no adverse inference would be drawn from this against them: Lee Fuk Hing v HKSAR (2004) 7 HKCFAR 600. 

10.  Insofar as the prosecution relies on any inferences to support the charge, such inferences are not to be drawn unless they are the only reasonable interferences from the direct facts proved: Kwan Ping Bong & Another v R [1979] HKLR 1.

11.  By admitted facts, the defendants have clear records.  I give myself the good character direction in favour of each of them in relation to propensity: Tang Siu Man (No 2) v HKSAR (1997-1998) 1 HKCFAR 107.  This is because all of the defence counsel agree that the credibility limb of the good character direction is not relevant here, as none of the defendants elected to give evidence or prayed in aid any of their out of court statements. 

12.  As regards the substantive offence of blackmail, it requires the prosecution to prove that (a) a demand with; (b) menaces was made; (c) that it was unwarranted; and (d) that at the time of making the demand the accused made it with a view to gain for himself or another or with intent to cause loss to another.  The elements of blackmail are discussed in detail in Archbold Hong Kong 2016, at §§22-216 to 220.  It suffices for me to highlight that a demand with menaces is unwarranted unless the person making it does so in the belief:-

(a) that he has reasonable grounds for making the demand; and

(b) that the use of menaces is a proper means of reinforcing the demand.

In this context “menace” should be liberally construed and not as limited to threats of violence but as including threats of any action detrimental or unpleasant to the person addressed. It may also include a warning that in certain events such action is intended: Thorne v Motor Trade Association[1]. It is for the defence to raise the issues contained in both paragraphs (a) and (b) above if they so wish. Once the issues are raised, it is for the prosecution to negative so that a jury can be sure that the defendant did not have the beliefs he alleges in relation to either the grounds of the demand or the means of reinforcing it.

13.  I note also what Bingham J (as his lordship then was) said in R v Harvey and Others (1981) 72 Cr App R 139, CA, that the word “proper” is:-

“plainly a word of wide meaning, certainly wider than (for example) “lawful.” But the greater includes the less and no act which was not believed to be lawful could be believed to be proper within the meaning of the subsection. Thus no assistance is given to any defendant, even a fanatic or a deranged idealist, who knows or suspects that his threat, or the act threatened, is criminal, but believes it to be justified by his end or his peculiar circumstances. The test is not what he regards as justified, but what he believes to be proper. And where, as here, the threats were to do acts which any sane man knows to be against the laws of every civilised country no jury would hesitate long before dismissing the contention that the defendant genuinely believed the threats to be a proper means of reinforcing even a legitimate demand.”

The above case authority has been applied in HKSAR v Lau Wa Sang & Lau To Sang (CACC 203/2000).

14.  As regards the doctrine of joint enterprise, in its simplest application, it means that if a person reaches an understanding or arrangement amounting to an agreement with another or others that they will commit a crime, and one or other of the parties to the arrangement does, or they do between them, in accordance with the continuing understanding or arrangement, all those things which are necessary to constitute the crime, all are equally guilty of the crime regardless of the part played by each in its commission: see the decision of the High Court of Australia in McAuliffe[2].  Furthermore, secondary liability does not require the existence of an agreement between the principal and the secondary party to commit the offence.  If a person sees an offence being committed, or is aware that it is going to be committed, and deliberately assists its commission, he will be guilty as an accessory.  Where, however, an agreement exists, such agreement is by its nature a form of encouragement and in most cases will also involve acts of assistance: see R v Jogee[3].

CONSIDERATION

The 3 visits by the PWs

15.  There is no dispute that PWs 1 to 3 had visited the office of Merchants Wealth together on the following 3 occasions:-

(i) On 4 July 2014, PW1 alone met with D3 in a meeting room[4] whilst PW2 and PW3 were waiting in the reception area[5]. During the meeting, PW1 signed a loan application form with a privacy declaration (P10) and also a loan agreement (P11). She also showed a pile of supporting documents including her HSBC bank passbook and a set of title deeds of her residence to D3 who made copies of some of those. At the request of D3, PW1 left the title deeds behind which D3 told her was for checking.

