HKSAR v. HUNG JOHN TERENCE

CACC 235/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 235 OF 2009

(ON APPEAL FROM DCCC NO. 1047 of 2008)

____________

______________________________

REASONS FOR JUDGMENT

______________________________

Hon Line J (giving the reason for judgment of the Court):

1.  The applicant was convicted of four offences under section 9(1)(a) of the Prevention of Bribery Ordinance Cap 201 by Deputy District Judge Anthony Kwok. He appealed the convictions on a point of law, as of right, and sought leave to appeal on further questions of fact.

2.  At the conclusion of the hearing we dismissed the appeal on the point of law and refused the application for leave, indicating that we would give our reasons thereafter. This we now do.

3.  The undisputed background to the case was that the applicant was a voting member of the Hong Kong Jockey Club, an incorporated body limited by guarantee. The club had different levels of membership. Those seeking full membership of the club needed to be proposed by a voting member, of which there were only a limited number.

4.  In October 2006 the applicant had been approached by a friend. The friend represented a racing member of the club who wished to be elevated to full membership. The applicant agreed to exercise his powers as a voting member and a formal proposal form was completed and submitted to the management of the club together with a request that the application be considered on an accelerated basis.

5.  There was no dispute that in the same month the applicant solicited a loan of $200,000 from the friend, the subject of Charge 1, and accepted the sum of $250,000 from him, the subject of Charge 2, and that in the following two months he accepted two further sums of $100,000, the subject of Charges 3 and 4.

6.  The issue at trial was the connection between these two series of events. The prosecution alleged that the applicant solicited and accepted the money as a reward for doing an act as an agent in relation to his principal’s affairs, namely proposing the candidate for full membership and assisting in the expeditious processing of her application. The applicant contended that the solicitation and the acceptances were merely personal loans between himself and his friend which had no connection to the candidate’s application for full membership.

7.  The first ground of appeal was that the applicant was not an agent of the Hong Kong Jockey Club. The ground acknowledged that it was made notwithstanding the decision of this Court in HKSAR v. Fung Hok-cheung [2008] 5HKLRD 846.

8.  The first line of argument in support of this ground asserted that proper statutory construction of the definition of the word agent in section 2 of the Ordinance, namely that it "includes a public servant and any person employed by or acting for another", confines the meaning to the context of employment and confines it to what is understood by the word agent as a legal term of art.

9.  The contention was that even if the applicant in recommending candidates to the club could be said to be acting for the club, that was not enough because he was not in civil law the agent of the club.

10.  In HKSAR v. Fung Hok-cheung it was held:         

“There is no justification for simply applying, in an unmodified form, the principles of agency developed in the common law of contract for the purposes of section 9 of the Ordinance. In order to give effect to the intention of the Legislature it is necessary to apply a less restrictive approach to the concept of agency than that contended for by the applicant and to give the wording it is ordinary and natural meaning.”

11.  It was boldly asserted that this statement of principle is erroneous. We disagree. The decision in question was in our view a correct one. This area of the criminal law does not need the introduction or consideration of the principles of agency from the civil law. Judges, magistrates and juries should not be concerning themselves with such matters if the plain words of the defining section in the criminal Ordinance can be applied with common sense.

12.  It was argued that Fung Hok-cheung could not be reconciled with the authorities: particular emphasis was given to the cases of Lai Man Yau v. AG (Nos 2) [1978] HKLR546, Ng Siu Chau v. HKSAR (2000) 3 HKCFAR 329 and Commissioner of  ICAC v. Ch’ng Poh [1997] HKLRD 652.  We found nothing irreconcilable between Fung Hok-cheung and the cases cited to us. What we did find was that its ratio decidendi exactly covers the issue raised in Ground 1 and we declined to depart from it.

13.  In the admitted facts of this case there is reference to a letter sent by the club on 27 June 2002 to all voting members reminding them that:

“The stewards are dependent on Voting Members to recommend high-quality candidates and to take responsibility for ensuring that the integrity of candidates is beyond reproach.”

14.  That responsibility amply illustrates how the activity of the applicant in putting forward a candidate can sensibly be described as an activity which involves him acting for the club. The facts that also he may have been the agent of the candidate and had a relation of principal to principal with the club in his capacity as a member are considerations that are irrelevant. We suggest that no one in Hong Kong would be surprised to learn that taking money for the discharge of that responsibility owed to the club without their consent would and should see a successful prosecution under the Prevention of Bribery Ordinance. We regard as unrealistic the argument that the public would be the better informed of the limits on their behaviour in this regard if the construction of the word agent depended on a knowledge of the civil law of agency.

