R. v. WONG YUEN FAI

IN THE COURT OF APPEAL

1995, No. 706
(Criminal)

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J U D G M E N T

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Ching, J.A. (giving the judgment of the Court) :

1. The applicant was the first Defendant in the Court below. He was charged and convicted of having conspired with the second Defendant, Yiu Kwok-on, between the first and fourth days of March, 1993, to defraud Maxgold Textiles Co. and Sky Wealth Ltd. There was no allegation of conspiracy with anyone else. Yiu Kwok-on was acquitted. The applicant now seeks leave to appeal against conviction.

2. Maxgold and Sky Wealth share the same premises, staff, telephone and fax machine. They both dealt in purchasing textiles from China and selling them on. Maxgold was a sole proprietorship of Ms. Luk Yuet-wah who was the owner of 40% of the issued share capital of Sky Wealth although she was never registered as such. The other shareholders were Mr. Ip Man-sau and his mother, the latter of which held only one share. Although Ms. Luk was not a director it was she and Mr. Ip who ran the affairs of Sky Wealth. Although he held no interest in Maxgold, the evidence was that Mr. Ip would look after its affairs in the absence of Ms. Luk. One of the customers of Maxgold and Sky Wealth was National Manufacturing (Pte) Ltd., which acted as the agent of Unimax Manufacturing (Pte) Ltd., both of which were companies in Singapore. There was uncontradicted evidence that Maxgold and Sky Wealth would deal with Unimax only through National and that it was Maxgold or Sky Wealth who paid the commission of the latter.

3. There was some dissension as to whether the Applicant was an employee of Maxgold or of Sky Wealth. It suffices to say that in the circumstances of this case the dispute is of no importance, for the guilt or innocence of the Applicant does not, or does not necessarily, depend upon his exact relationship with either company. The Applicant is content to proceed on the basis that he was employed by Maxgold but that part of his duties was to help in Sky Wealth. He is described as having been a goods attendant. His duties included locating samples for customers and sourcing supplies, the preparation of purchase orders, the monitoring of production, the checking of the quality of goods produced and the transportation of goods from China to Hong Kong. He was not involved in sending goods to customers abroad because the documents would be in English and his command of the language was insufficient. There was evidence that he had been told that he must not divulge to competitors details of the types of goods requested by clients, the source of supply and prices. There was clear evidence that he was not permitted to quote prices to customers abroad. Indeed, since those quotations were to be in English he could not do so. Each quotation had to be decided upon by either or both of Ms. Luk and Mr. Ip. They would bear the chop of the company and would be signed by either one of them although sometimes the signature would be omitted. Each quotation had a file number and all documents relevant to the transaction should have been kept in the file.

4. Mr. Michael Then of National was the person who would deal with purchases for Unimax. On 1st March, 1993, in his absence from Singapore, Mr. Philip Tang of Unimax telephoned the offices of Maxgold and Sky Wealth for a quotation for a supply of dyed cloth for a client in Tahiti. He spoke to a person identifying himself as Mr. Wong. There is no doubt that that Mr. Wong was the Applicant. It is clear that he spoke to Ms. Luk about this and she said in effect that she would deal with it through National. It is clear that he also spoke to Mr. Ip about this and he said that he would attend to it. However, it was an agreed fact that on 2nd March, 1993, the Applicant faxed a quotation to Mr. Philip Tang on the letter-headed paper of Sky Wealth, Ex. P4. This offered the cloth at US$0.65 per yard and asked Mr. Tang to fax a copy of his name card for the purposes of facilitating contact. There was no file number, it was in Chinese and had neither the company chop nor the signature of either Ms. Luk or Mr. Ip. On the same date Mr. Tang replied by fax saying that the price was too expensive, pointing out that the price was the same as that quoted for a previous transaction done through National and asking for a quotation at the best price. This fax never found its way into the relevant file. On 3rd March, 1993, a company by the name of Tai Tung Textiles sent a quotation to Unimax for exactly the same goods at the price of US$0.60 per yard, Ex. P6. it was signed by the second Defendant. The second Defendant is a friend of the Applicant. Tai Tung is owned by the second Defendant's brothers and, subsequent to his dismissal from Maxgold and Sky Wealth, it is where the Applicant found employment.