(ii) On 7 July 2014, PW1 again met with D3 in the same meeting room to submit further documents for the purpose of the loan application. As to whether PW2 and PW3 were inside the meeting room at the time, PW1 and PW2 said all three of them (PWs 1 to 3) were there. However, PW3 said that only PW1 was inside the meeting room whilst she and PW2 were waiting at the reception area. I tend to believe PW3 that PW2 had not in fact been inside the meeting room; otherwise, it would be difficult to see why PW2 was later unable to identify D3 as one of the two males who met them inside the same room on the following day. However, I find it unnecessary to resolve the discrepancy as nothing untoward was alleged to have happened on 7 July. Also, since the purpose of the 7 July visit was for PW1 to submit further documents only, their stay at Merchants Wealth would be brief. I am alive to some obvious mistakes in PW3’s testimony. One example of which is her initial evidence that she had, together with PW1 and PW2, first visited Merchants Wealth on 6 July. It was only after PW3 was told that 6 July was a Sunday that she corrected the day to 4 July. Another example is when she said that the incident which was the subject matter of the charge occurred on 7 July when there is not dispute that it should be on 8 July. Yet another example is from her cross-examination by counsel for D2. When it was put to her that she had made no reference in any of her two witness statements to the police that one of the males had mentioned on 8 July that there were $75,000 in PW1’s bank account, her disagreed firmly. However, when counsel said she could be shown her statements, she changed her answer and said, “I don’t remember”. In my assessment, PW3 is the kind of witness who can talk confidently when in fact she is wrong. I bear this shortcoming of PW3’s evidence in mind that when I assess her credibility and reliability as a witness.

(iii) On 8 July 2014, PW1 to PW3 visited Merchants Wealth again pursuant to an appointment that PW1 had made with a Ms Chan of Merchants Wealth earlier that day. There is no dispute that the three of them were led to the same meeting room as before and afterwards two male staff members came to meet them in that room. However, there are some discrepancies among the PWs as to who those two males actually were. There are also some discrepancies as to what exactly was said by one or both of the two males inside the room. The details are to be discussed in due course. However, there is no dispute that the PWs later went to Metroplaza together to make withdrawals in the company of D2 and D3. After that, the five of them returned to Merchants Wealth where $100,000 was handed over to D1 who returned the title deeds to PW1. Then, there is a discrepancy in the prosecution evidence as to whether D1 had returned to the title deeds to PW1 before she received the $100,000 or after. There is no dispute that the PWs called 999 and made a report to the police shortly after they had left Merchants Wealth. It is an admitted fact that the PWs pointed the defendants to the police officers later on the same day on the ground floor of Metroplaza.

As to (a): the amount of the loan applied for

16.  As regards how much PW1 had intended to borrow through Merchants Wealth and whether she had made a decision to borrow on 4 July at all, her evidence-in-chief is inconsistent with what she said in cross-examination.  The relevant parts of her evidence are summarised as follows:-

(a) in her examination-in-chief she said that initially she wanted to seek a loan of just 200,000 through Merchants Wealth. She said she intended to use the loan from Merchants Wealth to repay an earlier loan which she had borrowed from another finance company called Actually Finance. She knew that Merchants Wealth would charge a handling charge equalled to 25% of the loan amount;

(b) she agreed that the information given in the loan application form (P10) about the previous loan from Actually Finance was correct and was based on her contract with Actually Finance. P10 shows that PW1 had borrowed $200,000 from Actually Finance. It also shows that for that loan she had to pay 12 monthly instalments of $7,500 for interests and then a lump sum of 300,000 in order to settle the debt. PW1 had given different version as to whether she had made any repayment in relation to the loan from Actually Finance. However, she eventually said that that loan was obtained in the end of June or the beginning of July which was less than 2 weeks before her first visit to Merchants Wealth and that its first instalment for repayment had not yet become due. She agreed that assuming that she repaid everything on time, she would have to repay a total of $390,000 to Actually Finance for the loan of $200,000;

(c) in relation to the new loan which she intended to seek through Merchants Wealth, she said that she had asked D3 what would happen if she did not have money to pay Merchants Wealth the handling charge. D3 said he had to consult Ms Chan and he subsequently suggested that she should borrow $300,000 and for that loan she would have to pay $75,000 as handling charge;

