HKSAR v. YONG SENG CHEN and Another

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(APPELLATE JURISDICTION)

MAGISTRACY CRIMINAL APPEAL NO. 1165 OF 1997

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J U D G M E N T

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1. This is an appeal against conviction of the 1st Appellant for an offence of being engaged in bookmaking contrary to Section 7(1)(a) of the Gambling Ordinance Chapter 148 and against the conviction of the 2nd Appellant for an offence of assisting another person in bookmaking contrary to Section 7(1)(c) of that same Ordinance. The Defendants were jointly charged with the offence of bookmaking contrary to Section 7(1)(a), the statement of charge of particulars of the offence reading as follows:

"Yong Seng-chen and Liew Siew-cheong on the 16th day March 1997 at Flat E 36/F, Block I, Jubilee Garden, Shatin in Hong Kong did engage in bookmaking."

The date which appears in those particulars is of fundamental importance to this appeal.

2. 'Bookmaking' is defined in Section 2 of CAP 148 as "the soliciting, receiving, negotiating or settling of a bet by way of trade or business whether personally, or by letter, telephone, telegram or by any other means".

3. The prosecution's case as presented in its opening was as follows:

" At about 5 p.m. on Sunday 16th March 1997, ICAC officers attended at premises located at Flat E.... While outside the door of the premises the officers heard men inside the premises uttering phrases such as "yes, a total of three" and "number 4, number 7 $100.00". The officers attempted to gain entry to the premises but the door was slammed in their faces by the 1st Defendant and the premises were then forcibly entered. Upon entering the premises the 2nd Defendant was seen to rush to the bathroom with a large number of papers which he threw into a bucket of water and into a toilet which he then flushed. The ICAC officer who chased him into the bathroom saw that the paper was fast dissolving but nonetheless was able to see that the papers were about 3 inches square and had red and blue writing on them.

A search of the premises was then conducted. Four Malaysian men in all were found inside the premises including D1 and D2. During the course of the search, a number of items associated with bookmaking were found including among other things the following:

a) a number of portable telephones and pagers;

b) personal and laptop computers containing racing data;

c) a fax machine;

d) books and papers bearing lists of names;

e) dissolvable paper and

f) red and blue pens held together by rubber bands.

A bankbook belonging to the D1 was also located at the premises which book contained a large number of entries (withdrawals and deposits) on Mondays and Thursdays, the days following race days in Hong Kong. A video camera was used during the search to record items discovered and also to conduct interviews under caution with the four men at the premises.

Following the search and interviews, the two Defendants and the two other men who had also been arrested were taken to ICAC offices at the Garden Road Carpark Building. D1 was interviewed twice under caution and D2 was interviewed once. In his first interview, D1 said that he had been gambling and that he had been a middleman for bookmakers in Singapore collecting their bets and forwarding them to Macau. He said that water soluble paper had been used to record bets and had been destroyed in order to make sure that the occupants of the premises were not misconstrued as bookmakers. He said that the machine used for stamping out the details of cheques was only used to prepare cheques for such items as electricity and water bills.

D2 said in his interview that he had been betting at the time of the arrival of the ICAC officers and he denied that bookmaking activities were occurring at the premises. He said that he flushed away certain papers upon the arrival of the ICAC officers because he had been betting through a friend's account and he was worried that the practice was illegal in Hong Kong and the papers contained his betting records. He asserted that the equipment found at the premises such as the computers and telephones had been used merely for personal betting."

4. That then was the prosecution's case at the outset of the trial. The evidence against these two appellants was entirely circumstantial. The learned Magistrate was asked to convict both Appellants of the charge which they faced by drawing inferences from the evidence and most particularly from the exhibits that were found in the premises on the 16th March.

5. Given the precise wording of the charge, what the learned Magistrate was in effect required to infer was that on that particular day the 16th March, these two appellants were engaged in bookmaking. In this context, it should be said straightaway that an inference, albeit an overwhelming inference, that the premises in question were equipped or had been used for the purposes of bookmaking in the past would not be sufficient to support this charge. What was necessary was the inference, if indeed it could be drawn, that these two appellants were actually in the course of bookmaking on the 16th March.

6. That point is central to the appeal. Indeed the learned Magistrate was well aware of this as can be seen from his oral reasons of verdict delivered on the 21st November, during the course of which he said:

"I accept defence counsel's review of the legal position that I must find that on the 16th march 1997 when the ICAC raided the flat, that D1 and D2 were actually running the bookmaking business in order to find them guilty of the charge laid against them."

