HKSAR v. PETER NORMAN ELLIOTT

CACC 126/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 126 OF 2003

(ON APPEAL FROM DCCC NO. 488 OF 2002)

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J U D G M E N T

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Hon Yeung JA:

Introduction

1. The applicant, Peter Norman Elliott, left school after his A-Levels. He began working for a London firm of stockbrokers in 1972 and in the next 20 years excelled himself in trade finance and "forfaiting" business, i.e. the discounting of bills of exchange and other financial instruments.

2. In 1989, the applicant set up Elliott Gordon, a private brokerage company in Singapore with Mr Gordon Toh. The applicant and Mr Gordon Toh were the only directors and they held more or less equal shares in the company.

3. In 1990, the applicant set up Asia Pacific Leasing Limited ("Asia Pacific") in Hong Kong with Graham Anthony Clements ("Mr Clements") of a London address, specialising in aircraft leasing. They were the only directors, each holding 50% shares. In the brochure of Elliott Gordon, Asia Pacific was described as its affiliate "which operated out of the United Kingdom".

4. However, Asia Pacific was not in active business and its tax returns showed that it was dormant from August 1990 to March 1994.

5. In March 1993, the applicant ceased to be a director of Elliott Gordon and he sold his shares to Mr Gordon Toh one month later. He also resigned from Asia Pacific on 1 June 1993 and transferred his shares to Jade Nominees, which held the shares on trust for him.

6. On 1 April 1993, the applicant commenced employment with Standard Bank London Limited ("SBL") in Hong Kong. SBL was a wholly owned subsidiary of Standard Bank Investment Corporation of South Africa.

7. The applicant was SBL's representative in Hong Kong with the title of General Manager.

8. The applicant resigned from SBL in January 1997 and returned to England.

9. After prolonged and contested extradition proceedings, the applicant returned to Hong Kong in 2002 on an indictment consisting of six charges of accepting an advantage as an agent.

10. In January 2003, the applicant appeared before Judge Toh in the District Court and he pleaded not guilty to the charges.

11. After a trial lasting over two weeks, the applicant was acquitted of charge 1 but convicted of the remaining five charges. Judge Toh sentenced him to three years' imprisonment on each of the charges with one year to run consecutive. The total sentence was four years' imprisonment.

12. The judge ordered the applicant to repay SBL a sum of just over $2 million, being the amount he received in relation to charges 2 to 6.

13. The judge also ordered the applicant to pay the costs of the prosecution, including its costs incurred in the extradition proceedings.

14. The applicant sought leave to appeal against both conviction and sentence. The applicant also sought to set aside the costs order.

15. The hearing before us was restricted to the application for leave to appeal against conviction, to which application this judgment is confined.

Prosecution Allegations

16. Charges 1 to 2 related to services allegedly provided by SBL to Shenzhen Yiwen Industrial Company Limited ("Yiwen") to enable Yiwen to obtain the respective loans of US$30 million and US$20 million. Charges 3 to 6 related to the discounting of bills of exchange by SBL. The bills of exchange, amounting to about US$33 million, were drawn under letters of credit issued by the Bank of Communications, Hainan Branch ("BOC") in favour of Lia Heavy Industries Limited ("Lia").

17. The prosecution alleged that the applicant, as the employee of SBL, assisted Yiwen to obtain loan or credit facility of US$30 million in return for a commission of HK$2,142,070.20 (charge 1) and then US$20 million in return for a commission of HK$1,541,935.50 (charge 2). The transactions involved the issue of certificates of deposit by the Agricultural Bank of China ("ABC").

18. The contention was that the commission under charge 1 was paid mainly by way of a banker's draft payable to the applicant's brother-in-law, Titus Galama ("Mr Galama"). The balance of $110,000 was paid by cheque, which was deposited into the applicant's account; and that the commission under charge 2, after the deduction of some expenses, was paid to the applicant in cash.

19. The prosecution also alleged that on four occasions between January and August 1994, the applicant received four payments of HK$165,440.48 (charge 3), HK$142,133.14 (charge 4), HK$231,304.61 (charge 5) and HK$112,826.91 (charge 6) as a reward for assisting Lia to obtain a loan or credit facility by discounting bills of exchange to the SBL.

20. The payments, after the deduction of charges incurred by Elliott Gordon and Asia Pacific, were paid via another company and then to the applicant by cheques, which were deposited into his HSBC account.

21. Although the applicant did not have authority to approve the Yiwen transactions, he did recommend them to the head office of SBL in London. His recommendations were accepted and acted upon. On the other hand, the applications for discounting the Lia's bills of exchange were received and approved by the applicant.

22. It was the policy of SBL not to allow its employees to accept commissions and this was made clear in their Permanent Employees Staff Handbook and a Compliance Manual, a copy of which was provided to the applicant when he was first employed by SBL.

23. According to the prosecution, apart from SBL, Yiwen, and Lia, the transactions also involved Madam Chow Yee-wan, her husband Yap Kea-sing (collectively referred to as Chow), Edward Yiu ("Mr Yiu") and Heng Kwoo-seng ("Mr Heng").

24. Madam Chow owned and ran Bestgroup Holdings Limited and Standard Capital Inc. They introduced Yiwen to SBL.

25. Mr Yiu was the director and a 50% shareholder of PYCY International Limited ("PYCY"). Mr Yiu introduced Lia to SBL.

26. Mr Heng was the sole proprietor of K.S. Heng & Co, Certified Public Accountant, a firm that he started in July 1990. He was also the founder of a BVI company, Morison International Inc. ("Morison"). Mr Heng provided secretarial services to both Elliott Gordon and Asia Pacific in the name of Chartac Secretaries Ltd ("Chartac"). Mr Heng was to one degree or another involved in all the transactions.

27. In late 1993, Liu Pak-fung ("Mr Liu") and Ma Kam-kin ("Mr Ma"), the Director and Deputy Director of Yiwen asked Madam Chow for assistance in order to raise capital of US$30 million for Yiwen and Madam Chow in turn approached Mr Heng, her long time acquaintance. They were then introduced to the applicant.

28. After several meetings, an agreement was reached. In addition to the 1.5% charge payable to SBL, Yiwen would pay a consultancy fee of 4.5% on the US$30 million arranged by SBL. Madam Chow would receive 2.5% and Mr Heng 2%.

29. Yiwen subsequently paid the 2% to Mr Heng by crediting the HSBC account of Morison.

30. The allegation was that Mr Heng then paid half of the 2% to the applicant (charge 1).

31. In November 1994, the applicant, Mr Ma and Mr Heng reached another agreement without the participation of Madam Chow. Yiwen would get a further facility of US$20 million through SBL. Yiwen also agreed to pay a consultancy fee of 2%.

32. After the US$20 million loan was arranged, Mr Ma caused Yiwen to pay the 2% to Mr Heng who in turn allegedly paid half of it to the applicant, after deducting certain expenses incurred by Elliott Gordon and Asia Pacific (charge 2).

33. Mr Yiu first came to know the applicant in late 1992 when the applicant was still with Elliott Gordon. In early 1993, they talked about the prospect of sharing commissions from bills of exchange discounts. In late 1993, Lia had to discount bills of exchange and Mr Yiu approached the applicant. The applicant agreed to make the arrangement through SBL.

34. It was agreed that PYCY would be paid an introduction fee by SBL initially of 7/8%, later re-negotiated down to 3/4%. The first Lia's bill of exchange discounted by SBL was dated 11 September 1993. PYCY was paid the agreed fee of 7/8%. The applicant did not share the fee.

35. The bills of exchange discounted by Lia under charges 3 to 6 were dated between December 1993 and June 1994. The fees payable to PYCY were reduced to 3/4%. It was allegedly agreed between the parties that, 1/4% out of the 3/4% payable to PYCY would be paid to the applicant acting for Elliott Gordon. The applicant also told Mr Yiu that Morison, acting for Elliott Gordon, would invoice PYCY for the 1/4%.

36. After the successful discounting of Lia's bills of exchange, PYCY was paid the agreed fees.

37. Mr Heng, on the applicant's instruction, then requested PYCY for the payments in the name of Morison. The four payments, being 1/4% of the face value of the discounted letters of credit payable to the applicant, were then credited to Morison's bank account.

38. Mr Heng, after deducting his professional fees due from Elliott Gordon and Asia Pacific, issued cheques for the corresponding amounts (the subject matters of charges 3 to 6) in favour of the applicant. The cheques were deposited into the applicant's account.

39. The prosecution suggested that the payments were made in relation to SBL's affairs or business and that the applicant did not have any lawful authority or reasonable excuse to accept the payments.

The Prosecution Evidence

40. The prosecution called a number of witnesses and produced significant quantity of documents. The evidence of some of the witnesses was not substantially disputed.

41. Mr Gordon Toh described how Elliott Gordon was established. He confirmed the resignation of the applicant in March 1993. He also confirmed that Elliott Gordon never had any dealing with Lia or PYCY. As for Asia Pacific, Mr Gordon Toh said he only remembered Elliott Gordon conducting two aircraft leasing transactions through Asia Pacific in 1989 or 1990.

42. Madam Chow confirmed the agreement with Yiwen and Mr Heng. She said Mr Heng introduced the applicant to her and it was Mr Heng who did all the translations at meetings, as Mr Liu, Mr Ma and herself did not speak English. She said the applicant's role was to liaise with SBL and she had no idea if Mr Heng would split his 2% with any one.

43. Francine Ng was recruited by the applicant in August 1993 as the Assistant General Manager of SBL. Ms Ng confirmed the meetings with Mr Heng, Mr Ma and an economist of ABC in Beijing in 1994. She also confirmed the $30 million loan and the signing of the relevant certificates of deposit.

44. Mr Ma was not particularly forthcoming in his evidence. Nevertheless, he confirmed the meetings he had with the applicant in Hong Kong, Shenzhen, and Beijing in connection with Yiwen's capital raising. Mr Ma said he was told that the applicant worked for SBL. He confirmed the agreement that Yiwen would pay 2.5% to Madam Chow and 2% to Morison on the US$30 million loan, and 2% to Morison on the US$20 million loan. He also confirmed that through the arrangements in question, Yiwen successfully raised the respective capital of US$30 million and then US$20 million.

45. Mr Wilde was a director of SBL. He recruited the applicant and had been his supervisor until his resignation in 1997. Mr Wilde confirmed that any staff of SBL who wished to accept any gift of over 100 pound sterling from a customer had to obtain permission in writing.

46. Mr Wilde produced the relevant documents in connection with the transactions between SBL, Yiwen and Lia. He also described the nature of the transactions.

47. He said the applicant had not asked for and had never been granted permission to accept payment in connection with the transactions. He said he had no knowledge at all of the payments to the applicant.

48. Mr Wilde agreed that the applicant could unwind his prior business after joining SBL and no deadline was set. However, what the applicant did after joining SBL must not be in conflict with his employment with SBL and he must not accept any unauthorised payment.

49. Mr Wilde said he was not aware of the 7/8% payable to PYCY until November 1993 and he thought it was exceedingly high. Mr Wilde also considered the reduced rate of 3/4% to be still unusually high. He conceded that the applicant could be entitled indirectly to introduction fees payable to Elliott Gordon if such introduction fees related to business concluded before the applicant joined SBL.

50. The statement of Mrs Smollett, the Compliance Officer of SBL was read to court by agreement. She confirmed that the Compliance Manual of SBL forbid its staff from accepting personal gift or inducement of over 100 pound sterling without the special permission in writing of the vice-chairman or his alternate.

51. The more important witnesses for the prosecution were Mr Heng and Mr Yiu as they were directly involved with the payments to the applicant.

52. Mr Yiu said he first met the applicant in early 1993 when the applicant was still with Elliott Gordon. They talked about possible deals from Lia and they agreed to share the fees deriving there from. However, Mr Yiu was under the impression that the applicant was a broker with Elliott Gordon.

53. Mr Yiu confirmed that as the director of PYCY, he had introduced Lia to SBL. He produced a letter dated 10 September 1993 to the applicant as the General Manager of SBL and the letter stipulated that fees of 7/8% and 1/8% were payable to PYCY and SBL respectively.

54. Mr Yiu also confirmed that the fee payable to PYCY was subsequently reduced to 3/4% as demonstrated by an invoice dated 19 January 1994 issued by Morison seeking the payment of US$21,455.85.

55. Mr Yiu said he agreed to share the fees with the applicant as the agent of Elliott Gordon. However, of the fees he received in connection with the 2nd to 5th Lia deals, he paid 1/4% to Morison instead of Elliott Gordon, as the applicant told him that he had disagreement with the partner of Elliott Gordon and he had to use Morison to collect the fees.

56. Mr Yiu made a total of four payments to the applicant through Morison in January, March, May and August of 1994.

57. Mr Yiu also said that the applicant had told him that SBL was aware of the payments to the applicant and had also approved them.

58. In July or August 1994, Mr Yiu stopped paying the applicant as he thought it was no longer appropriate and that he did not want to operate in any "grey area". When he informed the applicant of his decision, the applicant "just smiled". However, the applicant did not seek to argue or persuade Mr Yiu to continue with the payment.

59. In cross-examination, Mr Yiu repeated that when he first talked to the applicant about the commission, the applicant said he had obtained permission from SBL to receive the commission as the deals were agreed upon before he joined SBL.

60. Mr Yiu agreed with the suggestion that he only showed concern for the payments to the applicant after four payments were made. He said that he believed the four payments were made to the applicant in his role as a broker acting for Elliott Gordon.

61. Mr Yiu also agreed with the following suggestions: that he believed the applicant concluded the initial deals as a broker and that the applicant had specifically told him that he had permission from SBL to continue receiving the fees; that the applicant said he had had a disagreement with Elliott Gordon's partner and hence he had to use Morison's account to collect the fees.

62. Mr Yiu's evidence was not challenged but confirmed under cross-examination. In particular, it was never suggested to him that the applicant was collecting the fees as Asia Pacific's agent.

63. Mr Heng gave evidence under immunity and his evidence relating to charge 2 was fundamentally disputed.

64. Mr Heng was a Certified Public Accountant and he carried on his consultancy work in the name of Morison or Chartac. Mr Heng had been handling the affairs of Asia Pacific and Elliott Gordon on the applicant's instruction.

