HKSAR v. WONG YUK SIM

CACC 497/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 497 OF 2002

(ON APPEAL FROM DCCC 196 OF 2002)

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REASONS FOR JUDGMENT

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Stuart-Moore, VP (giving the judgment of the Court):

Background

1. The applicant was convicted on 9 September 2002 of offering an advantage to an agent, contrary to sections 9(2)(a) and 12(1) of the Prevention of Bribery Ordinance, Cap. 201, following a trial in the District Court before Judge Toh.

2. The applicant sought leave to appeal against her conviction. At the conclusion of proceedings on 28 July 2004, we dismissed the application. We now give our reasons for so doing.

3. The wording of the charge was as follows:

"WONG Yuk-sim, on or about the 4th day of December 1996, in Hong Kong, without lawful authority or reasonable excuse, offered an advantage, namely a gift, loan, fee, reward or commission consisting of $525,000 Hong Kong currency, to an agent CHAU Chok-ming (PW1), an employee of Easyknit International Holdings Limited ('Easyknit'), as an inducement to or reward for or otherwise on account of the said CHAU Chok-ming doing or having done an act in relation to his principal's affairs or business, namely causing Easyknit Properties Holdings Ltd to achieve the successful purchase of the properties known as 2X & 2W at Sai Yeung Choi St., Mongkok, Kowloon through her agency on behalf of Chung Shun Property Agency." (Appeal bundle pp. 1-2)

4. We are grateful to Mr Simon Tam, counsel for the respondent, for his comprehensive outline of the prosecution's case and the general nature of the evidence given by each of its witnesses. We can utilise this to a considerable extent in setting out the background to this application.

5. The applicant was described at trial as the boss of the Chung Shun Property Agency ("Chung Shun"). As the charge makes clear, the allegation was that she offered Chau Chok-ming (PW1) a bribe of over half a million dollars. PW1 was the project manager of Easyknit International Holdings Limited ("Easyknit") whose duties included the buying and selling of real estate for his company. The bribe, said to have been offered by the applicant to PW1, was allegedly designed by her to smooth the way for the successful purchase by Easyknit of property situated at 2X and 2W Sai Yeung Choi Street in Mongkok ("the Property"). The applicant was to be paid a half percent commission by both the buyer and the seller and, perhaps to ensure that she earned at least half of this amount, she was said to have offered half of the commission to PW1 to overcome the obstacle which, according to PW1, might have prevented the sale from taking place.

6. In mid-1996, Easyknit was interested in buying properties for development. The applicant was contacted and she, in turn, approached Mr Tang Shing-bor, whose company Dynamic Glory International Limited ("Dynamic Glory") held the equitable title to the Property. Mr Tang was also the proprietor of another company called Success Motors Limited. Mi Li was a financial manager employed by Mr Tang. Mr Li knew the applicant as he had had dealings with her in the past.

7. In order to save stamp duty, it was agreed between the parties that instead of buying the Property itself, Easyknit would cause one of its subsidiaries, Easyknit Properties Holdings Limited ("Easyknit Properties"), to buy all the shares of Dynamic Glory. Thus the purchase of the Property could take the form of a purchase of the shares of Dynamic Glory. The agreed price was $105 million.

8. The advantage which was said to have been offered to PW1 by the applicant while acting as the estate agent in the negotiations took the form of a cheque in the sum of $525,000 which was issued by Mr Tang on the Success Motors Limited account. It was made payable to a company called Focus Design Consultant ("Focus Design") and was dated 11 November 1996.

9. PW1, who was acting on behalf of Easyknit as the purchaser of the Property, owned a number of companies. One of these was Focus Design.

Defence case

10. Before looking at the prosecution's evidence in greater detail, it is worthwhile considering the overall presentation of the defence case at trial.

11. The applicant elected to remain silent at her trial.

12. From the cross-examination of witnesses, the applicant's case was advanced on the footing that PW1 had never disclosed to her that he was an employee of Easyknit or Easyknit Properties. When, purportedly, PW1 went to the applicant's office for the first time, he had told her that he or some of his friends had, in a personal capacity, been looking for properties in Mongkok. PW1 was said to have provided the applicant with no business card.

