R. v. CHAN KAM WAH

IN THE SUPREME COURT OF HONG KONG

Appellate Jurisdiction

MAGISTRACY APPEAL NO. 503 OF 1994

________________

________________

J U D G M E N T

________________

1. CHAN Kam-wah (hereafter referred to as Chan) was convicted after trial by Ms J. Livesey sitting at the Kwun Tong Magistracy of 15 charges of Accepting an Advantage. He was sentenced to concurrent terms of imprisonment of nine months on each charge. He was also ordered to pay by way of compensation to his employer the Garway Handbag Manufacturing Company (hereafter referred to as Garway) HK$80,000.-.

2. He now appeals against both conviction and sentence.

3. The case against Chan is simple.

4. The first prosecution witness MAK Yip-wu was the sole proprietor of Garway and Chan's employer. The main business of Garway was the manufacture of handbags for export, for which purpose, insurance polices had to be taken out on a regular basis for the export of their manufactured articles. It would appear that the only important evidence Mak Yip-wu gave was that Chan was not entitled to accept any commission, bonus. or reward from customers. It was not disputed that he had drawn cheques to pay insurance premiums to the New Zealand Insurance Co., Ltd. (hereafter referred to as NZI) and that those cheques were cashed.

5. The main evidence came from Chan's co-accused, Albert HUI Bun (hereafter referred to as Hui), the second accused at the trial. On the 2nd March 1994, he came before the Principal Magistrate Mr. McKee, and indicated through Counsel that he wished to plead guilty and be a witness for the Crown at trial. The case was then transferred to Ms. Livesey's court for plea on the same day. Hui thus pleaded guilty to 15 charges of Offering an Advantage and admitted the facts contained in the Summary of Facts read out to him. Sentences were adjourned to 22nd April 1994, and Community Services Order Report and Probation Officer's Report were ordered.

6. Chan's trial began before Ms. Livesey on 18th April 1994. He was convicted and sentenced on 21st April. Hui was sentenced on the following day to concurrent terms of three months' imprisonment on each charge, sentences to be suspended for 12 months; he was also fined HK$1,000 on each charge, making it a total fine of HK$15,000.

7. Hui's evidence was as follows. He started working for a CHAN Hon-yuen of the NZI in April 1991. When CHAN Hon-yuen retired for ill-health he took over the insurance business of NZI. CHAN Hon-yuen died soon after he had assigned this business to Hui. The appellant Chan had been a customer of CHAN Hon-yuen's, and Hui continued to do business with him.

8. According to Hui, he would regularly deposit cash sums into Chan's bank account; each sum thus paid would be equivalent to 20 per cent of the premium paid by Garway in respect of insurance policy issued by NZI. Hui said this procedure was adopted because he had been instructed to do so by his predecessor CHAN Hon-yuen before the latter handed over the business to him.

9. Hui further said in evidence that he first had contact with Chan in about April 1991 over the telephone. He informed Chan that he had received the policy premium from Garway, and that he would take care of "the follow-up matters", by which phrase Hui meant that he would calculate the 20 per cent of the policy premium and deposit it into Chan's account. Hui also stated that he would always inform Chan of the receipt of the premium cheque, and confirm the intended deposit. He would meet Chan for tea, the first time being mid-1991. At that meeting, according to Hui, he told Chan he would follow the usual practice, whereupon Chan said if Hui did not do so, he (Chan) would take his business elsewhere. Hui also gave evidence that it was Chan who had instructed him to deposit cash into Chan's account.

10. In her Statement of Findings, the learned trial magistrate was mindful of the fact that Hui was an accomplice and his evidence was uncorroborated. However she found that Hui was a truthful witness. She also accepted the evidence of Mak the sole proprietor of Garway and found that Chan was the one responsible in Garway for obtaining insurance for the goods exported, and in particular for arranging the insurance with NZI.

11. On the basis of the Notice of Admitted Facts, the magistrate also found that between April 1991 and December 1992, sums of money were deposited into Chan's account. Within two to four days of the cheques for insurance premiums being paid by Mak of Garway, a cash deposit was made into Chan's savings account. In almost all instances, the cash deposit was equivalent to 20 per cent of the value of the insurance premium paid by Garway of NZI.

12. Referring to the Record of Interview between the officers of the ICAC and Chan, the magistrate noted that when faced with evidence of payments into his account, and their relationship to the value of cheques paid by Garway an insurance premiums, Chan gave a number of explanations, including -

a. Hui was framing him,

b. the deposit receipts had been fabricated,

c. Hui used the account to deposit money to avoid payment of tax,

d) the deposits had been made by himself, and

e) they were gambling debts.

13. Chan also mentioned that the sums were paid to him as commission or reward. The magistrate concluded that Chan was not telling the truth therein. Chan did not give evidence.

