HKSAR v. TAM KWAI KEUNG AND ANOTHER

CACC10/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO.10 OF 2001

(ON APPEAL FROM DCCC NO.755 OF 2000)

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J U D G M E N T

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Burrell J (giving the judgment of the Court) :

1. At the conclusion of the hearing of this appeal on 21 November 2001, the court reserved its decision in respect of the 1st applicant (A1) and, in respect of the 2nd applicant (A2) granted leave to appeal and allowed the appeal with written reasons to follow.

2. We now dismiss A1's application for leave to appeal his conviction. These are the courts reasons for dismissing A1's application and allowing A2's application.

3. On 22 December 2000 both A1 and A2 were convicted after a lengthy trial in the District Court before H.H. Judge Chua. They were convicted of nine charges of theft. Originally they faced 28 similar charges but prior to the conclusion of the prosecution case charges 1 to 19 were "left on the file" and the trial proceeded on charges 20 to 28.

4. The charges concerned the theft of a considerable volume of oil from Mobil between December 1998 and January 2000. The total value of the oil stolen exceeded $3.4 million. A2 was the managing director of Sun Ngai Oil Company (Sun Ngai) whose business included the selling of oil to motor vessels in Hong Kong. It purchased much of its oil from Mobil where A1 worked as a dispatcher. There was much evidence at trial about the system whereby oil was ordered, delivered, invoiced and paid for. The office system at Sun Ngai, the office system at Mobil, the computer system at Mobil and the security system at Mobil were all carefully examined at length and in great detail. For the purpose of this appeal and so as to explain how the thefts were committed this evidence need only be outlined briefly. The reason it is only necessary to give a brief summary is that at trial, objection was taken to the admissability of all computer documents that were generated from the Mobil office system. Without these documents the prosecution could not prove that a theft had occurred at all. The learned judge ruled the "computer evidence" to be admissable and found the thefts proved. The remaining issues were whether A1 and A2 were the thieves.

5. Ground one of A1's appeal challenged the ruling on the computer evidence's admissability. On 20 November 2000 Mr Jonathan Acton-Bond who appeared for A1 on appeal but not at trial, formally abandoned this ground. The consequence being that this court is no longer concerned with whether or not the prosecution had proved the fact of the thefts. The issues on appeal relate solely to the sufficiency and reliability of the evidence that A1 and A2 were the thieves. The computer evidence is still relevant but the issues are confined to the question of the weight to be attached to that evidence rather than its admissability.

AN HONEST TRANSACTION FOR THE PURCHASE OF OIL

6. In short, a consignment of oil would be honestly purchased by Sun Ngai from Mobil, in the following way. A Sun Ngai staff member would contact Mobil and place an order, quoting its account number. Mobil would give Sun Ngai a delivery order number. That number would be written on a requisition order form at Sun Ngai's office. That form would be taken by a barge captain to the Mobil pier to collect the oil. At the pier the form would be shown to the Mobil oil loader. The captain would then take it to the shipping office and present it to a "dispatcher" (of which A1 was one of four at Mobil). The dispatcher put all the details of the order into the computer system. A "loading order" was then produced. This was taken back to the pier which authorized the oil to be pumped onto the barge. After the loading the barge captain would return to the shipping office to present the signed loading order and a card which proved the oil has been loaded. The dispatcher then signs the loading order himself and produces a "delivery order receipt" which has three coloured copies, one of which, the pink one, is taken back by the captain to Sun Ngai's office. The system generates an invoice to Sun Ngai which it pays once the documentation is brought back to the office which proves to Sun Ngai that the oil was delivered.

A DISHONEST TRANSACTION

7. A delivery order number (which is given to Sun Ngai when the order is placed and put on the requisition order) can only be used once. It is an eight figure digit. Once oil is delivered on that number it should not be used again. If, at Mobil's office, an order is put into the computer system which has a number which has been used before the computer will immediately say so. If however, a dishonest dispatcher in the Mobil shipping room knew that a requisition order was being presented with a delivery order number that had been used before, it was possible to input the information manually so as to produce a loading order which would enable the barge to be filled with the oil ordered. Of course, it was not as simple as that. If a number was used twice the computer would generate an "error" message. Error messages were contained in a computer generated report which was produced daily. The dishonest dispatcher had to delete the relevant error message from the computer before the production of the daily report. Once that was done the double delivery on a single delivery number would only be revealed by a later text search done specifically for that purpose.

