HKSAR v. Cheung Wai Ho

DCCC 72/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 72 OF 2015

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Reasons for Verdict

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1.Out of the 18 charges in the charge sheet, D2 faced only one count of conspiracy to defraud (18th charge) with D1 as the co-defendant. On 8 July 2015, D1 pleaded guilty to a total of 10 counts of various offences, with eight counts be left on file, one of which is the 18th charge. D2 pleaded not guilty to the charge. After trial, I now deliver the reasons for verdict as follows.

2.Charge 18 related to one insurance policy which purportedly stated that D2 was the handling agent.  Based on the information in the insurance application form, Zurich approved the said policy and released commission of $10,584 to D2 and credited D2 with two sums of $100,800 and $63,504 under the headings of Total Annual Premium (TAP) and Annualised First Year Commission (AFYC) respectively.  D1 also got $529.20 as the overriding commission and two sums under TAP and AFYC.  It was D2 who lodged a complaint against D1 with Zurich.  D2 alleged that it was D1 who asked him to sign a blank application form of the said policy.  D2 was actually not the handling agent.  D2 transferred all the commission of $10,584 back to D1.

3.D2 challenged the admissibility of his video-recorded interview (VRI).  A voir dire was conducted at the start of the trial to determine the admissibility of the admissions.  D2 maintained that it was D1 who was his senior at the time who forced him to sign the blank form. There was no meeting of minds between them.  D2 made no gain from this act at all as D1 told him to transfer all the commission money that D2 received from Zurich back to D1.  It was D2 who made the complaint and eventually brought the case to light.

PW1 Yung Lai-ming, Raymond

4.In 2012, PW1 was the senior investigator with the ICAC.  On 21 February 2012, PW1 and his colleague Ho (PW2) went to D2’s residence known to the ICAC at Connaught Road West with the intention to arrest D2 and to execute a search warrant.  The ICAC officers were told by D2’s mother that D2 did not live there.  PW1 was able to contact D2 over the phone, and they arranged to meet at Tower 3, Ocean Shores in Tseung Kwan O. PW1 arrested and cautioned D2 inside the ICAC vehicle. 

5.D2 took the initiative and told the officers that he had some documents relating to this case and wanted to return to Flat 3, 51st Floor of Ocean Shores to retrieve the documents.  They went to the said flat, and D2 got some documents.  On the way back to the ICAC headquarters, D2 told PW1 that it was Tong (D1) who asked him to fill in information on a blank insurance document.  D2 was required to transfer all the commission back to Tong.  D2 was acting in accordance with Tong’s instruction.  PW1 asked some questions in response to D2’s answers.  PW1 mentioned the dialogue in the VRI subsequently.

6.PW1 recalled that PW2 kept one bank document and they used it in the VRI.  PW2 served D2 the notice to detained person.  D2 signed to acknowledge receipt of the notice. D2 read the content of the notice himself.  After the interview, D2 was escorted to Central to attend a dental appointment as D2 had some problems with his gums.  D2 did mention this problem on the car ride back to the ICAC.  The officer described the demeanour of D2 on the car ride as “nothing special”.

7.D2 did not make any request as documented in the arrest and detention sheet prepared by the ICAC.  PW1 mentioned about the bail issue in the detention centre.  After the interview, D2 did not make any complaint.  D2 was brought to the dental clinic on time as scheduled.  D2 was granted the ICAC bail in the afternoon.

8.Under cross-examination, PW1 knew that D2 has a clear record.  PW1 maintained that it was D2 who took the initiative to return to his house in Ocean Shores to get some documents.  PW1 did not suggest to D2 to do so.  Nor did the officers enter into D2’s house and look around for the bank documents.  PW1 said they were just at the door of D2’s unit and D2 came out within one minute.  PW1 had no idea of what kind of documents D2 wanted to get.  PW1 rejected the suggestion that when they were inside D2’s unit, D2 pointed to a black folder and PW1 took the folder.  PW1 said D2 gave him a pile of documents, one of which is the bank statement which was used in the VRI. PW1 also disagreed that he did not arrest and caution D2 at Ocean Shores.  PW1 agreed that the left side of D2’s face was visibly swollen due to his teeth problem.

