HKSAR v. Woo Yuet Sim and Another
Read the full judgment text of DCCC 1088/2015 on BabelCite. This District Court judgment was delivered on 11 November 2016.
1. The second defendant (D2) faces 11 charges of lending money at an effective rate of interest which exceeds 60% per annum, contrary to s 24(1) and (4) of the Money Lenders Ordinance, Cap 163, commonly known as “loan sharking”. (Charges 1 to 11) The offences are said to have spanned a period of 4 years between 8 August 2005 (for Charge 3) and a day unknown in August 2009 (for Charge 10). The respective dates of offences, loan amounts and borrowers concerned are listed in the Schedule attache
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DCCC 1088/2015 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CRIMINAL ACTION NO 1088 OF 2015 ----------------------
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--------------------------------------- REASONS FOR VERDICT --------------------------------------- INTRODUCTION 1.The second defendant (D2) faces 11 charges of lending money at an effective rate of interest which exceeds 60% per annum, contrary to s 24(1) and (4) of the Money Lenders Ordinance, Cap 163, commonly known as “loan sharking”. (Charges 1 to 11) The offences are said to have spanned a period of 4 years between 8 August 2005 (for Charge 3) and a day unknown in August 2009 (for Charge 10). The respective dates of offences, loan amounts and borrowers concerned are listed in the Schedule attached. 2.Besides, D2 is jointly charged with the first defendant (D1) for one charge of conspiracy to deal with property known or believed to represent proceeds of an indictable offence, contrary to s 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap 455 (“OSCO”) and ss 159A and 159C of the Crimes Ordinance, Cap 200. The offence, which is commonly known as “money laundering”, is said to have occurred between 4 May 2009 and 14 May 2011 and the property concerned was a total sum of $4,336,000.01 Hong Kong dollars in D1’s bank account held with the Hongkong and Shanghai Banking Corporation Limited (“HSBC”). (Charge 12) MAJOR ISSUES 3.As regards Charges 1 to 11, judging from the way the prosecution witnesses who were named as borrowers (“the borrowers”) were cross-examined, there can be little dispute that each of them had in fact obtained loans and paid interests. However, of all the borrowers only PW8 could identify D2 as his lender. Apart from identity, there is also an issue of reliability of the evidence of the borrowers concerning details of their respective loans. In particular, it is noted that the borrowers were only asked to give their first statements to the police about 4 or 5 years after the incidents they testified about. In addition, many of the borrowers had at the material times borrowed from different sources. Therefore, their memory of the loans which are the subject matters of the charges is naturally called into question. On the other hand, D2’s case is that he did not know any of the borrowers and had not lent money to any of them. 4.As regards Charge 12, there is no dispute that D1 had let D2 have the use of her aforesaid HSBC bank account and she had since retained no control over it. Also, D2 does not dispute the monies subsequently deposited into D1’s bank account were in fact his. The prosecution case is that D1 agreed to let D2 use her bank account when she had reasonable grounds to believe that D2 would use it to launder his proceeds of indictable offence. As regards D2, even though the prosecution say that the deposits, or at least some of them, were his proceeds so that he must have known about their nature, perhaps out of abundance of caution they also say that D1 at least had reasonable grounds to believe that the deposits were proceeds of an indictable offence. As regards the defence, D2 says that the proceeds came from his trading in parallel goods which was legitimate. It is the case of both defendants that they had neither knowledge nor reasonable grounds to believe that the monies were proceeds of any indictable offence. LEGAL PRNICIPLES General 5.I bear in mind that the burden is on the prosecution to prove their case beyond reasonable doubt. Moreover, the case against each defendant is to be considered independently and separately. In case of D2 who is facing more than one charge, each of his charges is also to be considered independently and separately. On the other hand, the defendants are not required to prove anything. D1 chose not to give or call any evidence. This is her right and no adverse inference would be drawn because of the exercise of this right. As regards the evidence of D2, when considering his credibility, the tribunal of fact should not only have regard to that which it is satisfied is true, but also to those facts in the defence evidence which it finds might be true: Lee Fuk Hing v HKSAR.