HKSAR v. LAW KING YIP AND OTHERS

CACC369/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO.369 OF 2003

(ON APPEAL FROM DCCC NO.837 OF 2002)

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REASONS   FOR   JUDGMENT

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Lunn J (giving the reasons for the judgment of the court) :

Background

1. The applicants who seek leave to appeal against their convictions and their sentences were convicted after a very lengthy trial in the District Court by Deputy Judge McNair of a single charge of conspiracy to defraud, contrary to common law and punishable under section 159C(6) of the Crimes Ordinance, Cap.200.  At the hearing of those applications on 14 October 2004, we dismissed the applications and indicated that we would hand down our reasons for so doing later.  This we do now.

2. The ‘Particulars of Offence’ alleged that between May 1999 and July 2000 these applicants, the former 2^nd, 5^th and 8^th defendants together with other persons unknown conspired to defraud such persons as might be induced to give any of them money to invest, by dishonestly :

“	(a)	falsely representing that such persons were genuinely employed by Talent Elite International Limited( the company);
	(b)	falsely representing that the company was genuinely involved in trading or investing;
	(c)	inducing, causing or allowing such persons to invest money in an investment with the company;
	(d)	falsely representing that money given to invest was invested in a genuine and existing investment;
	(e)	failing to invest or not investing the money given to invest;
	(f)	falsely representing that the money given to invest had all been lost in the investment; and
	(g)	appropriating the money given to invest.	”

3. The trial commenced on 10 February 2003.  On 11 February the 8^th defendant was convicted of the charge following her plea of guilty.  Subsequently, she was called as a prosecution witness (PW31), her evidence beginning on 30 June and concluding on 9 July 2003.  Shortly before the prosecution closed its case the former 2^nd defendant pleaded guilty to the charge followed by the 1^st, 5^th and 7^th defendants, who were convicted of the charge on 22 July 2003.  The deputy judge delivered his ‘Reasons for Verdict’ on 29 July 2003.

Convictions and sentence

4. The deputy judge convicted the 3^rd, 4^th and 6^th applicants of the charge.  The sentences imposed upon those applicants and the 1^st and 7^th applicants were :

A1     three years eight months’ imprisonment;

A3     four years’ imprisonment;

A4     three years and two months’ imprisonment;

A6     four years’ imprisonment; and

A7     three years and four months’ imprisonment.

Applications for leave to appeal against conviction

5. The 3^rd, 4^th and 6^th applicants seek leave to appeal against their convictions and sentences.  The 1^st and 7^th applicants seek leave to appeal against their sentences only.

THE PROSECUTION CASE

6. The prosecution case concerned the business activities of a company, Talent Elite International Consultant Limited (“Talent”), which operated from premises at the 1^st Floor, First Pacific Bank Centre, 56 Gloucester Road, Wanchai.  The nub of the case was that its purported business of dealing in bullion, namely Loco London Silver trades， was entirely bogus and that these applicants, the former co-defendants and other persons unknown were parties to a conspiracy to defraud such persons as might be induced to give any of them money to invest in such trading by making the false representations set out in the “Particulars of Offence”, thereby inducing, causing or allowing such persons to make payments of money, not investing the money but appropriating it.  The persons targeted to make such investments were persons who were lured into obtaining employment with the company with the offer of generous rates of salary, irrespective of their experience for the positions they were to occupy.  Once in employment they were the target of other apparent employees of Talent who sought to persuade them to open accounts with Talent and to trade in bullion, after they had made payments of money into that account.  To persuade them to do so they were regaled with accounts of profits made by their apparent fellow employees.  There were no profits and there was no trading.  If persuaded to invest, initially they were encouraged by assertions that their account had made a profit, but thereafter the account was said to have become exhausted of funds so that it was necessary for them to make further payments of money in order to try to recoup their losses.  In truth, they were persuaded to throw good money after bad.

7. In support of their case the prosecution called as witnesses a number of employees of Talent who had been persuaded to invest in accounts with the company and who had been told that all their monies had been lost in trading.  Those witnesses identified the roles played by the various applicants within the company, in particular in respect of their investment in bullion trading.  Also, the prosecution called as a witness the former 8^th defendant, after she had pleaded guilty to the charge of conspiracy to defraud.  The only other witnesses of significance were two expert witnesses who testified as to the contrast between the operation of Talent and the operation of other Loco London Silver trading companies.

THE DEFENCE CASE

8. None of the applicants exercised their right to give or call evidence in the defence case.  In the conduct of their case counsel put in issue both the very existence of the alleged conspiracy and the part played by each respective applicant.  In respect of the latter, the identification of the applicants by particular witnesses and the attribution by those witnesses to the particular applicant of specific conduct was put in issue.

REASONS FOR VERDICT

9. In his consideration of the relevant law the deputy judge stated of his approach to the conspiracy charge :

“Once the prosecution case is established on a prima facie basis, some independent evidence as to the existence of a conspiracy and the defendants’ complicity in it, the evidential rule allowing for admission of otherwise inadmissible hearsay evidence applies.  Acts and statements made by a co-conspirator in furtherance of the common unlawful purpose within the currency of the specific conspiracy alleged are admissible against co-conspirators.”

No doubt, in so articulating the relevant law the deputy judge was mindful of the statement of law set out in the judgment of this court in R. v. Au Shui Yuen, Alick [1993] 2 HKC 219 at 226 F-G :

“In applying the prima facie case test, we would state the co-conspirator’s role thus — before the evidence of the words and acts of the accused’s co-conspirators, done in furtherance of the conspiracy, is admissible against the accused, a foundation for its reception must be laid.  This takes the form of independent evidence which links the accused to the conspiracy charged.  This evidence must be independent in the sense that it is evidence other than that admissible only pursuant to the co-conspirator’s rule (i.e. evidence of the co-conspirator’s doings relied on for its hearsay value).”

10. Having reviewed the evidence of the former 8^th defendant (PW31), PW1 to PW6, PW8 and PW9, (all ‘employee/victims’) together with the evidence of the two expert witnesses Mr Chu and Mr Pike, the deputy judge found :

“There was ample prima facie evidence before the court that a conspiracy as alleged in the indictment particulars existed as between all eight defendants.  It follows from this that the acts and statements made in furtherance of the alleged conspiracy are admissible as against all conspirators.”