5. According to Mr. Tang, he had telephoned directly rather than routing his enquiry through National because he wanted to test Sky Wealth. In what way he wished to test is not clear. It may be that he wanted to see whether Sky Wealth would act without the intervention of National or, given that Sky Wealth was responsible for National's commission, that he wanted to see whether the price quoted to Unimax would be net of that commission. However that may be, his suspicions were aroused and he spoke to Mr. Ip who in turn alerted Ms. Luk to what had happened. Ms. Luk taxed the Applicant upon the matter. According to her, the Applicant apologised and said that he had done what he did in a moment of greed. Neither the Applicant nor the second Defendant gave evidence at the trial.

6. A number of grounds of appeal have been put forward. The Reasons of the Judge below were attacked on the basis that he ought not to have accepted the evidence of Ms. Luk and Mr. Ip. The Applicant's version of events as put forward in cross-examination was that he had been told that neither Sky Wealth nor Maxgold were interested in the transaction and that he could pursue it for himself if he wished. It is then objected that the Judge below failed to take into account the cautioned statements of the Applicant or his good character. Whatever merits there may be in these arguments, and it is not possible to say that there are none, it is unnecessary to deal with them further. Of supervening importance is the acquittal of the second Defendant and the finding of the Judge below that there was evidence that there had been an agreement between the Applicant and the second Defendant.

7. When Defendants are charged with conspiracy amongst themselves and others, it is basic that it is possible for one Defendant alone to be convicted for he may have conspired with the others not before the Court. When two Defendants are charged with conspiring between themselves and one is acquitted it is still possible that the other may be convicted for the admissible evidence against him which proves the offence may not be admissible against his alleged co-conspirator. In these circumstances, however, it is necessary to look more carefully than usual at the evidence upon which a conviction is founded. At the heart of the present case is the passage in the Judge's Reasons headed "Agreement" where he said,

"I believe and hold that it was far more than coincidental that D2 sent the fax, P6, to Unimax at a price less than that conveyed by D1's fax, P.4.

I am of the view that D2 had to be, and was, aware of :

(a) the identity of the entity in Singapore who made inquiries of Sky;

(b) the quantities sought; and

(c) what price had been regarded by Unimax as being too excessive.

The foregoing leads irresistibly to the inference which I make, that D1 conveyed the information to D2, that this was in breach of his employer's code of ethics and instructions given to him. I further hold that D1 did not have any authority, express or implied, to make the quotation of Unimax."

These were matters which the Judge was entitled to find as he did. They show that the second Defendant must have been in possession of knowledge before the fax, P6, could have been sent and that that knowledge must have come from the Applicant. They show that the Applicant acted in breach of his instructions in giving that information to the second Defendant and in sending the fax P4. The charge and the conviction, however, was for conspiracy.

8. The Judge below continued,

"I have considered the submissions of Mr. Fenton where the matter was put succinctly; however, I believe that there was evidence of an agreement and that, in fact, there was an agreement between D1 and D2."

Mr. Fenton appeared for the second Defendant in the Court below. The Judge does not say what constituted the evidence of that agreement nor what the agreement was . He went on to deal with the question of dishonesty and, in relation to the second Defendant, held that he and the Applicant were aware of the economic risk to be or to be potentially suffered by Sky Wealth and/or Maxgold in the Applicant passing information to a trade competitor. He then went on to consider various alternatives postulated by Mr. Fenton and said,

"(iii) The aspect of whether D1 did not have permission and knew full-well that he did not and may have told D2 that the company or companies which employed him were not interested in the business, falls for consideration ...... the Crown ...... I believe ...... failed, by admissible evidence, to negative that D1 may have conveyed or implied to D2 that his source - i.e. the company or companies which employed him - were not interested in the business, thus leaving a hypothesis that the business was, to use the vernacular, 'up for grabs' and, accordingly, has failed to establish dishonesty on the part of D2."

He therefore acquitted the second Defendant.

9. The crime of conspiracy requires mens rea on the part of all of the conspirators. In the present case it was held that the only other alleged member to the conspiracy, the second Defendant, was not shown to have the necessary intent. Insofar as the Applicant is concerned it would have been possible for him to be convicted if, for instance, he had made the necessary admission, but he did not. He confessed to acting in momentary greed and it may be that he committed some other offence. That is not sufficient upon which to base conviction of conspiracy. It is not possible to ascertain how the Judge could have found that there was an agreement between him and the second Defendant. In these circumstances the application for leave to appeal against conviction must be granted and, treating the application as the appeal itself, the appeal must be allowed. Mr. McWalters who appeared for the Crown very fairly felt unable to argue in favour of upholding that conviction.