8. It was the prosecution's case that on nine occasions, by this method, large quantities of oil were delivered to Sun Ngai which were not invoiced for and therefore not paid for. It was the prosecution's case that A1 was a dishonest dispatcher at Mobil and A2 was the person at Sun Ngai who caused requisition order forms with previously used numbers to be used, knowing that A1, at Mobil would manipulate the system as described, so that Sun Ngai would get the oil without paying for it. Each of the nine dishonest transactions bore numbers for which there had been an honest transactions a few days or weeks earlier.

A1's APPEAL

9. It was firstly necessary for the prosecution to prove that A1 was present at the Mobil office when the second order arrived. They also had to prove that he was the knowing party to this dishonest scheme who caused the computers to generate the documents which enabled the theft to occur and that he ensured that the transaction did not appear on the "error" report.

10. Ten grounds of appeal have been advanced. Some can be grouped together and indeed were grouped together by Mr Acton-Bond so that it is, for the purpose of these reasons necessary only to consider five aspects of the evidence. Before turning to each of those five matters it is necessary to emphasise that the learned judge's conclusion that the prosecution had proved its case against A1was based on the cumulative effect of a considerable volume of evidence, much of which was circumstantial. It is true that on each charge, considered in isolation, the pieces of evidence which point to the defendants' guilt are different. On some charges there are more pieces of evidence than on others. Similarly, looking at each piece or category of evidence on its own, valid criticisms may be made of it which might reduce the amount of weight which could be safely attached to it. It is fair to say that no one piece or category of evidence would be sufficient to result in a safe conviction on any one charge. However the learned judge was perfectly entitled to, and did, consider the totality of the evidence in coming to her carefully considered verdict. Mr Acton-Bond took us through his carefully prepared and detailed schedules relating to each charge to demonstrate where evidence against A1 was lacking or where evidence which was relied on was deficient. What remained however, after his challenges to the case against A1 was an abundance of evidence which the learned judge was satisfied proved his guilt. She made findings of fact which we are satisfied were proper findings on the evidence before her. She was aware of the circumstantial nature of much of the evidence and was aware of the shortcomings in the individual pieces of evidence about which Mr Acton-Bond complains. It is not for this court to re-try the case. There are no exceptional circumstances in this case which requires this court to reverse the findings of fact made by the learned judge.

11. The five categories of evidence which require separate consideration which it is submitted by A1 should cause this court to conclude that the conviction was unsafe and satisfactory (Ground 11) are as follows.

1. The Mobil office computer system

12. The evidence revealed two common lapses in security by Mobil staff which would cause the information generated by the computer to not necessarily reflect the true situation. The first was that each dispatcher when he came on duty should use his own log-on name and password before using the computer on his shift. If adhered to faithfully at all times by all the staff then the production of the "user name" from the computer would prove that that person was using that computer at a particular time. The evidence revealed however that sometimes a dispatcher did not log off at the end of a shift so the next dispatcher simply carried on with the use of the computer without logging on himself. Thus evidence of a user name from a computer, on its own, was not proof that that person was using the computer at the material time.

13. The second lapse concerned door swipes. Mobil staff had swipe cards to gain access to computer rooms. The movement in and out of rooms by use of swipe cards was recorded on computer. The evidence however revealed that sometimes a door was left open and sometimes it was forced open without using a card. Thus, unauthorized people could be inside a room and the fact would not be recorded on the "door" computer.

14. The learned judge was alive to both these security lapses and took them into account. Where there was evidence of A1's presence at Mobil at a material time because of his use of his door swipe it was evidence that he was on duty. It was not evidence that he was alone. Also, there was not "door swipe" evidence that he was present for each and every charge. The learned judge simply, as part of the totality of evidence, gave weight to the fact of his presence at material times.

15. The learned judge was also aware that in some of the charges the user name at the material time was not that of A1 but was that of a different dispatcher. Where A1's name does appear as the user of the computer at the material time it was a piece of evidence to which she was entitled to attach some weight. Where a different name occurred the prosecution adduced evidence from different dispatchers who, by reference to a "duty roster" book gave evidence as to their whereabouts at the times their names appeared on the computers as the users. The reliance on the duty roster book is the second category of evidence about which complaint is made.