[1] 6.Insofar as the prosecution relies on any inferences to support the charges, such inferences are not to be drawn against any of the defendants unless they are the only reasonable interferences available from the direct facts proved: Kwan Ping Bong & Another v R.[2] 7.Both defendants had made statements under caution which are adduced by way of admitted facts. Their respective statements under caution are “mixed statements” which contain both inculpatory and exculpatory parts: see HKSAR v Yuen Man Tung.[3] Both the inculpatory and exculpatory parts are evidence for the purpose of determining where the truth lies. It is trite law, however, that the court, as the tribunal of fact, is entitled to attach different weights to different parts of a defendant’s out of court statements: see generally Criminal Evidence in Hong Kong, by Bruce & McCoy, at V[1203]-[1250]. 8.Furthermore, I remind myself that what one defendant said under caution is not evidence against the other and that the court would not compare out-of-court statements given by different defendants to determine if they are true: see Wong Wai Man & Ors v HKSAR;[4] and also generally Criminal Evidence in Hong Kong, ante, at V[1055]-[1100]. On the other hand, under the principle in R v Myers (Melanie),[5] the contents in defendant A’s cautioned statement which were favourable to defendant B could be used in support of defendant B’s defence: see HKSAR v Ho Ching Wah.[6] 9.Both of the defendants have a clear record. In the case of D1, even though she did not give evidence, she seeks to rely on what she said in her statements under caution. In the circumstances, I give myself the good character direction in favour of each of the defendants in relation to both propensity and credibility: Tang Siu Man v HKSAR (No 2).[7] Conspiracy 10.S159A(1), Crimes Ordinance[8] defines what a statutory conspiracy is. It is the agreement to commit an offence and the intention to take part that form the offence of conspiracy: see R v Anderson.[9] A conspiratorial agreement can be expressed or implied or partly expressed and partly implied. Proof of its existence is generally a matter of inference: see R v Brisac;[10] and Churchhill v Walton.[11] S25 of OSCO 11.Monies passing through a bank account are clearly property: see the definition of “property” in s 2, OSCO as read with the definition of “property” in s 3, the Interpretation and General Clauses Ordinance, Cap 1. 12.The actus reus of an offence under s 25, OSCO is “dealing” with property. “Dealing” in relation to property is defined in s 2(1) of the Ordinance and it includes (insofar as it is relevant to the present case):-
13.The mens rea of an offence under s 25 has two limbs: “knowing” or “having reasonable grounds to believe”. The court has repeatedly pointed out that the prosecution do not have to prove, as an element of an offence under s 25, that the property concerned in fact represents the proceeds of an indictable offence. The quality of the property being such proceeds is an element in the mens rea but not the actus reus: see HKSAR v Wong Ping Shui;[12] Oei Hengky Wiryo v HKSAR (No 2);[13] and HKSAR v Yeung Ka Sing Carson. [14] 14.As to the test for determining whether an accused had “reasonable grounds to believe”, in Carson Yeung’s case the court confirmed their earlier decision in HKSAR v Pang Hung Fai[15]that the test is that propounded by the Appeal Committee in Seng Yuet Fong v HKSAR,[16] namely that:-
15.Moreover, in deciding whether a defendant had reasonable grounds to believe, the applicable standard is whether on the grounds available to him, the accused would have been led to have the requisite belief. In determining this, the defendant’s beliefs, perceptions or prejudices are to be considered and given such weight as is warranted.[17] The conclusion which a court reaches on the issue of whether a defendant had the relevant reasonable grounds to believe depends on the state of the evidence.[18] 16.As regards the indictable offence on which the money laundering is predicated, in HKSAR v Yang Sigai[19] the Court of Final Appeal stressed that under the second limb, there is no requirement that it must be proved that accused was actually aware of the crime that produced the relevant property dealt with by the accused. The court also rejected the submission that it must be shown at least the accused knew of the nature of the activity that has brought about the property deal with. Reference was made to the following paragraph from Carson Yeung’s case:-