7. However, immediately after saying that he went on to say:

"I am, however, sure that the flat was occupied by the 1st Defendant for the main purpose of running a bookmaking operation from it on race days and upon other days when he could undertake some betting activities. I find as a fact that the 1st Defendant arranged the installation of all of the equipment to assist him in this operation. In addition, I find as a fact that the 1st Defendant set the whole operation up in such a manner as to be able to quickly destroy the betting records of his operation in the event of a raid and this arrangement was put into action when the ICAC officers entered the flat on that day."

8. In his subsequent very careful and reasoned Statement of Findings, the Magistrate said, inter alia,

"The prosecution tried to adduce into evidence telephone records for the telephone lines in the flat but this was objected to by the defence. I refused to allow such evidence to be admitted as I considered its probative value was greatly outweighed by prejudicial value to the defence. I bore in mind that the charge related to an "activity" on the day of the raid."

9. In that part of his Statement of Findings, which the learned Magistrate has headed Reasons for Decision, he deals individually with the many exhibits that had been presented to him during the course of evidence. He dealt specifically with a pen with a blue colour at one end and the red colour at the other and the fact that two pens had been taped together. He dealt with initials or names that appeared next to landline telephone numbers. He dealt with a sheet of paper Exhibit P3 upon which certain initials appeared. He noted that certain names which appeared on a landline telephone also appeared in a diary Exhibit 19. The learned Magistrate went on from there to say this:

"I could see no reason why a person would need to keep the bank account details of so many people in a diary together with the other exhibits unless that person was in the business of receiving and transferring money to them. And in this respect I noted that the 1st Defendant opted not to give any explanation of the diary which of course was his right but without such an explanation I was led to only one possible conclusion that these items taken as a whole with the other evidence were clearly connected with a bookmaking operation."

10. The learned Magistrate then said this:

"I was of the view that there was only one conclusion to be drawn from the 2nd Defendant's behaviour in attempting to destroy the records and that was that they contain extremely incriminating evidence which he had to try and destroy at all costs. I was unable to give any credence to the suggestion by D1 and D2 that the paper had contained innocent gambling tips and that the 2nd Defendant had gone to such extremes to destroy the tips because a friend had warned them of presumptions that would arise if they were found in possession of such information. I find that if the Defendants were such hardened punters as they would have the court believe then they would be well aware that most punters in Hong Kong kept records of their tips and betting information on documents without fear of prosecution and arrest."

11. He went on:

"I also found that there was only one reasonable explanation taking all the evidence together for the information contained in Exhibit P3 and Exhibit P18 being recorded on the piece of paper in blue and red and that was to record positive and negative positions in a betting slip. The mere fact that P18 was shown not to relate to the race day on 16th March and the fact that Exhibit P3 lacked some information did not change my findings that there was a bookmaking operation working on 16th March 1997, but rather confirmed my findings that the bookmaking operation had been operating for longer than that day."

12. Among many of his other findings the learned Magistrate found it-:

"inconceivable that the Defendants were innocently gambling when the ICAC officers raided the premises and I was satisfied beyond a reasonable doubt that the bookmaking operation was in progress when the ICAC officers entered the flat. The fact that there was only one call to the flat after the officers entered the premises and before the phones were switched off did not alter my view that bookmaking was in full operation at the time of the raid."

13. He then referred to a tele-bet account and he did so in this way:

"I also noted that the tele-bet account belonging to the 1st Defendant had only recorded 3 telephone transactions on the 16th March 1997 which appears to me to be extremely strange if the Defendants were such heavy punters as they alleged, and this left me in no doubt that the tele-bet account had been used that day for bookmaking purposes to cover bets that the bookmaking centre felt was too risky or where some form of insurance was required. I also noticed in this connection that the tele-bet account appeared to have a much larger usage later after the raid."

14. Towards the end of his Statement of Findings, the learned Magistrate said this:

"I found that the 1st Defendant's references to football related to part of his bookmaking business."

15. And then he proceeded to draw four inferences which he said were irresistible. The first inference that he drew was that the dissolvable paper destroyed at the time of the raid by the ICAC contained betting information which related directly to the bets of the customers who were placing bets with the 1st Appellant in his bookmaking operation on the 16th March.