9.PW1 maintained that D2 took the initiative to talk about the case while they were on the way back to the ICAC headquarters. PW1 took the chance to clarify D2’s answers.  PW1 said he had “recorded” D2’s admissions in the car ride in the VRI (items 17 to 30 at page 1393 to 1395).  PW1 said he had briefly reminded D2 that he was under caution in the car ride when D2 was talking.  PW1 disagreed that it was a “happy coincidence” that D2 made the admission in the car ride, saying that Tong wanted a promotion and asked D2 to sign some blank documents.  PW1 rejected the idea that D2 asked for a lawyer and to phone his parents three times before the interview.  PW1 was of the view that it would be better if the VRI was conducted before the dental appointment as after the dental, dental treatment, D2 may not be in a good physical state to be interviewed.  But in the VRI, PW1 did ask D2 if he was fit to be interviewed.  He also told D2 that if there was anything wrong, he could raise it during the interview.   

PW2 Ho Yiu-kwong, Alan

10.He was the assistant investigator with the ICAC.  On 21 February 2012, PW2 went with PW1 to Connaught Road West and then to Ocean Shores in Tseung Kwan O to arrest D2.  They met D2 at about 9:23 am in the parking space outside Block 3, Ocean Shores.  After checking D2’s identity card, they took D2 on board the car.  PW1 arrested and cautioned D2 in the car.  D2 indicated that he understood.  It was D2’s idea to return to his unit in Tower 3, Ocean Shores to get some documents.  They did not enter D2’s unit but waited outside the doorway.  D2 mentioned that he had some documents to show that he had given some money back to Tong and the document was inside his residence.  When they arrived at Unit 51C, D2 dashed into the unit with the main door closed but came out in less than one minute. D2 was carrying with him a bundle of documents.  He was holding the documents himself. They left the unit at about 9:35 am and returned to the headquarters.

11.During the car ride, PW2 said he could not remember if anything was said between PW1 and D2 but believed that if something was said, it was not related to the case.  After documentation and body search, they seized one bank document (P2) which was taken out from the bundle of documents that D2 was carrying.  They returned the rest of the documents to D2.  The officer in the detention centre will prepare the arrest and detention sheet.  PW2 served the notice to D2 and asked him if he needed to exercise any rights so listed.  D2 said no need.  PW2 asked D2 to sign on the duplicate and write down the time.  D2 was given a copy thereof.  PW2 and D2 wrote on the form in two different coloured inks.  Apart from the gum problems, D2 did not say he was unwell in any way.

12.After the interview and D2 was granted the ICAC bail, D2 was asked to sign the detainee complaints sheet.  The officer of the detention centre would ask the detainee if he has any complaint.  PW2 saw D2 signing on the sheet, and the guard commander of the centre signed too.  D2 said he had no complaint.

13.Under cross-examination, PW2 said that D2 looked normal despite the fact that D2 told PW1 about his tooth problem.  PW2 said that they did not have a search warrant for the unit in Ocean Shores and they did not go to D2’s unit.  When they arrived at the unit, D2 dashed in and they just waited outside.  They were worried but D2 soon came out.  After his arrest, D2 told the officers that all the money was given to Tong and he had documents to prove that.  It was not his decision as to when to conduct the VRI but usually it was done after documentation and body search.  PW2 said if D2 wanted a lawyer, he could get one any time, but D2 did not ask for that.  PW2 said if D2 was not fit to take part or feeling unwell, he could say so, and there was no way to force him to take part in the VRI.  Once the video was switched on, D2 could say he was unwilling.

14.PW2 served the notice to D2 and read it and then asked D2 to sign in duplicate.  PW2 said he could not force D2 to sign, and he gave a copy to D2.

PW3 Tang Chan-hung

15.He was the guard commander of the detention centre in 2012.  His duty had nothing to do with the investigation.  Part of his duties was to see if there is any complaint from the detainee when the latter is granted bail.  The detainee was asked to sign a detainee complaint sheet.  On the complaint sheet (P4), as D2 had no complaint,  PW3 wrote “no complaint” on the sheet.  D2 was asked to sign to confirm his reply.