65. Mr Heng said he first met the applicant in late 1992. In late 1993 and early 1994 after the applicant had joined SBL, he went to the Mainland and had a discussion with the applicant about a loan project. He said it was after such discussion that the Yiwen loans came about.

66. Mr Heng confirmed that pursuant to an earlier agreement, he, the applicant and Madam Chow shared a consultancy fee of US$675,000 (4 1/2% of $15 million, being half of the 1st loan). The payment was made in the form of a cashier order from Billion Pearl, a company belonging to Mr Ma. Mr Heng said he shared 2% equally with the applicant.

67. For the second US$15 million, Billion Pearl only paid HK$2.3 million (2% of US$15 million) as Madam Chow were excluded and he then shared the sum equally with the applicant.

68. In connection with commission on the US$30 million, Mr Heng produced his own audit note (exhibit P6), showing the 50/50 split with the applicant and the disbursements in connection with air tickets and hotels for the period from 4 October 1993 to 12 April 1994. The audit note showed how the money was paid to the applicant.

69. Mr Heng also produced a brief record (exhibit P40) showing the withdrawal on 23 March 1995 of cash and the payment of $1.397 million (US$100,000; 10,000 pound sterling and HK$500,000) to the applicant. Such payment related to the 2nd loan of $20 million obtained by Yiwen. He confirmed that all the payments were made after the applicant started his employment with SBL.

70. When Mr Heng made payments to the applicant, he deducted from the payments disbursements for Asia Pacific and Elliott Gordon. After the payment of $1.397 million and the deduction, there was a balance of about $122,000. Mr Heng said he believed that he had paid the balance to the applicant. However, he was unable to produce any document to support such payment.

71. Exhibit P6 was headed Yiwen's Deal and contained more detail. Exhibit P40, was undated and had less detail. However, they were both supported by relevant documents and invoices.

72. Mr Heng also gave detail accounts of the payments by PYCY to Morison in connection with the discounting of Lia's letters of credit by SBL.

73. According to Mr Heng, the applicant gave him written instruction to invoice PYCY for the fees. A sample letter drafted by the applicant authorising Mr Heng to invoice PYCY for the payment was produced. The letter, captioned "Introduction to Standard Bank" asked for payment for "assisting in arranging/introducing this offshore transaction".

74. After PYCY paid Morison, Mr Heng deducted the disbursement due from Asia Pacific and Elliott Gordon and then paid the corresponding sums to the applicant.

75. As late as February 1994, the applicant was still paying the bills for Asia Pacific and Elliott Gordon by allowing deductions from the PYCY payments.

76. Mr Heng agreed that the applicant was still in control of Asia Pacific until 1995 or 1996 with Mr Clements although the applicant resigned in June 1993. He also agreed that by June 1994, he had received four payments from PYCY. As Asia Pacific had no bank account, he just paid them into the applicant's personal account.

77. Mr Heng admitted under cross-examination that K.S. Heng & Co. was a member of Morison International Limited, which was a different company from Morison. He was also a director of the Asia Pacific Region of Morison International Limited. Mr Heng admitted to have used the logo of Morison International Limited on the letterhead of Morison without authority.

78. Mr Heng said that as K.S. Heng & Co was a member, he thought Morison was also an affiliate of Morison International Limited. However, he admitted that it was unlikely that Morison itself would be accepted as a member by Morison International Limited.

79. Mr Heng was also questioned about a Morison Heng & Law Management Consultant Company ("Morison Heng & Law") that he set up with Jack Law. He said his association with Mr Law ceased in 1993 when Mr Law either found another job or returned to UK. Mr Heng then changed the name of the company to Morison Heng Management Consultant Company. Mr Heng said the company was only used for leasing purposes.

Defence's case and Evidence

80. The applicant admitted the payments in respect of the 1st Yiwen's loan. However, he said he accepted the money on behalf of Mr Liu who asked him to transfer the money to Thailand on his behalf. The applicant denied receiving the cash payments of $1.397 million from Mr Heng in connection with the 2nd Yiwen's loan.

81. As for the Lia transactions, the applicant admitted that he had received the payments from PYCY via Morison. He said he honestly believed that he was entitled to receive such payments as they arose from an agreement he reached with Mr Yiu prior to his joining SBL.

82. The applicant, in his evidence, gave a detailed account of his work experience. He mentioned Asia Pacific and said it was an affiliate of Elliott Gordon.

83. The applicant said Mr Clements left Hong Kong in 1990 and Asia Pacific did not initially have any bank account.

84. The applicant emphasised that when he was still with Elliott Gordon, he met Mr Yiu and from what Mr Yiu told him in early 1993, he expected a large volume of work from Lia.

85. After the applicant joined SBL, Mr Wilde had told him to extricate himself from Asia Pacific and Elliott Gordon. However, Mr Wilde did not set any time limit.

86. The applicant then had a discussion with Mr Gordon Toh and his shares in Elliott Gordon were put in trust as Mr Toh did not fully pay him the price for his shares until September 1995.

87. The applicant resigned from Asia Pacific on 1 June 1993 and Jade then held his shares on trust for him. He said Asia Pacific only opened its own bank account in March 1995 and he was one of the authorised signatories.

88. The applicant said when he started his employment with SBL, he still had clients from his previous business and he tried to persuade Mr Toh to filter the transaction from Elliott Gordon to SBL.

89. The applicant insisted that the Lia transactions were negotiated before he joined SBL. He also insisted that he treated Lia as a client of Asia Pacific. He said Mr Clements also agreed to use Asia Pacific to conduct the Lia transactions.

90. The applicant said he met Mr Yiu in the summer of 1992 and he explained Elliott Gordon's business to Mr Yiu. Mr Yiu then told him about letters of credit given to Lia. Mr Yiu further told the applicant that Lia would get additional letters of credit in 1993, and would be looking for banks to discount them. The applicant was asked to help.

91. The applicant said such discussion took place in the meetings with Mr Yiu in January and March of 1993, very shortly before he joined SBL.

92. An agreement was then reached with Mr Yiu to share the introduction fees equally. At that time, the applicant had begun to withdraw from Elliott Gordon, but he had not yet signed up with SBL.

93. The applicant confirmed that he asked Morison to invoice PYCY for the commission from Lia on behalf of Asia Pacific. He admitted that the payments from PYCY were deposited into his personal account. He said he had notified Mr Clements of the deals and Mr Clements approved them.

94. The applicant insisted that the Lia deals were discussed before he joined SBL and he was entitled to receive the commissions. He said his contract with SBL and the Compliance Manual did not disqualify him from receiving such commissions. He said he did not mention the deals to Mr Wilde, as he did not see the need.

95. As Mr Yiu insisted on invoices and at Mr Heng's suggestion, Morison was used to issue invoices to collect payments. The applicant agreed that he had drafted the letter for Mr Heng to copy to send to PYCY to demand the payments. In the draft letter, the fees were said to be for "assisting in arranging" and the applicant said this meant, "We introduced discounting parties to them".

96. The applicant said he did not realise any conflict in accepting the payments from PYCY until Mr Yiu told him in 1994 that no further payment to him would be made. He then decided not to ask for any more fees. He agreed that the 7/8% fees paid to PYCY was too high and it was later reduced.

97. The applicant said that the payments he received from PYCY were all subsequently paid to Mr Clements in cash. He withdrew equivalent sum in pound sterling in England to pay Mr Clements. He said Mr Clements had introduced business to Asia Pacific and as he was no longer able to help Mr Clements any more after joining SBL, he thought it was fair to give him the payments he received from PYCY.

98. The applicant detailed his dealings with Yiwen. He said he first met Mr Liu in October 1993 in Beijing with Mr Heng and others and there were subsequent meetings to structure the proposed loans to Yiwen.

99. The applicant admitted to have accepted the 1% commission in connection with the US$30 million deal, not for himself but for Mr Liu.

100. The applicant said he was first offered the 1%, but he refused. Mr Liu then asked him to accept the money on behalf of his overseas relative. The applicant then made use of an account of Mr Galama in Thailand so that Mr Liu's relative could collect the money there.

101. After Mr Heng received the 2%, the applicant instructed Mr Heng to issue a draft payable to Mr Galama without telling Mr Heng anything of his agreement with Mr Liu. The applicant said the balance of $116,500 was also given to Mr Liu through Mr Galama.

102. The applicant said Mr Galama was unhappy about the arrangement and he therefore told Mr Liu's assistant to quickly withdraw the money in Thailand. The applicant said he had lost contact with Mr Liu since the summer of 1994.

103. Under cross-examination, the applicant made the following admissions:

1. that he was obliged to comply with SBL's requirement of not accepting any payment without express written permission and he never received any such permission;

2. that Mr Liu probably did not require his assistance to send the money overseas when he himself had extensive connection;

3. that Mr Heng had no reason to frame him;

4. that no deals were concluded with regard to the Lia transactions prior to his joining SBL;

5. that the letters of credit under charges 3 to 6 were only discounted by SBL long after he joined SBL;

6. that the assisting and arranging in connection with the Lia deals all took place after he had joined SBL;

7. that all the applications for discounting of Lia's letters of credit were received and approved by him;

8. that he had no record to show he had given the money he received from PYCY to Mr Clements as he paid Mr Clements all in cash; and

9. that the invoices from Mr Heng were accurate and represented amounts owed to Mr Heng for services rendered to Elliott Gordon and Asia Pacific.

104. The applicant also called a good friend, Mr Mocatta to give character evidence on his behalf. Mr Mocatta said that the applicant was a man of integrity.

105. The affidavit of Mr Galama and that of one Jautmet made in 1999 were produced under section 31 of the Evidence Ordinance, Cap. 8. Mr Galama died in 2002 and Jautmet did not give viva voce evidence.

106. Mr Galama suggested in his affidavit that the draft and a cheque given to him by the applicant were deposited into a bank. The money was then given to Jautmet.

107. According to Jautmet, it was Mr Liu who asked him to collect the money. He said he collected the money and then gave seven million Baht cash to a Mr Chan. Jautmet annexed to his affidavit a document "document 4" with a Chinese signature and the character "received". The document appeared to bear fax stamped date - "1994-07-42PM".

108. The testimony of the applicant in his extradition hearing in London in June 1998 was also produced.

The Findings by the Judge

In relation to charge 1:

109. The judge was concerned about the date stamped on document 4, which supported the defence's suggestion that Mr Galama's instructions to Jautmet were sent in 1994. The judge commented that it was not made for the purpose of preparing a defence. The judge was also concerned about the non-availability of Mr Liu. In the end, the judge gave the benefit of the doubt to the applicant and acquitted him of charge 1.

In relation to charge 2:

110. The judge accepted the evidence of Mr Heng. She said Mr Heng was honest and he did not embellish his evidence in any way. The judge pointed out that Mr Heng frankly admitted that he was unable to properly account for the balance of about $122,000 due to the applicant under the loan of US$20 million.

111. The judge said that records kept by Mr Heng supported the cash payment of $1.397 million to the applicant on 23 March 1995. The judge also pointed out that before Mr Heng made the payment, he had deducted fees due to his company by the applicant's companies, Elliott Gordon and Asia Pacific. The judge opined that Mr Heng must believe the payment to be due to the applicant or else he would have not deducted such fees from the payment. The judge also opined that the applicant must have agreed to the deduction or else he would have asked Mr Heng for an accounting.

112. The use of the Morrison International Logo by Mr Heng was described as sharp practice in marketing, but in the end did not alter the judge's conclusion that Mr Heng's testimony was "fair, logical and reasonable".

113. The judge rejected the applicant's evidence when he denied the receipt of the cash payment of $1.397 million from Mr Heng. The judge said that the applicant's evidence that Mr Heng fabricated his evidence with the ICAC was not even put to Mr Heng in cross-examination. She also said the evidence of the applicant did not make sense.

114. In the end, the judge convicted the applicant on charge 2, but limiting the amount to the cash payment of $1.397 million because she was not sure whether the sum of $122,000 had in fact been paid to the applicant.

In relation to charges 3 to 6

115. The judge pointed out the undisputed fact that letters drafted by the applicant to be sent to PYCY for payments were captioned "Introduction to Standard Bank London and the fees were said to be due "on assisting in arranging/introducing this offshore transaction".

116. The judge emphasised that all the bills of exchange and letters of credit (except two) were created after the applicant had joined SBL and were all discounted by SBL long after the applicant became its employee.

117. If the applicant did believe he was so entitled, he would have informed Mr Wilde of the deals and he would not have accepted without any demur whatsoever Mr Yiu's decision not to pay him after the first four deals.

118. The judge emphasised Mr Yiu's unchallenged evidence: that the applicant claimed to be collecting the payments for Elliott Gordon and had told Mr Yiu that he only used Morison's account because of a dispute with a partner; that the applicant claimed that SBL knew and approved Mr Yiu's payments to the applicant; whereas in stark contrast, the applicant in his evidence said he was collecting the payments for Asia Pacific and that SBL was completely unaware of such payments.

119. The judge also pointed out that being such a meticulous keeper of records, the applicant would have been able to produce documents supporting the alleged payments to Mr Clements if his evidence was true.

120. The judge found that the applicant's evidence did not make sense and she rejected his case. The judge found that the applicant, with his background, could not have believed that the fees were earned prior to his joining SBL when he simply said he could introduce banks to discount the bills of exchange of Lia.

121. The judge also rejected the defence's suggestion that discounting of bills of exchange was not a loan or credit facility. In the end, the judge convicted the applicant also of charges 3 to 6.

Grounds of Appeal

122. Strong criticism was made on the judge's approach to the applicant's character. Mr Griffiths SC, counsel for the applicant, suggested that the judge misdirected herself on the issue of the applicant's character, in that she had failed to consider the impact of good character as to credibility; and misunderstood the propensity factor. Objection was taken to the following two passages in the judge's Reasons for Conviction:

"I also have, throughout, borne in mind the defendant's good character and clear record, and therefore I am aware that he has no propensity in the past to commit criminal activities.

The defendant has a clear record(s) and apart from the glowing character reference, he has also not ever shown a propensity in the past to (stray) into criminal activities."