16. The second inference which he drew was that the flat was occupied by the 1st Appellant for the main purpose of running a bookmaking operation from it on race days and upon other days when he could undertake some betting activities.

17. The third inference that he drew was that the 1st Appellant had set the whole operation up in such a manner as to be able to quickly destroy the betting records of his operation in the event of a raid.

18. And the fourth inference that he drew was that the 1st Appellant misjudged the time given to the 2nd Appellant to dispose of the betting record in the bathroom when he reopened the wooden door of the flat and this accounts for PW1's ability to catch the 2nd Appellant in the act of disposing of the betting records.

19. In presenting the appeal for the two appellants, Mr. Lok leading counsel put forward two general grounds of appeal. Firstly, that there was a complete lack of evidence before the Magistrate in relation to the activities of the four persons occupying the premises on the 16th March. The second general ground of appeal was that in convicting the appellants the learned Magistrate had erred in taking into consideration irrelevant matters. As to the first general ground, Mr. Lok argued that firstly none of the ICAC officers were able to give evidence as to what went on inside the premises before entry. The finding by the learned Magistrate that PW3 heard somebody say in the flat "number 4, number 7 $100,000.00, a total of three" was consistent with a part of conversation between four persons in the flat and could not be relied upon to indicate a telephone conversation with an outsider. Secondly, that having gain entry there was no evidence of any incoming telephone calls. Thirdly, that the alleged betting slip Exhibit P3 did not contain a date; that Exhibit P18 was conceded by the expert witness to be unrelated to the 16th March 1997 and that Exhibit P40 did not contain a date. Fourthly, the soluble papers as seen by PW1 dissolved and PW1 did not and could not give evidence as to what had been written on them. The blank soluble papers that were seized from the premises suggested that they were not used on the 16th March 1997. Fifthly, the Magistrate's other adverse findings with regard to the television set, the red and blue pens and the number of telephones might give rise to an inference with regard to the character of the premises, but they could not be relied on to show the activities that had taken place prior to the entry of the ICAC officers on 16th March. And sixthly, the learned Magistrate therefore erred in convicting the Appellants by relying on the character of the premises as a bookmaking centre without appreciating the complete lack of evidence in relation to the activities being pursued there on the 16th March.

20. As to the second general ground of appeal, Mr. Lok argued as follows:-

1) the finding relating to the tele-bet account was wholly irrelevant to the activities inside the premises on the 16th March.

2) the Magistrate's finding that "D1's references to football related to part of his bookmaking business" was wholly irrelevant, football was never part of the prosecution case. The references by the 1st Appellant to football in his interview under caution were incoherent and there was no evidence as to the date of any dealings in football.

3) the Magistrate's finding that "the bookmaking operation had been operating for longer than that day" gave a clear indication that he was relying on the character of the premises before the 16th March 1997.

21. The general thrust of Mr. Lok's argument, if I understood it correctly, can be summarised as follows. When the ICAC officers went to the premises they were not looking for a bookmaking operation, they were therefore ill-prepared for it and indeed were not trained for such an investigation. Had it been otherwise when they entered the premises, they would not have switched off all the telephones but would have allowed them to continue so that recordings could be made of those telephone calls. As a direct consequence all that the prosecution could rely upon to prove its case were the exhibits found within the premises, and those exhibits gave rise to no more than a purely circumstantial case. Also during the course of his argument Mr. Lok has laid great emphasis on the necessity for the prosecution to prove an activity, and specifically an activity relative to the Appellants being engaged in bookmaking on the 16th March and not merely to prove that the premises had the appearance of a bookmaking establishment or that they plainly had been used as such previously. And Mr. Lok says that the learned Magistrate in effect adopted the wrong approach when considering the evidence in this case.

22. Mr. Lok drew the analogy before me as indeed he did during the course of the trial before the Magistrate, of a person charged with selling liquor without a licence when the only evidence related to the premises and the fact that were suitable for that activity. He drew the further analogy concerning a charge of keeping or running a vice establishment where, during the course of a police raid exhibits common to such an establishment were found and seized but there was no direct evidence of any specific vice activity being carried on at the time of the raid. Mr. Lok says that what is required in either of those 2 examples for there to be a successful prosecution is that in the first example, there has to be evidence of somebody actually selling liquor without a licence and in the second example, there has to be direct evidence of a person keeping or being responsible for the vice establishment at the time that vice activities are being carried out and that it is simply is not sufficient to show the status of the premises. Evidence of activity is what is required.