(d) she said that there was no agreement between D3 and her on that day as to the amount of the loan from Merchants Wealth and that the box for “Loan Amount” on P10 had not been filled in when she signed the form. She said that she did not made any decision whether to borrow because she did not know the interest rate and the tenure;

(e) in cross-examination by counsel for D1, however, she agreed that in the first “cold call” she received prior to the first visit on 4 July allegedly from the Public Bank, she had already decided to borrow $300,000;

(f) later, in reply to the court’s question as to how she could repay Actually Finance if she only intended to borrow just 200,000 through Merchants Wealth, PW1 said that she had cancelled the insurance policies of herself and her son and the proceeds of which would be about $100,000;

(g) however, in answer to a further question from counsel for D1, PW1 said that she had in fact decided to make a loan of $300,000 through Merchants Wealth in order to cover its handling charge;

(h) upon clarification sought by the court, PW1 confirmed that on 4 July 2014, after she had signed P10 and before she left the office of Merchants Wealth, she had decided to apply for a loan of $300,000 and that she and D3 had agreed on this; and

(i) in re-examination, the issue whether she had in fact decided to borrow $300,000 on 4 July had not been revisited.

17.  In view of PW1’s evidence in cross-examination and the fact that she had signed both the loan application form and the loan agreement, I am satisfied so that I am sure that on 4 July 2014, she had already decided to apply for a loan of $300,000 through Merchants Wealth.

18.  Counsel for D1 further put to PW1 that on 7 July PW1 had in fact asked to increase the loan amount from $300,000 to $400,000 and that was the reason why she was asked on 8 July to pay a handling charge of $100,000, being 25% of $400,000.  As to this, PW1 denied. However, having considered her evidence and the inherent probabilities of the matter and having observed PW1 in the witness box, I do not accept this part of her evidence:-

(a) in cross-examination by D2, PW1 agreed that the total amount she had to pay Actually Finance would be $390,000. When PW1 was asked why she thought that $300,000 was enough to help her, she said for the first time that besides the proceeds of the insurance policies of she and her son, she was also expecting the proceeds of her husband’s insurance policy which she had also cancelled. She said the total amount of the proceeds from the three insurance policies would be around $200,000 and that the monies would be available in about a month’s time. If what she said was true, then all she needed was only a bridging loan for a month’s time. In the circumstances, one wonders why she would be interested in borrowing from Actually Finance in the first place with all the interest and additional repayments;

(b) if she was in fact expecting $200,000 from the insurance policies she said she had cancelled, then it is most unreasonable that she would be interested in seeking yet another loan through Merchants Wealth and to pay a handling charge as high as 25%, bearing in mind that the new loan would also carry its own interests. Instead, it would be more economical for her to used the proceeds from the insurance policies to repay Actually Finance in order to reduce her indebtedness;

(c) her evidence that she had not given any thought to the economics involved relating to the two loans beggars belief. She said that she borrowed money to open her business and she had insufficient cash. If that was the case, one would expect that the costs of borrowing would have been in the forefront of her mind;

(d) also in cross-examination by D2, she mentioned for the first time that on 8 July when D2 demanded her to pay a $100,000 handling charge to cancel the loan agreement, she asked to pay a lesser sum. However, she agreed that that was neither mentioned in her examination-in-chief nor in any of her four statements to the police. Upon further cross-examination, she eventually agreed that she had not tried to negotiate the handling charge down from $100,000;

(e) she knew that Merchants Wealth’s handling charge was 25% of the loan amount. If she had, as she said, only agreed to borrow $300,000, then even if she had to pay anything, the handling charge should be $75,000 instead of $100,000. However, she did not argue with D2 that she should only pay $75,000;

(f) in cross-examination by D2, PW1 agreed that she worked out from the demand of $100,000 as handling charge that the figure was based on a loan of $400,000. She said that she had protested to D2 that she had not borrowed $400,000. The above cross-examination suggested that PW1 knew how the figure was arrived at;