123. The Yiwen's deal in charge 2 was described as anomalous and bearing no relation to the particulars of the charge. Mr Griffiths suggested that SBL did not assist Yiwen to obtain a loan of credit facility as the formal documents relating to the transaction suggested that Yiwen deposited funds with ABC instead of obtaining a loan.

124. In so far as charge 2 rested entirely on the evidence of Mr Heng, it was suggested that Mr Heng's evidence was entirely unsatisfactory and that the judge did not sufficiently warn herself of the motive for Mr Heng who testified under an immunity to lie against the applicant.

125. Mr King, also for the applicant, suggested that the setting up of Morison, the unauthorised use of the Morrison International Logo, and the manner in which Mr Heng dealt with Morison Heng & Law were blatant frauds committed by him, yet the judge failed to have proper regard to such matters when assessing the credibility of Mr Heng.

126. Mr King suggested that Mr Heng lied about the importance of Mr Law in an attempt to exclude him from sharing the commission. According to the applicant, Mr Law actually introduced SBL to Yiwen.

127. Mr King described the withdrawal by Mr Heng from three different accounts to meet the payment due to the applicant as "highly unusual". Mr King pointed out that in connection with the US$20 million deal, Mr Heng took three weeks to pay the applicant whereas the payments in respect of the US$30 million deal were settled on the same day by the issue of a draft in favour of Mr Galama.

128. Mr King further attacked Mr Heng's evidence with reference to the evidence of Madam Chow and Mr Ma who denied knowledge of the fee sharing arrangement. There was the reference to a third deal involving Yiwen for which, it was accepted, no fee was paid to the applicant, a factor to which no importance was attached by the judge. Mr King pointed out that Mr Heng could have received commission of US$40,000 without sharing it with the applicant.

129. In the course of his evidence, Mr Heng had referred to two particularly significant documents (exhibits P6 and P40), the contents of which were consistent with Mr Heng's allegation against the applicant in relation to charges 1 and 2. Mr King pointed out that the style of the two documents were materially different, and he suggested that exhibit P40 was suspicious, a fact, he said not recognised by the judge.

130. In exhibit P6, it was accurately recorded as relating to "Yiwen's deal". It also clearly identified the parties sharing the commissions, their respective shares and the expenses relating to the deal. On the other hand, exhibit P40 was just a piece of scrap paper without mentioning when it was created, the particulars of the relevant deal or the applicant's name. There was also no mention of what happened to the balance of $122,000 in exhibit P40.

131. Mr King suggested that the circumstances in which exhibit P40 surfaced was also suspicious when there was no evidence if it was seized by the ICAC.

132. The judge was attacked for the alleged failure on her part to deal with the aforesaid matters adequately or at all.

133. In respect of charges 3 to 6, Mr Griffiths suggested that the discounting of the bills of exchange by SBL did not constitute loan or credit facilities from SBL when SBL simply sold the deals with Lia to third parties.

134. The essence of the defence case was repeated. Mr Griffiths contended that the commission paid to the applicant was in respect of an agreement made before the applicant commenced his employment with SBL and that under the employment agreement, there was nothing to preclude the applicant accepting those payments, it being envisaged and accepted that he had to have time to wind up his involvement with Elliott Gordon.

135. It was emphasised that by bringing the deals to SBL, the applicant enabled SBL to earn fees of US$500,000 and that the payments to the applicant did not result in the reduction of such fees.

136. It was further emphasised that the applicant did not apply to join SBL and it was SBL that recruited him to start the "forfaiting" department within the bank. In the circumstances, it was not surprising for SBL, Mr Griffiths said to adopt a relaxed approach to the applicant's terms of employment and to allow him sufficient time to disengage from his previous dealings.

137. The payments in questions were said not to be gifts or personal inducements, but fees arising out of genuine business transactions that the applicant had before he joined SBL and the terms of the Compliance Manual had no application.

138. In the circumstances, it was wrong for the judge to draw any adverse inference against the applicant and to convict him on the evidence.

139. With respect, every point made in this application was made before the judge except perhaps the matters relating to the applicant's character.

140. The credibility of the applicant was no doubt a very important issue as recognised by the judge. It is evident from a reading of the Reasons for Verdict that throughout her deliberation, the judge was mindful of the fact that the applicant had a clear record and of the positive evidence as to his good character. We note too, though it is not at all conclusive on the issue that the applicant's trial counsel had also reminded the judge in his final submission of the importance of the applicant's good character in relation to the issue of credibility and propensity.

141. The judge mentioned in her Reasons for Verdict not only the character witness of the applicant, Mr Mocatta, but the following:

"that the applicant was a well-respected person in the trade financing and forfeiting circle;

that Wilde and Standard Bank had thought very highly of him and, as Wilde said, he knew the defendant to be a man of integrity and honesty;..."

142. The judge reminded herself repeatedly that the applicant had a clear record. The judge also said that the applicant had not shown any propensity towards criminal activities in the past.

143. When the judge was referring to the question of "propensity", she was simply stating as a matter of fact that the applicant had shown no propensity towards any crime in the past. It should not be read as if the judge was referring to the technical aspects of "propensity" and "credibility" arising out of the applicant's good character.

144. The applicant sought reliance on R v Lee Kam-yuen [1995] HKCLR 264 and HKSAR v Tang Siu-man [1998] 1 HKLRD 350 to support the contention that once a decision has been made to give a good character direction, the judge must give an adequate and proper direction, in particular with reference to the issue of credibility. Both Lee Kam-yuen and Tang Siu-man concerns the direction by a judge to a jury and has no application in a District Court trial.

145. As Mr Zervos SC, counsel for the respondent, quite rightly pointed out, the Court of Appeal in R v Lin Kae-tzong [1995] HKCLR 116 held that there was no requirement of "a District Judge or a Magistrate to state in his or her Reasons for Verdict that he or she has given himself or herself a Berrada or Vye direction".

146. In any event, the judge had reminded herself of the clear record of the applicant and its effect on the evidence before her. The two passages in the Reasons for Verdict to which objection was taken, namely that the applicant had no propensity to commit crime in the past, do not support Mr Griffiths' contention that the judge had misdirected herself on the issues arising out of the applicant's "good character".

147. A judge sitting alone need not formally direct himself/herself on all issues of law for it is assumed that he/she knows the law (see Li Defan & Anor v HKSAR [2002] 1 HKLRD 527. Unless there is possible indication that the judge has misunderstood the law or has wrongly directed himself/herself on the issue of law, the absence of the reference to the question of law in the Reasons for Verdict cannot be a valid ground of appeal.

148. Mr Griffiths' suggestion that the judge must have disagreed with or misunderstood counsel's submission on the relevance of good character to the issues of credibility and/or propensity is not a submission that I can accept.

149. Mr Zervos sought to argue that the applicant's own evidence demonstrated discreditable conduct on his part and therefore the judge need not consider any "good character" direction. Mr Zervos sought reliance on HKSAR v Tang Siu-man (supra).

150. Mr Zervos was referring to the applicant's attempt to channel funds to Thailand on behalf of Mr Liu's family. Such conduct, according to Mr Zervos, was made to defeat the foreign exchange restriction in the Mainland or worse still to defraud Yiwen and was thus unbecoming of a respectable banker such as the applicant.

151. I do not find it necessary to dwell on this matter. Even if Mr Zervos was right in suggesting that in the course of the trial itself, it was shown that the applicant had acted discreditably or dishonestly, the judge was still entitled to treat the applicant as a person of good character (see HKSAR v Tang Siu-man (supra) at page 355H-J), and having done so she had not misdirected herself on the issue.

152. I reject the complaints about the judge's approach to the applicant's "good character".

153. As the judge rightly pointed out, the issue relating to charges 3 to 6 was simply whether the applicant honestly believed that he had a reasonable excuse or lawful authority to accept the four payments from PYCY via Morison.

154. There was no dispute that the applicant had received the payments and they were all paid into his account. The payments clearly related to SBL's affairs or business as they arose directly out of the discounting of Lia's bills of exchange by SBL.

155. There was no mention of the fees payable to the applicant in any of the documents between PYCY and SBL.

156. The applicant himself drafted the letters demanding payments from PYCY with the heading "Introduction to Standard Bank". The payments were described as payments "on assisting in arranging/introducing this offshore transaction".

157. SBL's earning of US$500,000 from the applicant's services and the fact that the payments received by him did not result in any reduction of such earning was simply irrelevant.

158. The 7/8% payable to PYCY was agreed to be exceptionally high. Even the reduced rate of 3/4% was considered by Mr Wilde to be excessive.

159. It must be borne in mind that the discounting of the bills of exchange by SBL and the payments to the applicant by PYCY took place long after he joined SBL. The applicant himself admitted that there was no concluded deal between Lia and SBL prior to his joining SBL. Indeed it is to be noted that at the time when assistance for Lia was first mentioned as a prospect by Mr Yiu and the applicant, the methodology and the vehicles, in particular SBL had not been identified.

160. The applicant represented to Mr Yiu that Elliott Gordon was behind the deals and was entitled to share the commission. The applicant told Mr Yiu that SBL was fully aware of and approved the payments. The applicant even told Mr Yiu that he had disagreement with the partner of Elliott Gordon and he had to use the Morison's account to receive the payment.

161. The letter dated 10 September 1993 to the applicant as the General Manager of SBL stipulated the fees payable to PYCY and SBL without disclosing the fact that the applicant was to share the fees with PYCY.

162. If the applicant honestly believed that under the employment contract he had with SBL, he was entitled to receive the payments from PYCY as the agent for Asia Pacific, why did he not inform SBL of the payments? Why did he not mention to Mr Wilde when Mr Wilde was complaining about the excessive fees payable to PYCY? Why did he tell Mr Yiu that SBL was aware of and approved such payments? Why did he not share the fee earned by PYCY when Lia's first bills of exchange was discounted by SBL? The suggestion that the applicant had forgotten about it is an unlikely explanation when it involved such a large sum of money.

163. If the applicant was acting for Asia Pacific as he claimed in his evidence, why did he tell Mr Yiu that he was acting for Elliott Gordon? Why did he tell Mr Yiu that Morison was used to collect the fees because he had disagreement with the partner of Elliott Gordon and why did he use the Morison's account to collect the fees at all? If the applicant genuinely believed that he was entitled to receive the payments from PYCY, why was he not open about it? On the contrary, as Mr Zervos has demonstrated in considerable detail, the applicant's conduct in relation to all the charges is characterised by convoluted routes for transfer of funds, lack of disclosure of his name, and lack of documentary support for payments - it is all the very opposite of openness and reeks of deliberate subterfuge.

164. There was never any Asia Pacific document showing the receipt of the fees. No entry was made of such receipt in the company account and no tax was paid. The applicant suggested Asia Pacific did not have an account at the material time. It was not a valid excuse either.

165. The applicant had relinquished his connection with Elliott Gordon in April 1993 although Mr Gordon Toh did not fully pay him the price for his shares until September 1995. Mr Gordon Toh said Elliott Gordon never had any dealing with Lia or PYCY. Mr Gordon Toh was not challenged.

166. Was it because of such undisputable evidence that the applicant said in his evidence that he was acting for Asia Pacific in connection with the Lia deals? Why did he not tell Mr Yiu the true position? Why did he allow expenses incurred by Elliott Gordon to be deducted from the payments from PYCY if Asia Pacific earned the fees?

167. The undisputed evidence showed that Asia Pacific was dormant from August 1990 to March 1994 and did not even have a bank account until March 1995. It was in any event an aircraft leasing company based in London and had only concluded two such deals on behalf of Elliott Gordon in 1989 or 1990. Why would the applicant be wearing an Asia Pacific hat when conducting "forfaiting" deals on behalf of Lia?

168. Again as the judge quite rightly pointed out: if the applicant did pay Mr Clements the money he received from PYCY, he must have documents to support the payments.

169. There was ample evidence to justify the judge's conclusion that the applicant's evidence did not make sense. Indeed, the defence was so tenuous that the judge must have found it unnecessary to deal with it in greater length than what she did.

170. It must be remembered that the payments to the applicant did not originate from PYCY. In fact PYCY was just sharing the commission from Lia with him. It must be remembered that the applicant was paid, not because he did anything for PYCY but because he assisted Lia to discount the bills of exchange with SBL in his capacity of its General Manager. It must also be borne in mind that the applicant received and approved all the applications for discounting.

171. I am surprised by the argument before the judge and repeated before us that the discounting of the bills of exchange by Lia with SBL did not amount to a loan or credit facility from SBL to Lia.

172. I fail to see the relevance of the on-sale of the Lia deals by SBL to third parties ("other forfaiters"). I am concerned with the relationship between Lia and SBL in the discounting of the bills of exchange and not with the relationship between SBL and other forfaiters.

173. Mr Griffiths suggested that a special feature in "forfaiting" was the absence of recourse in case of default. He therefore suggested that there was no question of repayment and hence no loan.

174. With respect, Mr Griffiths' suggestion was not tenable. There might well be no recourse between SBL and subsequent "forfaiters" of the bills of exchange, but Lia would certainly be liable as the drawer of the bills of exchange in case of default, not just to SBL, but also to all subsequent holders or indorsers (see section 55 of the Bills of Exchange Ordinance, Cap. 19).

175. Under the letters of credit upon which the bills of exchange in question were drawn, Lia, purportedly as the seller of heavy earth-moving equipment, would be entitled to receive payments from BOC's correspondent bank in Hong Kong to the full value of the letters of credit at their maturity, i.e. 360 days from the presentation of documents.

176. The only reason for Lia to "sell" the proceeds of the letters of credit by discounting them to SBL was the wish to obtain advance payment. SBL would be entitled to charge interest for such advance payment in the form of the discounted payment.

177. The net effect of such discounting arrangements, having striped it of exotic term such as "forfaiting", was nothing more than the obtaining of loans by Lia from SBL with Lia agreeing to repay the loans at a future date from the proceeds of the letters of credit. The bills of exchange drawn on the letters of credit and certified by BOC were just instruments evidencing and guaranteeing the repayment of such loans. Lia would certainly be liable in case of default.