17.Lastly, although the Court of Appeal in HKSAR v Salim Majeb[20] rejected the submission made on behalf of the respondent that the judgment of the Court in HKSAR v Wong Chor Wo & Another[21] was authority for the proposition that “the lending by an account holder of the use of his account to a third party constitutes, by itself, a dealing with property” for the purposes of the offence of money laundering”, it went on to observe:[22]
The above passage is followed in the recent judgment of the Court of Appeal in HKSAR v Jariabka Juraj[23] which was decided after the judgment of the Court of Final Appeal in Carson Yeung’s case. PROSECUTION EVIDENCE Charges 1 and 2 18.The prosecution evidence of the loans which were the subject matters of these two charges comes mainly from PW4 who is a goods delivery driver. PW4 gave evidence that after he was declared bankrupt in 2005 he asked his then girl friend Chan Yuen Yee (PW5) to open for him a bank account in her name. PW5 complied and opened an account with Hang Seng Bank. PW4 obtained the bank card from her and since then had the sole use of the bank account. 19.PW4 said further that after bankruptcy he was unable to obtain any loans from financial institutions. Through the introduction of a friend, PW4 borrowed money on several occasions from a person whom he addressed as “Ho Pak” (Uncle Ho) to ease his cash flow. The first such loan was obtained in 2005 for $20,000 for which PW4 agreed to pay an interest of $2,000 every 15 days. Subsequently, he met Ho Pak in the vicinity of Silver Spring Sauna in Portland Street, Mongkok and received $18,000 cash from the latter. PW4 believed that the shortfall of $2,000 was deducted for interest. PW4 was given a piece of paper by Ho Pak written with details of a bank account for making repayment. It appeared to PW4 that the name of the account holder belonged to a female. It took him several years to clear that debt. However, I note that this incident is not the subject matter of any charge. 20.PW4 said in the years ensuing 2005 he had obtained further loans from Ho Pak. PW4 said that he borrowed $1,000 and several hundreds in 2006 and 2007. The interest was also 10% of the principal for every 15 days, so that in case of a loan of $1,000 the interest would be $100 for an installment, whereas in case of a loan of $300 the interest would be $30. He made all the repayments by way of transfer deposit via ATM through PW5’s bank account. After each repayment, PW4 would inform Ho Pak. PW4 said also that in early 2009 he borrowed $5,000 from Ho Pak because he needed cash flow for the Chinese New Year and the terms of that loan were similar to the previous ones. Again, I note the last mentioned loan of $5,000 is not the subject matter of any charge. 21.However, PW4 was unable to remember the dates or even the months of his loans:-
22.Moreover, PW4’s cross-examination revealed further problems concerning his evidence about the $1,000 and $300 which he said were loans from Ho Pak:-
23.That said, there were bank entries in D2’s bank account held with Hang Seng Bank[26] showing that:-
Charges 3-6 24.The evidence of these charges comes mainly from Lau Wai Hung (PW1) who works in the Post Office. PW1 gave evidence that he was in financial difficulties in 2000s and he borrowed from various finance companies. 25.Subsequently, through the introduction of a friend PW1 got a telephone number of a person called “Ho”. It seems to PW1 that Ho was the surname but he was not sure. PW1 rang that number and addressed the man he spoke to as “Ho Sang” (Mr Ho) and the latter responded to that address. PW4 asked for a loan of a few thousand dollars to 10 thousand dollars. However, because of the long lapse of time, he could not remember the exact amount of the loan. After refreshing his memory from his bank records,[28] he said the loan was made on 8 August 2005 and for $5,000, which was to be repaid within a month together with an interest of $500 to $1,000. PW1 said nothing was discussed as to what would happen if he failed to repay the loan within one month. Later, PW1 said he cleared the debt within a month and he repaid a total of $5,500 including interest. The repayment was made by way of deposit into a bank account designated by the other side but he no longer kept the account number. (Charge 3) 26.PW1’s attention was drawn to a deposit of $5,000 made to his bank account on 16 August 2006[29] which, he said, was another loan from