Of that issue the deputy judge went on to find :

“I find that all statements and acts of all the named defendants and others not known are admissible against these defendants.  These statements are all framed and intended to further the conspiracy by enveloping the prosecution witnesses in a reassuring and protective cocoon in which they were encouraged subtly and not so subtly to open accounts.”

11. Of the fundamental issues of which resolution was required the deputy judge said :

“The question at the end of the day is two-fold.  Firstly, has the evidence, direct and circumstantial, proved beyond reasonable doubt that the alleged conspiracy, as particularised, existed at the material time and does the evidence prove beyond reasonable doubt that these defendants here present knowingly played certain roles in that conspiracy as part of the common criminal purpose?”

12. In resolving those questions the deputy judge went on to find :

“… it is clear to this court that Talent’s operational practices were such that no trier of fact could find that it was a legitimate business operation.  The significant differences described by Chu and Pike were, in the court’s opinion, such that I find Talent in itself was a sham company, albeit properly incorporated, the sole purpose of which was to milk money from unsuspecting employees.”

The deputy judge went on to find that :

“… all representations to the P.W.’s as to employment of the P.W.s were false; all representations that Talent was genuinely involved in trading or investing were false; all false representations did induce, cause or allow prosecution witnesses to invest in Talent; that false representations were made to the prosecution witnesses regarding the quality and existence of the investments made at Talent; that none of the prosecution witnesses’ money given to Talent was invested as agreed; that false representations were made to the prosecution witnesses regarding the loss of their investment funds; and that all funds provided to Talent by the prosecution witnesses were appropriated by the conspirators.  Having considered all the relevant and admissible and probative evidence in the round, I find it proven beyond any reasonable doubt that the alleged conspiracy existed.”

13. Of the issue of proof of the participation of the applicants in the conspiracy charged the deputy judge found :

“I do accept the evidence of identification of D3, D4 and D6 as strong and reliable evidence and I find it proven that they did and spoke as described.”

Of that conduct the deputy judge found :

“… the evidence against each of these defendants puts them at Talent, interacting with Talent staff, other defendants and the P.W.s in the course of their daily activities on matters which directly related to the conspiracy .”

The deputy judge went on to find that in conducting themselves in that way the applicants were dishonest.

14. In the result, the deputy judge concluded :

“… they were knowingly part of this conspiracy, performing their assigned roles with the intent of accomplishing the common criminal purpose as alleged.”

Perfected grounds of appeal against conviction ― 3^rd and 4^th applicants

15. Mr Wong Po Wing, who appears on behalf of the 3^rd and 4^th applicants, advances similar grounds of appeal in respect of each of them.  At the outset Mr Wong made it clear that he does not challenge the finding of the deputy judge that the company, Talent, was not involved in the genuine business of gold/silver trading using the victim’s funds; it was a fraud.  The issue which is taken is the deputy judge’s findings that these appellants were party to the conspiracy found.

Grounds 1 and 2

16. By Ground 1 complaint is made that the :

“… judge erred in holding that the Appellant was a member of the conspiracy as ‘virtually all the acts and statements made by all defendants in this case to prosecution witnesses and to each other in the presence of other defendants or not were made in furtherance of the conspiracy’ when there was no independent evidence which links the Appellant (3^rd defendant in the trial) to the conspiracy charged.”

17. By Ground 2 it is complained that the :

“… judge erred in failing to look for, consider and make findings in respect of the independent evidence which links the third appellant to the conspiracy before relying on acts and statements made by his co-accused to prosecution witnesses and to each other as evidence against the appellant.”

18. The passage quoted from the deputy judge’s Reasons for Verdict in Ground 1 are not quoted in their entirety or context.  The passage quoted was preceded by the words :

“It is open for this court to find that”

The deputy judge’s finding in this respect is set out later in his Reasons for Verdict :

“I find that all statements and acts of all the named defendants and others not known are admissible against these defendants.  These statements are all framed and intended to further the conspiracy by enveloping the prosecution witnesses in a reassuring and protective cocoon in which they were encouraged subtly and not so subtly to open accounts.”

19. Earlier in his Reasons for Verdict, as cited earlier, the deputy judge had identified the nature of the evidence of which he needed to be satisfied before he could rely upon the acts and statements of co-conspirators, namely that it required to be established on a prima facie basis by admissible independent evidence that the conspiracy existed and that the defendant was a party to that conspiracy.

20. Following his review of the evidence in his Reasons for Verdict the deputy judge returned to address those issues of law.  He concluded :

“There was ample prima facie evidence before the court that a conspiracy as alleged in the indictment particulars existed as between all eight defendants.”

21. It is clear from the deputy judge’s recitation of the evidence adduced in the prosecution case that there was an overwhelming volume of evidence to establish on a prima facie basis the existence of the conspiracy charged.  Indeed, Mr Wong does not suggest otherwise.  However, he does take issue on whether or not the evidence established, on a prima facie basis, the complicity of the 3^rd and 4^th applicants.  Mr Wong concedes in his submissions that the evidence of two of the employee/victim witnesses, Lo Yuet Yiu ‘PW5’ and Lui Fung ‘PW8’, together with the evidence of Ma Ka Lai, the former 8^th defendant, ‘PW31’, established the presence of both the 3^rd and 4^th applicants in the office premises of Talent and that they were employed there.  However, it is clear that it is the evidence of another of the ‘employee/victim’ witnesses Hui Ka Fai ‘PW9’, which provided the court with the evidential basis upon which the deputy judge made his determination that there was “ample prima facie evidence.”  He testified that he had been employed at Talent for about three weeks from the end of February into March 2000.  Of PW9’s evidence the deputy judge noted that he had testified that after he had been employed the question of his opening an account with Talent was raised.

“He identified D3, Ho, as a part of the group present when Joe mentioned opening up an account.  D3 stated that he had opened an account before PW9 and had made a profit of several thousand dollars.”  

