HKSAR v. LAM BING YU

CACC 81/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. CACC 81 of 2000

(On Appeal from HCCC No. 157 of 1999)

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J U D G M E N T

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Hon Woo JA:

1. This is the judgment of the Court.

2. This is an application for leave to appeal against conviction.

3. The applicant was indicted and tried before the Court of First Instance for four offences, namely,

(1) furnishing false information, contrary to s 19(1)(b) of the Theft Ordinance, Cap 210 in that on or about 29 September 1997, in Hong Kong, together with ZHU Zhongqi and ZHANG Xiujie, dishonestly with a view to gain for himself or another or with intent to cause loss to another, in furnishing information to BCA Finance Limited ("BCA") for the purpose of negotiating a draft drawn under Letter of Credit number L/C51F0161/97 issued by the Bank of China, Zibo branch, China produced to BCA a document made or required for an accounting purpose, namely a Bill of Lading dated 27 September 1997 which to his knowledge was misleading, false or deceptive in a material particular in that it purported to show that on 27 September 1997, a quantity of aluminium ingots had been loaded on board a vessel named Jin Feng in Hong Kong;

(2) procuring the making of an entry in a record of a bank by deception, contrary to section 18D of the Theft Ordinance in that on or about 15 October 1997, in Hong Kong, together with ZHU Zhongqi and ZHANG Xiujie, dishonestly with a view to gain for himself or another or with intent to cause loss to another, procured the making of an entry in a record of BCA, namely a credit entry of US$1,421,458.72 held to the order of Frank International Limited with BCA by deception, by falsely representing to BCA that the information contained in documents submitted to BCA in order to obtain payment on a draft drawn under Letter of Credit number L/C51F0161/97 issued by the Bank of China, Zibo branch, China, were true and genuine documents, that the goods referred to therein, being the subject of the said Letter of Credit had been shipped in accordance with the terms thereof and that BCA thereby owed a debt in the sum of US$1,421,458.72 to the said Frank International Limited;

(3) furnishing false information, contrary to s 19(1)(b) of the Theft Ordinance, in that on or about 28 November 1997, in Hong Kong, together with ZHU Zhongqi and ZHANG Xiujie, dishonestly with a view to gain for himself or another or with intent to cause loss to another, in furnishing information to Nedcor Asia Limited ("Nedcor") for the purpose of negotiating a draft drawn under Letter of Credit number L/C51F0201/97 issued by the Bank of China, Zibo branch, China produced to Nedcor a document made or required for an accounting purpose, namely a Bill of Lading dated 27 November 1997 which to his knowledge was misleading, false or deceptive in a material particular in that it purported to show that on 27 November 1997, a quantity of VRD Catalyst ICR 126L had been loaded on board a vessel named Xing Hai in Hong Kong; and

(4) procuring the making of an entry in a record of a bank by deception, contrary to section 18D of the Theft Ordinance in that on or about 28 November 1997, in Hong Kong, together with ZHU Zhongqi and ZHANG Xiujie, dishonestly with a view to gain for himself or another or with intent to cause loss to another, procured the making of an entry in a record of Nedcor, namely a credit entry of US$1,490,962.50 held to the order of Hilco Limited with Nedcor by deception, by falsely representing to Nedcor that the information contained in documents submitted to Nedcor in order to obtain payment on a draft drawn under Letter of Credit number L/C51F0201/97 issued by the Bank of China, Zibo branch, China, were true and genuine documents, that the goods referred to therein, being the subject of the said Letter of Credit had been shipped in accordance with the terms thereof and that Nedcor thereby owed a debt in the sum of US$1,490,962.50 to the said Hilco Limited.

4. The applicant pleaded not guilty and the trial took place before Beeson J with a jury. The jury returned a verdict of guilty on all of the four counts and the Judge sentenced the applicant to a total of 3 1/2 years' imprisonment. The applicant applies for leave to appeal against the convictions.

5. The facts of the case showing the offences under all of the four counts had taken place were admitted by the applicant and the prosecution in the court below in two sets of very detailed Admitted Facts, save that there was no admission as to the only issue that the jury had to decide, namely, whether the applicant or anyone else was the person who committed the offences.