Ho arranged through a phone call. For that second loan, he had to repay a total of $5,500 to $6,000 (interest included) within a month. He said he could not remember the exact amount of interest. Similar to the previous occasion, the repayment was made by way of deposit into an account nominated by the lender. (Charge 4) 27.Then, PW1’s attention was also drawn to a deposit entry of $10,000 made to his bank account on 16 February 2007 which he thought was yet another loan from Ho. He said that he had to repay $12,000 within a month. He added that if the loan was not settled within a month, then he would have to pay interest. He said that he settled the loan within a month and the repayment was made to an HSBC bank account. He could not recall whether the same account number was given to him for making repayment on the previous occasions. He thought that an HSBC account had also been used on those occasions. (Charge 5) 28.Lastly, he was asked about a deposit entry of $8,000 made on 7 September 2007 to his bank account.[30] He said that it was also a loan from Ho arranged through a phone call and for which he had to pay an interest of $1,000 to $2,000 within one month which he did in October. Again, the repayment was made by depositing money into a HSBC bank account nominated by Ho. He could not recall whether it was the same HSBC bank account as before. (Charge 6) 29.Concerning the lender, PW1 said he met Ho only once about 10 years ago at the time of the first loan. The purpose of that meeting was for PW1 to give Ho a photocopy of his staff card. PW1 could not recall where they met but said it would be in Mongkok. 30.In cross-examination, PW1 agreed that he had also borrowed money from family members and therefore it is possible that they had deposited monies into his bank account through ATM. One such example of that was the deposit of $9,000 made on 14 February 2007. PW1 said that when the police showed him ([P4], B1), he remembered that he had borrowed money. I note that there were only two entries on B1, a deposit of $5,000 on 8 August 2005 and a withdrawal of the same amount on the same day. PW1 agreed, however, that by just looking at the credit entry, he could not tell whether it was a loan from Ho or not. The same also applies to the other three credit entries that he was asked about in his examination-in-chief. PW1 also agreed that he could not remember the exact amount of interest that he had paid for the $8,000 loan in September 2007 (Charge 6). He agreed that he had said in his witness statement that the interest for that loan was $800 instead of $1,000 to $2,000 as he said in the examination-in-chief. 31.Besides PW1’s evidence, there were entries in D2’s account held with Hang Seng Bank showing that:-
Charge 7 32.The evidence of this charge comes mainly from Lai Yung Kan (PW2) which to a limited extent is supported by the evidence of his former wife Fung Choi Yin (PW3). PW2 is a retired CSD officer. PW2 and PW3 had a son and a daughter from their marriage. In 2004, PW2 was declared bankrupt and since then he was unable to obtain loans from financial institutions. 33.According to PW2, prior to his formal divorce in or around 2008, he had already been living apart from his family and staying with his then girl friend. During that period, he had to pay PW3 and the children for their monthly living expenses. That he did by depositing money into PW3’s bank account held with HSBC. In March or April 2007, PW2 had difficulties paying PW3. Through the introduction and arrangement of a work colleague, PW2 went to meet a man in a café in Mongkok. Prior to that meeting, PW2’s colleague had already told him that the interest would be $2,000 per month. PW2’s colleague had also told him that the lender was called “Simon”. Yet, during the meeting PW2 did not address the lender by any name and the lender had not introduced himself either. PW2 obtained from Simon $10,000 cash and Simon gave him a piece of paper with details of a HSBC bank account for PW2 to make repayment. For that loan, PW2 repaid Simon a total $12,000 (principal and interest inclusive) in the following month through a cash deposit machine and he informed the lender by phone after the deposit was done. I note, however, that the aforesaid loan is not the subject matter of any charge. 