(g) PW2 said in his examination-in-chief that on 8 July D2 had suggested that PW1 to borrow to $400,000. According to PW2, D2 also said on that occasion that if PW1 paid $100,000, the contract could be cancelled. This evidence of PW2 does not appear to make any sense if the possibility of a $400,000 loan had not been canvassed at all prior to the 8 July visit. However, if a $400,000 loan had in fact been canvassed before the visit, then it would be readily understandable as to why D2 would ask PW1 to borrow $400,000 or to pay a $100,000 handling charge for cancellation of the contract; and

(h) there are also the statements of the two police officers who were summoned to Metroplaza to assist on 8 July 2014. The statements are admitted pursuant to s65B of the Criminal Procedure Ordinance, Cap 221. According to the statement of PC 15438 (P19), PW1 had told him that:-

“On 8 July 2014, the staff member of the said company informed her that the financial arrangement application had been approved and she was allowed to take out a loan of $600,000. Nevertheless, she just needed $400,000 and the two parties then arranged to meet at the above location at 1430 hours the same day to complete the formalities.”

According to the statement of Sgt 33741 (P20), PW1 had told him that:-

“On 8 July 2014, the informant received a call from a staff member of the said company and she was told that her loan application had been approved with a loan amount of $600,000. However, the informant replied that she just needed $300,000 and the staff member then suggested her to borrow $400,000. The informant agreed and went to [Merchants Wealth] with her son …… and the son’s girlfriend …… to complete the formalities.”

19.  In my assessment, PW1’s evidence as to how much she had eventually agreed to borrow through Merchants Wealth before the 8 July visit is so riddled with inconsistencies and inherent improbabilities that it cannot be accepted.  The aforesaid problems with PW1’s evidence are not remedied by the evidence of PW2 and PW3 who apparently had no personal knowledge as to whether PW1 had asked for a larger loan after the 4 July visit. 

20.  On the other hand, taken into the amount that PW1 would need in order to settle her pre-existing loan from Actually Finance, the fact that she had eventually paid $100,000 as handling charge without bargaining and the fact that she had told the police officers arrived at the scene that she had agreed to a loan of $400,000, in my view the likelihood is that PW1 had in fact asked for or agreed to a loan amount of $400,000 to be obtained through Merchants Wealth before her 8 July visit.  At the very least, there is a reasonable doubt on this point.

As to (b): handling charge

21.  According to the loan agreement (P11),

“Upon successful approval, consultation fees will be charged” by Merchants Wealth”;

“Charges will not be incurred if the entrusted loan application is unsuccessful”;

“Upon successful approval of the financial arrangement or individual voluntary arrangement application, [the client] shall immediately pay [Merchants Wealth] consultation fees equivalent to 25% of the total loan amount in full”; and

One of the terms[6] which the client had to agree was that “Application shall not be cancelled or rendered unsuccessful in any way by the client”. It was stipulated that

“If [the client] fails to comply with any of the above terms or renders the procedure unsuccessful by failing to comply with the terms, [the client] shall pay the service charges in full.”

Therefore, on the face of P11, PW1’s liability for the 25% handling charge did not depend on drawing down of the loan. Once the loan application was approved, PW1 would have to pay whether or not she took up the loan.

22.  As regards whether PW1 was aware of her liability to pay the handling charge and whether she had been misled by D3 regarding the terms of the loan agreement, her evidence is as follows:-

(a) In PW1’s examination-in-chief, she said that when D3 explained the terms of P11 to her on 4 July, he did not do it line by line. D3 had said that if she borrowed, she would have to pay the 25%. She said she remembered asking D3 what if she was not to borrow money, whether she would still have to pay anything and D3 replied that she did not. She said she could not remember whether she had been given opportunity to read the document before signing.

(b) In cross-examination by counsel for D2, she disagreed that she had been told by D3 that if the application was successful, she would have to pay regardless of whether she wished to borrow or not. However, when she was asked whether she had paid any attention to the discussion when the application form and the loan agreement were being filled out by D3, she admitted that she had not paid much attention. She further agreed to counsel’s suggestion that she had not really pay all that much attention to what D3 was telling her during the time when P10 and P11 were being filled up.