178. The discounting arrangement in question was analogous to the obtaining of loans with the issue of post-dated cheques. The borrower (Lia) had a fixed deposit account (the letters of credit) with the bank (BOC). The fixed deposit account (the letters of credit) would mature in 360 days' time. In order to have immediate access to fund, the borrower (Lia) issued post-dated cheques (the bills of exchange), drawn upon the proceeds of the fixed deposit account (the letters of credit) and had the post-dated cheques (the bills of exchange) discounted by a credit company (SBL). The bank (BOC) could certify the post-dated cheques (the bills of exchange) good for payment and the credit company (SBL) could further discount (sell or "forfait") the post-dated cheques (the bills of exchange) to other credit companies (other "forfaiters" such as RZB Austria, London; Royal Bank of Canada, London; National Bank of Bahrain, Manama).

179. Could it be seriously suggested that in the circumstances aforesaid, the borrower (Lia) had not obtained a loan or credit facility? Could it be argued that the transactions in question were "forfaiting" transactions between "forfaiters" without recourse and hence not loan or credit facilities?

180. With respect, the suggestion that Lia was one of the "forfaiters" and there was no recourse against Lia in case of default was simply incorrect.

181. Mr Griffiths referred to an example at page 638 of Roy Goode, Commercial Law, 2nd Edition and Chow Yoong-hong v Choong Fah Rubber Manufactory [1962] A.C. 209. Mr Griffiths contended that the discounting of bills of exchange was not a loan arrangement as there was "no repayment of money lent". The quoted example is as follow:

"B Ltd wishes to borrow from A Ltd on the security of B's receivables, but is precluded from so doing by the terms of a debenture given to its bank. So it is agreed that B will sell the receivables to A outright at a discount, B guaranteeing payment by the debtors concerned. The end result is the same as on a loan: A pays cash now and gets back later. But a sale at a discount is not a loan at interest even where recourse is given."

182. It must be remembered the quoted example and Chow Yoong-hong (supra) concern the relationship between subsequent transferees ("forfaiters") of receivables provided by debtors or cheques issued by customers. They concern neither the relationship between debtors who provide the receivables and the creditors nor the relationship between borrowers who issue post-dated cheques and banks or credit companies to whom the cheques are discounted. With respect, Mr Griffiths fell into the same error as he did when he suggested that there was no recourse in case of default.

183. In our case, Lia being the beneficiary under the letters of credit, issued bills of exchange drawn upon the letters of credit, directing BOC to make payments to SBL or any subsequent transferees in order to obtain advance payment under the letters of credit. Lia, of course, had to pay interest to SBL in the form of the discounted payments.

184. I fail to see how, in such circumstance, it could be argued that the discounting arrangements did not constitute loan or credit facilities to Lia.

185. In any event, the crux of charges 3 to 6 was not whether the discounting of the bills of exchange by SBL was or was not a loan or credit facility. The crux was whether the payments related to the provision of the discounting facilities by SBL to Lia or even more generally, whether the payments related to the applicant's act concerning the affairs or business of SBL.

186. In Attorney General v Chung Fat-ming [1978] HKLR 480, the court was concerned with the need to particularise the "act" to be performed in the capacity as a public servant under section 4 of the Prevention of Bribery Ordinance, Cap. 201.

187. In deciding that the "act" need not be "particularised", but must be "discernible" as within the public capacity as distinct from his private capacity, Leonard J repeated the sentiment of McMullin J in Chan Wing-yuen v The Queen [1977] HKLR 186 at pp. 191-192:

"The substance of the offence created by section 4(2) is in the soliciting or accepting of an advantage by one acting in the capacity of a government servant under circumstances which make it clear that the advantage is solicited or offered in reference to his having such capacity. It is a feature of the particular evil at which those provisions are aimed that the purpose may be generally apparent without being entirely explicit. In a given case it may be that the evidence available to the prosecution is not sufficiently specific to indicate whether the advantage has been solicited or offered as an 'inducement' to do a particular act or as a 'reward' for having done it. In such a case the charge should no doubt properly speaking be one of offering or accepting the advantage 'on account of' some prospect of favour not particularized but discernible among a variety of possible acts within the public capacity of the accused. Yet the addition of the other two terms in the charge, in such a case, can scarcely prejudice the accused whereas if the Crown pins itself to naming either inducement or reward for a particular purpose and the evidence turns out not to be so specific as to warrant such a charge and yet shows a clear mutual understanding that the purpose was to 'keep the official sweet' there will arise the necessity of amending, a course which, though permissible, could be avoided without injustice to the accused by naming of all the alternatives in the first instance."

188. It is perhaps also useful to refer to the judgment of Cons J in Chan Man-hong v The Queen, CACC584/1974 at page 2 of the judgment:

"The ordinary person frequently speaks with grammatical inexactitude, and is yet correctly understood. And it is by the standards of the ordinary person using ordinary language that the wording of the charge sheet must be judged. It should set out in that language the substance of the offence, giving sufficient particulars for the defendant to know what case he has to meet. The gravamen of the present offence was the asking for money. That was mentioned. Further particulars identified the incident by reference to the person involved and to the company for which that person worked. That limited the occasion and at the same time enabled the appellant to know exactly what incident was comprised of. He cannot possibly have been misled by the fact that the niceties of strict grammar might have preferred a different proposition."

189. Similar observation was made by McMullin VP in The Queen v Chu Piu-wing and others, CACC330/1983 at page 4 of the judgment:

"The primary intention of the legislation is to catch corrupt offers, solicitations and acceptances of gratifications. Although the forbidden behaviour may come about either by performing or by abstaining from performing an act within the official's capacity the Crown in selecting the appropriate formula for its charge must have regard to the reality of the situation and is not to be confined by a nice regard for the contractual aspect of the allegedly corrupt arrangement."

190. The aforesaid observations clearly apply to the alleged defects of the charges in question.

191. I reject the arguments put forward on behalf of the applicant. On the evidence, the applicant was rightly convicted of charges 3 to 6.

192. Unlike charges 3 to 6, charge 2 turned entirely on the credibility of Mr Heng.

193. However, it is pertinent to point out that the applicant did not suggest that Mr Heng lied against him in connection with any of the payments under charges 3 to 6. The applicant did not even dispute that he had received the payment under charge 1 for which he was acquitted. The payments under charges 1 and 3 to 6 were of course evidenced by bank records and indisputable.

194. The applicant only disputed the cash payment of $1.397 million under charge 2.

195. Was it a coincidence that Mr Heng told the truth about the payments in connection with charges 1 and 3 to 6 but lied about the payment in connection with charge 2?

196. Admittedly Mr Heng was an accomplice and he gave evidence against the applicant under immunity. The judge was well aware of it and expressly mentioned: "I had warned myself, in assessing his evidence, that he was giving evidence under an immunity and thus may have his own interest to serve ....".

197. Mr King complained that the judge did not sufficiently warn herself of the motive and reasons for Mr Heng to lie against the applicant. However, the applicant himself admitted that Mr Heng had no reason to frame him. There was not even suggested motive for Mr Heng to lie to wrong the applicant.

198. In his submission, Mr King initially suggested that Mr Heng had a motive to lie against the applicant although he was unable to specify such motive.

199. Indeed, there could be no dispute that Mr Heng was perfectly entitled to receive the payments from Yiwen. What he did wrong was to share such payments with the applicant.

200. If Mr Heng lied against the applicant, he was not just making unjustified accusation against the applicant, but was at the same time unnecessarily involving himself in criminal acts. His "lies", if lies they were, would also lead to the consequential complication relating to his professional standing as an accountant. Why would he do that?

201. If Mr Heng indeed lied about the applicant in connection with charge 2, he could have simply said he paid him the entire sum of $1.5 million in cash. There was hardly any need to create exhibit P40 with the further complication of the deduction of charges due from Asia Pacific and Elliott Gordon and the balance of $122,000 that he could not properly account for. There was hardly the need to specify the payment to be in different currencies of US dollars (100,000), pound sterling (10,000) and HK dollars (500,000) with supporting bank documents.

202. There is no valid basis for the complaint in connection with Mr Heng's evidence on his relationship with Mr Law or the withdrawal from three accounts to meet the payment under charge 2. Mr Heng simply had not been properly questioned so as to give him the opportunity to explain such collateral matters. The same applied to the complaint on the alleged sloppiness of exhibit P40 when comparing with exhibit P6 and the circumstances in which exhibit P40 came to be in existence. As Mr King admitted, no question on those matters had been directed at Mr Heng and he was never given any opportunity to offer explanation.

203. When confronted with such observation and the suggestion that the criticism against Mr Heng's evidence was therefore unjustified, Mr Griffiths retorted, on behalf of Mr King, by saying that the defence was not obliged to clear up ambiguities in the prosecution case.

204. The prosecution of course must prove its case beyond all reasonable doubt. However, the onus only relates to elements of the offence charged and the prosecution has no obligation to clear up all perceived ambiguities in the evidence of its witnesses on every collateral issue, relevant only to the credibility of such witnesses when the matters have not been properly canvassed under cross-examination.

205. The complaint about the sloppiness of exhibit P40 was premised on the incorrect assumption that if Mr Heng had indeed made the cash payments to the applicant, he would have prepared a more formal document. Only with this incorrect assumption would it appear that Mr Heng's evidence was somehow unsatisfactory.

206. The suggested sloppy nature of exhibit P40 could equally be an indication that Mr Heng was telling the truth. One could argue that if Mr Heng indeed tried to wrong the applicant, he would have easily taken the trouble of preparing a more formal document using paper with Morison letter-heads. After all, such paper must be readily available. The suggested differences between exhibits P6 and P40 as a ground for attacking Mr Heng's evidence were of little consequence.

207. The judge was aware of the unauthorised use of the Morrison International Logo by Mr Heng, the alleged discrepancies between his evidence and those of Madam Chow, and Mr Ma, the receipt of US$40,000 from Yiwen, the circumstances in which exhibit P40 came to be relied on and its contents, and his inability to properly account for the balance of $122,000.

208. Mr Zervos rightly observed that Mr Ma was not asked if he knew of the split of fees or commission as between Mr Heng and the applicant. When Mr Heng said he believed that Madam Chow and Mr Ma were aware of the split, it was because Madam Chow and Mr Ma were present during the negotiation he had with the applicant. It was not his evidence that he specifically told Madam Chow and Mr Ma of the split. Indeed, the applicant himself admitted that the 1% payable to him from the Yiwen deals was discussed quite openly.

209. Madam Chow said she was unfamiliar with the English language and perhaps that explained why she said she was unaware of any fee sharing agreement.

210. In any event, the judge could not have overlooked those matters. Counsel for the applicant had certainly placed repeated emphasis on those matters in his final submission.

211. The judge might not have referred to all the aforesaid matters in her reasons for verdict. However there was no such need, (See HKSAR v Choi Gin-ngon [1998] 1 HKLRD 902, HKSAR v Chan Man-chung unreported CACC87/2000 referred to by Mr Zervos), particularly when the defence's evidence was so blatantly unbelievable, as found by the judge.

212. The judge was clearly entitled to accept the evidence of Mr Heng to find charge 2 against the applicant proved. Her findings, having regard to the whole of the evidence, were supported by evidence and were entirely reasonable.

213. The particulars of charge 2 alleged that Yiwen made the payment to the applicant as a reward for his assistance in enabling Yiwen to obtain a loan or credit facility of US$20 million. The initial reference to the obtaining of the loan from SBL was deleted by an amendment to the charge.

214. The scheme devised in connection with charges 1 and 2 was no doubt convoluted. It involved the placement or the procurement of the placement of the required amount by SBL, the issue of certificates of deposit by ABC firstly to the order of SBL, then to the order of banks that put up the funds and then to the order of Yiwen.

215. Under the agreement executed between SBL and Yiwen, SBL was entitled to specify the denominations of the amount of the deposits and to nominate the "buyers" of the certificates. The fact that some of the certificates of deposit were payable to the order of Yiwen was highly unusual as it suggested that Yiwen had deposited US$20 million with ABC although Yiwen had simultaneously transferred the certificates of deposit to parties nominated by SBL.

216. A lot of questions could have been asked on the scheme to determine its exact nature. The issuance of certificates of deposit to the order of Yiwen by ABC was inconsistent with the undisputed fact that Yiwen was in need of fund and was therefore highly suspicious.

217. I do not find it necessary to go into details of the scheme. I just wish to commend that in cases involving corrupt payments, the documents relating to the relevant transactions may not and often do not show the true and/or the complete pictures.

218. However, there was no dispute that the ultimate purpose of the scheme was to enable Yiwen to obtain a loan of US$20 million. All the witnesses (Madam Chow, Mr Heng and Mr Ma) said the purpose of approaching the applicant for assistance was because Yiwen need to raise capital. Mr Ma specifically said as a result of the applicant's effort, Yiwen successfully obtained the loans of US$30 million and then US$20 million.

219. The agreement between Morison and Yiwen (exhibit P41) suggested that the consultancy fee was paid because Morison assisted in the securing of "a deposit of US$20 million for a term of five years". In the letter of appointment signed by Mr Liu (exhibit P64), Madam Chow was appointed to raise a capital of US$30 million. In the letter addressed to the applicant, Mr Liu talked about ABC agreed to provide a guarantee for the loan of US$30 million. Indeed, all the relevant documents relating to charges 1 and 2 stated that the purpose of the arrangements was to provide loans to Yiwen.

220. The witnesses and the documents on the issue were never challenged. Indeed, the applicant himself admitted that the arrangement concerned loans to and repayments by Yiwen. He expressly admitted in his evidence that, "Yiwen got the money by the arrangement of SBL from the participating banks"; "(we) discuss how to structure the loan to Yiwen".

221. A summary of the cash flows as set out in the credit application form of SBL provided a very good indication of the underlying arrangement:

"i) The Chinese borrower (Yiwen) pays the arrangement fee to SBL in advance.

ii) SBL arranges participant banks to provide the funding through a CD.

iii) ABC issues CDs in favour of SBL, transferred to order of the participant banks, simultaneously with the flow of funding from the participant banks.

iv) ABC on lends the funds to Yiwen.

At maturity:

i) The participant banks will present the maturing CDs to SBL.

ii) Yiwen will pay ABC.

iii) ABC will repay SBL, and we will simultaneously distribute the proceeds to the participant banks."