It is clear from the transcript of this evidence (p.1729) that the context in which the third applicant spoke was an attempt by the third applicant and others to persuade PW9 to pay monies to invest through Talent in prospect of profits and commissions from clients whose business he would then be given.  PW9 did invest monies, all of which he lost.

22. The deputy judge noted that PW9 had testified of the 4^th applicant in respect of the training that he received on engagement as an employee that :

“He identified D4 as ‘shi hing’ meaning a colleague of equal stature but more senior at Talent.  D4 would help him understand part of the training course.”

In his testimony PW9 had testified that the 4^th applicant had assisted him during his training.

“During training course he, that is Chi Hing, would write on the board and did calculations if there was anything that I didn’t understand I would ask him.”

In cross-examination the witness denied that he was mistaken in his identification of and the roles he attributed to the 3^rd and 4^th applicants.

23. Clearly, on the evidence which had been led at the trial the deputy judge was entitled to determine, as he did, that it was established on a prima facie basis that there was a conspiracy as charged and that the 3^rd and 4^th applicants were parties to it.  The evidence of those ‘employee/victims’ and that of PW31, the former 8^th defendant was independent evidence which provided that evidential basis.  Accordingly, the deputy judge was entitled to have regard to the acts and statements of the co-conspirators made in furtherance of the conspiracy when considering the case against these applicants.  In any event, Mr Wong conceded that he was unable to point to any such act or statement of co-conspirators of the 3^rd and 4^th applicants to which the judge had or may have had regard in considering their cases.

Ground 4

24. By Ground 4 complaint is made on behalf of the 3^rd and 4^th applicants that the deputy judge :

“… erred in failing to have regard to the conflicts and /or inconsistencies between the evidence of PW9 and the statements which he made to the police…”

It is submitted, in effect, that in light of those conflicts and inconsistencies the deputy judge erred in relying upon the testimony of PW9.

25. In his Reasons for Verdict the deputy judge noted that the events about which the witnesses testified had occurred some time earlier.  Of that it is to be noted that, for example, PW9 testified in June 2003 about events that had occurred commencing in February 2000 and that his witness statements to the police had been made in November 2000 and June 2001.  The deputy judge went on to state :

“The P.W.s have given some witness statements that are internally inconsistent with their evidence and with each other.  Some have reconsidered their statements and testified differently than was expected while others have remembered substantially more while under oath than was apparent in the witness statements.

I have considered all these inconsistencies and contradictions.  Each P.W. was cross-examined minutely.  It was not unexpected that such difference(s) did occur after all these years.  Indeed, it would be surprising and potentially suspicious if differences did not arise.  I bore in mind the fact that each witness had lost substantial amounts of money and I remained alert to the possibilities that persons in their position may be vindictive or blame such losses on any one who presented a likely target rather than accept ultimate responsibility for their losses.

At the end of the day, I was impressed with the attempts and indeed struggles made by the prosecution witnesses to be accurate, even if contradictory on occasion.  I found that these inconsistencies did not impugn in any material way their reliability and integrity.”

26. It is to be noted that the evidence of PW9 was given over the course of two days.  His evidence-in-chief occupied one-day, after which he was cross-examined for the whole of the following day.  It is clear from the transcript of that cross-examination that the witness was subjected to lengthy and detailed cross-examination in respect of his earlier out-of-court statements.  Indeed, at one stage the deputy judge intervened in the cross-examination of counsel appearing for the 3^rd and 4^th applicants and said :

“Mr Tsang, we’ve spent an hour and a half approximately and we haven’t even moved from witness statements. … We’re not even into the facts yet, you’re still attacking his credibility on prior inconsistence.”

27. Amongst the minor matters laboured over in this cross-examination was the issue of the length of the period of training, the exact date on which the witness had first gone to Talent and the source of the monies paid by the witness to Talent.  It was established that on 5 June 2001 the witness had identified both the 3^rd and 4^th applicants at identity parades, after which he had made a witness statement.  In it he described the 3^rd applicant as having told him that he had opened an account and the 4^th applicant having taken part in teaching him calculations at the company.  Of course, that was the nub of their evidence at trial.  On the other hand, it was established that the witness had identified an actress at one identity parade and had failed to identify the 7^th defendant at another parade, although he had identified her at court.  Complaint was made that in a witness statement dated 22 June 2001, whilst giving a physical description of a ‘team’ member, the witness had not said in terms that this was a person he had picked out at the identity parade held on 5 June 2001.  Furthermore, it was established that whilst the witness had testified that the 6^th applicant had interviewed him for employment at Talent, consistent with his witness statement dated 12 June 2001, in a subsequent statement dated 22 June 2001 he had said that he was interviewed by a “Miss Lam”.  The witness testified that he had ascribed that name to the 6^th applicant only after being told by another participant at the identity parade that was the name of the person who had interviewed them.  He remained adamant that the 6^th applicant was the person who had interviewed him.

28. It is to be noted that at the conclusion of the cross-examination by counsel for the 3^rd and 4^th applicants, upon the application of the prosecution, the deputy judge ordered that the witness statements used to cross-examine PW9 be made exhibits.  Of the use to which they were to be put he said :

“The purpose of this is that the trier of fact, in due course should that be the case will have an opportunity to look at this witness’ evidence viva voce as compared to previous statements to get a full breadth of appreciation of this witness’ participation in this whole process.

Witness statements do not constitute evidence, evidence in the witness box under oath constitutes evidence.  This will merely be as background against which the court can possibly compare evidence.”

29. We are satisfied that the deputy judge approached his analysis of the evidence and his determinations in respect of credibility of the witnesses in the correct way.  None of the matters advanced by counsel for the 3^rd and 4^th applicants persuade us that the deputy judge was in error in accepting the evidence of PW9.  There is no merit in the proposed Grounds 1, 2 and 4 sought to be advanced on behalf of the 3^rd and 4^th applicants.

Ground 3

30. By this ground it is asserted that the deputy judge had convicted the applicants “on the basis that they (and the other defendants in the case) had provided an office ambience conducive to the continued ongoing participation of the prosecution witness” and that in allegedly doing so the deputy judge was in error.