23.  Besides, there are also the statements of the two police officers, P19 and P20, admitted pursuant to s65B of the Criminal Procedure Ordinance.  In P19, PW1 told the police constable that “She also signed an Agreement for the application for financial arrangement with the company and had read the terms and conditions carefully.”  And then in P20, PW1 had told the sergeant that D3 “passed an Agreement for the application for financial arrangement to the informant for signature.  The informant claimed that she did read the said agreement carefully and agree with its content at the time.”  In my view, the two s65B statements undermines PW1’s credibility in that they show that PW1 in her very first account to the police had accepted that she had ample opportunity to read the loan agreement before she signed on it and that she had made use of that opportunity.

24.  PW1 was a mature lady with education up to Form 4.  She could read and write Chinese in which the loan agreement was written.  In view of her admission in cross-examination that she had not been paying attention to what D3 had said and also in view of the aforesaid s65B statements, I am unable to accept her evidence that D3 had told her anything to the effect that if she decided not to take up the loan, then she would not be required to pay anything.  Another point to note is that if D3 had in fact misled her as to the true meaning of the terms of the loan agreement (P11), one would expect her to raise that and made a protest to D2 when she was demanded to pay a handling charge on 8 July, especially when D3 was apparently also present when D2 was making the demand.  However, according to the evidence of all the PWs, that was not done.  The absence of any protest by PW1 provides another reason to doubt PW1’s evidence that she had been misled by D3. 

25.  As to whether any loan had in fact been arranged by Merchants Wealth prior to 8 July, there is evidence raising the issue that a loan of up to $600,000 had been made available for PW1 and such issue has not been rebutted by any contrary evidence:-

(a) according to PW1, the reason why she, her son and PW3 visited Merchants Wealth for the third time on 8 July was that she had earlier on, at about 4 pm, received a phone call from a Ms Chan of Merchants Wealth saying that a loan of $600,000 had been arranged for her, to be repaid by 120 instalments of $13,000 each. Although PW1 in her examination-in-chief had not identified who that Ms Chan was, later in cross-examination she agreed with counsel acting for D2 that the female staff member who made the call on 8 July was D1. PW1 said that she told D1 in the aforesaid telephone conversation that she did not want such a large loan and she could not afford that. She said D1 told her, however, that she could not refuse to borrow. PW1 then told D1 she was going down to Merchants Wealth to discuss the matter. PW1 said that she then hung up immediately and went to Merchants Wealth by MTR with her son; and

(b) although PW1 in her examination-in-chief may give one the impression that D1 was trying to force her to accept a $600,000 loan, I do not understand that to be her evidence. PW1’s evidence in cross-examination was that D1 had told her that D1 could obtain a loan of $600,000 for her. Moreover, in cross-examination by counsel for D2, PW1 agreed that when she went back from the bank, D1 spoke to her and once again asked her whether she would re-consider taking the loan that had been granted to her. PW1 said she refused and then she was asked to pay the $100,000.

26.  In view of the above, I find that there is at least a reasonable doubt that Merchants Wealth had in fact arranged a loan of $400,000 for PW1 as agreed which could be raised to as much as $600,000 if PW1 so wished.  As such, the effect of the loan agreement (P11) would be that PW1 was under a contractual duty to pay Merchants Wealth a handling charge of $100,000, which was 25% of $400,000, even if she eventually decided not to take up any loan with Merchants Wealth.  Therefore, I am unable to be satisfied beyond reasonable doubt that Merchants Wealth was not entitled to demand PW1 to pay $100,000. 

As to (c): the alleged threats and the withdrawals

27.  That said, an offence of blackmail could still be made out if threats as alleged by the prosecution were used by D2 and D3 to reinforce the demand.  In the following discussion, I will concentrate on the evidence about what had allegedly happened later that day in the meeting room of Merchant Wealth before the withdrawals.  It has to be noted that there was nothing to suggest that any of the PWs had met D1 prior to their return from the bank. 