222. SBL had significant role to play in the scheme and had earned substantial fees. The applicant himself confirmed that SBL arranged the sales of the certificates of deposit to other banks. Mr Heng said it was a syndicated loan to Yiwen involving several banks, but arranged by SBL.

223. It was because of the effort by SBL in securing the loans for Yiwen that SBL was able to earn substantial fees. How it could be argued that Yiwen had not obtained any loan or credit facility or that SBL had not assisted Yiwen to obtain such loan or credit facilities was beyond comprehension.

224. I do not agree with the suggestion that the particulars of charge 2 bore no relationship to the Yiwen's deal of US$20 million. In any event, the observations on the particulars of a charge relevant to charges 3 to 6 equally apply. This ground of appeal also fails.

225. Although I am firmly of the view that the applicant was rightly convicted of charges 2 and 3 to 6, I would grant leave to appeal and dismiss the appeal. There is nothing unsafe or unsatisfactory about any of the convictions.

Hon Stock JA:

226. There were a number of issues in this application which struck me as deserving of particular scrutiny, and it is in respect of those that I add this judgment.

(1) The good character direction

227. We were taken to a series of decisions concerning the duty of judges in providing directions as to good character, some which related to directions to juries, others which tackled the approach when studying reasons provided by those who had been sitting alone; and to judgments which said that, as between propensity and credibility, good character went primarily to the issue of credibility. Mr Griffiths SC emphasised that where, as in this case, there was a burden placed upon an accused to show reasonable excuse for an act which (as to charges 3 to 6 inclusive) was said to be an honest belief that he was entitled to the payments, an accurate character direction was most particularly important. With that contention, I respectfully agree. Mr Griffiths then stressed that this was a case which revealed not merely an absence of previous convictions but ample testimony of positive good character. In the light of the applicant's evidence, if true, about how he helped Mr Liu to secure funds overseas for the benefit of Mr Liu's family, the impact of that evidence may be said to require some qualification; but as it happens the judge nonetheless treated the applicant as a person of good character, and that possible qualification does not therefore affect the analysis of the judge's approach.

228. Amongst the authorities drawn to our attention was R v Fok Tin-yau [1995] 1 HKCLR 351 in which Power VP said at p. 356:

"As Penlington, J.A. made it clear in R. v. WONG Chi-wei [1994] 1 HKCLR 94, CHAN Wu-nam's case is not authority for the proposition that in all cases where credibility is in issue, the judge must set out the manner in which he has considered the accused's good character in deciding that issue. Where a judge is sitting alone and evidence of good character has been given, this court will, even if he makes no mention of it, unless there be some express or implied indication otherwise, act upon the basis that he was aware of the character evidence and that he gave it the weight which he thought it deserved."

229. Further, in R v Cheng King-ho, Crim App No. 255 of 1993, the Court of Appeal pointed out that the failure of a judge in a jury case to give a Berrada or Vye direction did not automatically result in the quashing of a conviction: the question remains whether in all the circumstances the conviction is unsafe or unsatisfactory.

230. Each case must be examined according to its own facts and in the light of the directions which the judge in fact chose to give himself or herself. It seems to me that in this case, given the defence of honest belief and given too the prominence accorded in the conduct of the defence case to the applicant's suggested good character, it would have been odd indeed, and a material omission, had the judge not mentioned the question of character. Yet the fact is that she did so, and it is evident that she had well in mind that the applicant was a person of good character for it is a matter to which she alluded several times in the course of the Reasons for Verdict. In the event, the sole question is whether she has, as is suggested, misdirected herself as to the significance and effect of that good character.

231. It is said that she misdirected herself in two regards:

(1) by assuming that good character was relevant only to propensity and not to credibility; and

(2) by misunderstanding lack of propensity as relating solely to lack of an inclination in the past to commit offences, rather than to propensity to commit the very offences with which the applicant stood charged.

232. I agree with Mr Griffiths that it is no answer to say that an experienced judge would surely not commit such an error. Judges, even the most experienced, are capable of material error and if such an error appears on the face of a reasoned judgment, there must be demonstrated sound reason for not treating the words used to mean what they say, although to this I would add the very important qualification that reasons for verdict are not statutory instruments and must be read with common sense, and with proper regard to context, nuances, and style.

233. All that said, I am in the end firmly persuaded that to adopt the reading of the judge's comments about good character which we have been invited to adopt would be to distort what she was saying. We can best see the sense of it at paragraph 110 of the Reasons for Verdict where the judge alludes to two factors:

(1) the 'glowing character reference' which she has heard; and

(2) the fact that the applicant has 'also [n]ever shown a propensity in the past to [stray] into criminal activities'.

It is these two pieces of evidence together, she is saying, which show his good character. That is the context in which she speaks of no 'propensity in the past' to commit criminal activities, and indeed it is the only context in which reference to propensity in the past makes sense. The phraseology which the judge has used at paragraph 9 of her Reasons for Verdict, especially her use of the word 'therefore', is such as encouraged me at one stage to assume that Mr Griffiths' point had merit, but I am wholly satisfied upon re-reading it together with the passages at paragraphs 110 and 126 that she was not saying that the relevance of good character was propensity, and propensity in the past at that, but rather that she was saying that a lack of propensity in the past to commit unlawful acts was demonstrative of good character.

234. I am satisfied therefore that the judge did not misdirect herself in relation to good character.

(2) A suggested conflict of evidence

235. The applicant's defence in relation to the second charge (and to the first of which he was acquitted) was that there was never any arrangement that he would receive a share of commission in relation to such assistance as was accorded to Yiwen by Mr Heng, Madam Chow and Mr Yap. There was no agreement as between himself and Mr Heng that he, the applicant, would receive half of Mr Heng's commission. In support of his denial of Mr Heng's contention in this regard, much was made in submissions of a suggested discrepancy between the evidence of Mr Heng, on the one hand, to the effect that the others (Madam Chow and Mr Yap) knew of the fee splitting arrangement between Mr Heng and the applicant and, on the other, the evidence of Madam Chow and Mr Ma, which, it was said, supported the applicant's account in that they said that they knew of no such arrangement. Whilst the judge acknowledged this disparity she made no express finding about it, and it was a non-peripheral issue of fact which seemed to me to warrant close analysis by this Court.

236. We have been told by Mr Zervos who has since the start of the hearing before us had an opportunity, as have counsel for the applicant, of listening to the recording of Mr Ma's testimony, that no one asked Mr Ma whether he was party to any such discussion. Therefore, the conflict of evidence is restricted to the evidence of Mr Heng and Madam Chow.

237. Although Mr Heng said at one stage that he 'believed so' when asked whether 'the other three knew that Mr Elliott was getting 1 per cent' (transcript p 90), the rest of the testimony from him seems quite clear, that he recalled it as having been a discussion to which all had been a party. When asked (tr. p 189) where these discussions had taken place, he said that he could not recall exactly when or where they took place. That lack of recollection would not be surprising given that the events in question took place about nine or ten years before he gave evidence. It was put to Mr Heng by counsel for the applicant that: '.. this was a matter that was never discussed between the parties you have mentioned and Mr Elliott in your presence' to which the answer was: 'It was all agreed".

238. The judge said that she was persuaded by the evidence of Mr Heng that he was telling the truth about the agreement and I can see why exhibit P40, and the details and the accounting which it revealed, carried with it the force which the judge accorded it. Given her acknowledgment of the disparity to which I have been referred we can, I believe, safely take it that, being conscious of it, she was satisfied that Madam Chow's testimony did not detract from the essential truth of Mr Heng's assertion that there was an agreement for the splitting of fees and that the others knew about it. It may well be that she took the view that knowledge by the others was, at the end of the day, not as real a dispute of fact as is now presented on appeal. We have been taken by Mr Zervos to testimony by the applicant himself:

"Q.	Was there ever any discussion in the presence of Mr and Mrs Yap where Mr Heng stated or discussed that you were to share the commission and that he would receive it?
A.	No.
Q.	Did you ever have discussion with anyone on say trips to Beijing about commission payments? Was the subject ever raised?
A.	Yes, it was. Again, on one of the meetings in December or January when things looked like they might be going, we adjourned one evening and I got a phone call again and this time I was - from Ms Ya-ping to go back downstairs again. This time I met her and Mr Liu together and Mr Liu informed me through Ya-ping, that he had agreed a commission with Mr Heng and that I was to receive half of it.
....
Q.	What was your reaction to that?
A.	Well, I thought it was tempting, flattering, whatever, but I told him that, no, I couldn't take it, and really I didn't want it. But he was saying, 'Well, look, I've arranged for this commission, I want you to take it because you're putting in all the hard work, I want you to do it.' Again, I had to say no, I wouldn't accept it.
Q.	Were you entitled to take a commission on any such deals?
A.	I don't think on this occasion because I hadn't met these people before I joined Standard Bank. This was business that, although I had had dealings with the Agricultural Bank, it wasn't the same people, it wasn't business that Heng had even talked to me about prior to joining the bank. So in my mind there was no possibility for me to accept anything. They were quite insistent that I did. This is Mr Liu and Ms Li. Eventually, when they could see I wasn't going to accept it, they said to me, well, would I accept - if I didn't take it, Heng would get the whole lot. So I said, well, I haven't done any arrangements with the bank. That's not my problem really. So they asked me if I could accept it on their behalf, as they had extended family overseas studying and any money that was offshore would help pay for tuition and upkeep of their relatives. So I said, 'I'll see what I can do. Let me think about it and I'll get back to you.'" (Tr. pp 582-583)

Later we have the following exchange in cross examination of the applicant:

"Q.	When you went down to the coffee shop, didn't this conversation start with them asking you whether you were happy with your 1 per cent?
A.	Something like that, yes.
Q.	Well, that would indicate wouldn't it that the person in the Agricultural Bank and the director of Shenzhen Yiwen knew that you were supposed to get 1 per cent at that point in time?
A.	Well, at that point of time, yes, but when I gave him my answer that I wasn't aware of it, they said well, they'd arrange 2 per cent.
Q.	I'm not talking about what you say you were aware of, it implies doesn't it that people were aware that there was a commission to be paid and that they were aware or thought you were to get 1 per cent. It indicates that, doesn't it?
A.	It indicates that they'd allowed for a commission to be paid and they thought I was getting something, yes.
Q.	Yes.
A.	But I didn't - when I told them I wasn't aware of it, that was another thought for them.
Q.	Why did you consider it flattering that you should be given this money?
A.	Well, I don't think - the flattery was more as a gesture to them without just telling them to get lost, you can't just say 'go away' or whatever, it was 'Thank you very much, but I don't need it.' That's more the type of flattery I meant." (Tr. pp 612-613).

239. Given the passage of time between events and testimony, the evidence of the applicant about the comments made by others in relation to a 1% share in his favour, the strength of supporting evidence in relation to charge 2, and the judge's acknowledgment of the evidence of Madam Chow in so far as it departed from that of Mr Heng, I am satisfied that the judge's verdict is not validly to be undermined by the suggested conflict of evidence and her treatment of it.

(3) Loan and credit facilities

240. A considerable proportion of the argument advanced on behalf of the applicant in this appeal has been devoted to the suggestion that the charges were fundamentally flawed in so far as they asserted that Yiwen and Lia were the beneficiaries or intended beneficiaries of loans or credit facilities since, it is argued, it was not shown that the services provided by SBL constituted loans or credit facilities.

241. Rule 3(1) of the Indictment Rules, Cap 221, provides that:

"Subject to rule 4, every indictment shall contain, and shall be sufficient if it contains, a statement of the specific offence with which the accused is charged describing the offence shortly, together with such particulars as may be necessary for giving reasonable information as to the nature of the charge."

242. There can be no realistic suggestion made in this case that the applicant was, from the charge sheet itself, other than fully aware of the very conduct which was alleged to constitute the offence for which he was facing trial. The specific offence with which he was accused was stated. In relation to all the charges it was the offence of accepting an advantage as an agent of SBL. The payments which he was said to have accepted were identified, and the services performed by SBL in respect of which he was said to have accepted those payments were known to him and sufficiently earmarked in the charge sheet. There was only one US$20 million transaction facilitated by SBL which had Yiwen's name associated with it (charge 2), and as for charges 3 to 6 there was no issue but that he had received the payments which were alleged. If, as I find, the SBL service or business in respect of which he was said to have received a secret commission was sufficiently identified, the categorisation of that service or business as a matter of contractual or commercial law was irrelevant. The gravamen of each offence was identified, and the incident to which each allegedly corrupt act related was identified in such a way as to enable the applicant to deal with it.

243. There are many documents to which we have been taken redolent with suggestions of a loan to Yiwen, whatever the commercial reality may have been. Exhibit P86, for example, is an agreement between Yiwen and Morison which refers to a deposit of US$20 million by SBL with ABC for Yiwen's account with Yiwen agreeing to pay Morison 2% of the total of the deposit secured. It was half of this 2% that lay at the root of charges 1 and 2. Exhibit P137 is an agreement between SBL and none other than Yiwen for the deposit by SBL of $20 million, and the documentation flowing within the offices of SBL itself relating to the provision of this very US$20 million (e.g. exhibits P133 and P139) was all placed before the applicant and his advisers, as was the document (exhibit P135) which showed payment by Yiwen to SBL of the fee for the deposit of US$20 million. The agreement signed between SBL and ABC in November 1994 (exhibit P136) was an agreement whereby SBL agreed to 'place or procure the placement of a deposit with ABC in the sum of US$20 million' and it is common ground that SBL fulfilled whatever role in relation to the US$20 million was expected of it by either ABC or Yiwen; that SBL received its fee for the performance of its role; that Morison received from Yiwen a fee or commission as a result; and that it was in respect of that fee or payment to Morison by Yiwen that the applicant was said to have in turn received a half as a commission, an act which, if he received it, was self evidently received in relation to a role performed by his principal, SBL. Whether as a matter of law or fact that role by SBL is properly described as the making of a loan or the granting of a credit facility or the facilitating of some other benefit seems to me to be quite by the way.