2. The Duty Roster Book

16. The duty roster book was a record of when members of staff were on and off duty. Those dispatchers whose names appeared on the computer as "users" when the dishonest transactions took place were allowed, when giving evidence, to refer to the duty roster book as an aide memoire to say if they were in fact on duty and present at Mobil at the material times. There were many instances when a witness testified that he was not on duty at the time. The duty roster was also used as an aide memoire to provide some evidence that A1 was on duty at material times. It was not claimed by the prosecution that the duty roster book was a flawless document. No criticism can be made however of its use at trial to the limited extent it was used. Moreover it provided further evidence for the learned judge to consider when assessing the overall picture. It provided some evidence (the weight of which was a matter for the judge) of A1's presence at material times and some evidence of the absence of others whose user names were on the computer at material times.

3. Evidence of A1's signatures or initials on incriminating documents

17. An important part of the prosecution case was the evidence from other dispatchers that A1 had signed various documents which related to the stolen consignments of oil. Mr Acton-Bond's primary contention was that no weight at all should be attached to this evidence because, with the exception of one witness (PW9), the witnesses did not specifically say they were familiar with A1's handwriting, only that they were familiar with him and had worked with him in the same job for many years. We find there to be no merit in this submission. The evidence of one witness identifying or recognizing another's signature or initialing of documents must be viewed with common sense and in context. In this particular office a small number of dispatchers had done the same job, signing or initialling the same types of documents which were very simple documents, over and over again for years prior thereto. Their familiarity with each other and with each others signatures, was in a working environment in which the signing of hundreds of documents was an integral part. Add to this the finding of the learned judge that the identifying witnesses were being honest and accurate when they gave their evidence, it is a tall order for Mr Acton-Bond to persuade this court that the learned judge was in error when she took into account the evidence that A1 had in many instances signed documents connected with the transactions at a time when he must have known they were dishonest. In short, if a witness such as a dispatcher in this case, says he recognizes A1's signature and he is found to be an honest witness, implicit in his answer is the fact of his familiarity with A1's signature. It should be noted also that the signature evidence was that A1's signature or initials appeared, in many instances on both the loading order and on the post delivery receipt. It was submitted by Mr Acton-Bond that only the signature on the loading order was of any significance. The judge recognized that the loading order signature was of greater significance. However the additional evidence of his signature on the post delivery receipt is still of some relevance. Like many pieces of evidence in this case standing alone it proves little but placed in context it plays its part in the cumulative effect.

18. At this stage, before moving on to consider the 4th and 5th categories of evidence which made up the whole picture upon which A1 was convicted, it is appropriate to summarize what evidence the learned judge did have before her, stemming from the three categories considered thus far. The learned judge in her reasons for verdict, after dealing thoroughly with all the preliminary matters such as the office procedures, the computers, the security and its shortcomings, the signature evidence and so on, went through each charge seriatim and set out the individual pieces of probative evidence on each charge and the inferences she drew therefrom. In none of the nine charges is there what one might call a complete set of pieces of evidence namely A1's user name at the material time, door swipe evidence of his presence and his signatures on both documents. However, every charge to a greater or lesser degree is supported by one or more such pieces of evidence. This picture has then to be considered together with the 4th and 5th categories of evidence which are discussed later.

19. Looked at globally her task was to attach such weight as she deemed proper to the following evidence.

(i) User name. In relation to each charge there would be evidence of two computer entries. One when the dishonest order was added and a second one when the actual loading of the oil was authorized. Potentially therefore there would be 18 entries. Evidence was adduced in relation to 16. Five were in A1's name (one each for five of nine charges). Six other user names appear. Five of those witnesses gave evidence either that the particular entry was not made by them or that it could not have been because they were not on duty at the time and not on the premises, according to the duty roster book.

(ii) Door swipe evidence. Regardless of its deficiencies this evidence did establish A1's presence at material times in six of the nine charges.

(iii) Signature evidence. In respect of the loading orders, six were produced (three were missing). Three witnesses testified as to A1's signature on three of them. As for the post delivery exhibits eight were produced. Four witnesses testified as to A1's signature on seven out of eight of the transactions.

4. Banking evidence

20. At trial the defence objected to evidence being adduced concerning large sums of money in three different accounts in A1's name. It was firstly submitted that it was not relevant and therefore not admissable. Secondly it was argued that it was more prejudicial than probative and so the judge should have exercised her discretion to exclude it. The judge's decision to admit it and attach weight to it cannot be faulted. She additionally weighed in the balance the fact that A1 gave no explanation for these large sums when asked about them by the investigating officer and further, elected not to give evidence in court which might have undermined or contradicted the inference which the prosecution invited the court to draw from it.