13. The applicant, for her part, was said at no stage to have proposed to share half of the commission she would earn on this transaction during her negotiations with PW1. She had never asked PW1 for the name of a company that he owned so that she could arrange for a cheque to be issued to that company. It was alleged that the money representing the alleged bribe was in fact paid to PW1 by the vendor, Mr Tang, and not, as PW1 had said, by her. PW1 had made a deal, it was said, with Mr Tang that he (PW1) would send $250,000 of the allegedly corrupt money he would receive, to a lady who it was suggested was Mr Tang's mistress, also a proprietress of Chung Shun, and a further $25,000 to Mr Tang's trusted employee Mr Li.

14. In short, the applicant's case was that she had not offered any advantage to PW1 and had not known that PW1 was acting for Easyknit in the purchase. If there was a corrupt offer of money this was a matter which did not concern the applicant. It was between PW1 and Mr Tang.

15. No evidence was called by the defence to substantiate the allegations it had made.

The prosecution's evidence

16. When the applicant was interviewed over three years after these events by ICAC officers on 31 March 2000, she, to some extent, echoed the general lines of her defence at trial. She agreed that she was the boss of Chung Shun in 1996. She admitted that she had handled the property transaction in question saying that PW1 had come into her shop one day and asked her if any property was available in the vicinity of Sai Yeung Choi Street. She said that PW1 told her he wanted to purchase a property in a busy location in Mongkok. She stated that she was not told by PW1 that he was acting for a company and that he provided no business card. She then asked PW1 to come back in a few days' time or to ring her later. She said that she called her friend, Mr Li, because he was an employee of the company which owned the Property. The effective owner, Mr Tang, initially asked for a price of about $140 million but this was eventually reduced to $105 million. The applicant agreed that she had acted as a middleman and remained in touch with PW1 by telephone. The applicant said that "Uncle Bor", the name by which Mr Tang was known, offered to pay her a commission of 0.5%.

17. The applicant said the price of $105 million was acceptable to PW1 provided that there was "vacant possession". She said that PW1 gave her the name of a company and that she asked for an invoice because of the tax she would have to pay on the commission.

18. Importantly, at that stage of the interview the applicant was then shown two documents which had been seized from her flat earlier that day. These two documents were produced as exhibits P16 and P17 in the trial.

19. The original of exhibit P16 was written in Chinese. This bore the applicant's signature. It was addressed to Mr Tang requesting him to issue a cheque in the sum of $525,000 made payable to "Focus Design Consultant" to settle the commission he owed Chung Shun in respect of the property transaction in question. This document is dated 10 November 1996.

20. Referring to this document, the applicant said: "Well, this payee's name was written on the cheque". When asked whether PW1 had told her to use this company, she said: "This company name was written on it".

21. Exhibit P17 is another document in Chinese signed by the applicant. It was also addressed to Mr Tang. In this document, the applicant acknowledged that she had received the $525,000 commission in the form of a Chiyu Banking Corporation cheque numbered 139609. This is a reference to the cheque (exhibit P20) made out to Focus Design.

22. The applicant agreed with her interviewer that the first document (exhibit P16) was one that she used to ask Mr Tang to issue a cheque to Focus Design and that the second document (exhibit P17) confirmed that the commission had been received. However, later in the course of her interview, the applicant changed her account to say that she had not received the cheque. When asked why it was recorded on the document (exhibit P17) that the cheque had been paid to her, the applicant answered that she did not know. When she was asked whether she had ever received a cheque in the sum of $525,000 and handed it to a third person, the applicant said she could not remember.

23. At this stage, the applicant's lawyer requested the cessation of the interview. There was no resumption of the questioning.

24. Whilst dealing with exhibits P16 and P17, which had been found in the applicant's bedroom, it is perhaps worthwhile mentioning that the applicant's counsel at trial referred to them as false documents. No evidence, however, was called to show why the applicant had kept these so-called "false documents" in her bedroom.