31. Needless to say, the deputy judge did not convict either of the applicants on that basis alone.  Having noted what he described as the “common thread winding through all the victims’ evidence” he observed that the multiple false representations made to them were made against a background of impressive offices and facilities.  Of that he concluded :

“An essential part of the conspiracy was clearly to provide an office ambience conducive to the continued ongoing participation of the prosecution witnesses.  The evidence as against these present defendants demonstrates exactly that role.”

That evidence, of course, included the role of the 4^th applicant as an instructor in making calculations, and being available as a senior colleague to give advice; that of the 3^rd and 4^th applicants conversing in the offices apparently knowledgeably about silver trading and that of the 6^th applicant, in having conducted an apparently genuine job interview of PW9, watching computer monitors and passing on information to others in Talent of prices.  In the circumstances of this conspiracy to defraud we have no doubt that the deputy judge was entitled to find that the maintenance of the appearance of a genuine business created by the office ambience was an essential part of the conspiracy.  This proposed ground of appeal fails.

Ground 5

32. By this ground complaint is made that, although the evidence established the presence of the 3^rd and 4^th applicants in the offices of Talent, there was no evidence that the conduct of either of them induced or affected any of the victims to make an investment in Talent.

33. In respect of the 3^rd applicant this contended ground of appeal is not factually accurate.  As the deputy judge noted in his review of the evidence of the victims of the conspiracy the 3^rd applicant had taken an active part in the successful efforts to persuade PW9 to open an account and invest monies with Talent.  Of the testimony of PW9 of the role of the 3^rd applicant the deputy judge said :

“He identified D3, Ho, as a part of the group present when Joe mentioned opening up an account.  D3 stated that he had opened an account before PW9 and had made a profit of several thousand dollars.”

That conduct was consistent with what the deputy judge had found to be the “common thread winding through all the victims’ evidence”, namely that the new recruits were placed with small groups which contained at least one recruit who had purportedly opened a personal account and apparently made immediate profits, after which all were persuaded to open personal trading accounts by that recruit or other recruits and staff.

34. There was no evidence that the 4^th applicant had been involved directly and personally in inducing or causing one of the victims to open an account and invest monies in Talent.  His role was to appear to be experienced in the trading of silver and to teach the methods by which trading was to be conducted.  Clearly, he added apparent verisimilitude to the facade of business ambience, which the deputy judge found to be an essential part of the conspiracy.  Obviously, not all the conspirators played the same part in the conspiracy : some pretended to be fellow recruits, others managers and so on.  The deputy judge found :

“The evidence against each of these defendants puts them at Talent, inter-acting with Talent staff, and other defendants and the P.W.s in the course of their daily activities on matters which directly related to the conspiracy.”

In the result, the deputy judge concluded :

“… they were knowingly part of this conspiracy, performing their assigned roles with the intent of accomplishing the common criminal purpose as alleged.”

35. We are satisfied that there is no merit in this proposed ground of appeal, which fails.

Ground 6

36. By this omnibus ground of appeal it is contended that in all the circumstances the convictions of the 3^rd and 4^th applicants are unsafe and unsatisfactory.  In his written and oral submissions Mr Wong has not identified any basis to support this ground of appeal other than by reference to the preceding grounds of appeal.  In light of this court’s rejection of those proposed grounds of appeal this proposed ground fails as well.

The 6^th applicant’s perfected grounds of appeal against conviction

Ground 1

37. By this ground it is contended that the deputy judge made a finding of fact, which is not supported by the evidence, namely :

“At identity [sic] parade, PW1 identified D1, D2, D5, D6and D8 as being persons in various roles at Talent and how they interacted with himself.”

Of that statement complaint is made that the identification of the 6^th applicant was at a confrontation, not an identity parade, and that PW1 had not testified that the 6^th applicant had interacted with him.

38. The respondent submits that, whilst the submission of the applicant is factually correct, in reality, there is no substance in the complaint. It is submitted that at most the deputy judge is guilty of the use of infelicitous language in trying to compress his findings in respect of a hearing which lasted five months into narrow compass.

39. The complaint in respect of the mistaken finding that identification of the 6^th applicant was at an identity parade, rather than a confrontation, is of no relevance or substance whatsoever.  The submission that somehow the deputy judge was in error to describe as interaction the contact between the 6^th applicant and PW1 has no merit.  In his more detailed review of the evidence of that witness, which review immediately precedes the impugned statement, the deputy judge makes no reference to dealings between the witness and the 6^th applicant.  In short, the witness identified the 6^th applicant as being present at the premises of Talent, he thought in the role of a member of staff, but he testified of no personal dealings between them.  There is no merit in this proposed ground of appeal.

Ground 2

40. Complaint is made on behalf of the 6^th applicant by this ground that the deputy judge erred “in totally disregarding the evidence of PW31 i.e. D8 (Madam Ma Ka Lai ) who turned into a prosecution witness and was found to be a strong and credible witness …” in respect of the role of the 6^th applicant.

41. Nowhere in his Reasons for Verdict does the deputy judge make such a statement.  Indeed, immediately after he stated of her that he remained alert to the possibility she may have been testifying in a manner that served some private agenda he went on to state :

“I have considered all the relevant, admissible, probative evidence, the submissions of counsel and the relevant law.”

42. In truth, the thrust of the argument submitted under this ground is that in light of the testimony of PW31 in respect of the 6^th applicant, given that he found her a strong and credible witness, he ought to have acquitted the 6^th applicant.  In support of that submission, Mr Luk invites the court to note that the witness, who worked at the premises of Talent from June 1999 to July 2002, did not name the 6^th applicant as one of the managers of Talent she listed in her testimony, nor did she describe her as being known to her as a tout or shill.  Further, whilst the witness testified of the presence of the 6^th applicant at the premises of Talent looking, from time to time, at computer monitors she did not ascribe any specific role to the 6^th applicant.  Also, it is submitted that the context in which that is to be viewed is the testimony of the witness that she knew the name of the 6^th applicant and that the deputy judge was in error to state that she did not know her name.  In short, the rhetorical question posed is: if, as she testified, PW31 was a co-conspirator in the conspiracy charge why did she not identify the 6^th applicant as one of her co-conspirators?