28.  There are the following common points between the evidence of PWs 1 to 3 as to what had happened inside the meeting room on 8 July:-

(a) they were led to the meeting room and after they had sat down facing the room door two males came to them;

(b) one of the males slammed shut the door, slammed a pile of documents down on the table and asked “What’s now” in a loud and ferocious manner. PWs 1 to 3 all said that they were frightened or scared;

(c) PW1 indicated to the two males that she was not going to borrow any money from Merchants Wealth;

(d) PW1 was demanded to pay $100,000 to cancel the contract;

(e) PWs 1 to 3 felt that they would not be allowed to go if they did not pay, although they had not in fact tried to leave or requested to do so. One reason for them not to leave the room was that the two males were sitting near to the door and the PWs were concerned about their own safety if they tried to leave;

(f) PWs 1 to 3 decided to go to the bank to withdraw money to pay the $100,000 demanded of PW1 and they left Merchants Wealth to go to the nearby HSBC branch to withdraw money;

(g) PWs 1 to 3 were accompanied by two males en route to the HSBC branch on the ground floor of Metroplaza, during the journey there was no physical contact or conversation between the PWs on the one hand and the two males on the other;

(h) the two males waited outside when PW1 was inside the bank queuing up making withdrawal and when PW2 and PW3 had gone to a nearby ATM machine to withdraw cash. The bank was about to close at the time. None of the PWs ever tried to seek help from the bank staff or the police;

(i) the reason why PW2 and PW3 had to go to the nearby ATM machine was that PW1 only had about $75,000 in her bank account[7]. Therefore, PW3 withdrew monies from her two Heng Sang bank accounts to make up the shortfall[8]; and

(j) all five of them then returned to Merchants Wealth after the cash withdrawals.

29.  As regards what had happened inside the meeting room before the journey to the banks, there are a number of discrepancies between the PWs:-

(a) As to who the two males were, PW1 said they were D2 and D3 and D2 did all the talking. According to PW1, D3 did not say anything. PW2 agreed with PW1 that it was D2 who slammed documents down on the table, closed the door and asked “What now?” However, PW2 was not sure who the other male was. On the other hand, PW3 said the male who slammed the documents on the table was in plainclothes who she later identified in an identification parade as D3. She even said that D3 had thrown a chair onto the floor inside the room whilst the other male (wearing suit) was sitting there calmly. However, the chair throwing incident, if it had happened at all, had not been mentioned by PW1 and PW2.

(b) As to what PW1 was first asked to pay by the two males, PW1 said that upon she telling D2 that she was not going to borrow money from him and asked him to give her title deeds back, D2 said no and asked her to repay $400,000. PW1 then asked why she had to pay so much when she had not borrowed any money, D2 then asked her to pay $100,000 to cancel the loan. I note that neither PW2 nor PW3 had mentioned anything about PW1 being asked by anyone to repay $400,000. According to PW1, D3 had not said anything throughout. PW2’s evidence was that D2 had asked PW1 to borrow $400,000, saying that $300,000 would not be sufficient and D2 had also said that if $100,000 was paid, then the contract could be cancelled. According to PW3, D3 said that they had borrowed $300,000 more for PW1 and PW1 replied that $600,000 was too much for her and PW1 went on to say that she wanted to cancel the contract. According to PW3, D3 then demanded a $100,000 handling charge.

(c) As to whether any of the two males had said what would happen if PW1 did not pay the $100,000, the first answer given by her in her examination-in-chief was that nothing was said about this. Upon being asked whether she had tried to leave when D2 asked her to pay $100,000, her answer was that she did not do that because her title deeds were still in the other side’s possession. When asked whether they were allowed to go, PW1 said in the negative, the reasons being that D2 and D3 were sitting near to the door. Prosecuting counsel then asked, “Did they say anything about not allowing you to leave?” PW1 answered that D2 had said that “If don’t pay, then can’t leave.” I pause here to note that this is an answer to a leading question from prosecuting counsel. PW2’s evidence was that D2 had explained the contract and said that if they were to cancel the contract, a handling fee had to be paid and if they did not pay, they were not to leave and they could not get back the title deed. PW2 said they were all worried about their safety. He said he suggested to his mother by her ear that if they had to pay, let them just paid and get out of the place first, but they had to get back their title deeds and make sure that they were safe first. According to PW3, however, it was D3 who said that if they did not pay the $100,000, they could not leave the room. PW3 did not mention anything about the title deeds. PW3 said her concern at the time was that if she tried to leave, she did not know if the two males would beat her, hit her or do something to hurt her.