6. The Admitted Facts can be summarised as follows. There were two letters of credit involved, one was L/C51F0161/97 referred to in counts (1) and (2), and the other was L/C51F0201/97 referred to in counts (3) and (4). The applicant was a 50% shareholder and director of Frank International Limited ("Frank"), Hilco Limited ("Hilco") and Sinoble International Ltd ("Sinoble"). The applicant's wife was a 50% shareholder and director of Topwise International Shipping Ltd ("Topwise"). All these companies were at the time of the applicant's arrest by the police on 21 January 1999 operated from Room 602 Mirror Tower, 61 Mody Road, Tsimshatsui, Kowloon.

7. On 29 September 1997, Frank submitted L/C51F0161/97 together with the required documents and a covering letter to BCA for discounting. The documents submitted included a bill of lading signed by Topwise as agent and endorsed by Frank for the shipment of 957 bundles of Prime Quality Aluminium Ingots shipped from Hong Kong to Shekou China on 27 September 1997 by vessel Jin Feng. These goods had not been shipped and the bill of lading was false. Through BCA, L/C51F0161/97 was discounted and the net proceeds (after the deduction of interest and charges) in the sum of HK$10,994,984.76 (equivalent to US$1,421,458.92) were directed by a document issued by Frank signed by the applicant to be paid into Frank's account. These facts showed the bogus transactions underlying counts (1) and (2).

8. Relating to counts (3) and (4), on 28 November 1997, Hilco submitted L/C51F0201/97 with the required documents to Nedcor for discounting. The documents submitted included a bill of lading signed by Topwise as agent and endorsed by Hilco for the shipment of 108,750 lbs of VRD Catalyst ICR 126L from Hong Kong to Shantou China on 27 September 1997 by vessel Xing Hai. These goods had not been shipped and the bill of lading was false. Through Nedcor, L/C51F0201/97 was discounted and the net proceeds (after the deduction of interest and charges) in the sum of US$1,432,257.19 were directed by a document issued by Hilco signed by the applicant to be paid into three accounts of Sinoble. These were the underlying bogus transactions in respect of counts (3) and (4).

9. Now we turn to the matters in issue in the court below and before us. The police raided the applicant's Mody Road office on 21 January 1999 and arrested the applicant. At 12:20 pm of that day, inside that office, Sgt 17239 inquired of the applicant about the two letters of credit ("L/Cs"). Under caution, the applicant said: "The documents for the aforesaid two transactions involving Letters of Credit are false. The goods and names of shipping companies listed in the Bill of Lading were also fabricated. All the information was made by subordinates as required by me." This was exhibit P181 before the court below.

10. On the same day, between 20:41 and 21:38 hours, Sgt 17239 with WPC 56143 had a video-recorded interview with the applicant, in which the applicant admitted the falsehood of the documents including the bills of lading submitted for discounting the subject two L/Cs. He provided the names of ZHU Zhongqi and ZHANG Xiujie who were instrumental in causing the L/Cs to be opened by the Bank of China, Zibo branch. He also gave details as how the bogus transactions were employed for financing ZHANG Xiujie and how much profit he obtained for making the arrangements including fabricating and submitting false documents including the bills of lading for discounting the L/Cs. The video-tape recording of this 1st video-interview was exhibit P185 in the court below, and the certified Chinese and English transcripts of the contents of the tape were respectively exhibit P185(a) and exhibit P185(b). We simply refer to the record of this interview as exhibit P185 below.

11. On 22 January 1999, between 19:26 and 20:34 hours, the 2nd video-interview took place between the same persons, in which the applicant provided further information as to how the proceeds of the subject two L/Cs obtained by the use of the false documents had been employed, and more particularly about the parts played by ZHU Zhongqi and ZHANG Xiujie in the transactions. The videotape recording of this 2nd video-interview was exhibit P206, and the certified Chinese and English transcripts of the contents of the tape were respectively exhibit P206(a) and exhibit P206(b). We simply refer to the record of this interview as exhibit P206 below.