25. However, copies of exhibits P16 and P17 were kept by the vendor and these were produced at trial as exhibits P57 and P58.

26. Mr Li, the financial manager of the vendor, testified that negotiations as to the price for the Property were handled by his boss, Mr Tang, who dealt with the applicant. Mr Li said it was the applicant who gave him the name of Focus Design. He then wrote out the cheque drawn on the Success Motors Limited account. He stated that he had drafted exhibits P57 and P58 and given the copies (exhibits P16 and P17) to the applicant. He also said that after the cheque had been written out, he had requested the applicant to give him a receipt and that he had chased the applicant for some time before she signed exhibits P57 and P58. He said that these two documents had been signed on a later date than the dates shown on them.

27. Mr Li also told the court that after the signing of the provisional sale and purchase agreement on 31 October 1996, the applicant had asked him to fax the document to PW1. Although he agreed that the applicant was not present at the signing of the agreement, the applicant had earlier telephoned him to tell him that the buyers were coming to his office to sign the agreement.

28. Mr Li also gave evidence that it was the applicant who pressed for payment of her commission saying that she had other agents working for her which was why she was paid this before the formal sale and purchase agreement had been signed.

29. Exhibit P16 was worded as follows:

"To: Mr. TANG Shing-bor

Re: The commission of the sale of the shares of Dynamic Glory International Ltd holding the property situated at No. 2x & 2w, Sai Yeung Choi Street
__________________________________________________________________________________

I request you to pay me the agent's commission of the above-mentioned transaction (HK$525,000.-). I now instruct you the cheque concerning the commission should be made payable to 'Focus Design Consultant'.

(signed) (WONG Yuk-sim)

WONG Yuk-sim

 

Date: 10 November 96"

30. The receipt (exhibit P17) followed a similar layout and stated:

"To: Mr. TANG Shing-bor

Re: The commission of the sale of the shares of Dynamic Glory International Ltd holding the property situated at No. 2x & 2w, Sai Yeung Choi Street
____________________________________________________________________________

I acknowledge the receipt of the above-mentioned commission of HK$525,000.- (The cheque of Chiyu Banking Corporation and the cheque No. 139609).

(signed) (WONG Yuk-sim)

WONG Yuk-sim

 

Date: 11 November 96"

31. Evidence was given by Mr Tang Shing-bor that he had bought the Property for $98 million subject to existing tenancies. He said his agreement to sell to Easyknit for $105 million would give him a "clean profit" of some $7 million. He denied that he had given a bribe to PW1.

32. Mr Koon, the president of Easyknit, testified that he had formed suspicions about PW1 and that these were confirmed when he happened to see PW1's savings passbook only to find that it recorded a large amount of money. He then spoke to PW1 about this. He stated that he was aware, prior to the signing of the provisional sale and purchase agreement on 31 October 1996, that the Property had a number of sitting tenants.

33. Mr Tsang, who was Easyknit's vice-president, signed the provisional sale and purchase agreement for the Property in Mr Li's office at the vendor's address. He also confirmed that the management of Easyknit were aware that there were existing tenants at the Property and that the purchase price of $105 million had already taken that fact into account.

34. The prosecution produced a quotation in Chinese, dated 31 October 1996, suggesting an agency fee of $600,000 (exhibit P34) and a debit note (exhibit P35) to confirm that Chung Shun was to receive an agency fee of $600,000 from Easyknit Properties. The applicant had signed each of those documents which had, on the face of them, been issued by Chung Shun to Easyknit.

35. PW1 gave evidence on 12 August 2002 about events which happened in 1996. He said it was his job on behalf of Easyknit to settle the price of the Property with the applicant who was negotiating on behalf of the vendor. He said the negotiations lasted for months. He said that during this time, the applicant offered to share half of the total commission that she would receive from the vendor and purchaser with him. In this regard, it was not disputed that the $525,000 cheque issued by Success Motors Limited was deposited into the Focus Design bank account on 4 December 1996. PW1 said it was the applicant who gave the cheque to him and one or two days after that he paid it into the bank. PW1 said that out of this sum, he wrote cheques for $250,000 in favour of a Ms Xu Yu, who was a partner in Chung Shun, and for $25,000 to Mr Li as the applicant had instructed him to do. The remaining $250,000 was transferred by PW1 into his personal savings account.

