HKSAR v. LIU WAI KOON AND ANOTHER

CACC 213/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 213 OF 2014

(ON APPEAL FROM DCCC NO. 1014 OF 2013)

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BETWEEN

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JUDGMENT

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1.  This is an application by Lam Man Shing (also known as Lam Wai Kuen), the 2^nd defendant in DCCC1014/2013, for bail pending appeal. He had been charged with one count of fraud to which he pleaded not guilty. He was convicted after trial and sentenced to imprisonment for 3 years.

Background 

2.  Briefly, Mr Suen (PW3) was the administrator of an estate which owned land in the New Territories.  He and his siblings were the beneficiaries.  For convenience only, he is referred to hereafter as “the Owner”. 

3.  Mr Wong (PW1) and Mr Ho (PW2) were interested in the land and acted through a corporate vehicle.  They approached the Applicant, an estate agent, with a view to acquiring the land.  For convenience, they are referred to hereafter as “the Purchasers”.

4.  There was a meeting where the sale and purchase of the land was discussed between the Purchasers, the Applicant, the 1^st defendant and a Mr Kong (referred to as Tit Gor).  It is common ground that the 1^st defendant was a friend of the Owner and had successfully assisted the Owner to acquire the title to the land.  The 1^st defendant produced a document signed by the Owner purportedly authorizing him (the 1^st defendant) to sell the land.

5.1   On 17 January 2011 the Purchasers signed a provisional sale and purchase agreement (“PSPA”) for the purchase of the land in the estate agency’s standard form.  At that stage the document was signed only by the 1^st defendant. 

5.2   It is common ground that the Applicant reminded the Purchasers that they should not pay any deposit money until the PSPA was signed by the Owner. This has been referred to as the “reminder”.

6.  The next day the PSPA, purporting to have been signed by the Owner, was shown to the Purchasers and the deposit money was then paid to the 1^st defendant at his request.  Completion was scheduled for April 2011.

7.  However the transaction was not completed.  Eventually the Purchasers entered into a settlement with the 1^st defendant pursuant to which the deposit was refunded to them, and compensation of $150,000 was paid.

8.  The prosecution case was that the Owner had never agreed to sell the land to the Purchasers at the price set out in the PSPA, that although the Owner had signed an authorization in favour of the 1^st defendant, that document did not contain an authorization for sale, and that the 1^st and 2^nd defendants knew of the above and were dishonest.

9.  The 1^st defendant gave evidence to say that his transactions with the Owner were conducted through Mr Kong, and that he (the 1^st defendant) trusted Mr Kong who gave him the document which contained an authorization for sale, and told him the Owner had agreed to the sale.  Mr Kong had died prior to the trial.

10.  The 2^nd defendant did not give evidence.

Verdict

11.  The judge accepted the Owner’s evidence that he had only told the 1^st defendant that he would sell the land if his siblings agreed and if the price was right, and that when he signed the authorization document, the authorization for sale had not been included. 

12.  The judge rejected the 1^st defendant’s evidence for reasons set out in the Reasons for Verdict which I will not repeat here. 

13.  The judge held that the 2^nd defendant must have known the Owner had not authorized the sale.  Even though the 2^nd defendant was an estate agent:

- he had not contacted the Owner regarding the sale;

- he had not asked the Owner to pay commission; and

- he had not witnessed the signing of the PSPA by the Owner.    

Appeal

14.  The Applicant’s main grounds of appeal are as follows:

- the judge failed to resolve the essential question, which was whether he could be sure that the 2^nd defendant was complicit in the fraud, when the 2^nd defendant had reminded the Purchasers not to pay the deposit money before the Owner had signed the PSPA;

- the 2^nd defendant had been denied a fair trial by the incompetence of trial counsel who, amongst other things, had not suggested various matters to the 1^st defendant and to the Owner which would  have been indicative of the 2^nd defendant’s innocence.     

Principles

15.  The principles governing the grant of bail pending appeal are well established.  The sentence here is three years and the Applicant has abandoned his application for leave to appeal against sentence.  The appeal will be heard well before then, so I need only consider whether there is a reasonable prospect of success in the appeal.   

16.  I have considered the submissions advanced by counsel for the Applicant and for the Respondent.  It seems to me at this stage that the judge has not adequately dealt with the “reminder” point, ie the fact that the 2^nd defendant had reminded the Purchasers not to part with their money before the Owner signed the PSPA.  One would normally expect a fraudster to be anxious that money should be paid over as soon as possible, rather than allow the Purchasers to have time to “sleep on it” and think about whether or not to proceed with the transaction.  The judge was aware of the point but discounted it, apparently without expressing reasons for doing so.  He said only: “the fact D2 told Mr Wong to wait until Mr Suen had signed the agreement before transferring funds for the deposit cheque does not cause me to doubt the findings I have made” (para 106).  

17.1   Further, the judge seems to have focussed on the fact that the 2^nd defendant had not contacted the Owner, nor asked for commission from him, nor witnessed his signature on the PSPA. 

17.2   However the PSPA on its face shows that the 2^nd defendant was only looking to the Purchasers for his commission. This suggests that the 2^nd defendant was only the Purchasers’ agent and not the Owner’s. This is supported by the Owner’s evidence saying that he did not know what the 2^nd defendant did. 

17.3   In those circumstances, it would not have been surprising to find that the 2^nd defendant relied on the 1^st defendant to contact the Owner and to witness his signature.  Indeed it would have been surprising if the 2^nd defendant were to have contacted the Owner direct. However I have to say as well that even at this point, it is not clear what the Applicant’s case is on this aspect.   

17.4   In any event, even if the 2^nd defendant was the agent of both the Owner and the Purchasers, in view of the Owner’s delegation of various acts to the 1^st defendant, the 2^nd defendant’s reliance on the 1^st defendant may be as consistent with carelessness as it is with guilt.  At least it is highly arguable that the 2^nd defendant’s involvement in the fraud was not the only irresistible and reasonable inference that could have been made on those facts.

18.1   Finally there is the point made by counsel for the respondent that the 2^nd defendant was aware in early December that the Owner was not interested in selling the land. 

18.2   However there was no evidence that the Owner had told the 2^nd defendant that he would never allow the land to be sold as a matter of principle. 

18.3   Indeed the Owner’s evidence was that he was prepared to sell the land if the price was right and if his siblings agreed.  Therefore it was not as if he was averse to a sale as a matter of principle.

18.4   The Owner had further admitted that the 2^nd defendant was not present when he told the 1^st defendant that he needed the consent of his siblings for a sale.   

18.5   Further, some time had passed between the intimation in early December and the 1^st defendant’s negotiations with the Purchasers, and people are of course entitled to change their minds, including the Owner.  This point is therefore not of much importance.  

19.  As I am prepared to grant bail on this ground, I do not need to consider the ground based on incompetence of counsel.  I would grant bail on the following conditions:

- $100,000 cash bail;

- the Applicant is to report to Sheung Shui Police Station every Tuesday and Friday between the hours of 6 and 9 pm;

- the Applicant is required not to leave Hong Kong;

- the Applicant must surrender all his travel documents.