21. The evidence showed, in outline, that during the period of time covered by these offences (December 1998 to January 2000) A1 had three bank accounts. In February 2000 the balance in a US$ account was US$56,435. In a fixed deposit HK$ account the balance in February 2000 was over HK$1 million. In a HK$ savings account the balance in December 1998 was HK$460,000. Thereafter, in December 1998, February 1999, May 1999 and October 1999 sums of $168,000, $170,000, $160,000 and $170,000 respectively were deposited. A1's salary was $13,000 per month.

22. It was submitted that this evidence should have been ignored on the basis that there was no nexus between the payments and the thefts. Also prayed in aid by the appellant is the fact that the prosecutor at trial acknowledged that "we cannot dovetail" the payments. Presumably this meant that the dates of the large deposits did not immediately follow the thefts. We see no merit in this submission. We do not think that a pre-condition of admissability of this evidence in this case is evidence suggesting that a particular large sum of money directly related to a particular theft on a particular date.

23. The learned judge's evaluation of this evidence was far from being in error given that regular large sums were paid in during the period the thefts were committed. Moreover, his overall finances clearly called for an explanation from a man earning $13,000 a month. There was a wall of silence.

5. A1's letter in relation to charge 28

24. Although there is no specific ground of appeal in relation to this letter it nonetheless requires consideration on appeal because the general tenor of the appeal is that the individual pieces of circumstantial evidence are flawed whereas the respondent's response is that the totality of the evidence left the court below in no reasonable doubt of guilt. The "charge 28 letter" forms part of the overall picture.

25. On 23 February 2000 A1 sent a letter to Mobil in which he admitted that he was the person responsible for the fact that the consignment of oil, the subject of charge 28, was wrongly delivered to Sun Ngai by the method alleged by the prosecution. The letter also contained what purported to be an innocent explanation. He said "I found there was an error message appeared in the JDE (a computer) and verified this is a duplicated order. So I immediately deleted the error message without thinking the consequences." Taking the letter as a whole the learned judge regarded it as an admission that he had made the relevant computer entries but disbelieved his innocent explanation.

26. In her reasons for verdict she said :

" D1's letter to PW2 (Exhibit P15) amounts to a mixed statement and all of it constitutes evidence to be considered for the truth, R v Sharp [1988] 1 WLR 7. With regard to events giving rise to charge 28, he admits he did not check the JDE computer, and after loading he accessed the JDE computer and deleted the 'R' error message. He admits this was the wrong action for it would lead to no charge to the customer. He claimed he put the sticker on the wrong delivery note and put it in the tray of the line dispatcher to rectify matters. I disbelieve this. And also the reason he gave for not checking the JDE computer before authorising the delivery.

The point is, an honest dispatcher who processes the delivery on 23 January and who may not be alerted by not having checked the JDE computer, that a second order was manually input, say on 22 January, a different day, and having done so without question, he would not afterwards check the JDE computer. Moreover, even if he had, and seen the 'R' error message, he would not have deleted it.

In the absence of evidence from D1, I infer he had deliberately accessed the JDE computer, as he had done on the eight previous occasions to delete the 'R' error message to cover his tracks, and so also that no invoice would be sent to his partner in crime."

27. Her use of this compelling evidence on charge 28 in her consideration of the eight previous charge is perfectly proper.

28. Finally, on the morning of the appeal Mr Acton-Bond filed two further grounds of appeal (Grounds 10 and 11). There was no objection.

GROUND 10

29. This ground is that the learned judge failed to remind herself as to A1's previous good character, in particular when considering his credibility as to the contents of his letter referred to above. It is correct that no specific mention of A1's good character is made in the reasons for verdict. His good character was one of the agreed facts. It is not incumbent on a judge giving written reasons for a verdict to specifically mention each and every legal direction by use of the formula "I reminded myself that ..." It is safe, in the circumstances of this case, to assume that a professional judge of considerable experience neither forgot about A1's good character nor failed to take it into account in the appropriate way.

30. Nothing new arises out of Ground 11 which is that the conviction was unsafe and unsatisfactory in all the circumstances.