30.  My observation of the above evidence is that the PWs were broadly consistent in that between the two males, one was more active and did most of the talking and the other was relatively passive.  However, one major difficulty in the prosecution evidence is PW3’s identification of D3 as the one who had played the more active and ferocious role.  I have mentioned above that PW3 could appear to be convincing when in fact she was wrong.  I am satisfied that here PW3 was simply mistaken again as regard the role played by D3.  I note also that when PW1 and PW2 were cross-examined, it had never been suggested to either of them that D3 was not inside the meeting at the relevant time.  Moreover, PW3’s evidence that the more active male had thrown a chair onto the floor seemed to me to be an exaggeration.  Had that in fact happened, it must have left a deep impression on PW1 and PW2.  However, none of them had mentioned anything about it at all. I find that I can rely on the evidence of PW1 and PW2 that inside the meeting room on 8 July, D2 rather than D3 was the major talker. 

31.  Despite the aforesaid discrepancies, can I rely on the evidence of PW1 and PW2, and also that part of PW3’s evidence insofar as it is relevant, to find that they had in fact been frightened or scared by the conduct of D2, who allegedly had dumped documents onto the table heavily, slammed shut the door, talked to them in a loud and ferocious manner and also told them that they could not leave the meeting room and could not have their title deeds back without paying?  As to this, I note that the evidence of each of the PWs has their own problems:-

(a) as regards PW1, I have found that her evidence is riddled with inconsistencies and inherent improbabilities as to how much she had agreed to borrow through Merchants Wealth and those shortcomings, in my view, also has a bearing on her general credibility. I also remind myself that I should be cautious before accepting her evidence, as she might have her own interest to serve by denying that she was contractually bound to pay the handling charge;

(b) as regards PW2, I note there were numerous occasions when he answered “don’t remember” or “no recollection” in reply to prosecuting counsel’s questions. It is obvious that he did not have a clear recollection of the incident. It is also remarkable that he was unable to remember whether D3 was the other male with D2 inside the room on 8 July. This is because, according to PW2 himself, he had just met D3, albeit briefly, the day before on 7 July when he accompanied her mother to submit further supporting documents; and

(c) as regards PW3, as I have mentioned, she had a tendency to speak something as true which she was in fact wrong.

32.  Furthermore, in my view the PWs cannot without qualification be treated as independent witnesses testifying to the same incident from their own perspectives.  PW1 and PW2 are mother and son, living together and close to each other.  PW2 and PW3 had been intimate at the time, though they no longer are.  In this regard, I find PW1’s categorical denial that she had talked about the incident with either PW2 or PW3 even up to today most improbable.  According to the PWs, they had been to the Consumer Council to lodge a complaint on 9 July 2014.  Moreover, according to PW3, PW1 had repaid $25,000 to her after she (PW3) had broken up with PW2 earlier this year. Naturally, there would be some discussions among the PWs on those occasions.  That provides another reason why I should treat PW1’s evidence in general with circumspection.

33.  That said, the prosecution case that the PWs had been threatened inside the meeting room on 8 July may be strengthened if there is objective supporting evidence.  One such piece of evidence may be the alleged fact that D2 and D3 had escorted the PWs to the bank to withdraw money.  If it could be inferred that D2 and D3 had gone with the PWs to the bank with a view to prevent them from running away or to make sure that cash was withdrawn for payment to Merchants Wealth, then that would in my view strengthen the prosecution case against D2 and D3 that they had acted jointly to blackmail.  However, in view of the following reasons I find that I am unable to draw that adverse inference:-

(a) According to PW1 and PW2, regarding the journey to the bank, D2 and D3 were leading the way and walked in the front whilst the PWs were following behind. In particular, PW2 agreed that because he and PW1 did not know where the HSBC was, D2 then suggested that D2 and D3 could take them to the bank. Based on the above evidence of PW1 and PW2 in cross-examination, it was not the case that D2 and D3 were guarding them in order to prevent them from running away or reporting the matter to the police. I am unable to accept the contrary evidence of PW3 that D2 and D3 had followed them on the way to the bank. I note also that PW3 changed her evidence given examination-in-chief that D2 and D3 had “escorted” them en route to the bank and agreed in cross-examination that the word “accompanied” would more accurately described the conduct of D2 and D3. She also agreed that there was nothing to prevent them from seeking help either at the bank or at the ATM machine.