244. In relation to charges 3 to 6, it was not suggested by anyone that there was no act done by SBL insufficiently identified by the charges. The defence was that although SBL did perform services for which it was remunerated in respect of identifiable transactions covered by charges 3 to 6, the applicant was entitled, or so he believed, to his commission nonetheless. We see from exhibit P152 a letter from Mr Yiu to the applicant, addressing the applicant as the General Manager of Standard Bank, by which Mr Yiu confirms an agreement in respect of Lia Industries and 'the resulting L/C discounting opportunities', by which agreement there is to be a 'front-end fee to be charged 1% flat' of which 1/8% 'is for the account of Standard Bank London Limited' and '7/8% is for the account of PYCY International Limited'. That 7/8% was precisely the amount which was charged to SBL, a fact about which SBL was unhappy, and which was then reduced to 3/4% as a result. It is common ground that the applicant was paid a proportion from that 3/4% which went to PYCY, a fact never revealed to his employers even when the subject matter of the unusually high fee was discussed in his presence. For what act or service, one has to ask, rhetorically, was that 3/4% paid to the applicant's employers? Can it seriously be suggested that the applicant did not know from the charges themselves what that act was, however it might more appropriately be categorised as a matter of law, and that he did not know that it was that very act of his employer in respect of which he was said to have received a secret commission? Of course that cannot seriously be suggested, and if he knew, that was because it was sufficiently explained in the charge sheet.

(4) Charges 3-6: the essence of the defence

245. Section 9 of the Prevention of Bribery Ordinance provides, in so far as is relevant, as follows:

"(1) Any agent who, without lawful authority or reasonable excuse, solicits or accepts any advantage as an inducement to or reward for or otherwise on account of his-

(a) doing or forbearing to do, or having done or forborne to do, any act in relation to his principal's affairs or business; or

(b) showing or forbearing to show, or having shown or forborne to show, favour or disfavour to any person in relation to his principal's affairs or business,

shall be guilty of an offence.

....

(4) If an agent solicits or accepts an advantage with the permission of his principal, being permission which complies with subsection (5), neither he nor the person who offered the advantage shall be guilty of an offence under subsection (1) or (2).

(5) For the purposes of subsection (4) permission shall-

(a) be given before the advantage is offered, solicited or accepted; or

(b) in any case where an advantage has been offered or accepted without prior permission, be applied for and given as soon as reasonably possible after such offer or acceptance,

and for such permission to be effective for the purposes of subsection (4), the principal shall, before giving such permission, have regard to the circumstances in which it is sought."

246. There is a suggestion in the written argument advanced by counsel for the applicant (at paragraph 120) that 'the applicant was not receiving the commissions for doing or having done any act in relation to his principal's affairs or business'. This is difficult to accept. The commissions given to the applicant were drawn from, or were part of, the fees paid by none other than SBL to PYCY on the basis of, and because of, PYCY's introduction of the deals to SBL; and the applicant was the person who had effected PYCY's introduction to his principal SBL. Each positive recommendation to SBL that SBL assume the role proposed in or in connection with the discounting of the bills of exchange was made by the applicant himself. The fee payable to PYCY was in each instance described along similar lines in the recommendation, such as: 'an introduction fee of 0.75 % ... payable to PYCY for introducing this deal to SBL. This sum is not to be borne by SBL but rather, a flat fee of 1% will be deducted from the net proceeds payable to Lia, with 0.75% being paid to PYCY and 0.25% being retained by SBL' (see for this particular example exhibit P159, the proposal dated 22 November 1993, seven months after the applicant joined SBL). From this 0.75%, the applicant was paid a proportion by PYCY in response to billing by Morison International at the applicant's behest, and in terms drafted by the applicant thus:

"Re: Introduction to Standard Bank London. Further to the above we understand that you have arranged for Standard Bank London Ltd to discount US$..... between Bank of Communications, Hainan and Standard Bank London. As agreed we are due 0.25% ... on assisting in arranging/ introducing this offshore transaction." (see exhibit P 17 for this particular example)

It seems clear enough, as we shall shortly see, that there was some sort of fee sharing agreement between the applicant and Mr Yiu before the applicant joined SBL, but under that agreement the fees would fall due for payment only once the applicant had fulfilled his part of the bargain, which was to arrange such facilities as would ultimately be requested or required by Lia, in connection with existing or future letters of credit or bills of exchange. In the event, the applicant fulfilled his part of that bargain by introducing his own employers, SBL, 'to this ... transaction' and indeed recommended to his employers that they lend themselves to those transactions.

247. It is therefore obvious that, as matters turned out, the applicant accepted an advantage on account of his doing an act in relation to his principal's affairs. It is also plain that that is conduct prohibited by section 9(1) of the Prevention of Bribery Ordinance.

248. That being so, the only possible remaining issues in relation to charges 3 to 6 were whether the principal, SBL, gave permission for him to receive those commissions and, if not, whether there existed either lawful authority or reasonable excuse for the acceptance by him of these commissions.

249. It was accepted that there was no request made by the applicant to SBL for the receipt of the payments made to him by PYCY, and that the Bank knew nothing about them. That leaves lawful authority or reasonable excuse, and it was reasonable excuse upon which the case was run. The live and central issue in the case, as far as concerned charges 3 to 6 inclusive, was put by Mr King in his address to the court below thus:

"The central issue to this case is the reasonableness of [the applicant's] belief - and I submit that was a belief that was honestly held - that he was entitled to accept these funds" (tr. page 743).

The basis for that suggested entitlement, and for the consequential reasonable excuse, was an agreement struck with Mr Yiu before the applicant joined SBL, an agreement in relation to Lia's search for letter of credit related banking facilities. According to the applicant, SBL knew that he had an ongoing business, namely, his interest in Elliott Gordon, immediately before he joined SBL, and they knew and indeed expected that he would be bringing Elliott Gordon business to the Bank. This is what he did, and in all these circumstances he honestly believed that he was entitled to these commissions and that no disclosure by him to SBL of these specific commissions was required, nor was the Bank's permission sought, for he had earned the fees or commissions before joining the Bank.

250. The applicant's testimony about this agreement, reached in the early months of 1993, before he joined SBL, was this:

"[Yiu] was able to show me some LCs had been issued by the Bank of Communications, in the Hainan branch, but the shipments hadn't been made yet. He told me this was a sizeable contract that they had, and during the course of 1993 there would be additional LCs and, because the Chinese importer needed time to get the machinery and put it to work, they had requested for a deferred - it was a deferred payment letter of credit, 360 days, which means that once the shipment has been made the shipping documents together with a bill of exchange are sent to the issuing bank. So the exporter has given up title to the goods by giving away the bills of lading. But in return they would get an accepted draft from the LC issuing bank. That draft becomes freely negotiable instruments. And like most exporters, LIA was in the position that its business was trading in machinery, not in financing customers for 100 - 360 days. So it was looking for - it would be looking for a bank to discount the bills of exchange when they became available. That was a role that they said would I have any interest in assisting them on when this came about. So naturally it was something I was very interested in. Edward Yiu was the person that put us together and he said he could arrange an introduction fee for this business if we could perform and find a bank to do the discount. So we had a discussion about the introduction fee and basically had a gentleman's agreement that we would share that if a bank could be brought to the table when the bills of exchange were available." (Tr. p 551)

251. Mr Yiu gave evidence that there was indeed an introduction to Lia before April 1993:

"I took him to the office and introduced him to Lia Heavy Industries. My company PYCY was an agency. The financing the discount of the letters of credit was mainly arranged through EG. At the end, it was found that Mr Elliott was once a director of EG. Later, it was found that he had joined Standard Bank. At that time, we had reached an agreement with EG that we would share the fees with them." (Tr. p 276)

It is not entirely clear to what time Mr Yiu was referring when he said: 'At that time...' but one should assume that it referred to a time before the applicant joined SBL.

252. We see therefore that in this case there was an undisputed factual premise for the defence, which premise might be said to have injected a factor different from the run of the mill section 9 case. By 'run of the mill section 9 case' I have in mind cases in which an employee accepts secret payments which are in explicit or implicit recognition of his role in securing from the principal a business deal or advantage in favour of the third party, and in which the defence is that there has been no such payment or that the payment was in satisfaction of some loan or agreement entirely unconnected to any service or facility in the principal's line of business. The difference in this case is that the commission due and paid was said to arise out of a contract between recipient of the commission and a third party which was concluded before the recipient was engaged by the principal, and before it was contemplated that the principal would be the one who would proffer the business deal or facility to that third party; a facility or deal of precisely the type contemplated by the original contract. The importance of this difference is this: that there was in this particular case an acknowledged factual foundation for the defence of good faith; the defence of belief in entitlement to the commissions. It follows that it is of the utmost importance to examine whether the trial judge sufficiently appreciated the fact of the pre-employment agreement between Mr Yiu and the applicant and, if she did, its possible subjective impact on the mind of the applicant. In this latter regard, the impact on the mind of an accused is an issue to be analysed with fair regard to the fact that dishonesty is not an inevitable conclusion to be drawn from a failure to act prudently or in strict compliance with rules; although that failure may (or may not) be evidence of dishonesty. So, too, care should be taken not to make hindsight master of the analytical process.

253. Under the heading 'Analysis', this is what the judge had to say about charges 3 to 6 inclusive :

"118. Now, I turn to deal with Charges 3-6, and it is not disputed that the defendant told Heng to collect the fees in these charges from PYCY and that subsequently PYCY paid Morison International and Morison International paid these sums to the defendant. The defendant does not dispute that he had drafted the letters that Heng had sent to PYCY from Morison International. As I have said, the heading of the letter says 'Introduction to Standard Bank'. In the letters it says:

'We are due 0.25 per cent [i.e. as in P28] US$14,631.10 on assisting in arranging/introducing this offshore transaction.'

119. It is clear from the exhibit that all the LCs and bills of exchange were created after the defendant joined Standard Bank, except for P183 and P198. These two LCs were dated prior to the defendant joining Standard Bank but discounted in March 1994 after he had joined Standard Bank.

120. The defendant said that he was entitled to these sums because he had met and discussed with Yiu and Lia before joining Standard Bank while he was wearing his Asia Pacific hat. He said he had told Clements about this, and his agreement with Yiu prior to his joining Standard Bank London was that he and Yiu would split the introduction fee if they could find a bank to discount the bill of exchange, so the fee was only earned when the bank was introduced and found.

121. He says that when the first bill of exchange in these four transactions became available, he had already joined Standard Bank, so he introduced it to Standard Bank. The defendant felt he was entitled to these fees but, at the end of the day, he said he gave all these fees to Clements, and he had continued receiving the fees until Yiu stopped paying and he only realized that there may be a conflict then.

122. I note that the defendant had said that the reference in the letter, where it says 'for assisting in arranging and introducing' meant 'we introduced the discounting party to them' which in this case was Standard Bank. All the transactions in these four charges became available for discounting after the defendant had joined Standard Bank and he introduced Standard Bank to them, and this fee was earned after he joined Standard Bank. I do not accept for one moment that the defendant, with his background, would believe that his fees were earned prior to his joining Standard Bank when he had done nothing more than said he could introduce banks or banks to discount these instruments.

123. A very good indication of the defendant's mind was when Yiu said he would stop paying the defendant because he believed it was not right to do so and the defendant merely smiled his assent. This clearly shows that the defendant himself did not feel that he was entitled to the fees in the first place and therefore made no protest to Yiu.

124. If he indeed did realise that there was a possible conflict, as he says, when Yiu told him, why did he not tell Wilde and ask for permission? Wilde's evidence was unequivocally that the defendant should have asked his permission to accept these fees from PYCY.

125. It is also pertinent to note that the defendant claimed he paid Clements, but for such a meticulous keeper of records as the defendant, he has not managed to produce any documentary evidence of his payments of such large sums in cash to Clements.

126. The defendant's evidence on this does not make sense. I find that the defendant had no lawful authority or reasonable excuse to accept these funds. Of course, I bear in mind all the time of his good character and that he only need to show, on the balance of probabilities, that he honestly believed that he had a reasonable excuse or lawful authority, but he had failed to do so." (Tr. pp 40-42).

254. There are two aspects of that analysis that have caused me concern, the first more than the second:

(1) there is no finding of fact expressed as such by the judge that there was an agreement between Mr Yiu and the applicant about the sharing of fees, and that that agreement was made before the applicant joined SBL; and

(2) in that the judge suggests that in response to Mr Yiu's decision to stop paying commission to the applicant was merely to smile, that does not reflect the full picture.

255. It is often correctly said that judges sitting alone are not expected to rehearse all the evidence nor to express findings on every contested detail or suggested disparity asserted by one party or the other. That said, it is not the function of an appellate court to make findings of fact on key issues nor, in the absence of clear pointers in the Reasons for Verdict, to assume a finding one way or the other in respect of such issues. We are left therefore, in this particular case, to see whether it is sufficiently clear from the Reasons for Verdict as a whole that the judge had well in mind the uncontested evidence of the applicant and Mr Yiu about the agreement and its relevance to the defence.

256. One finds in the closing submissions no contention by the prosecution that there was no introduction to Lia before the applicant joined SBL, nor a suggestion that there was no agreement as between Mr Yiu and the applicant at that stage about the sharing of fees; and in the submissions of Mr King in the court below, he points to the agreement and the evidence in support of it from Mr Yiu and to that from the applicant. The gravamen of the prosecution case was that once the applicant became an employee of SBL, there existed, as he must well have known, whatever had gone before, an expectation that he was to bring business to the Bank from existing contacts and that for performing that role he was to receive a salary and not commissions from those contacts:

"Q.	You couldn't possibly have seen the bills of exchange until months after you'd been working for Standard Bank?
A.	That's right, it's quite common.
Q.	Some of them are dated even the next year, 94. You couldn't possibly have been talking about the discounting of those bills of exchange before you joined Standard Bank?
A.	No, he said he had large contracts and there was going to be lots of continuing business.
Q.	You were employed by Standard Bank to bring in business, weren't you?
A.	I was.
Q.	They got you as the man in Asia to set up Standard Bank for them in Hong Kong, right? Because of your contacts?
A.	True.
Q.	Paid you what to us seems a reasonable remuneration, despite your disputes about bonuses?
A.	Yes.
Q.	They expected you to use your vast network of contacts and your knowledge of people in the forfaiting business, to use it for the bank, is that right?
A.	To bring business to the bank, yes.
Q.	That's why you got your salary, isn't that right?
A.	Correct.
Q.	This Lia PYCY deal was just another example of business that you brought into the bank, right?
A.	Yes.
Q.	The bank apparently were very happy with it because it's just the sort of thing they expected you to bring in?
A.	I don't think they knew what I was going to bring in, because they didn't have much knowledge of the product, but they were happy, yes.
Q.	It's the sort of business that they expected you to bring in?
A.	They didn't have any experience in trade finance, but they expected me to bring in profitable business, so, yes." (Tr. pp 639-640) (Emphasis added).