16.Under cross-examination, PW3 said he had no independent recollection of the event but his testimony was based on his general practice and the sheet.  PW3 said this document was prepared after the bail procedure of the detainee was completed already. 

Evidence of D2 relating to the special issue

17.D2 met the ICAC officers on 21 February 2012.  He was aged 31 and had been living with his girlfriend in the unit in Ocean Shores for seven years.  His parents lived in the flat on Connaught Road West, but they did not know D2 was living in Ocean Shores.  The unit was registered in the name of D2’s girlfriend.  On the morning of 21 February, he received a call from one Yeung of the ICAC, and eventually they met in the carparking area near Tower 3 of Ocean Shores.  D2 had never had any encounter with the ICAC before.  He has a clear record.  The ICAC officers wanted to ask him questions about Zurich.

18.D2 said he was not arrested and cautioned at the time.  PW1 told him that he had a search warrant relating to the flat at Connaught Road West but not for Ocean Shores.  He asked D2 to accompany him to go to D2’s unit to retrieve some documents.  D2 agreed.

19.D2 claimed that both officers went into his flat in Ocean Shores.  PW2 walked around inside the flat.  At that time, D2’s girlfriend was not at home.  D2 stayed in the flat not long.  PW1 asked D2 where did he keep his personal bank documents.  D2 then pointed at an area next to the window-sill, and PW1 then retrieved a black box file.  It was PW2 Ho who kept the box file.  D2 said at that time he had a laptop computer and also an iPad but did not know why these items were not seized.  D2 said there was no personal data in his laptop computer.  The laptop computer was placed on the table.

20.The journey to the ICAC headquarters took about 20 minutes.  D2 did not feel “okay” as he was having severe inflammation and was in great pain.  His left face was severely swollen as he had his wisdom tooth extracted about two to three weeks ago.  D2 said he went to the government dental clinic on 20 February, one day before his arrest.  The dental appointment on 21 February was for 12:30 pm.  He told the officers about his teeth problem when they took D2 back to the ICAC headquarters.  D2 told them that he was in great pain and his teeth were bleeding.  PW1 told D2 “not to play with them”, and they had the power to detain him for 48 hours. PW1 appeared to be in command.  PW1 just asked D2 to sign the document which turned out to be the notice (P1).  D2 asked what it was but was told it was just an “ordinary document”, and told D2 just to sign it and fill in the time. D2 did not have the opportunity to read the content nor did the officer read the same to him.

21.D2 finished his Form 5 education and was doing delivery work at a logistics company.  When D2 was brought to the ICAC headquarters, he asked if the interview could be done after he went to see the dentist.  D2 was in agony at that time and wanted to be in a better physical condition when the interview was conducted.  D2 also requested to call his parents but was refused by PW1.  D2 did not think of calling his girlfriend.  D2 also told the officer that he wanted to get a lawyer but was told by PW1 that it would be a waste of time to find a lawyer and D2 would not be able to see the dentist on time.  Eventually D2 participated in the VRI because he wanted to go to the dental clinic punctually.  D2 did not know his rights.

22.Under cross-examination by the prosecutor, D2 said he was aged 28/29 in February 2012 and had finished Form 5 education.  He had been working for about 10 years.  He worked as an office assistant and/or courier and was also an insurance agent for one year.  He took the words of the ICAC officer that it was okay for him to sign the “ordinary document”.  D2 thought that he had to comply with the instructions.  Otherwise, he might not be able to see the dentist.  D2 did not notice the heading of the document which is in pink colour.  He was in agony and would like to leave as soon as possible to see the dentist.

23.D2 had seen a government dentist on 20 February, one day before his arrest.  As he found his tooth was still bleeding, he then made an appointment with a private dentist on the following day.  D2 had a copy of the notice after he was granted bail but he did not read it.  D2 said he was frightened and, when detained, there was no one he could trust.  D2 did not know how long he would be detained in the ICAC.  D2 said he requested to have the VRI conducted after seeing the dentist but was refused.  But he did not raise the matter again in the VRI.  PW1 told D2 that D2 had to co-operate. Otherwise, D2 would be detained, and D2 felt that he had no alternative but to co‑operate.  