43. It is clear that in the nature of the conspiracy as it operated not all the co-conspirators did or needed to know of the identities, activities or roles of their co-conspirators.  That was the nature of this conspiracy.  In respect of the issue of the witness’ knowledge of the name of the 6^th applicant the witness had testified at the time of her dock identification of the 6^th applicant that she knew her then as Chow Wai Kuen, that she could not recall by what name she went at the time of the conspiracy.  The respondent submits that it is hardly surprising, given that the witness and the 6^th applicant had been co-accused in prospect of trial for a lengthy period, that the witness was able to name the 6^th applicant.

44. We are satisfied that the deputy judge correctly stated the necessary approach to the evidence of PW31 and, given that the evidence was little more than neutral to the 6^th applicant — it not precluding a role as a co-conspirator for the 6^th applicant — we are satisfied that there is no merit in this ground of appeal.

Ground 3

45. Complaint is made by this ground that the deputy judge erred in attaching any or alternatively undue weight to the evidence of PW9 of his identification of the 6^th applicant as the person at Talent who interviewed him for employment, in light of the conflicts between his testimony and his out of court witness statements and having regard to the evidence of other prosecution witnesses in respect of the 6^th applicant.

46. The propriety of the deputy judge accepting the evidence of PW9 in respect of the 3^rd and 4^th applicants’ has been considered earlier in this judgment.  Much of the consideration we gave there to the deputy judge’s approach to the evidence is apposite in respect of this ground of appeal for the 6^th applicant.

47. In his evidence-in-chief PW9, who had identified the 6^th applicant at an identification parade on 12 June 2001, was permitted to identify her in the dock at the trial.  Of the 6^th applicant, he said that he had seen her but that he did not remember her name.  He said that about one week after becoming an employee of Talent at the end of February 2000, he had seen the 6^th applicant at the premises of Talent watching the computer monitors for prices and using the telephone.  During his training period he had seen her talking to other members of his group, including the 3^rd, 4^thand 7^th applicants.  He heard her relating information about prices from the computer monitors to the 7^th applicant.  The 6^th applicant was on the premises up and until the time he left Talent, three weeks after becoming employed.  However, when cross-examined by counsel for the 6^th applicant on a witness statement he had made on 12 June 2001, after he had identified the 6^th applicant, he went on to testify that the 6^th applicant was the person who had interviewed him for employment at Talent in February 2000.  Of the interview he testified that the 6^th applicant had inquired of what work he had done previously and told him that the company had read : “my information and thought that I was suitable for the job that the company advertised”.  It was his testimony that he had worked as a platform attendant for the M.T.R..  Having explained that the business of Talent was the provision of services to clients in trading in heavy metals she explained that after a training course he would be able to earn money by commission in addition to a basic salary.

48. The evidence which has been identified in Mr Luk’s written submission as being relevant to consideration by the deputy judge in determining the credibility and reliability of the witness was all before the deputy judge at trial.  The repeated cross-examination in respect of contended inconsistencies in testimony, in contrast to prior out of court statements, eventually moved the deputy judge to say to counsel for the 6^th applicant :

“I think you’ve flogged that dead horse enough, with respect , and it can be a matter for submissions”.

49. As we indicated earlier we are satisfied that the deputy judge approached his analysis of the evidence and his determinations in respect of credibility of the witnesses in the correct way.  None of the matters advanced by counsel for the 6^th applicant persuades us that the deputy judge was in error in accepting the evidence of PW9 in respect of the 6^th applicant’s role at Talent.

50. This proposed ground of appeal fails.

Ground 4

51. By this ground of appeal it is complained that the deputy judge erred in drawing the inference that the 6^th applicant was a party to the conspiracy and guilty.  Mr Luk submits that the evidence, notwithstanding that it established that the 6^th applicant was an employee of Talent who had been seen watching the computer monitors in those premises, was insufficient for the deputy judge to find the 6^th applicant guilty.

52. Mr Shiu, on behalf of the respondent, submitted in written submissions that this court should note that no evidence was given by or on behalf of any of the applicants or any defendant at the trial.  Citing the judgment of Lord Hoffmann in the decision of the Court of Final Appeal in Li Defan and Another and HKSAR, [2002] 5 HKCFAR 320, Mr Shiu submits that in certain circumstances a jury or deputy judge alone could, but need not, consider that a prosecution case on a particular issue relevant to guilt is strengthened by the absence of the accused from the witness box.  Mr Shiu notes that the deputy judge stated that he gave himself, in effect, the “standard” direction, referred to by Lord Hoffmann, when no evidence is led by the defence at trial, namely :

“Each of these defendants having taken legal advice have elected to exercise their right to silence and not testify or call witnesses and have closed their respective cases.  No adverse inference is taken from this exercise.”

53. Surprisingly, in light of the simple direction of law which the deputy judge stated he adopted Mr Shiu submits that the circumstances of the trial of these applicants are such that it was not only open to the deputy judge to have determined that the inferences of guilt in respect of these applicants to be drawn from the evidence were strengthened but that he may have done so and, if he had done so, he was entitled to do so.

54. The direction the deputy judge gave himself, as cited earlier, makes it abundantly clear that he did not take that course.  That he did not do so is put beyond any peradventure by his statement at the end of his Reasons for Verdict :

“There is no onus on these defendants to explain their respective status or presence at Talent.”

55. We are satisfied that on the evidence led at trial the deputy judge was entitled to conclude in respect of the 6^th applicant, amongst others, as he did do :

“… I draw the only and inexorable inference as against each of them, that is that they were knowingly part of this conspiracy, performing their assigned roles with the intent of accomplishing the criminal purpose as alleged.  On the evidence, I find that there is no explanation that is favourable to any of the defendants."

56. This proposed ground of appeal fails.

Ground 5

57. By this ground of appeal it is contended that the deputy judge found that he could draw the inference that by interviewing PW9 the 6^th applicant : “…must be participating in the fraudulent scheme of conspiracy to defraud the victims” and in so doing erred.