34.Towards the end of the first day of his evidence[35] when PW2 was asked whether he had obtained any further loans from ‘Simon”, he answered in the negative. However, in the following morning[36] when PW2 continued his in-chief, he indicated that he had something to correct. It later transpired that PW2 had read his police statement the previous night without leave of the court. PW2 said that by the end of 2007 he had difficulties paying his family their living expenses again. Therefore, he obtained from his aforesaid colleague the telephone number of Simon again, rang that number and asked for another $10,000. The male who answered the call agreed to lend the money to PW2. It appeared to PW2 that the male who answered the call was the same Simon whom he met on the previous occasion in the café in Mongkok. PW2 provided the account of PW3’s bank account to Simon. This time PW2 did not discuss with Simon about the interest, as he assumed that it would also be $2,000 a month. For this second loan of $10,000, in the first two months PW2 did not have sufficient money to settle. Therefore, PW2 paid two installments of interest at $2,000 each. In the third month, he cleared the debt by repaying a total of $12,000. When PW2 was asked why he was able to remember this second loan, he said that that was because he had been invited by the police to give a statement during which he was presented with the bank statement of his former wife showing a deposit of $10,000. 35.PW3 gave evidence that she had only given her bank account details to PW2 so that if there were any deposits they must have come from him. PW3 said also that PW2 was supposed to deposit living expenses into her bank account on the first or second day of each month after he had received his salary. The payment from PW2 was not fixed and they ranged from $7,000 odd to $10,000 a month. There were occasions that PW2 was late in paying and when that happened she would call and tell him that she had no money to spend. PW3 said that prior to her formal divorce with PW2 she had no source of income other than the payment from him. However, she did not know where PW2’s monies came from. PW3 could not remember what the deposit of $4,000 on 14 December 2007 (which apparently was not from PW2) was about. 36.There are several difficulties with PW2’s evidence which bear on his reliability including the fact that he was testifying about events which had happened almost 9 years ago. The following serve as examples:-
37.Apart from the above, as regards interest under cross-examination PW2 agreed that there was no discussion about that between him and Simon at their meeting in the café in Mongkok. He simply relied on what he had been told by his colleague. As regards the second loan, he just assumed that the interest would be the same as before and he made two interest payments of $2,000 without being chased. 38.As regards identity, PW2 had only met Simon once. According to him, the second loan was months after the first one and during the interim he had no contact with Simon. PW2 agreed under cross-examination that it is possible that the person who spoke to him over the phone about the second loan was not the same person who he met in March/April 2007 in the café in Mongkok. 39.There was an entry in D2’s account held with Hang Seng Bank showing a transfer of $10,000 to PW3’s bank account on 13 December 2007. Charge 8 40.The evidence of this charge comes mainly from Chu Bik-leung (PW8) who works in the Food and Environmental Hygiene Department as a hawker control officer. 41.Around 22 May 2009 PW8 was in financial difficulties. On that day he went to a finance company in Mongkok called Professional Finance Company and applied for a loan of $10,000 but the application was not successful. As PW8 was leaving, he met a man (later known as “Simon”) who asked him whether he wanted to borrow money. Afterwards, in an eatery nearby (which he later said was McDonald) PW8 gave Simon his personal particulars and bank account number and asked for a loan of $10,000. The term of the loan was that PW8 had to repay $12,000 within 30 days. If PW8 failed to repay within time, an interest of $2,000 would be added every 30 days. Repayment was to be made by depositing money into a bank account given by Simon. PW8 said he obtained the loan of $10,000 on the same day. PW8 identified the deposit of $10,000 made to his bank account on 22 May 2009 ([P6], B1) as the loan. PW8 repaid the loan within 30 day by depositing cash into the bank account given by Simon, as Simon asked him not to do bank transfer. 42.On 13 April 2015, PW8 attended an identification parade and identified D2 as Simon. In cross-examination, he said that he was able to identify D2 because of his characteristics, namely his long neck, height and body built. He agreed that he took about a minute looking at the line up before he made the identification. He said that he had not assumed that Simon was there when he made the identification. 