31. For all the above reasons we dismiss A1's appeal.

THE COURT'S REASON FOR ALLOWING A2'S APPEAL

32. All parties to this appeal agreed that there was no overlap between the grounds of A1's appeal and the grounds of A2's appeal. They concern wholly different issues and merit different considerations.

33. A2 was the "boss" of Sun Ngai. It was the prosecution's case that someone at Sun Ngai must have been A1's accomplice. Orders with duplicated order numbers could only have emanated from Sun Ngai's office deliberately. Any suspicion that might have fallen on the barge captain was dispelled by the fact that in all but one case, the pink slips acknowledging receipt of the stolen oil was returned to the Sun Ngai office. A dishonest barge captain would not do this. The evidence of Sun Ngai's system for recording the ordering delivery and payment of consignments of oil showed that the stolen oil was ordered from Sun Ngai's office but after delivery it was neither invoiced nor paid for. The prosecution's case that A2 was A1's accomplice was based solely on circumstantial evidence. The learned judge's reasons for convicting A2 were brief and were as follows :

" Case against D2

It is formally admitted D2 is the secretary and director of Sun Ngai Oil Limited and he owned 5,000 shares. From the common registered home address provided in his company's annual return for 1999, it is possible the other director and shareholder, Madam Fan Mui-chi, is D1's wife or someone closely related to him. Be that as it may, PW20 called him the boss, who took over the reins of the company after the death of his father.

The evidence also established D2 knew D1, who has phoned the office asking for him by his nickname. I find the partial (charge 20) and total omission of entries relating to the oil deliveries pertaining to charges 21 to 28 in the Mobil order record book, were both deliberate and dishonest.

In the absence of evidence from D2, I infer the thefts were planned and executed by D1 and D2 together, so both could profit financially. I infer D1 would inform D2 of the delivery order number he used and D2 would issue the requisition order or inform the barge captain of the delivery order number.

While the failure of a defendant to give evidence can never be evidence of his guilt, the consequence of this election is to leave the prosecution's case uncontradicted by the evidence."

34. Mr D Marash SC who appeared for A2 both at trial and on appeal submits firstly that the evidence adduced at trial implicating A2 was insufficient to support a conviction and secondly that the reasons given for the conviction were inadequate and flawed.

SUFFICIENCY OF EVIDENCE?

35. The prosecution relied on certain admitted facts and the evidence of one witness, PW20, a former clerk at Sun Ngai's office. She gave evidence at length and we have considered it. In short, we agree with the criticisms that are made of her testimony. She did not advance the prosecution case. The learned judge did not say that she believed her or relied on her evidence. Her evidence did not connect A2 with any of the documentation which proved the thefts. In fact, it went the other way, it distanced him from the documentation. Moreover there were at least two other members of staff who were more directly involved with the paper work. The respondent on appeal did not attempt to submit otherwise in respect of any of the above criticisms.

36. It is accepted of course that being the sole person in charge of a small company which would benefit substantially from these thefts creates a very heavy cloud of suspicion. In addition, there was some evidence that A2 knew A1, through work, having met him at a spring dinner hosted by Sun Ngai for Mobil staff. This adds to the suspicion. However, we are persuaded that the totality of the circumstantial evidence against A2 falls short of the necessary standard of proof and for that reason have come to the conclusion that the conviction of A2 was unsafe.

SUFFICIENCY OF REASONS?

37. We have concluded also that there is merit in Mr Marash's submission that insufficient reasons have been given for the finding of guilt. In a 20 page written reason for verdicts the learned judge carefully and correctly set out the evidence of how the thefts were committed, A1's role and separate analysis of the evidence on each charge against A1. It is acknowledged that the reasons relating to A2 would naturally, bearing in mind the nature of the prosecution's case against him, be shorter than for A1. However, the totality of the reasons, which have been set out above, do not reveal a sufficiency of primary facts from which an inference of guilt should properly be drawn. Unfortunately also the reasons contain a factual error. The respondent conceded that the sentence - "The evidence also established D2 knew D1, who has phoned the office asking for him by his nickname" was erroneous. There was no such evidence.

38. We have no doubt that the learned judge, who had seen and heard the witnesses herself, after a long trial considered all the relevant issues. However, it is not clear to this court, from the written reasons, the evidential basis from which guilt has been inferred. For this reason we consider the verdict unsatisfactory as well as being unsafe.

39. A2's appeal was therefore allowed with costs to be taxed if not agreed.