58. It is clear that the deputy judge drew the inference that the 6^th applicant was a party to the conspiracy performing assigned roles with the intent of accomplishing the common criminal purpose as charged from a consideration of all of the evidence in respect of the 6^th applicant, whose case and those of the others he stated he considered separately.  That he did not rely only on the evidence of the fact that the 6^th applicant had interviewed PW9 in drawing an inference of guilt is made abundantly clear in the Reasons for Verdict :

“An essential part of the conspiracy was clearly to provide an office ambience conducive to the continued ongoing participation of the prosecution witnesses.  The evidence against these present defendants demonstrates exactly that role with D6 additionally having interviewed at least one victim.”

59. We are satisfied that on the evidence which the deputy judge accepted of the fact that the 6^th applicant interviewed PW9 for the employment which he accepted at Talent soon afterwards, together with the evidence as to her conduct in the offices of Talent in the weeks that followed, in the context of the evidence as to her presence in those offices both before and after that time, that the deputy judge was entitled to find that the 6^th applicant was a party to the conspiracy and guilty of the charge.

60. This proposed ground of appeal fails.

CONCLUSIONS

61. Accordingly, the applications of the 3^rd, 4^th and 6^th applicants for leave to appeal against their convictions on Charge 1 were dismissed.

The APPLICATIONS OF THE 1^ST, 3^RD, 4^TH, 6^th AND 7^TH applicants FOR LEAVE TO APPEAL AGAINST SENTENCE

The Reasons for Sentence

62. Talent Elite International Ltd was the vehicle by which the fraud was perpetrated.  The judge described it thus :

“Talent was set up in reputable offices.  It presented well in the photos.  It occupied over 7000 square feet, had a lobby and reception area, some 13 separate offices inside, it had a conference room, a staff area, toilet facilities and open workstations.  There were numerous computer terminal monitors distributed throughout the offices.”

63. Of the modus operandi the judge said :

“Job advertisements, very brief interviews and immediate offers of jobs at attractive salaries had the victims lining up to be hired.  Once hired, they were inexorably drawn or switched into another field other than the one they were hired for.  None of the prosecution witness victims had any relevant experience, relevant to spot silver trading.”

In the course of their apparent training the new employees were the subjected to the attention of persons who appeared to be fellow employees or new recruits, whose object was to get them to open their own accounts and trade in silver contracts with Talent.  They were known as “Shills”.

64. Of the result the judge said :

“Each victim fell prey to the scam and opened a trading account with Talent, and initially made a profit.  In profiting by trading, they were guided by the shills and other staff at Talent.  As the victims gained confidence in their own abilities to trade and in the abilities of the shills and other Talent staff about them, they continued to trade.  They invested more and lost everything.  In total, over $3 million was lost.”

65. Of the nature of the fraud the judge said :

“This was a sophisticated fraud.  It was a cold-blooded and callous scam set up to the milk those who were looking for work.  The victims were gullible but otherwise blameless.”

Starting point

66. The judge stated that in the circumstances of this fraud he took an initial starting point of four years’ imprisonment.

The roles of the applicants

67. The judge stated in terms that in determining the sentences to be imposed the court must reflect the respective positions of the applicants in the hierarchy of Talent.  He found the 1^st applicant and the second defendant to be the managers and key players in this fraud.  They were responsible for the day-to-day management and operation, not only holding themselves out as managers but also acting as persons experienced in the spot silver market, advising and guiding the victims.  The judge said of the 7^th applicant and the former 8^th defendant and prosecution witness at trial that they were proficient “shills”.  Of their conduct he said :

“They were the conspirators directly responsible for the face-to-face deception, persuasion and false friendships integral to the conspiracy.”

68. Of the 3^rd and 4^th applicants he determined that they were less important in the hierarchy to the actual manipulation of the victims.  He found that they contributed to the apparently genuine business ambience.  Notwithstanding that that he found that the 6^th applicant had acted as an interviewer of a prospective employee and in another capacity he determined not to regard that has being an aggravating factor, but to treat her as falling in that the same category as the 3^rdand 4^th applicants.

Factors in aggravation

69. In respect of the 1^st applicant and former 2^nd defendant the judge stated that having regard to his finding that they were “key men in the conspiracy” and in light of their management positions an additional six months’ imprisonment to his initial starting point of four years’ imprisonment was appropriate.  For them he took a starting point of four years six months’ imprisonment.

70. Having regard to the conduct of the 7^th applicant and that of the former 8^th defendant as “shills” he determined it appropriate to increase the initial starting point by two months to a starting point of four years and two months imprisonment.

Discount

71. The 3^rd, 4^th and 6^th defendants having been convicted of the charge only after trial the deputy deputy judge stated he gave no discount of sentence.

72. In light of the 1^st applicant’s plea of guilty tendered at a very late stage in the prosecution case he discounted sentenced by 10 months’ imprisonment, rather than by 18 months’ imprisonment, which would have reflected a discount of the full one-third from the starting point.  For similar reasons, he discounted the sentence imposed upon the 7^th applicant by 10 months, that being a discount of 20% from the starting point.  It is to be noted that the trial had commenced on the 10 February 2003 and proceeded thereafter, no doubt with adjournments for public holidays.  However, it was not until the 22 July 2003 that the 1^st and 7^th applicants pleaded guilty and were convicted.  Those pleas of guilty were tendered hard on the heels of the conclusion of the testimony of the former 8^th defendant, whose evidence had concluded on the 9 July 2003.  She was the last of the 31 witnesses called at trial.

The 1^st and 7^th applicants’ perfected grounds of appeal against sentence

73. Mr Fenton and Miss Lily Yew, respectively on behalf of the 1^st and 7^th applicants, submit that the deputy judge was in error in not giving those applicants the benefit of a full one-third discount from the appropriate starting point, given the fact of their pleas of guilty to the charge.  In the alternative, it is submitted that the discount afforded to those applicants in consequence of their pleas of guilty was inadequate.  In addition, it is submitted on behalf of the 7^th applicant that the deputy judge erred in determining that 50 months was an appropriate starting point in her case. Further, the 7^th applicant was not given credit for her previous good character nor had the deputy judge taking into account her assertions, reported in a probation report, that she had not pleaded guilty earlier because of her concerns about her seriously ill father and that, as a result of the lengthy trial, she had had a pregnancy terminated.  For his part Mr Fenton accepts, on behalf of the 1^st applicant, that the initial starting point of four years imprisonment and the increased starting point in respect of the 1^st applicant were appropriate.