36. PW1 went on to say that he had used part of the remainder of the proceeds to compensate the tenants and claimed that he gave some $200,000 to $300,000 in cash to the applicant for that purpose. At the end of the day, he said that he was only left with $62,500. This aspect of his evidence was rejected by the judge.

37. Although PW1 was serving a prison sentence for corruption offences at the time he gave evidence, he was somewhat evasive as to how the question of a bribe was first raised between him and the applicant. PW1 said that he thought the applicant offered to share her commission with him because he could influence the success of the transaction and that he was being rewarded to facilitate this because the whole transaction was being handled by him. Giving evidence-in-chief, PW1 was seemingly unable to admit using the bribe for himself or to describe himself as having acted corruptly. However, when PW1 was cross-examined, he then agreed that, when he received the cheque, he knew he was accepting an advantage in circumstances which could amount to a criminal offence.

38. PW1 was also less than forthcoming about the reason he had led the applicant to believe that Easyknit would consider the failure on the part of the vendor to deliver vacant possession might pose a problem which could put the deal at risk when, in reality, the management of Easyknit had known all along that there were sitting tenants at the Property and their estimation of a proper purchase price had already taken this factor into account.

39. PW1 was cross-examined extensively by counsel for the applicant as to the inconsistencies in his previous statements (exhibits D1 and D2) about the destination of the corrupt money which he had received and on other topics including the other bribery offences for which he was then serving his sentence.

Principal issues at trial

40. Given the way the applicant's defence had been presented, the major factual issues on which the judge needed to make findings were, firstly, whether the applicant had known that PW1 was Easyknit's employee who had been given the responsibility of settling the price and other details on its behalf for the sale and purchase of the Property; secondly, whether the applicant offered $525,000 to PW1; and, thirdly, if such a sum was offered to PW1, what had been the applicant's intention when she offered that sum.

The application

41. Two grounds of appeal were advanced on the applicant's behalf by Mr Edwin Choy.

(1) Mens rea of the offence

42. In the first ground, Mr Choy submitted that the judge had erred when concluding that the applicant participated in PW1's corrupt scheme because of evidence that PW1 "had speculated about the reason for the sharing of commission as a reward". It was contended that the fact that PW1 himself interpreted the payment as a bribe was insufficient to establish that the applicant, herself, had the requisite mens rea. Furthermore, according to PW1, the ostensible reason for the sharing of part of the commission had been to compensate the sitting tenants. If, Mr Choy suggested, the intention may have been to use the money merely as compensation, then plainly no corrupt advantage had been offered by the applicant.

43. In HKSAR v So Kam-tim [1997] HKLRD 1123 at 1126, it was held by this court that:

"The gravamen of a s.9(2)(a) offence lies in the making of an offer to pay a corrupt reward, and the offence is committed once the offer is made. Just as an offence of soliciting an advantage is complete at the moment when the solicitation is made, a s.9(2)(a) offence is complete when an offer is made, regardless of whether or not the corrupt agreement will be honoured by the offeree. The guilty intent of the offeror is to be judged independently as at the time of the making of the offer, because after the offence is complete upon the making of the offer, whatever intent he subsequently forms on the offeree's action or inaction will no longer be material. The court is concerned exclusively with the offender's intent at the time of the making of the offer. That would seem to be the law in a case where the offeree is expected to perform after payment of the reward.....

Section 9 corruption offences focus on the state of mind of the offender.....

What is critical was the corrupt purpose of the applicant's when he made his offer to pay, ie what his intent was at the time."

By a similar process of reasoning, it was decided in Attorney General v Ling Kar-fai [1997] HKLRD 671, in a case which was concerned with an offence under section 9(1)(b) of the Prevention of Bribery Ordinance, that it was the state of mind of the agent accepting the advantage which had to be looked at when determining whether the offence had been proved.