14. On appeal against conviction, eight Grounds are advanced by his Counsel.

15. Briefly, they are as follows-

Ground 1: The magistrate found that Hui's evidence was essential to Chan's conviction. She should not have proceeded to try Chan after convicting Hui on his own plea. In the event Chan was denied a fair trial.

Ground 2: The magistrate, having convicted the accomplice Hui upon his agreeing with the facts which formed the basis of the evidence he later gave against Chan, placed herself in a position where she could not properly and impartially assess the witness's creditworthiness.

Ground 3: The magistrate, having convicted Hui on the basis of agreed facts, had had sight of a document inadmissible and highly prejudicial to Chan's fair trial.

Ground 4: In calling for the Reports prior to Hui's giving evidence against Chan, the magistrate provided Hui with a powerful and unacceptable inducement to give evidence in accordance with the agreed facts.

Ground 5: The magistrate erred in assessing the creditability of Hui as a witness.

Ground 6: The magistrate erred in not excluding hearsay evidence from Hui as to the purported conversations he had had with CHAN Hon-yuen.

Ground 7: Having found that Chan had lied in his interview with the ICAC, the magistrate erred in not indicating what use she made of such lies.

Ground 8: The conviction was unsafe and unsatisfactory.

16. These eight Grounds are expanded in the Skeleton Argument and in submission before me, all of which I have considered but do not propose to repeat in detail.

17. The main arguments under Grounds 1 and 2, taken together, are that the warning which the learned magistrate gave herself on the danger of convicting on the uncorroborated evidence of an accomplice amounted to mere incantation. Having accepted Hui's plea of guilty and his admission of the Summary of Facts, the magistrate "had manoeuvred herself or permitted herself to be manoeuvred into a situation where she could do nothing other than accept Hui's veracity." Art. 10 of the Hong Kong Bill of Rights was relied on. This article, it will be recalled, deals with equality before courts and the right to fair and public hearing.

18. No authority was cited for the proposition that what the magistrate did was wrong. When a co-accused pleads guilty and admits the facts, all that the magistrate is concerned with is whether it is a genuine plea of guilty and whether the plea is supported by the admitted facts. She is not concerned with the credibility of the accused at this stage, even if it is known that the co-accused will give evidence for the prosecution at the trial of the accused. The assessment of the co- accused's credibility at the trial of the accused is a completely separate and distinct exercise. It is difficult to see how an earlier guilty plea and admission of facts could affect or prejudice the mind of the magistrate at the trial of the accused. It is still open to the magistrate to doubt the co- accused's evidence as a whole or on that part of his evidence implicating the accused.

19. With respect to counsel, I do not see how the procedure adopted by the magistrate breached Art. 10 of the Hong Kong Bill of Rights.

20. As to Ground 3, the document referred to is the Summary of Facts and relates to Hui only; it is not evidence against Chan. The Crown concedes that it would have been better to delete any mention of Chan in the document. There is, however, nothing to suggest that the Summary of Facts was used by the magistrate as evidence against Chan. It is clear from the magistrate's Statement of Findings that the evidence she relied on consisted of the evidence of Garway's proprietor Mak, the evidence of Hui, the facts admitted under the Notice of Admitted Facts, and the Record of Interview between Chan and the ICAC. There was nothing in any of the documentary evidence which was not agreed by Counsel.

21. I have considered with care the arguments advanced under the first three grounds and find there was no real likelihood of bias on the part of the magistrate.

22. Ground 4, it is conceded, would not vitiate the conviction if taken by itself. The procedure adopted by the magistrate here was obviously for the purpose of saving time. Whilst it would have been a better practice for the magistrate to explain that the calling of such reports was in no way an indication of the kind of sentence she would impose, the purpose of such explanation would for the accused own peace of mind or to prevent disappointment. There was nothing in what the learned magistrate did which could justify any conclusion on Hui's part that he might obtain a lenient sentence if he should lie against Chan.

23. Coming to Ground 5, all that I need to say is that the magistrate as a judge of fact and using her common sense was quite entitled on the evidence before her to come to the view that Hui offered, and Chan accepted, the advantages specified in the charges. Having regard to the course of conduct of the two men, the magistrate's conclusion was inevitable.

24. There is nothing in Ground 6. Hui's evidence of what CHAN Hon-yuen told him was clearly to explain Hui's state of mind and not to prove the truth of what was said.

25. The lies in Ground 7 were referred to by the magistrate clearly in the context of Chan's credibility and nothing else.

26. In the light of what I say on Grounds 1 to 7, there is nothing in Ground 8.

27. The appeal against conviction is dismissed.

28. On sentence, the complaint is one of disparity. Clearly Chan's culpability is greater in view of his position of trust as an employee at Garway. The magistrate found that the commission Hui paid Chan came out of the former's pocket. It is thus argued that Garway suffered no loss. The point of course is that Garway could well have paid a lesser premium to NZI.

29. The appeal against sentence also fails.