43.Apart from PW8’s evidence, there was also an entry in D2’s bank account held with Hang Seng Bank showing a transfer of $10,000 to PW8’s bank account on 22 May 2009. Charge 9 44.The prosecution evidence mainly comes from Leung Kam Hung (PW6) who works as a good delivery driver. 45.PW6 gave evidence that around July 2007 because of gambling he had to borrow money from different sources. A friend referred him to a man who could help him. PW6 went to see that man alone in Soy Street, Mongkok. The purpose of the meeting was for PW6 to give the man copies of his identity card and address proof. PW6 asked for a loan of $5,000 and he understood that he had to repay a total of $5,500 within 15 days. Nothing was discussed as to what would happen if PW1 failed to repay within that period. Subsequent to the meeting, someone deposited $4,500 into his bank account. PW6 understood that if one borrowed $5,000, he would only receive $4,500 but the repayment would still be $5,500. PW6 made repayment by depositing the money through a cash deposit machine into an account nominated by the man. After that he called and informed the other side. He had no idea whether the one who answered his call was the same person that he had spoken to previously. PW6 was asked about a deposit of $4,500 made on 20 July 2007 into his bank account ([P7], B1) and replied that it was the loan from the man. 46.In cross-examination, PW6 agreed that he had been in debts for many years around 2007 and he had borrowed from various sources. However, he said that the occasion he testified about was the only time that he had borrowed from an “unofficial source”. He said that it was because the interest rate was too high. However, he agreed that before the police showed him the bank records, he could not remember the date or even year of the loan in question. He agreed that the only reason why he said the deposit of $4,500 made on 20 July 2007 was the loan from the male he met in Mongkok was because he was shown B1 by the police. I note that B1 contains only 4 entries. PW6 agreed that he could not be sure that this entry of $4,500 represented the loan from the man in Mongkok. He agreed that he had not heard of the name of D2, Simon or Ho Pak. PW6 said if he had failed to repay the debt in full, he would have to pay $500 every 15 days. 47.Apart from PW6’s evidence, there was an entry in D2’s account held with Hang Seng Bank showing a transfer of $4,500 to PW6’s bank account on 20 July 2007.[37] Charge 10 48.The evidence comes mainly from Yau Chung-hoi (PW7) who works for the Electrical and Mechanical Services Department. He was keen on gambling and experienced financial difficulties when his daughter was born. He had been to a number of finance companies. In August 2009, after having been turned away by a finance company, he received a call from a male asking whether he wanted to borrow money. That male said that for a month’s loan, the interest would be 10% of the principal. PW7 did not ask what would happen if he was unable to repay the debt in full within a month. An agreement was made for PW7 to meet the male at a MacDonald restaurant in Mongkok. 49.At MacDonald, PW7 met two males. One of the males looked familiar and seemed to be a staff member of a finance company and the other male was introduced to PW7 as “Simon”. After PW7 had given his copy identity card, address proof and contact details of family members to the staff member and was made to sign an IOU which did not specify the amount of loan, Simon took out $20,000 cash and handed it to PW7. PW7 was told by the staff member that he had to repay $20,000 together with an interest of $2,000 within a month. 50.PW7 said that after the first loan, he had borrowed two further loans from Simon so that at one stage, he owed Simon as much as $50,000 and the monthly interest varied according to the total amount he owed. However, PW7 could not recall the exact dates of those subsequent loans. I note that the subsequent loans were not the subject matter of any charges. PW7 said that it was only until March 2010 that he was able to clear off all the debts owed to Simon. The repayments were made by either by a direct transfer from PW7’s bank account to a HSBC account nominated by Simon or by depositing cash into that account. PW7 could no longer remember the name of the account holder except that the surnamed started with “W”. PW7 said after each repayment, he would call Simon to confirm that the money was received. As far as he could recall, he had not made any repayment by phone banking. That was because he wanted to have a receipt for each repayment and he would not have one if he repaid by phone banking. 51.Under cross-examination, PW7 said that the second loan was obtained after the 1st interest payment of $2,000 in September 2009. He confirmed that the maximum amount he owed to Simon was $50,000 and that was subsequently repaid in one go. He could not be sure whether Simon had ever changed the repayment account. He agreed, however, that he had not mentioned any change of account in his witness statement. 52.As far as bank records are concerned, there were entries in PW7’s bank account and D1’s HSBC bank account (used by D2) showing the following:-