24.D2 claimed that because he wanted to leave the ICAC as soon as possible and was not feeling well, he did not make any complaint to the guard commander of the ICAC detention centre.  D2 did not trust the guard commander.

Ruling on the voir dire

25.Basically, the defence challenged the admissibility of the voir dire of the cautioned statement or cautioned interviews on the ground that at the time, D2 was having a swollen gum and teeth-bleeding problem.  D2 was in great pain and in agony.  He co-operated with the officers because he wanted to leave to see the dentist as scheduled and to leave the ICAC office as soon as possible.  In the written objection, the defence mentioned two grounds: inducement and intimidation.  D2 had a dental appointment at 12:30 pm on the day, and he was able to make it after the VRI.  When D2 was told to sign the notice, he did not read the content of the notice.  D2 claimed that he was denied to make a call to his parents and was not allowed to get a lawyer.  It was a “happy coincidence” that the officer got a bank statement from D2’s residence in Ocean Shores.  D2 had to co-operate in order to attend the dental appointment and to leave the ICAC office.

26.D2 was educated and was aged 28 or 29 at the time.  He has a clear record, and I take his good character into account and in his favour when assessing his evidence.  Even if D2 did not read the notice as claimed, it does not mean D2 would be totally ignorant of his rights.  He claimed that he had requested to have a lawyer but was refused.  D2 repeatedly said that he was feeling unwell and was in agony, but D2’s demeanour in the VRI speaks differently in that D2 did react spontaneously and was active in making replies.  D2 had every opportunity to make the complaint when the video-recording machine was switched on.  D2 could have reiterated his requests during the VRI and no one could stop him if the VRI was in the process.  D2 made no complaint to the guard commander when he signed the detainee complaint sheet.  It is noted that at the stage when D2 saw the commander, D2 was already granted bail and was about to leave the ICAC office.  Complaint, if any, lodged at that stage would not affect his bail.  The discrepancy in evidence between PW1 (the senior investigator) and PW2 (assistant investigator) is not material.  PW1 said the bundle of documents retrieved by D2 in his residence was kept by PW2 while PW2 said it was carried by D2.  PW1 mentioned about the dialogue concerning the case during the car ride, and PW2 said if anything was said, the conversation did not relate to the case.

27.I do not accept D2’s evidence.  I find that it was D2 who took the initiative to return to his residence to retrieve the document.  In fact, I cannot see any difficulty for the ICAC to get any personal bank documents from any banks in Hong Kong even if D2 did not retrieve any bank document from home.  It is apparent that D2 was keen to exonerate his role and said that it was D1 who instigated the plot and he had nothing to gain from this act.

28.After considering the evidence of the prosecution witnesses, I accept the evidence and rule that D2 participated in the VRI voluntarily, and I will not exercise my discretion to exclude it.

PW4 Chan Cho-kit

29.After the voir dire, the prosecution called PW4, Chan Cho-kit.  He was the senior manager of the agency complaint department in Zurich at the material time.  He left Zurich in January 2015. One of his duties was to deal with internal investigation and monitoring.  He confirmed that an insurance policy relating to one Lui Cheuk-kin (P6) was handled by D2 whose signature appeared on the last page of the application form (page 551 of the judge’s bundle).  D2 was an agent of Zurich.  The form was dated 28 November 2010.  The agent had to witness the client to sign the form, and prima facie, the procedure was completed on 28 November 2010.  The number appeared beneath D2’s name, 10208480, was D2’s insurance agent number registered with the Federation of Insurance.  The agent’s particulars also appeared on the top left corner of the form (page 548).  D2 was a licensed agent of Zurich.  PW4 confirmed that the payroll statement relating to the said policy (P8, at page 705 to 710).  This statement would be sent to D2’s district manager who in turn should further distribute the same to D2.  The client had to pay two months of premium for the months of December and January.  The commission given to the handling agent occupied over 60 per cent of the premium.

30.In July 2011, PW4 had a meeting with D2 and one Lui Cheuk-fung in his office in One Island East.  D2 made certain admissions.