44. Mr Choy rightly submitted that it followed, as this court had held in R v Li Fook-siu, Ronald [1991] 2 HKLR 288, that it may be that where a provider of a reward thinks he is providing something innocently but the receiver believes that the provider is providing it as a corrupt reward and he accepts it as a corrupt reward, believing it to have been provided as a corrupt reward, then the receiver behaves corruptly even if the provider behaves innocently. Such a state of affairs was, Mr Choy submitted, PW1's position in respect of whom the judge, in her Reasons for Verdict, said:

"5. (PW1) said he told the defendant that since no vacant possession was being offered by the seller, it was a problem for Easyknit so he discussed this matter with the defendant. Eventually PW1 said the defendant suggested that since she would receive 0.5 per cent commission from the seller and buyer, she would give PW1 half of the total of the two fees if PW1 would co-operate with her to compensate the tenants still residing on the Property.

6. PW1 was asked whether there was any other reason he was sharing the agency fee with the defendant apart from compensating the tenants and he said 'to achieve the transaction as a reward I think'. PW1 said that if he had reported to Mr Koon about there being sitting tenants on the said Property, there was a risk that Mr Koon may not want to proceed on the deal. PW1 said he was in the position of advising Mr Koon whether to proceed or not." (Appeal bundle p. 12)

45. It was, of course, the case for the defence that any corrupt arrangement there may have been was one which existed as between PW1 and Mr Tang. However, if the applicant was found by the judge to have effectively provided PW1 with the funds represented by a cheque for $525,000, having earlier offered to give him half of the commission she would earn on the sale, it was the applicant's state of mind at the time she made the offer which had to be examined with a view to determining whether the prosecution had made out its case against her. Plainly, in this regard, although what PW1 had thought was the purpose of the offer was a relevant consideration in arriving at a conclusion on this vital issue in the case, it was the applicant's state of mind that had ultimately to be determined. Mr Choy contended in this regard that the judge may have been focusing on the mindset of PW1 rather than the applicant's when she carried out her examination of the evidence on this issue.

46. Realistically, Mr Choy accepted that the judge was entitled to infer from all the circumstances that the applicant did have the necessary corrupt state of mind to be found guilty of the offence but, if so, he submitted that the judge had failed to provide the evidential basis for her conclusion. He further argued that bearing in mind the caution with which the judge had needed to approach PW1's evidence in the light of a number of factors which had led her to doubt PW1's credibility, it was possible, even if, as the judge found, the applicant was aware that PW1 was an employee of Easyknit, that in the applicant's mind the payment to PW1 had been earmarked to compensate the sitting tenants.

47. However, as Mr Tam was quick to point out, the judge was, in the passage taken from the Reasons for Verdict to which we have already referred, only examining PW1's state of mind for the purpose of deciding upon his credibility. The judge went on to say, in terms which make this clear:

"12. My only conclusion after assessing the evidence is that PW1 was trying to minimise his own role in this and therefore he falsely claimed that he gave $200,000 to $300,000 back to the defendant in cash to compensate the tenant when he knew full well that his own company was prepared to compensate to evict the tenants. He was asked several times when counsel for the prosecution was examining him how the defendant's payment to him would facilitate the transaction and he, to say the least, was evasive and finally he came up with the answer that he could influence the success of the transaction because the whole transaction was handled by him.

13. In looking at his evidence, I bear in mind constantly the fact that he is a tainted witness and I must be very cautious in accepting his evidence as he has a motive to lie. He not only has admitted to corruption in this offence, he has also admitted to corruption in other cases which he handled on behalf of Easyknit. So it leads me to think why therefore was PW1 evasive when answering counsel's questions." (Emphasis added) (Appeal bundle p. 14)

Later, the judge went on to say that she considered PW1 was an "opportunist" who had seen a chance to make some corrupt money so that he told the applicant that "his company wanted vacant possession and that he was the only person who could influence the outcome of the transaction". The judge, therefore, concluded that PW1's evasiveness was due to the fact that he was "trying to put a good light on his own conduct".