Charge 11 53.The evidence comes mainly from Lee Tak Wah (PW9) who works in the field of building management. According to PW9, in May 2009 he experienced financial difficulties and applied for a loan from Professional Finance Company in Mongkok intending to borrow $15,000. However, that application was not approved as he still owed the company money then. As he was leaving the company, he met a male who was distributing leaflets downstairs. PW9 had met that male before in the finance company. PW9 chatted with the male and was told that the latter had to way to help him out. PW9 was asked to wait in the McDonald restaurant in Sai Yeung Choi Street. 54.Later on the same day, he met the male and another man who was introduced to him as “Simon”. Simon gave PW9 a piece of paper and PW9 wrote his name and address on it. PW9 borrowed $5,000 from Simon for which he had to repay $6,000 in the following month by depositing the same into a bank account given by Simon. 55.PW9 said it took him 5 months to clear the debt from Simon and every month he repaid $1,000 to $2,500. Altogether, he had repaid around $8,000 to $9,000 in total. Every time PW9 had made a repayment, he would make a call to Simon. However, PW9 was not sure whether the one who answered his calls was the same person who he met in MacDonald. PW9 said he had only borrowed once from Simon. 56.As regards bank records, there are the following entries:-
The treasury accountant 57.The calculation of the effective annual interest rates in respect of Charges 1 to 11 was done by Wong Wai Ting (PW11), who graduated from the Polytechnic University with a degree in accountancy. PW11 had worked in various private institutions for 8 years before she joined the Government as a treasury accountant in 2015. Her expertise was not challenged and I found that she was qualified to give expert evidence on accounting matters. 58.PW11 based her calculation on the statutory formula stipulated in the Money Lenders Ordinance and also the data provided by the borrowers in their respective police statements. Her evidence is not challenged and her witness statement[58] is admitted by agreement as P94. 59.In short, it was PW11’s evidence that:-
Admitted Facts 60.The Admitted Facts [P93] cover the following areas and/or exhibits:-
NO CASE SUBMISSIONS Defence submissions 61.At the end of the prosecution case, Mr Davies for D2 and Ms Tso for D1 made submissions at half time in respect of all charges that the defendants were facing. Mr Davies emphasised the weaknesses in the evidence of the borrowers as discussed above and also the fact that none of them (except PW8) could identify D2 as the person who had lent them loans at excessive rates.[60] In relation to all of the loan sharking charges, it was submitted that it is not clear whether there was any calculation of compound interest and what would happen if the principal had not settled in time. 62.As regards the charge of money laundering (Charge 12), Mr Davies submitted that since it relates to only two of the loan sharking charges (namely Charges 10 and 11),[61] so that if those two charges could not stand, Charge 12 should also fall away, there being no evidence of any illegal behaviour in the present case. Ms Tso adopted Mr Davies’ submission and also emphasized that there is no evidence that D1 knew what was happening in her bank account after D2 after had taken the control of it. It was also submitted that D1 had no reason to believe that the deposits into her account came from loan sharking or that she knew that D2 was lending money to other people. Legal principles 63.Before considering the evidence, I will first set out the relevant legal principles. To start with, the approach a judge must take when considering a no case submission is set out in R v Galbraith,[62] where Lord Lane CJ said,[63]
64.The court adopted the words of Lord Widgery CJ in R v Barker (Note)[64] where his lordship said,