(Note: at this juncture, I sought clarification from defence counsel and was told there was no objection if the dialogue between D2 and PW4, being a person in authority at the material time, to be adduced.)

31.PW4 recalled that D2 revealed that Kamson Tong (D1) asked him to sign a blank insurance form as a witness.  Later, D1 gave D2 an application form which was filled out with the name of the applicant and a payment slip.  D1 asked D2 to submit the form to the company and took this policy as D2’s business.  D1 also asked D2 to repay the commission that D2 was to receive from the money back to D1.  The policy related to one Lui Cheuk‑kin. It was D2 who initiated the meeting.

32.Under cross-examination, PW4 agreed that D2 lodged the complaint with and was seeking guidance from PW4.  D1 Tong was D2’s senior at the time.  PW4 accepted that selling insurance policies was a kind of cut-throat business, and high quota was expected.  It is common that senior people put pressure on junior ones to sell policies.  PW4 had been in insurance business for about 32 years.  At times, agents in Zurich approached PW4 for advice.  PW4 said at that time basically D2 was making a complaint against D1 and asked what could be done.  It was not necessary at that time for the complainant to make a written complaint.  PW4 felt that apart from making a complaint, D2 tried to explain that he was forced to do the act.  PW4 also felt that D2 was frightened and did not know the consequence of his act.  PW4 maintained that agents were not allowed to sign a blank application form without seeing a client and to return the commission to the agent’s senior.

33.PW4 reported the matter to his superiors, and the management decided not to take any follow-up action.

D2’s VRI on 21 February 2012 (Exhibit P3 with the transcript as P3A, English version at page 1555 to 1651)

Items 12, 14 - agreed (that D2 was arrested on the

ground floor in Ocean Shores)

Item 16 - agreed (that D2 was cautioned)

Item 18 - agreed (that D2 and PW1 had a short dialogue)

Item 34 - agreed (that previous questions roughly related to the incidents that happened in the morning and that D2 signed a pink-coloured notice)

Item 36 - D2 understood (the rights listed on the notice)

Item 38 - no need (to have a lawyer)

Item 42 - suitable (to be interviewed despite the gum inflammation)

Item 78 - (employed by Zurich as) wealth planner

Item 92 - (Tong Kam-sun D1) was his manager

Item 120 - yes (had sat for professional examination of the Federation of Insurers)

Items 128, 132 - (in training course) the products of the insurance company were introduced, and to teach them to sit for the licence examination.

Item 174, 178 - theoretically yes (required to meet the client face to face and witness the client signing the application form).

Item 392 - don’t know (the person called Lui Cheuk‑kin).

Items 412, 420 - Tong had another policy relating to Lui and told D2 to copy from it.

Items 432, 434 - the handwritings in section A are D2’s, except the annual salary of 240,000.

Item 460 - at that time, Tong told D2 that he wanted to be promoted.

Item 472 - Tong mentioned about catching up with the year end. There was a promotion at the end of the year. He had to submit the numbers in a rush.

Item 482 - he (Tong) was at a higher post than D2.

Item 496 - had to submit the sum of the three (subordinates) in order to reach certain amount, in order to be promoted.

Item 508 - Tong asked D2 to fill out the file, and after signing it, Tong would deal with the rest.

Item 512 - at that time, D2 did ask Tong if there is any problem.

Item 514 - Tong said everybody did it as well.

Item 520 - D2 joined the insurance industry for about eight months.

Item 524 - D2 said he had no money and could not help Tong to pay.

Items 536, 538 - D2 had no money. Tong said he would deal with the rest, and no need for D2 to worry about it.

Item 542 – later, this policy was submitted.

Items 572, 586 - when D2 signed (the form), the client’s signature was not there.

Item 596 - this client was Tong’s, and he had other policies.

Item 612 - D2 did not receive a copy of the policy.

Items 616, 618 - D2 did not see this client and did not explain the terms to the client.

Item 624 - Tong said there would be no problem with the matters.

Item 632 - this client was not D2’s.

Items 654, 658 - D2 did not know who paid the premium, but Tong told him that it was done.

Item 690 - one day before the commission was released to D2, Tong gave him a call.