23. To emphasise the fourth point that he makes in his first general ground of appeal, Mr. Lok says that the disposal of the soluble papers is analogous to a person being pursued by the police who throws 'white powder' into the harbour. Such a person could not be charged for an offence relative to dangerous drugs in respect of whatever it was that was thrown into the harbour unless it was recovered and was found to be dangerous drugs. In the present case the soluble papers were proved to be no more than that - soluble papers, not betting slips.

24. And if the soluble papers had indeed been proved by the prosecution to be betting slips, they would have had to have gone a stage further and proved that those betting slips related to activities on the 16th March. In relation to the sixth point of his first general ground of appeal, Mr. Lok argues that just because a particular activity might have been carried on over a number of days or weeks say from the 15th February to the 15th March it does not follow without specific evidence that the same activities are being carried on on the 16th March, and he argues that this is plainly the assumption that the Magistrate has made by reason of what he says in his Statement of Findings.

25. As I have said in relation to the second general ground of appeal, Mr. Lok has argued that the Magistrate's finding or assumption concerning the usage of the tele-bet account after the 16th March is wholly irrelevant to the particular charge of which the two Appellants were convicted. He has also argued that the learned Magistrate's references to football betting was not only irrelevant to the particular charge which the Appellants were facing but it was also fatal to the convictions of the Appellants'.

26. As to the four specific inferences which the learned Magistrate drew, Mr. Lok has argued that the first one was not based on any evidence at all, and indeed nor could it be, given that the paper was destroyed.

27. As to the second one this too, in so far as it relates to the running of a bookmaking operation on race days and upon other days is based upon no evidence whatsoever. It was pure surmise or speculation on the part of the learned Magistrate.

28. As to the third inference, Mr. Lok submits that such inference could not possibly arise because the betting slips were not written on dissolvable paper. As to the fourth inference drawn by the Magistrate, that too could not possibly be drawn. Again the learned Magistrate's finding was based on no more than suspicion, speculation and assumption.

29. In her response to Mr. Lok's submissions Miss Yang, Counsel for the Respondent, sought to argue that the learned Magistrate had looked at the evidence as a whole, not at the exhibits in isolation. That he had not merely considered the layout of the premises but had drawn inferences which could very properly be drawn from the evidence as a whole. She argued that the learned Magistrate very properly looked at the whole 'scenario' as she called it which included the fact that the 1st Appellant had closed the door to prevent the ICAC officers from entering; that there was equipment in the flat to facilitate bookkeeping; that the TV channel was switched on to racing; that the computer in the flat had a disk in it for racing on the 16th March; that there were numerous telephones in the flat; that there was a fax machine; that there was a struggle between the ICAC officers and the 2nd Appellant whilst the 2nd Appellant was trying to dispose of various items in the bucket of water.

30. The issue which the learned Magistrate had to resolve in this case was whether or not there was sufficient evidence to prove beyond a reasonable doubt that the 1st and 2nd Appellants were engaged in the activity of bookmaking on the 16th March 1997. The issue was not whether they or indeed any body else had been engaged in the activity of bookmaking on some other day. Had the charge been amended, or indeed had it been originally formulated, to allege bookmaking activities over a period of time (and particularly in relation to that period of time between the 1st Appellant taking occupation of the flat and the day of the raid by the ICAC officers) then, it also seems to me, many of the inferences drawn by the learned Magistrate which he was invited to draw by the prosecution could have been properly drawn. However, the charge was not so formulated and nor did the prosecution at trial seek to amend the particulars. The prosecution case then was nailed very firmly to the mast of the activities on the 16th March and on no other date. The activities of both Appellants' on the 16th March were suspicious in the extreme but of course suspicion is not enough. What was required was specific evidence of specific activities of bookmaking that had taken place on the 16th March or primary facts sufficient and directly relative to the 16th March from which proper inferences of the activity of bookmaking could be drawn. As to such inferences the point was not whether the Magistrate could draw them but whether the primary facts were such that they could not fairly admit of any other inference being drawn from them.

31. In my judgment, there was no direct evidence available to the learned Magistrate concerning the activities on the 16th March and nor was there evidence of primary facts from which the necessary inferences relative to the specific and unamended charge could be properly drawn. Accordingly, the appeal by the 1st and the 2nd Appellants must succeed and I set aside their convictions and quash the sentences of imprisonment and the fines which were imposed as I do the orders for costs.