74. The 3^rd, 4^th and 6^th applicant’s are not represented in their applications for leave to appeal against sentence.  In their self-drafted grounds of appeal against sentence the 3^rdand 4^th applicants said that the sentences are “too heavy”.  The 6^th applicant asserts of the sentence imposed upon him that it was “unfair”.  Whilst the 3^rd applicant indicated that he had no submission to make in support of his application the 4^th applicant handed to the court two medical reports and a letter in support of mitigation of his sentence. The two reports were dated 24 and 27 September 2004 and were compiled by Dr Wan Koon Yat and Dr W.C. Ng respectively, the latter being a senior Medical and Health Officer in the Department of Clinical Oncology and the former a medical officer in the Division of Colorectal surgery.  The reports informed the court that on the diagnosis of carcinoma of hepatic flexure a right hemi-colectomy had been performed on the 4^th applicant on 18 August 2004.  Subsequent pathological examination confirmed Dukes’ C stage carcinoma of the Colon with lymph node involvement.  The 4^th applicant is now in the process of undergoing six courses of adjuvant chemotherapy, having been discharged from hospital on 1 September 2004.  He informed the court that his doctors had advised him that he had only a 35% chance of living five years. In a letter read out in court from his brother and sister a plea was made in misericordiam, reference being made to the discharge of his filial duties arising of the fact that their family, in common with many in Hong Kong, had been split with some family members resident on the Mainland and others in Hong Kong.  Next, the court was asked to have regard to the fact of delay from the time the 4^th applicant was arrested, as were the other applicants, on 5 July 2000 and the commencement of the trial, 10 February 2003.  Further, that the trial itself, lasting as it did 108 hearing days, was punishment itself, worse, he said, than prison.  Throughout he had a cloud hanging over him.

75. The 6^th applicant invited the court in mitigation of sentence to have regard to domestic hardships that had flowed following her incarceration :  her son had not visited her for a year; she relied on friends to continue to rent her home and care for her dogs.

Submissions of the 7^th applicant in respect of the starting point

76. Miss Yew submits that the deputy judge was in error to draw a distinction between the 7^th applicant’s role as a tout or “shill” and the role of the 3^rd and 4^th applicants in providing support for the facade of a business ambience, which distinction was marked by an additional sentence of two months’ imprisonment in the starting point.

Reduced discount for a late plea of guilty

77. On behalf of the 1^st applicant Mr Fenton submitted that, notwithstanding the fact that the 1^st applicant pleaded guilty only on the 105^th day of the 108 day trial, in fact very little court time was wasted thereby because, the charge being a charge of conspiracy in which other defendants had put the prosecution to proof, it was necessary to lead evidence to establish who were the parties to the conspiracy and its ambit.  He accepted that the counsel for the 1^st applicant had cross-examined witnesses called by the prosecution at some length, but asked the court to note that she did so also, in part on behalf of the 2^nd defendant at trial.  Further, he submitted that it was on the evidence led at trial that the deputy judge had determined the more serious role of the 1^st applicant which had led him to increase the initial starting point for sentence by six months imprisonment for the 1^st applicant.  As we understood his argument, it was that only by the participation of the 1^st applicant in the trial was his role established.  It was that which led the judge to increase the starting point, with which increase no issue is taken.  However, it was submitted that to then decline to give the 1^st applicant a full one third discount of sentence was unfair.

78. Counsel for both the 1^st and 7^th applicants drew the attention of the court to the decision of a slightly differently constituted division of this court in HKSAR and Hui Wai Ping, (unreported) CACC263/2003.  That case also concerned a LocoLondon gold and silver fraud similar in nature.  There the conspiracy to defraud resulted in a loss of $451,500.  The applicant occupied the role in the conspiracy of a manager in the company, trained victims and persuaded them to open accounts.  Several days before the day fixed for the commencement of her trial in the District Court the applicant intimated to the prosecution and to the court that she would plead guilty.  On the day fixed for trial she did plead guilty.  However, in passing sentence the judge determined that she was not entitled to a discount of one-third from the appropriate starting point for sentence.  In effect, he stated that he did so because, in all the circumstances, her plea of guilty had not been made “at the earliest reasonable opportunity”.  In the judgment of the court, Stock JA said :

“To the extent that the judge was limiting a full one-third discount to pleas offered at the first reasonable opportunity he erred in principle.  The approach is well-established: see HKSAR v Li Tak Yin, Criminal Appeal 395 of 2002, 6 February 2003 (unreported) where this Court, slightly differently constituted, said :

‘14…. In this particular case, the judge emphasised the fact that the plea was not entered at ‘the earliest opportunity’.’

… We accept that there have been cases in the past in which that phrase has been used, but of late the courts have rather been using the phrase ‘a timely plea’ and the judge’s approach is one which might suggest that it is exceptional rather than normal to deduct one-third if the plea of guilty is offered on the first day of trial.  We emphasise that the one-third discount is not a rigid rule, for there are instances where a lesser discount will be, and as the cases show have been, warranted, and there are many examples provided by the cases.  But there should, in our judgment, be some sound reason or circumstance, over and above the mere fact that the plea is only tendered on the first day of trial.  We do not see that such sound reason existed in this case.”

79. That division of this court went on to conclude that there was no such sound reason or circumstance that justified the judge discounting that applicant’s sentence by only 25%.  Accordingly, the sentence imposed by the judge was quashed and in its place a sentence imposed which reflected a discount of one-third from the starting point.