257. The judge has at paragraphs 28 to 36 inclusive of the Reasons for Verdict summarised accurately the testimony of the witness Mr Yiu from which we see the following:

"28. Then Edward Yiu gave evidence, and he was the director of PYCY from 1992 to 1996. He said he met the defendant in early 1993 when the defendant was with Elliott Gordon. In July 1993, letters of credit were issued through banks in China for the Lia financing. He produced P97, which was a letter from him to the defendant, who was then the General Manager of Standard Bank. This letter was dated 10 September 1993, which sets out the fees of PYCY as being ?th per cent and that ?th per cent was to Standard Bank.

29. He said that the financing of this deal was through Elliott Gordon and initially Elliott Gordon billed them and that they had agreed to pay, and that he had dealt with the defendant in Elliott Gordon, but later he found out that the defendant had joined Standard Bank, so he then dealt with the bank directly. It was at that time, he said, that he met the defendant and told him that he did not want to give him fees any more because he did not want to be, he said, 'in the grey area'.

...

32. He said that he first knew that the defendant was working for Standard Bank after the first discounting had been done. He said altogether there were 10 discounting deals that was done between Lia and Standard Bank. He said he had stopped paying Morison International after the fifth discounting because, he said, the defendant had initially arranged this deal as a broker and that the deal relating to the discounting was signed before he [the applicant] joined Standard Bank, and the defendant had told him that the bank knew about this activity." (Tr. pp 22-23) (Emphasis added).

In dealing with the evidence of Mr Wilde, she specifically mentions the fact that:

"He was hoping that the defendant would bring business which he had started in Elliott Gordon to Standard Bank.

50. Now, a question was asked. 'If the defendant was entitled to fees prior to joining Standard Bank, you have no objection to him receiving the fees even if he received them after joining Standard Bank London?' His answer was this, 'It would depend on whether Standard Bank London was a party to the transaction. That's my opinion, but this was not discussed.' This is mere common sense...." (Tr. p 27).

258. Most specifically when rehearsing the evidence of the applicant she summarised, again accurately, the applicant's testimony that:

"65. ...in the course of 1993, there would be additional letters of credit and Lia was looking for banks to discount the bill of exchange, and so they asked if the defendant could help. Yiu then told him that he could arrange for introduction fees if banks could be found to discount these bills of exchange, and he and Yiu agreed to share the fee. Yiu asked him for his usual fee and the defendant said normally it was half a per cent, splitting 50/50 with Yiu, but Yiu said he could probably get a bit more.

66. He said that when he agreed this business with Yiu, he had already begun an arrangement to withdraw from Elliott Gordon but he had not yet signed with Standard Bank." (Reasons for Verdict paras. 65-66).

and that although he joined the Bank before the fees were paid by PYCY to him, nonetheless:

"He felt that he was entitled to the fee because the agreement was made before he joined Standard Bank ...." (Reasons for Verdict para. 84)

259. It was in the context and against the background of this rehearsal of evidence, with no suggestion that the assertion of a prior arrangement with Mr Yiu was in issue, that the judge proffered her analysis, and in particular her comment at paragraph 122 of the Reasons for Verdict that all the transactions 'became available for discounting after the applicant joined Standard Bank ... and this fee was earned after he joined [the Bank]. I do not accept for one moment that the defendant, with his background, would believe that his fees were earned prior to his joining [the Bank] ...'.

260. I am in the event satisfied that the judge recognised that the fact of a prior arrangement with Mr Yiu was not a fact in issue and that the essence of her conclusion, adverse to the applicant, was:

(1) that no-one with the applicant's professional background would truly have considered himself entitled to the fees if, as turned out to be the case, the 'bank [that was] brought to the table when the bills of exchange were available' (the applicant's own terminology at page 551) was the bank which by then was his direct and sole employer, and which bank he had by his recommendation, in his capacity as its employee, brought to the table; and

(2) that there were in any event other cogent indicia that he did not so believe.

261. The judge's reference to the applicant's reaction to Mr Yiu's decision to halt payments is not quite accurate in so far as she attributes to the applicant a mere smile in response. It was put to the applicant in cross examination that he 'just smiled', but he answered:

"A.	No, not quite.
Q.	Well, what's your version?
A.	My version is, when he said that, I realised that people that introduce deals don't stay in them forever anyway. By raising it with me, it was a potential conflict in his mind and mine that - with the bank. So, I accepted that we wouldn't get any more, but it wasn't - we did discuss it, but I said 'Fair enough'.
Q.	That's it, is it?
A.	That's it." (Tr. p 636) (Emphasis added).

As for Mr Yiu, he did indeed say (tr page 295) that the applicant: ' .. smiled and did not say anything'; but he was pressed about this, and towards the close of cross examination it was put to him that at the meeting in August 1994 when he, Mr Yiu, announced his decision to stop payments to the applicant:

"Q.	... he told you at that August meeting once again that he had been given permission by senior management in London to continue dealing with PYCY as an agent and to receive fees?
A.	He said that those deals were made when he was a broker. Those were previous deals. He said he had got permission, approval.
Q.	And he also told you, did he not, again repeated that he had had a disagreement with the partner of Elliott Gordon and that is why he was using another company, Morison International to bill his fees?
A.	Right.
Q.	And on this occasion at the August meeting ...
....
Q.	At this meeting in the café in Admiralty in the summertime again you found that Mr Elliott was very direct with his explanation, did you not?
A.	Yes.
Q.	And you also found that explanation yourself at that time to be quite plausible?
A.	At first he said that he had obtained permission from London because those deals were previously made.
Q.	Well do you recall on a previous occasion prior to coming to court today, you stating that he was very direct with his explanation and again quite plausible?

INTERPRETER: Before court?

Q.	Before today, coming to court today, do you recall saying on another occasion?
A.	Although he said so but I could not stand it - it could not pass my own standard because he was a manager of a bank.
Q.	And you indicated that from that time on it was your intention not to pay any further commissions
A.	. Right.
Q.	And Mr Elliott did not seek to argue, to persuade you, that commission should continue to be paid, did he?
A.	He did not.
Q.	But at that meeting, at the café in Admiralty in the summertime, the matters that I've just put to you were discussed between you, were they not?
A.	Right." (Tr. pp 300-301).

262. It follows that at the August 1994 meeting - the same occasion, as I understand it, as the smile - the applicant repeated his assertion that the deals for which he had been receiving fees from PYCY were made before he had joined SBL and in respect of which he had permission from the Bank, a fact which the judge, on the face of her Reasons for Verdict, seems to have missed. Nonetheless, it remains the fact, as the judge found:

(1) that the applicant did not protest Mr Yiu's decision;

(2) that in so far as the applicant assured Mr Yiu that he had the Bank's permission to accept the commission payments, that assurance was, at the least, as the applicant must surely have known, misleading (see Reasons for Verdict at paragraph 34); and

(3) that if the applicant realised for the first time in August 1994 that another view might be taken about the propriety of his acceptance of commissions, a view so tenable that it 'was a potential conflict in his mind and mine... with the bank' (tr page 636), one might have expected the applicant then to raise the matter with the bank. Yet he did not do so; and as late as 18 August 1994 received $112,826 which he kept and made no attempt or suggestion to restore.

263. In that context, and in the context of the other indicia of lack of honest belief to which I shall now turn, I do not consider the judge's overly restrictive view of the evidence of the applicant's reaction constitutes a material error. Alternatively, I am satisfied that even if her reading of that piece of evidence was an error of a material kind, a proper analysis of the evidence of the applicant's reaction would, and should, have made no difference to the result.

264. In the course of this lengthy appeal, the facts of the case were canvassed in much detail, and I have studied them further since, and although this is not a retrial but an appeal, I am bound to say that the more we were taken to the evidence as the hearing progressed the more apparent it became why the judge was compelled to hold, as she did, that the applicant had not discharged the burden of showing a reasonable excuse - which he categorised as an honest belief in entitlement - for accepting payments made on account of his acts in relation to his principal's affairs. It is easy in a case of this kind for the trees to obscure the wood, so key facts bear repetition:

(1) the applicant accepted, as he was bound to, that before joining SBL, he concluded no deal with PYCY or Lia (tr page 632);

(2) none of the Bills of Exchange the discounting of which was facilitated by or through SBL, for which service SBL and thus PYCY and the applicant were paid, had been drawn by 1 April 1993;

(3) at the very time that SBL itself, to the knowledge of the applicant, expressed unease about the fee of 7/8% to be charged by PYCY for an introduction to which the applicant was a party, leaving SBL, the applicant's employer, with only 1/8%, the applicant said not a word to SBL about his interest in the 7/8%. I do not think it a counsel of perfection to say that at that stage any employee of experience acting hitherto innocently - let us for the moment make that assumption - would then surely have appreciated the conflict of his position and rejected any suggestion of receiving payments or further payments. Yet,

(4) on each occasion subsequent to the 7/8% episode, the applicant accepted payments - substantial payments - from PYCY, none of which he disclosed to the very employers to whom he had recommended each deal which ensured those payments;

(5) whereas the applicant's case was, as it had to be, that the agreement he made which entitled him to the commission was an agreement concluded on behalf of Elliott Gordon, it is common ground that Elliott Gordon saw not a cent of the commission payments;

(6) the commission payments themselves went to the applicant himself - in cash, or to a bank account held in the name of himself and his wife;

(7) the story of APL's substitution for Elliott Gordon and of payments to Mr Clements was palpably false. This is what the applicant said:

"A.	... These transactions I'd already reported to -- as I had already known that I was probably going to leave Elliott Gordon anyhow, and APL was already there as an umbrella company for me, I reported to my other partner, Mr Graham Clements of APL about my meeting with Edward Yiu, and that I thought some business was going to come up. He registered that and thought that was a good idea. He'd also introduced business to APL from, because he was based in London now, that we had done from time to time.
Q.	Just pause there. To your mind was there anything in your employment contract or in the compliance manual that you had received that disqualified you or prohibited you from taking the commissions that you did, in relation to Lia Heavy Industries?
A.	No, there wasn't. I felt that the commission that I was earning on these transactions was being paid by LIA through to PYCY and onto APL. I knew I was leaving Elliott Gordon and it was the right vehicle to put the business through when the time came." (Tr. p 553).

and later:

"Q.	In relation to - - put that aside, please - - the sums of money that we saw in your last few days of evidence that were received from PYCY in relation to the introduction concerning Lia Heavy Industries, those sums of money that were paid into your personal account, did you in fact personally benefit from those sums or after?
A.	I didn't in fact, no. I gave them to my partner in the UK, Mr Clements, basically because we had done business earlier that the company had been going - he'd introduced transactions because he was based in the UK and I was based in Asia, where I'd shared but had done very little or nothing in the transaction, on just a sale and purchase which he arranged. So now I was - - although I'd fixed it up before I was employed, once I was employed I realised I couldn't help him much more so he could take the benefit of these introductions I made earlier." (Tr. p 574).

One notes too that, according to this story, there was no request that the commissions due be paid directly to Mr Clements. No records were produced showing the payment of funds to Mr Clements. No evidence from Mr Clements was adduced, even though the applicant knew "more or less" (tr. page 616) where Mr Clements was. No request was even made to take evidence from him on commission. For further flavour of the testimony:

"Q.	Would we be able to see from your joint bank account corresponding withdrawals of the sums stated in the charges?
A.	No.
Q.	Did you give him any piece of paper showing an accounting?
A.	I probably showed him what I'd received, yes, in Hong Kong dollars.
Q.	'Probably'. What does 'probably' mean?
A.	Well, I would've shown him.
Q.	And you gave him all of it?
A.	I gave him all of it.
Q.	Why should he get all of it if you're a beneficial shareholder in APL?
A.	He didn't have to get it all, but the fact was that he'd done transactions where I'd received - he'd given me a 50 per cent share where I'd done nothing, whilst he was in the UK.
Q.	So, he'd done business in the UK for APL and gave you 50 per cent of the ...
A.	Yes.
Q.	... Profit of those deals, right?
A.	Correct. Prior to me joining the bank, that was.
Q.	Whereas you give him all of the shares of these amounts - you give him all these amounts. Why aren't you giving him 50 per cent?
A.	Well, because I felt by that time I had left him in the company. We had been partners, I felt a little awkward, I suppose, that I'd walked out on him because I joined the bank and I couldn't be able to help him much more. So, it was like a quid pro quo, he'd been decent and good to me so I was the same to him.
Q.	If what you're saying is right, he should've only got 50 per cent of these amounts set out in Charges 3 to 6?
A.	As a partner, yes, but as I said - I explained - I felt I was indebted to him for doing something else, I was getting a salary now, he could have the whole share." (Tr. p 647).

None of this carries the hallmark of truth; or any semblance of openness and inner conviction.

So, too, with the following:

"Q.	If you were perfectly entitled to the share of PYCY's introductory fee, why not simply tell Mr Wilde, put it in writing, seek permission, put it in the open?
A.	I didn't do it.
Q.	No, well I'm asking you why not?
A.	Because I felt that I'd already agreed it before in the transition way, I'd told my partner in APL that the commission was coming, and I had an obligation to him to collect it for APL.
Q.	Why didn't you open a bank account, put it in an APL bank account?
A.	Because my partner was in the UK and we had a company secretary who I thought was going to collect it.
Q.	Company secretary being the trusty Mr Heng, is it?
A.	That's right.
Q.	He could do it in the name of Morison International Inc., which on the face of it had no connection with you, right?
A.	Yes, he did that on behalf of APL.
Q.	And the initial claim with Standard Bank was done with PYCY, which on the face of it had nothing to do with you, is that right?
A.	That's true." (Tr. p 641);

(8) invoices for the commission payments to which the applicant says he thought he was legitimately entitled were in terms which were drafted by the applicant and issued at his behest by Morison International, yet on Morison's letterhead, with no mention of Elliott Gordon; no mention of APL; and no hint of a reference to the applicant himself; and

(9) in the written recommendations by the applicant to SBL, there is no mention of Elliott Gordon, the very company whose receipt of commission, so the applicant asserts, would not have fussed anyone at SBL. Nor of course is there any mention of the applicant's role, or of APL.