(b) If the purpose of D2 and D3 was to guard the PWs and prevent them from calling for help, then it would be difficult to understand why they would be waiting outside the bank whilst PW1 was queuing up inside and why none of them had followed PW2 and PW3 when the latter two were walking to the ATM machine to make withdrawals, thus giving the PWs plenty of opportunities to call for help.

34.  To the contrary, as it turns out the evidence of the PWs about the withdrawals in my view tends to weaken rather than strengthen the prosecution case that they had acted under threat.  If the PWs had been concerned about their personal safety when they were inside the meeting room, then it would be difficult to understand why the PWs did not call for help when they were on the way to the bank.  Also, when the PWs were all inside the bank they could have sought help from the teller without D2 and D3 knowing about it.  Moreover, if the PWs thought that the title deeds had been unlawfully retained by the defendants, there was nothing to prevent them from calling the police for assistance.  In fact, if the PWs had wanted to seek help, the best time to do so was when the bank teller asked PW1 why she withdrew so much money from her bank account.  However, PW1 instead simply told the bank teller that she wanted the money for personal use[9].  None of the PWs was able to give a satisfactory answer as to why they had not called for help at that stage.  PW1 and PW2 simply said that they had not thought of that. 

35.  Also, it does not help the prosecution that PW1 had told the two police officers arrived in response to the 999 call just that she reported to the police for assistance as she considered the business practice “improper”[10] and that she had acted “of her own free will in the course of the loan application and was not threatened or intimidated by anyone, including the staff of the said company” and said that she “signed all the documents of her own free will”[11] which in that context must have included the cancellation agreement P14.  Not only that PW1 had failed to complain to the police officers that she had been threatened, she had actually said the otherwise.  Furthermore, contrary to PW1’s evidence in court that she had complained to the police officers of being deceived of her money, that was not recorded in the statements of the police officers.  The accuracy of the accounts given by the two police officers had not been challenged in anyway and I attach weight to them regarding what they had been told by PW1.  Therefore, I find that PW1 had not told the two police officers that she had been deceived.  This is yet another reason for one to have concerned about the credibility of PW1. 

36.  In all the circumstances, I am unable to be satisfied beyond reasonable doubt that D2 and D3 had threatened the PWs as alleged.

As to (d): D1’s role and her state of mind

37.  Because I am unable to be satisfied that D2 and D3 had threatened the PWs, it must follow that I am also unable to be satisfied that D1 had been a party to a joint enterprise with D2 and D3 to blackmail the PWs. 

38.  Furthermore, for the sake of argument even assuming that D2 and D3 had threatened the PWs as alleged, the prosecution case against D1 has not been strong.  I am not going to repeat the evidence against D1 which I have outlined in my ruling on the submission of no case from her counsel.  Although I have ruled that D1 has a case to answer, at this stage of the proceedings the question is whether, as the tribunal of facts, I am satisfied beyond reasonable doubt that D1 was a party to the joint enterprise alleged.  I find that the answer is in the negative, there being in my view no sufficient evidence to show that she knew what was going on behind closed doors on 8 July when D2 and D3 were meeting the PWs. The fact that D1 was a fellow employee of D2 and D3, that she may have made some telephone calls to PW1 concerning PW1’s loan application prior to the incident and that she had received the $100,000 handling charge after the PWs had returned from the bank, all taken together, whilst sufficient in my view to give rise to a prima facie case, is insufficient to prove the charge beyond reasonable doubt against her that she was a party to the joint enterprise alleged.   

CONCLUSION

39.  One could understand if PW1 thinks that she had been hard done by Merchants Wealth in the transaction. She may also have grounds to complain about the trade practice of that company so that perhaps the relevant authorities should take a close look at it to see if there is anything questionable. 

40.  Nevertheless, the present trial is about whether PW1 had been blackmailed by the defendants. Based on the evidence before me, I have come to the view that the prosecution has failed to prove its case against any of the defendants.  In the circumstances, I have no choice but to acquit the defendants of the charge.