48. Nothing in any of these perfectly proper considerations suggested that the judge had fallen into the error of believing that the applicant had acted corruptly merely because PW1 had done so. The judge drew separate conclusions about the applicant, as Mr Choy rightly accepted she was entitled to do, when deciding, in the light of a considerable body of evidence, including the highly significant documentary material, that the only inference she could draw was that the applicant:

".... well knew that PW1 was an employee of Easyknit and an agent of Easyknit who was tasked with the responsibility of settling the price and details with her in relation to the sale and purchase of the subject property. That is why the defendant was the person, as Mr Li said, that told him to issue the cheque for the commission from Success Motors to Focus Design Consultant." (Appeal bundle p. 19)

49. The judge went on to make specific findings that the applicant had told Mr Li to issue the cheque in the sum of $525,000 payable to Focus Design and she found as a fact that:

"32. Mr Tang was anxious to sell the Property because he wanted to make a clean $7 million profit. But it was the defendant who brought the parties together and it was the defendant who was told that there may be a problem with the existing tenants. I am satisfied beyond a reasonable doubt that it was the defendant who then offered to PW1 to share with him half of her commission in order that the sale of these subject properties can be realised or achieved." (Emphasis added) (Appeal bundle p. 19)

50. We have placed emphasis in the last paragraph on words which demonstrate how the judge viewed the applicant's intention. As Mr Tam aptly expressed the situation, in a case where the defence had alleged that it was Mr Tang who had offered the bribe and that the applicant had no knowledge of PW1's employment by Easyknit, the judge needed to go no further in expressing her conclusions because to have done so would have been like giving a Ghosh direction in a simple theft case where the issue was mistaken identity.

51. The applicant was entitled to remain silent at her trial but, having done so, it would have been surprising, on the wealth of evidence before the judge, if she had drawn any other conclusion than one which was adverse to the applicant in regard to her motivation for the offer she made.

52. Finally, although not in itself fatal, this ground was mounted on arguments which were never advanced at trial. We consider that, set in their overall context, the arguments were unrealistic.

(2) Credibility of PW1

53. In his second ground of appeal, Mr Choy submitted that it was unsafe for the jury to have convicted the applicant having disbelieved a substantial part of PW1's evidence.

54. There were, as Mr Choy was unquestionably in a position to demonstrate, numerous shortcomings to PW1's testimony which, if the prosecution's case was to succeed, formed an extremely important foundation to establish that there was a corrupt motive for the offer of a bribe to himself. He had, amongst other things, pleaded guilty to two such offences in separate property dealings which he had conducted whilst employed by Easyknit. Furthermore, the judge rejected a considerable amount of the evidence given by PW1 on the basis, as we have already said in regard to the first ground of appeal, that he had provided false testimony when trying to minimise the extent of his own corrupt behaviour. These and other considerations outlined in the judge's Reasons for Verdict led the judge, appropriately and sensibly, to take a "very cautious" approach to this witness who was not only tainted but, as she expressed it, "had some facility with lying".

55. We could not accede to Mr Choy's submission. PW1's evidence could not be viewed in isolation. There was a considerable volume of relevant evidence also to be taken into account when considering what aspects of his testimony could be accepted. Mr Li had given evidence that it was the applicant who had asked him to issue the cheque. Exhibit P17, which was found with exhibit P16 in the applicant's bedroom, and is set out in full at paragraph 30 (above), recorded her receipt of the cheque. In any event, leaving aside the fact that Mr Tang denied giving the cheque to PW1, this was a highly convoluted way, as we pointed out to Mr Choy during the proceedings, in which to conduct a simple transaction unless, of course, it was designed to obscure a corrupt payment to PW1. Additionally, the judge was able to consider the replies given by the applicant in her interview.

56. In all the circumstances, we did not find it in the least surprising that the judge found herself able to accept PW1's evidence on crucial aspects of the case against the applicant. In doing so, her analysis of the evidence more than adequately covered the shortcomings in PW1's account.

Conclusion

57. Accordingly, for the reasons we have provided, the application was dismissed.