12. Two grounds of appeal are raised before us. The 1st ground is that the Judge was wrong in ruling admissible the aforesaid three exhibits, P181, P185 and P206 at the conclusion of a 5-day voir dire in that she had failed properly to apply the onus and standard of proof. The 2nd ground is that the Judge erred in failing to exercise her discretion to withdraw the exhibits from the consideration of the jury, or direct the jury to acquit, or discharge the jury and order a retrial, because "significant discrepancies" had emerged between the evidence of the principal police witnesses given in the voir dire and the trial proper.

13. Out of the 15-page skeleton arguments of Mr Egan and Mr Pierce, seven pages are devoted generally to the law relating to the admissibility of confessional statements. The only assistance that can be derived from the well-established authorities referred to are the following principles of the law, namely, that a confessional statement of a defendant is not to be admitted into evidence if the prosecution fail to prove to the satisfaction of the judge beyond a reasonable doubt that the statement was made voluntarily, and that the judge has a residual discretion to exclude a statement if its admission would make the trial unfair to the defendant. Further, after the admission of a statement at the conclusion of a hearing on the special issue, if there is cause for doubting the correctness of the decision of admitting the statement during the trial on the general issue, the judge has a discretion to exclude the statement from the consideration of the jury, or if the statement amounts to the only evidence proving the guilt of the defendant, the judge can properly direct the jury to acquit or discharge the jury and order a retrial. We accept these well-established principles as representing the law.

14. Regarding how the trial Judge erred and the alleged discrepancies in the evidence of the main police witnesses, the skeleton arguments are singularly unhelpful. Various pages and parts of the transcript of the trial are listed on the best part of eight pages of the skeleton, but without making clear how these references support the grounds of appeal. In our view, the skeleton arguments do not give assistance to the Court as they are supposed to.

15. After hearing the submissions of Mr Egan, we are not satisfied that he has made out anything in support of the two grounds of appeal. Indeed, the Judge was very careful in dealing with the subject of the three exhibits containing admissions of the applicant. She made it clear to the jury that the prosecution contended that even without the exhibits, the evidence was strong enough for them to convict the defendant beyond a reasonable doubt because it was common ground that the documents submitted for discounting the two L/Cs were false, that the proceeds of the L/Cs had been dealt with by the applicant through directions to the banks contained in documents signed by the applicant and that the applicant or his companies had benefited from the proceeds of the transactions. The three exhibits only served to make it even clearer that the applicant was knowingly responsible for the preparation and the submission of the false documents. On the other hand, the defence contended that without the exhibits, the common grounds of the false documentation as well as the fact that it was admitted by the defence that the applicant signed documents to deal with the proceeds from the two L/Cs was insufficient to prove the guilt of the applicant in respect of the four counts of offences that had taken place much earlier than his disposal of the proceeds.

16. The Judge also told the jury that "there are significant challenges to the police evidence in relation to the admissions allegedly made by the accused", and she reminded the jury that the Admitted Facts did not contain any admission in any way that pointed to the fact that the applicant was guilty of the charges. Then the Judge went on to deal with the contentions of the defence in no less than 15 pages of the transcript of her summing up, including the following aspects:

(a) the defence case that the applicant was the victim of a deliberate conspiracy by the police to frame him, by inducing or pressuring him into admitting something that he had not done, to sacrifice himself for or in order to protect his staff, his fellow directors and his wife, and to protect his business from being forced to collapse through lack of leadership or direction;

(b) the defence case that the verbal admissions in exhibit P181 were never made and the applicant was forced to write the admission in the Sergeant's notebook at the Sergeant's dictation;

(c) the video-interviews, recorded in exhibits P185 and P206, took place only after an extensive rehearsal had proceeded each one of them, and the applicant had been told by the police what he should say about the transactions;

(d) the defence criticism of Sgt 17239's failure to record the oral admission in exhibit P181 and the fact of the arrest of the applicant in his notebook, at or near the time those events occurred;

(e) the extensive cross-examination of the police witnesses about breaches of the police procedure which suggested, indicated or pointed to a deliberate framing of the applicant;