Items 696, 700 - Tong sent him a message and asked D2 to deposit back the amount into Tong’s account.

Items 704, 708 - D2 returned the sum ($10,584) to Tong on 7 December.

Item 710 - Tong said he was in a rush and asked D2 to fill it out. He had to get promoted.

Item 738 - Later, D2 went to the headquarters of Zurich to seek assistance.

Items 887, 889 - if a policy was terminated, no salary or commission would be paid.

Item 917 - once D2’s salary was stopped, he knew that (the policy) was terminated.

Items 921, 923 - D2 helped Tong to fill out (the document) in accordance with Tong’s instructions and return “every dollar and every cent” to Tong.

Item 933 - D2 had no gain in relation to this policy.

Items 937, 939, 943 - for a newly joined agent, when one reached a certain figure, he would get a basic salary.

Item 949 - Tong said he had put a policy at D2’s place.

Items 961, 965, 969, 971 - a fixed amount of the money ($8,000) was paid conditionally when the target is reached.

Items 999, 1001 - D2 was not (familiar with the internal operation).

Item 1009 - D2 did it purely with the intention of helping Tong.

34.After the close of the prosecution case, defence counsel prepared a written submission on no case to answer.  It was contended that:

“The whole tenor of the VRI (P3) and the evidence of PW1 is strongly suggestive of the defendant doing something against his better judgment rather than voluntarily entering into a situation of doing and agreeing to do something that he knew to be an unlawful act”.

35.The defendant made no false representation:

“The actions of the defendant are not those of a conspirator with any intent to defraud but a badgered employee being cornered by a greedy man who was content to use others for his own criminal enterprise of which this defendant had no actual part other than to sign a document, the contents of which were hidden from him and used by another for fraudulent gain.”

36.I ruled that the application was misconceived. I found that there is a prima facie case against D2.

37.D2 elected not to give evidence.  The defence counsel proceeded to submit a written final submission.  It was submitted that there was no direct evidence of the alleged conspiracy.  It was D1 who manipulated D2 for his own illegal benefit, and D2 was tricked and/or badgered to assist D1 in order to allow D1 to profit from a future unlawful act.  D2 did not make any representation as it was D1 who did so.  The inducement was performed by D1 as what D2 did was the mere signing of a blank form.  It was further submitted that there was no evidence of an intention to defraud on the part of D2, as the only evidence adduced is an intention, at its highest, to assist his boss.  There was no evidence of D2’s dishonesty too and that was supported by D2’s complaint to PW4 subsequently.  All in all, it was suggested that D2 had been asked to do something which the defendant reluctantly conceded to by virtue of perhaps a combination of naivety, inexperience and poor judgment and not dishonesty. 

Analysis

38.It is the duty of the prosecution to prove the charge against the defendant beyond reasonable doubt.  The defendant has no duty to prove anything.  D2 has a clear record and for that, I would have to consider the evidence in his favour, which includes his propensity to commit an offence and his credibility.  The fact that D1 has pleaded guilty to some of the charges in the charge sheet will not affect the way I assess the evidence available and will not cause any prejudice, in whatever sense, against D2.

39.The fact that D2 elected not to give evidence in the general issue is his right.  I would not and cannot draw any adverse inference in respect of his election. 

40.The facts of the case are straightforward.  D2 claimed that he was “forced” to sign a blank insurance application form by his senior, D1.  D1 gave a copy of an existing application form for D2 to copy some, not all, of the particulars therein, and D2 signed in the form as the handling agent in section I of the form.  D2 repeatedly said he was green at the time and was coerced to comply with D1’s instructions.  D2 admitted that he did not know the insured person Lui Cheuk-kin.  D2 did not meet Lui face to face.  He did not explain the terms to Lui.  He did not witness Lui’s signature in section H.  D2 knew that this was in breach of the business rules and conduct. 

41.After the policy was approved by Zurich and the commission released to him, D2, upon D1’s instruction, returned all the money to D1.  D2 claimed that he gained nothing from this act.  It is to be noted that D2 was a licensed agent after sitting for the professional examinations. D2 cannot claim that he was ignorant of the consequence of being a handling agent of an insurance policy. 