80. Counsel for the respondent submits that the decision of Hui Wai Ping is of little assistance to this court, given the fact that these applicants did not plead guilty until the very end of the prosecution case, over 100 days into the trial.  He has drawn our attention to the judgments of this court in The Queen v. Chan Chi Sing [1995] 3 HKC 325 and HKSAR v Kan Wa Man   , (unreported) CACC503/2003.  In the judgment of the court in the former case, Bokhary JA, (as he was then), said of an applicant who had pleaded guilty only after more than a week into his trial :

“… the applicant is entitled to some discount for his guilty pleas late as they were.  For one thing, a guilty plea removes the question of guilt or innocence from the consideration of the court whether at trial or on appeal.  So it does bring about some certainty and finality.  And even a very late plea does save some time even if not as much time as it would have saved had it come earlier.”

81. In HKSAR v. Kan Wai Man of the court were seized of an application for leave to appeal by an applicant who had been tried in the District Court on a single charge of wounding with intent, contrary to section 17(a) of the Offences against the Person Ordinance, Cap.212.  At the close of the prosecution case he pleaded guilty.  The judge adopted a starting point for sentence of six years’ imprisonment, which he discounted for the plea of guilty, imposing a sentence of five years’ imprisonment, that is a reduction of one sixth from the starting point.  Of the reduced discount for the plea of guilty, Yeung JA said in the judgment of the court :

“… the reduction by one year to reflect the late plea was a proper one in all the circumstances.”

82. Mr Shui also drew the court’s attention to the judgment of this court in HKSAR v. Lee Wan, (unreported) CACC284/2002 in which the applicant sought to leave to appeal against a sentence imposed upon him in which, notwithstanding that he had pleaded guilty, the judge at trial and refused to allow the applicant any discount of sentence from the starting point.  The plea of guilty had been tendered only after the conclusion of closing speeches following the end of the defence case.  The trial judge had said :

“A   guilty plea offered at this stage is no more than a recognition of the inevitable―that you are about to be convicted.”

This court did not interfere with the sentence imposed and dismissed the application.

Conclusions

Starting point

83. We are satisfied that in the circumstances of this case the deputy judge was entitled to take as an initial starting point a sentence of four years imprisonment and to increase it, to reflect the roles of the 1^st and 7^th applicants in the conspiracy to the extent that he did.  He described the role of the 7^th applicant, as a shill, as being a conspirator :

“…..  Directly responsible for the face to face deception, persuasion and false friendships integral to the conspiracy.”

We are satisfied that the deputy judge was entitled to determine that by that role the 7^th applicant’s culpability was less than then the managers, for example the 1^st applicant, but greater than what he described as the “ordinary soldiers”, such as the 3^rd and 4^th applicants.

Reduced discount for a late plea of guilty

84. As in many, if not most, aspects of sentencing consideration of a particular factor and the weight to be given to it must be tailored to the circumstances of the individual case.  In this case we are satisfied that the deputy judge was correct to determine that in light of the late pleas of the 1^st and 7^th applicants they were not entitled to a full one third discount of sentence from the starting point.  It is to be remembered that the pleas of guilty by those applicants were tendered only after 100 days or so of the trial and after the conclusion of the testimony of their former co-conspirator, the 8^th defendant.  We do not accept Mr Fenton’s submissions that the 1^st applicant’s contest of the trial for that period did not add to the length of the trial nor that the role and culpability of the 1^st applicant in the conspiracy was established only by his participation in the trial.  In our judgment, in all the circumstances of this case, the discounts of sentence from the starting points given by the deputy judge to the 1^st and 7^th applicants in consequence of their pleas of guilty were generous.

85. In the Reasons for Sentence the deputy judge does not deal specifically with the fact of the good character of the 7^th applicant nor with her contended explanation for her late plea of guilty to the charge.  Of the latter, we are satisfied it was irrelevant in mitigation of sentence.  Given the seriousness of the offence of which the 7^th applicant was convicted and noting, in particular, the evidence led at trial of her role as a shill in persuading PW5 and PW8 to invest $588,000 and $993,800 respectively, all of which money was lost, and the fact that she was a party to the conspiracy over a period of many months her good character availed her very little in mitigation of sentence.

86. In the result, we are satisfied that the sentences imposed by the deputy judge upon the 1^st and 7^th applicants were entirely appropriate.  Accordingly, we dismissed their applications for leave to appeal against those sentences.

87. The very serious illness suffered by the 4^th applicant after sentence was imposed upon him, whilst a matter of considerable regret to this court, is not a factor which this court can take into account in respect of sentence, if the sentence imposed by the deputy judge is otherwise appropriate.  Article 48(12) of the Basic Law of the HKSAR provides that it is the Chief Executive in whom the power to commute penalties imposed upon those convicted of criminal offences is reposed.  This court has said on a number of occasions that the exercise of clemency is for the Executive and not the courts.  (See The Queen v. Suen Shek and Others [1988] 1 HKLR 524; HKSAR v. Yeung Kwai Kuen [2002] 3 HKLRD 91.)  At the hearing we informed the 4^th applicant of his right to petition the Chief Executive for clemency.

88. The delay in the commencement of the trial of the 4^th applicant and his co-conspirator’s from the time of their arrest the 5 July 2000 to 10 February 2003 has to be viewed in the context of the size of the investigation that needed to be conducted by the police.  The conspiracy had operated over a period of about one year, there were many employee/victims and many potential parties to the conspiracy.  It was necessary to obtain the opinion of expert witnesses.  It is not suggested that the 4^th applicant, or any of the other applicants, was responsible for that delay.  Equally, given the size of the police investigation we are satisfied that the prosecution are not at fault for the delay.  The length of the trial itself is a matter that has concerned the court.  We were told that it was listed for 20 hearing days.  It lasted 108 hearing days.  We have asked the respondent to make inquiries as to how that came about.  However, given that the 4^th applicant vigorously contested the charge throughout this is not a matter that the 4^th applicant can pray-in-aid.  Accordingly, we are satisfied that neither the delay in the commencement of proceedings nor the length of the trial itself are factors relevant to the sentence imposed upon the 4^th applicant.  In the result, we dismissed the 4^th applicant’s application for leave to appeal against sentence.

89. We are satisfied that there is no merit in the bare assertion by the 3^rd applicant that the sentence imposed upon him was “heavy” nor in the assertion by the 6^th applicant of her post-sentence personal difficulties.  Accordingly, we dismissed the 3^rd and 6^th applicants’ applications for leave to appeal against sentence.