(f) the point made for the applicant that it was the duty of the police officers to obey Police General Orders and also to record significant events in their police notebooks and that failure to make such records would subject the officer to disciplinary measures;

(g) the fact that the Sergeant failed to record events in his notebooks;

(h) the fact that the 1st video-interview took place a long period after the applicant's arrival at the Commercial Crime Bureau, and after a lapse of two more hours since the interview room had been made available;

(i) the point made by the defence that in the admissions whenever the applicant implicated himself about signatures on the false documents, he in each case excused his employees signing the documents by saying that that was done at his direction;

(j) the applicant was recorded to have used on one occasion a "police jargon" in his statements;

(k) the defence criticism that WPC 46143, the exhibits officer and timekeeper who was with Sgt 17239 when he took the oral cautioned admission contained in exhibit P181 from the application, failed to record in her own notebook the admission and failed to ensure that the Sergeant recorded that in his notebook;

(l) the defence accusation that WPC 46143 assisted the Sergeant in rehearsing the applicant and that she was a party to the framing of the applicant;

(m) the defence suggestion that the Sergeant and the WPC delayed in having the 1st video-interview with the applicant so as to have a detailed rehearsal with the applicant in preparation for the video-recording;

(n) the defence contention that PC50977, who gave evidence that he was guarding the applicant from about 16:30 hours to 20:32 hours on 21 January 1999 before the Sergeant took the applicant for the 1st interview; but he had not made an entry into his police notebook about this guarding duty; and

(o) the defence criticism of Senior Inspector SIU Wai-sing who was present at the office of the applicant when he made the admission in exhibit P181 did not mention the admission in his examination-in-chief.

Though the applicant testified in the voir dire, he did not give evidence in the trial proper, so that as to these accusations made on his behalf against the police officers in taking his confessional statements, he offered no evidence in support before the jury.

The complaints enumerated above are the same as those raised before this Court under both of the grounds of appeal. Mr Egan accepts that the complaints and all the points he tried to elaborate before us had been addressed before the Judge and the jury in the court below. Having examined the Judge's summing up closely, we must say that her directions to the jury on the admissions contained in the exhibits were both correct and fair, or more than fair. What she told them included the following passages in the summing up:

"... the defence contends that the admissions are improperly obtained by the police and are untrue. In deciding whether you can safely rely on this evidence, you have to decide two issues: first of all, did the accused (the applicant) make the verbal admission? If you are not sure that he did make it in the manner that the Sergeant told us, and in the manner that the WPC confirmed, you should ignore it.

If you are sure that he made the verbal admission then you go on to consider the answer to a second question. Now, in respect of the written admission, you do not know that the accused actually wrote those words in the notebook, and you have also seen the video interview showing Mr LAM (the applicant) making various admissions. So in respect of those items, you do not have to ask the question whether the accused did make the admissions, because physically he did make them.

However, for all the items, the oral admission, the written admission, and the video interviews, you have to go on and ask the second question: are you sure that the admission and the contents of the videos is true? When deciding that you have to pay careful attention to all the circumstances in which you find the admission was, or may have been, made. And consider whether there were, or may have been, any circumstances which might case doubt on or cause you to have doubts about the reliability of those admissions.

In answering the second question whether or not the admissions or answers are true, decide whether they were or may have been made, or given, as a result of oppressive or improper conduct, or circumstances such as have been suggested by the defence. And quite clearly, if the police behaved in the way that is suggested by the defence, that would be improper behaviour. There is no question of that.

If the defence allegations are correct or may be correct, and that Mr LAM was framed and forced to sacrifice himself for his staff, or his fellow directors and wife, you may think it unsafe to rely on any of that evidence. It is for you to assess what weight should be given to the admissions, and if, for whatever reason, you are not sure that the admissions are true, you must disregard them. If, on the other hand, you are sure that they are true, you may rely on them, and you may then look at them in the context of the documents as well.

So you should look particularly carefully at the evidence of the two police officers who were present at Mirror Tower and were instrumental in the obtaining of the admission. ..."