15.  It followed that the alternative submission in regard to this first ground of appeal, based on the construction of the club's constitution, also failed. Of course the constitution confers contractual rights upon members, including extra rights for voting members. The simple point is that analysis in terms of the civil law is to be avoided if the activity meets the simple words of the definition. The concept of criminalising the taking of a reward from a third party when acting for another in relation to that other’s affairs is straightforward and should remain so.

16.  It was not surprising that defence counsel at trial conceded that the applicant was indeed acting as an agent of the club. The concession was properly made.

17.  Before leaving Ground 1, we deal with the question of the definition of the word principal in section 2 of the Ordinance, for that definition is expressed "to include an employer", as well as other descriptions of persons or bodies which could have no application to this case.

18.  It is obvious that the word “employer” cannot bear the limited narrow meaning of a party to a contract of service, for agents as opposed to employees under a contract of service are plainly intended to be subject to section 9 of the Ordinance. The sense of the word “employer” in this context has the wider meaning of a person who uses or engages the services of another. The distinction is one that was recognised in Fung Hok-cheung, where the Court dealt with the relevant authorities. Thus the club was the employer of the applicant when it trusted him on its behalf to ensure the integrity and suitability of candidates for elevation to full membership.

19.  The second ground of appeal was that the prosecution failed to call or tender credible evidence. The substance of the complaint was that the prosecution failed to put the candidate in the witness box.

20.  Evidence established that shortly after the friend had approached the applicant concerning the elevation of the candidate to full membership, $800,000 had been transferred by cheque from the candidate's bank account to the bank account of the friend; that two days later $500,000 had been withdrawn in cash from the friend's account; and that four days after that $250,000 in cash had been paid by the friend to the applicant, who deposited it into his bank account.

21.  The candidate, under caution, apparently made statements to the effect that the applicant had neither solicited nor received any payment from her and that the payment of the $800,000 to the friend was a deposit on a racehorse that she had asked him to buy for her when he found the right animal.

22.  The point to be made was that the evidence of fund transfer was just what one would expect to find if the candidate had been seeking to bribe her way expeditiously to full membership, providing funds to the friend both to compensate him and to disburse to the man with the influence.

23.  The idea that in such circumstances an out-of-court denial of any wrongdoing by the candidate should require the prosecution to put that witness forward as a witness of truth or to tender her for cross-examination is, in our judgment, wholly misconceived. If the defence wanted to establish that the payment from the candidate’s account to that of the friend was unconnected with the application, then they were at liberty to call the candidate themselves. Such an assertion by the candidate would then properly have been the subject of cross-examination by the prosecution. The case would have maintained its proper shape if there was to be evidence addressing the point.

24.  There was nothing in the circumstances of this case which obliged the prosecution to do more in this regard than disclose to the defence the statements made by the candidate.

25.  Counsel for the applicant referred to three cases said to support this ground: R v. Russell Jones [1995] 3AllER 239; R v. Kneebone [1999] 47NSWLR 450 and Ziems v. The Prothonotory of the Supreme Court of New South Wales 919570 97CLR 279.

26.  Russell Jones contains a review of the duties of the prosecution. Nothing said in that case obliged the prosecution in this case to call or tender the candidate. First, because what she may have said was not direct evidence of the primary facts. The primary facts in the case concerned what took place between the applicant and the friend and not between the applicant and the candidate. The movement of the funds from her account was a collateral matter capable of lending support to establishing the primary facts. Secondly, no obligation arose to call or tender, because there was obviously a strong motive for the candidate to be less than frank which alone justified the prosecutor to refrain from taking a step that introduced such evidence in a way that deprived him of the opportunity to test it, especially when the assertion of parting with $800,000 against the purchase of an unascertained horse was clearly vulnerable to cross examination.

27.  The other two Australian cases were of no help to the applicant. Kneebone says no more than was said in Russell Jones and was a case where the potential witness did speak to primary facts. The discussion in Ziems in fact highlights the mischief of forcing a party to call a witness themselves when the justice of the matter required that party to cross examine the witness. That mischief applies equally to prosecution and defence.

28.  In speaking to Ground 2 counsel made complaint concerning an exchange that took place between the prosecutor and the judge. The exchange occurred in the context of argument concerning the editing of the records of interview. Defence counsel said that he assumed that neither the friend nor the candidate would be giving evidence. The judge asked the prosecutor to confirm that and he did. The judge asked if they had been arrested but not charged and would not be witnesses. The prosecutor confirmed it to be so, saying that he did not think consideration had been given to calling them.