These indicia of a lack of honest belief are cumulatively powerful indeed.

Conclusion

265. For the reasons which I have provided, I am satisfied that there exists no proper basis upon which to overturn the verdicts in respect of charges 2, and charges 3 to 6. Whilst I take the view that there existed reasonably arguable grounds of appeal, for which reason I would grant leave to appeal, I would nonetheless dismiss the appeal against convictions.

Stuart-Moore, VP:

266. There is little which I desire to add.

267. It is unnecessary, in the light of the two judgments already given to rehearse the facts or the principal grounds of appeal. I can see force in the argument that the trial judge's Reasons for Verdict may have been somewhat light on detail when she provided the essential background facts and the conclusions she drew from them. Parts of the evidence were recounted in a way which seemed almost to pre-suppose that the reader was already familiar with the basic framework of the case against the applicant when, undoubtedly, a more comprehensive outline would have been helpful. However, if anything this was, in my view, a defect in style rather than one of substance because it is apparent, now that we have been taken through the evidence in more thorough detail, that the judge had comprehended the important issues in the case and had drawn sufficient material from the evidence to enable her to formulate with safety her conclusions upon it.

268. Most of the evidence on which the prosecution placed reliance was not in dispute with the notable exception of Mr Heng's testimony on charge 2.

269. Charges 1 and 2, contrary to section 9(1)(a) of the Prevention of Bribery Ordinance, Cap. 201, related to services provided by SBL to Yiwen to enable Yiwen to obtain loans of US$30 million and US$20 million respectively.

270. The particulars of charge 2 alleged that the applicant:

".... being an agent, namely an employee of the Hong Kong Representative Office of Standard Bank London Limited ('SBL'), in or about 1995, in Hong Kong, without lawful authority or reasonable excuse, accepted an advantage, namely a fee, reward or commission of approximately $1,541,935.50 Hong Kong currency from Heng Kwoo-seng, as an inducement to or reward for or otherwise on account of the said Peter Norman Elliott doing or having done an act in relation to his principal's affairs or business, namely assisting Shenzhen Yiwen Industrial Company Limited to obtain a loan or credit facility of $20,000,000.00 United States currency."

271. The remaining four charges, also contrary to section 9(1)(a), related to the discounting of bills of exchange amounting to about US$33 million by SBL and were drawn under letters of credit issued by the Bank of Communications, Hainan Branch, in favour of Lia. Each of these charges was similarly particularised. Charge 3, by way of example, alleged that the applicant:

".... being an agent, namely an employee of the Hong Kong Representative Office of Standard Bank London Limited ('SBL'), on or about the 26th day of January 1994, in Hong Kong, without lawful authority or reasonable excuse, accepted an advantage, namely a fee, reward or commission of approximately $165,440.48 Hong Kong currency from Yiu Chow-mo, Edward through Morison International Inc. as an inducement to or reward for or otherwise on account of the said Peter Norman Elliott doing or having done an act in relation to his principal's affairs or business, namely assisting Lia Heavy Industry Holdings Limited to obtain a loan or credit facility of $8,582,340.00 United States currency from SBL."

272. The approximate dates given in charges 4 to 6 were 30 March, 19 May and 18 August 1994 and these charges alleged the acceptance of an advantage in the sums of about $142,133, $231,304 and $112,826 respectively.

273. The applicant, aged 51 at the time of his trial, has had long experience in trade finance of one kind or another. He first worked in Hong Kong in about 1975 when he was the manager of a foreign exchange company. After about five years, he returned to the European circuit where he became involved in the discounting of bills of exchange and other financial instruments, often referred to in the world of banking by the term "forfaiting". Eventually, after a number of years in major banking circles, which brought him into contact with New York and Singapore, the applicant put his expertise in forfaiting to good use when he and a colleague, Mr Gordon Toh, went into a joint venture in Singapore by setting up their own brokerage business, Elliott Gordon. The applicant ceased to be a director of Elliott Gordon about a month before he became the General Manager of SBL in Hong Kong on 1 April 1993. This was part of the process of shedding any outside connections which might otherwise have left the applicant being faced with a conflict of interest with his work at SBL.

274. With this background, it goes almost without saying that the applicant was entitled to put himself before the court as someone whose life had been distinguished by hard work which had, in turn, brought him considerable success. It was implicit in this that the applicant, prior to his appointment with SBL, was someone whose integrity and honesty had never been in question.

275. It is manifest, from the three specific references made to this aspect of the evidence, that the judge was well aware of the applicant's good character and was treating him, in the two senses which the law requires when, as in the present case, the circumstances are appropriate for so doing, as a person who was less likely to have turned to crime and whose word was more likely to be credible. The dividing line between these two facets in the approach to good character, as a matter of common sense, is often difficult to discern but I am satisfied that the judge treated the applicant as being fully entitled to be regarded in this light. This was in spite of the applicant's own confession to conduct which arguably disqualified him from such an approach.

276. The allegations of an acceptance on various occasions by the applicant of secret commission payments, which he faced at trial after the lengthy delay necessitated by contested extradition proceedings in London, provided a stark contrast, which could hardly have been more obvious to an experienced judge, to the actions of someone who, it was accepted, had led an honest and industrious life for over three decades in at least as many continents.

277. The evidence on charges 3 to 6 demonstrated that the applicant, after his employment with SBL had begun, was accepting fees or commission payments in respect of SBL contracts which he, at no stage, made any attempt to reveal to anyone let alone Mr Wilde to whom he was answerable. This failure to communicate was despite Mr Yiu's understandable and openly expressed concern on behalf of Lia that led him to express the desire to avoid a "grey area" when he declined to make any more payments to the applicant. The applicant's more or less silent acknowledgement to Mr Yiu that these payments were inappropriate, and his complete silence to SBL about his acceptance of the four payments made to him by Mr Yiu, took on added significance in the light of Mr Yiu's evidence that the applicant had actually assured him that he had SBL's permission to accept these payments. Significantly, perhaps, having regard to the defence of "reasonable excuse" which was ultimately advanced by the applicant as his reason for the acceptance of these payments, not only was the explanation the applicant gave to Mr Yiu never challenged but Mr King also gave positive emphasis to this aspect in his cross-examination of Mr Yiu at trial in the passage which follows:

"Q	. And (the applicant) said to you, did he not, that he had been given permission by his senior management in London to continue dealing with PYCY as an agent and to receive fees?
A.	Yes, it was once mentioned.
Q.	And you found that to be at the time it was mentioned a very plausible and straight-forward explanation, did you not?
A.	Yes.
Q.	And you at that time had no reason to believe he was not telling you the truth?
A.	That's correct." (Tr. p. 297)

278. This stance which the defence were advancing has to be contrasted with the version given by the applicant from the witness box when, in relation to the payments he had accepted, he said:

"A.	My view was that I had had the discussion with the customer prior to joining the bank, almost -- well, two to three months prior to joining the bank, when I didn't know for sure I was joining the bank. My discussions with Mr Wilde and Mr Prinzlou, when it came to finally joining the bank, concerned wrapping up my other businesses. They were quite content for me to take time to do that. There was no written instructions on how I should do that; it was left as a basis of trust for me to get on with it. These transactions I'd already reported to -- as I had already known that I was probably going to leave Elliott Gordon anyhow, and APL was already there as an umbrella company for me, I reported to my other partner, Mr Graham Clements of APL about my meeting with Edward Yiu and that I thought some business was going to come up. He registered that and thought that was a good idea. He'd also introduced businesses to APL from, because he was based in London now, that we had done from time to time.
Q.	Just pause there. To your mind was there anything in your employment contract or in the compliance manual that you had received that disqualified you or prohibited you from taking the commissions that you did, in relation to Lia Heavy Industries?
A.	No, there wasn't. I felt that the commission that I was earning on these transactions was being paid by Lia through to PYCY and onto APL. I knew I was leaving Elliott Gordon and it was the right vehicle to put the business through when the time came." (Tr. p. 553)

279. It is not suggested that there was any mistaking the way in which the defence was ultimately presented and indeed the applicant's version was repeated by defence counsel in his final address to the trial judge.

280. The deliberate decision by counsel not to challenge the evidence of Mr Yiu thereby acquired an important status of its own. Mr Yiu's account that the applicant had told him that he had SBL's permission to accept these payments had gone without dispute until the applicant gave the potentially conflicting, and apparently inconsistent, account that he held a belief, without having sought permission from SBL, that he was entitled to the payments from Mr Yiu. When put alongside his counsel's cross-examination of Mr Yiu, this line of defence appears to reveal a U-turn on an issue which was fundamental to the applicant's case on charges 3 to 6. At the very least, by telling Mr Yiu that he had SBL's permission to accept payments from him, whether or not simply to placate him, the applicant was not speaking the truth. Yet its very assertion to Mr Yiu provides a revealing insight as to the applicant's state of mind. It appears to amount to a recognition on the applicant's part of the necessity for permission to have been given before such personal payments could be accepted by him as the General Manager of SBL.

281. This topic and its significance was dealt with by the judge, albeit briefly, in her Reasons for Verdict where she said:

"34. (Yiu) also went on to say that when he raised his concern about the defendant receiving commission while being employed by Standard Bank, the defendant mentioned that he had received permission to continue receiving fees acting as agent in PYCY. This was actually put to Yiu, that the defendant had told him he had received permission, but the defendant's own evidence was that he did not ask for permission because he did not think it was necessary." (Tr. p. 24)

282. When Mr Griffiths' contention that the judge had failed properly to evaluate the evidence on charges 3 to 6 was being examined, it became clear that the somewhat sparse detail which, with respect, the judge had provided in her Reasons for Verdict had a general tendency to favour the applicant rather than to demonstrate any deficiencies to the prejudice of his interests. Furthermore, when the judge concluded that charges 3 to 6 had been proved to the necessary standard, it must be remembered that the points set out at paragraph 264 (above) on the issue concerned with the applicant's alleged "reasonable excuse" to have acted in the way he did, provided in combination very strong evidence against him.

283. It would have been extraordinary, in my opinion, if the judge had arrived at any other conclusions on charges 3 to 6, bearing in mind these factors taken together with others to which she made specific reference. Not least amongst these, perhaps, was the rather obvious absurdity in the applicant's account that he had made the equivalent of a charitable donation to Mr Clements of all the monies he had received from Mr Yiu leaving no documentary trace of the payments.

284. In relation to Mr Clements allegedly receiving all the proceeds from these four charges, it is worth recalling that when asked if he had personally benefited from these sums of money, the applicant replied:

"I didn't in fact, no. I gave them to my partner in the UK, Mr Clements, basically because we had done business earlier that the company had been going -- he'd introduced transactions because he was based in the UK and I was based in Asia, where I'd shared but had done very little or nothing in the transaction, on just a sale and purchase which he arranged. So now I was -- although I'd fixed it up before I was employed, once I was employed I realised I couldn't help him much more so he could take the benefit of these introductions I made earlier." (Appeal bundle p. 574)

285. Although the applicant said that Mr Clements had been ill, from which it was implicit that he could not attend the trial to give evidence, there are in such circumstances ways of putting evidence before a court, not least under section 22 of the Evidence Ordinance, Cap. 8, which provides so far as it is relevant:

"(1) .... a statement contained in a document shall be admitted in any criminal proceedings as prima facie evidence of any fact stated therein if-

(a) direct oral evidence of that fact would be admissible in those proceedings; and

(b) ....

(c) the person who supplied the information-

(i) is .... by reason of his bodily .... condition unfit to attend as a witness;

(ii) is outside Hong Kong and it is not reasonably practicable to secure his attendance;

....

(vi) having regard to all the circumstances of the case, cannot be called as a witness without his being so called being likely to cause undue delay or expense."

286. It is not without note in this context that other evidence in affidavit form, relevant to charge 1, was put before the trial judge when a stay of proceedings, based upon the absence of four other witnesses, was sought.

287. Mr Griffiths described this aspect of the case so far as it concerned Mr Clements as being "peripheral" to the main issue and so, in one sense, it was. However, it concerned the disposal of sizeable sums of money arising from allegations of corruption which carried with them the implication of behaviour borne of greed and perpetrated for personal gain. In this sense, it was not without significance to examine the destination of the proceeds. There was, of course, no burden on the applicant to establish that his story in this respect was true, but bearing in mind that there had been no attempt to put evidence before the court from his former business partner, Mr Clements, it is little wonder that the judge commented in her Reasons for Verdict that:

".... for such a meticulous keeper of records as the defendant, he has not managed to produce any documentary evidence of his payments of such large sums in cash to Clements". (Reasons for Verdict para. 125)

288. The evidence on charges 3 to 6 was overwhelming and I am satisfied that the verdicts on these charges were neither unsafe nor unsatisfactory.

289. The issue to be decided on charge 2 was relatively straightforward as it effectively rested upon the view taken by the judge as to Mr Heng's credibility as a witness when he stated that he had given cash to the applicant in a sum equivalent to $1.397 million. This was the latest of the charges in chronological order and the applicant acknowledged in his evidence that he had no entitlement to commission on the deal with Yiwen.

290. The alleged discrepancies in the evidence concerning this transaction, for the reasons provided by Stock JA (at paragraphs 235-239 above), were of little consequence and I am unable to see any justification for interfering with the judge's verdict on this charge.

291. I agree with the conclusions reached by Yeung and Stock JJA. I would also grant leave but dismiss the appeal.

Conclusion

292. Treating the hearing as the appeal, it is the unanimous decision of the court that this appeal should be dismissed.