42.In fact, by signing in the declaration section of the form (see page 551 of the bundle), D2 declared: 

“that I have read and explained fully the section G to the life insured and policy owner before they sign this application in my presence, and have not made any inaccurate or misleading statements or comparisons nor withheld any information which may affect the decision of the life insured and policy owner. I hereby declare that I have gone through all the questions and information as stated in this application and the addendum/questionnaires attached, if any, with the life insured and policy owner. I hereby witness the application is signed by the life insured and policy owner in my presence.”

43.D2 simply made a false declaration in this aspect.  I accepted and believed that D2 did return all the commission he received from Zurich to D1.  He said he got no gain from this “help” so rendered to D1.  But the approval of the policy would allow D2, a newly joined agent, to have his “basic salary” or revenue from Zurich.  On top of that, both D1 and D2 would be credited with TAP and AFYC.

44.Defence counsel in the written submission suggested that there was no direct evidence of the alleged conspiracy.  It was the co-conspirator Tong who manipulated D2 for D1’s own illegal benefit, and D2 was tricked or badgered to assist D1.  It was submitted that D2, who has a clear record and was a greenhorn in the insurance business, was duped by his senior to sign a document.  D2 even made a complaint to and looked for advice from the senior manager of Zurich.  And the complaint, it was submitted, was consistent with D2’s innocence and showed that there was no meeting of minds between D1 and D2.  Defence counsel further submitted that “this case of conspiracy to defraud is dubious and underwhelming”.

45.The application form in question was dated 28 November 2010.  D2 went to lodge a complaint against D1 in July 2011.  D2 was arrested on 21 February 2012.  There can be many reasons for D2 to lodge the complaint some eight months after the incident.  D2 must have realised that he was in serious trouble and he wanted to take whatever remedial action that was available to him.  It does not mean that D2 did not realise that what he did was wrong back in November 2010.  D2 did not plead “Non est factum”.  I have no doubt that D2 knew what he was doing when he signed the application form in November 2010.  And that also explained why D2 transferred the commission in the sum of $10,584 on 7 December 2010 to D1’s bank account upon receipt of the same from Zurich.  D2 got his credit under TAP of $100,800 and AFYC of $63,504 on top of his entitlement to the “basic salary” or revenue in whatever form from Zurich.  D1 got his overriding commission and respective TAP and AFYC.

46.The law relating to the offence of conspiracy to defraud is settled: see Archbold Hong Kong 2015, paragraph 36‑34 to paragraph 36-66.  The offence is constituted by becoming a party to an agreement with another or others to use dishonest means, inter alia, with the purpose of causing economic loss to or putting at risk the economic interests of another. The Ghosh two-stage should be applied to determine whether the means agreed upon are dishonest.  While an intention to defraud is necessary, actual detriment need not be shown.  The act or declaration must be in furtherance of the conspiracy, and it must be made by a conspirator, although it matters not whether the maker is present or absent at the trial.

47.In the present case, there must be an agreement between D1 and D2 when the latter was asked to sign the declaration of the insurance application form as the handling agent of that particular insurance policy.  It is no defence that the whole plot was instigated by D1 who was senior to D2.  That goes to mitigation, not culpability.  D2 knew what he was doing, and he complied with the instruction of D1.  He had no money to pay for the insurance premium, and D2 knew that D1 would “take care” of the rest, once D2 signed the form.  D2 was told, and he did, to transfer the commission money back to D1.  Again it is no defence that, prima facie, D2 did not pocket any money from this transaction.  The application was submitted to Zurich who approved the policy.  It led Zurich to release the commission to D2 and the overriding commission to D1 on top of the TAP and AFYC.  It caused economic loss to Zurich and also put the economic interests of Zurich at risk.

48.On the other hand, by applying the two-stage test under Ghosh [1982] QB 1053, I have no difficulty to find that according to the ordinary standards of reasonable and honest people, what D1 and D2 had done was dishonest.  And I also find that D2 himself must have realised that what he was doing was obviously dishonest by those ordinary standards.

49.To conclude, I rule that the prosecution has proved the case against D2 beyond reasonable doubt, and I convict D2 of Charge 18.