17. After going through some of the allegations made by the defence on Sgt 17239, the Judge continued:

"However, in considering the evidence given by the Sergeant about the admission and interviews, you should carefully consider the matters put forward by defence counsel as to the manner of obtaining the admissions and interviews. If the evidence given by the Sergeant, particularly in relation to the defence counsel's suggestions, puts a doubt in your mind as to how the admissions in the video interviews were obtained, you may find that you cannot be satisfied about the truth of those admissions. If that is the case, you would not be able to be sure about Mr LAM's guilt and it would be your duty as jurors to acquit.

...

In deciding whether the Sergeant has told you the truth and whether it may be the case that the accused was framed and forced to admit doing things he had not done, look at all the circumstances, including the fact that the Sergeant failed to record events in his notebook. But if at the end you are sure that the admissions were made and that they are true, you are not entitled to ignore them just because they were not recorded in the notebook.

... But bear in mind that you have to be satisfied on this officer's (Sgt 17239) evidence that events occurred as he said they did in relation to the oral admission and to the written admission because he is the main witness on these points and if you are not satisfied on his evidence, the admission could not be accepted. ..."

18. The Judge then dealt with the evidence of PW4, WPC 56143, together with the defence criticism of this witness in her summing up. She went on:

"... your view of PW4's credibility is important and you should take all matters into account when looking at her credibility. ... If you find her a credible witness and you can accept her explanation, you can then go on to consider whether or not the admissions are true, otherwise if you find that what the defence has suggested is true or may be true, you would have a doubt about the truth of the admission and would acquit the accused."

19. The Judge also dealt with the defence criticism of PC50977 and Senior Inspector SIU Wai-sing. She then said to the jury:

"Now, only if you decide that the statements were made in the way the police have said they were made can you then go on and consider whether or not the contents of the video interviews and the content of the oral admission and the written admission in the notebook were true and correct. ...

...

Now, various suggestions of various police impropriety have been made on the accused's behalf. I would remind you that there has been no evidence on those matters and the suggestions that were made to them were not agreed by the police officers or adopted by them. Nevertheless, if having considered those suggestions and the manner in which the witnesses responded to them, you have doubts about the prosecution evidence on any material matter, or if you think that they are, or might be, true suggestions, then the defence has succeeded in casting doubt on the prosecution case so that you cannot be sure of Mr LAM's guilt, and in that case you must give him the benefit and acquit him. Unless the prosecution has made you sure of his guilt in respect of the charges, you must return a not guilty verdict."

20. Indeed, in the following passage close to the end of the summing up, the Judge was unduly favourable to the applicant. She said:

"If, looking at the documents you are unable to draw the inferences that I have suggested you can draw, in other words, that because of his position he (the applicant) must have been the person who dealt with these matters and he benefited from these matters, and that therefore he is the person who bears the responsibility for these matters, and that he knowingly deceived the companies; unless you can be satisfied of that on the documents, you cannot be satisfied that there is an irresistible inference that the accused is guilty as charged; you would then go on and look at the question of the admissions that were made. And as I have said, you have to be satisfied first of all, before you can consider anything related to the truth of them, you have to be certain that those documents were made in the manner that the police told you that they were made."

21. From all these cited portions of the summing up, it is plain that the Judge fully appreciated the onus and standard of proof that laid fairly and squarely on the prosecution relating to the confessions made by the applicant. She could not have made any mistake in that regard as counsel for the applicant wishes us to believe. The 1st ground of appeal has no substance whatsoever.

Having ruled admissible the cautioned oral statement in exhibit P181 and the two video-interviews in exhibits P185 and P206 at the conclusion of the voir dire, the Judge rejected the defence submission made at the trial proper to exclude them from the jury's consideration. Notwithstanding, she did leave the questions about the reliability of the admissions and whether their contents were true to the jury in a very fair manner. We are not persuaded that the Judge was wrong in allowing the three exhibits to be put before the jury or erred in anyway not to accede to the defence request of withdrawing the exhibits from the consideration of the jury. She properly left the exhibits for the jury to decide as to their reliability and the truthfulness of their contents, with proper and fair directions. There is no merit in the 2nd ground of appeal either.

22. In the circumstances, the application must be dismissed.