29.  It was contended that this exchange, eliciting accurate factual information as to the state of affairs then existing concerning the witness position, poisoned the mind of the judge against the friend and the candidate. We asked rhetorically why should the fact that the judge knew that they had been arrested but not charged poison his mind against them? It is clear from the Reasons for Verdict that the judge was at pains to identify the admissible evidence and act on that and nothing more. We reject the suggestion that this information, received by the judge in the context of legal argument, had the suggested effect.

30.  It was asserted in argument in support of Ground 2 that the trial judge misapprehended the nature of the relationship between the friend and the candidate. It was said that this was illustrated by a series of questions that the trial judge asked of the defendant at the conclusion of his evidence. We have read the passage in the transcript. It demonstrates no misapprehension on the part of the trial judge.

31.  It was also said in support of Ground 2 that the failure to call or tender the friend or the candidate was the more colourable as the prosecution's case was based only on theory but not on evidence: for that reason, the prosecution should never have been brought. This assertion ignored the evidence that the applicant had admitted the solicitation and subsequent receipt of advantages in his interviews, that those admissions connected the solicitation to a question of what it was that the applicant then wanted at a time when he was putting forward the candidate at the behest of the friend. The assertion also ignored the drawing of inferences from such facts. The prosecution's case was not based on theory.

32.  There was nothing in Ground 2. The third ground of appeal complained that the trial judge speculated in his Reasons for Verdict. It was said that the speculation concerned the role of the friend and occurred at paragraph 94 of the Reasons, being an error compounded by the failure of the prosecution to put before the court the candidate’s explanation under caution as to the movement of funds from her to the friend.

33.  The trial judge specifically warned himself against speculation especially in relation to the absence of both the friend and the candidate from the witness box. Further, paragraph 94 of the Reasons contains no speculation: the first part of it merely relates facts established by the evidence, which led the trial judge to remark that it was plainly difficult to explain why the friend had assumed such a main role in the matter if he was merely and only an introducer as described by the applicant. He went on to reject an explanation given by the applicant as to why he copied correspondence in relation to the application from the club to the friend and not the candidate. He concluded that the description by the prosecution of the friend being the thread connecting the candidate to the applicant was an accurate one.

34.  The paragraph contained accurate fact and sensible analysis and no speculation. Not only that, the assertion that the candidate had put the friend in funds in order to buy a horse did not have an impact upon the matters dealt with in paragraph 94. The thrust of paragraph 94 concerned the friend being more than a mere introducer: the point would be available even if it were true that the candidate had put him in funds to buy a horse.

35.  There was nothing in Ground 3. Ground 4 complained that the trial judge failed to provide adequate reasons for rejecting the sworn testimony of the applicant.

36.  The trial judge between paragraphs 75 and 85 of his Reasons for Verdict dealt with the credibility of the applicant in full and sensible terms. The reasons there set out amply justify his rejection of the applicant's evidence. It is not necessary to set out all of those reasons again, not least because the very first one of them alone undermined the applicant.

37.  That first reason was a material discrepancy concerning what the applicant had said in his video recorded interviews concerning the role played by the friend in the candidate’s application. In the first interview the applicant said that he had known the candidate for a number of years and they were even business partners; that the candidate came to see him directly on her own; and that the friend was not involved at all. It was only in the fourth interview that the applicant revealed that the friend had introduced the candidate. This change followed immediately upon the ICAC interviewer revealing to him his knowledge of the fund flow situation and it was only after he was asked about the deposit of $250,000 cash into his bank account that he came to mention for the first time that this sum of money actually represented another loan from the friend.

38.  The trial judge set out in his Reasons the verbal contortions the applicant went through seeking to explain these matters. He also set out the evidence and matters which convincingly undid a proffered explanation on the basis that the applicant was affected by the consumption of alcohol at the time of the first interview.

39.  This court fully understands why the trial judge rejected the evidence of the applicant. The Reasons are persuasive. This case does not begin to approach a point where an appellate court would interfere with findings of fact made by a trial judge who saw and heard the witness.

40.  There was nothing in Ground 4. Ground 5 complained that the trial judge gave himself a flawed direction as to the good character of the applicant. The suggested flaw was that in giving the otherwise standard direction the trial judge omitted the words "in his favour".

41.  This ground of appeal was utterly devoid of any merit and should never have seen the light of day. How could the judge take into account good character, in relation to both credibility and propensity as he did, otherwise than in favour of the defendant?

42.  Ground 6 was not pursued and Ground 7 merely alleged that the convictions were unsafe and unsatisfactory and against the weight of the evidence. No new matter was identified in argument.

43.  In our judgment these convictions were amply supported by the evidence. The coincidence of the two strands of evidence and the rejection of the innocent explanation put forward left a prosecution case well able to support the convictions.