65.R v Galbraith has been consistently adopted by the courts in Hong Kong: see, eg, R v Ip Chi Keung.[65] 66.As to how a trial judge should approach a prosecution’s case based on inferences when facing with a no-case submission, in my view the following said by Kempster JA in Attorney General v Li Fook Shiu Ronald,[66] which is about an application to discharge made under s 22 of the Complex Commercial Crimes Ordinance, Cap 394, is also applicable:-
67.Also, in Director of Public Prosecutions v Varlack,[67] the prosecution appealed the determination of the Eastern Caribbean Court of Appeal quashing the conviction of the defendant of murder on the basis that the judge had erred in rejecting a submission of ‘no case to answer’ at the close of the prosecution case. The prosecution case against the respondent was circumstantial, being based largely on the evidence of telephone calls made between the defendants from which the prosecution sought to draw the inference that she knew of and agreed to a plan to kill the deceased. In the advice of the Privy Council delivered by Lord Carswell, the authorities relevant to the issue of the proper approach to be taken to a submission on no case to answer were addressed. Having said that the “canonical statement of law” was to be found in the judgment of Lord Lane CJ in R v Galbraith Lord Carswell cited the judgment of King CJ in the Supreme Court of South Australia in Questions of Law Reserved on Acquittal[68] as being an accurate statement of the law:-
68.Lord Carswell went on to cite with approval a passage from the judgment of the Court of Appeal of England and Wales, Criminal Division delivered by Moses LJ in R v Jabber:[69] -
69.In the end, Lord Carswell said that when one applies the above principle, it follows that the fact that another view, consistent with innocence, could possibly be held does not mean that the case should be withdrawn from the jury. See also the recent case of the Court of Appeal in Secretary for Justice v Ng Siu Lun[70]where DPP v Varlack was applied in Hong Kong. Consideration – Charges 1 to 11 70.Although many of the borrowers addressed their respective lender “Ho Sang”, “Ho Pak” or “Simon”, I would not assume that those names referred to the same person. Similarly, in case a borrower said he obtained more than one loan from a person whom he had only met once, I would not assume that those loans necessarily came from the same lender. This is not to say that the fact D2 had the word “Ho” in his name and has an English name “Simon” is not relevant. It is only that, as I said, each charge has to be considered separately. 71.I have taken into account counsel submissions and considered the evidential difficulties concerning the evidence of the borrowers outlined above. Nevertheless, in respect of the loan sharking charges:-
72.As regards Charge 11, although there were ATM withdrawals from PW9’s bank account and also ATM deposits into D1’s bank accounts of the like amounts on two separate occasions, there is nothing in the relevant bank affirmations to show that the withdrawals and deposits were corresponding transactions. PW9 had not made any identification of his lender. In my assessment, the bank evidence is not capable of giving rise to a prima facie case that D2 was PW9’s lender or that the two deposits into D1’s bank account in question were loan repayments from PW9. Consideration – Charge 12 73.As regards Charge 12, in relation to both defendants I take into account the evidence of PW7 about his borrowings from Simon and his repayments into a bank account designated by Simon the holder of which had a surname beginning with “W”. I take into account the bank evidence relating to Charge 10 discussed above. I also take into account the size and pattern of deposits and withdrawals in D1’s HSBC bank account during the material period of time as summarised in Annex C of Admitted Fact, [73] a copy of which is attached. 74.In relation to D1 only, I also take into account the following:-
75.In relation to D2, I also take into account the following:-
76.I have not lost sight of the exculpatory parts of the statements under caution given by the defendants. In particular, I note that D1 had said under caution that Simon had assured her that he would not use her account for money laundering. I note also that D2 had said under caution that the deposits into D1’s bank account related to his business of parallel goods. However, in my assessment a reasonable jury properly directed having considered all the relevant evidence as a whole would be entitled not to attach any weight to those exculpatory parts. 77.Based on the above, in my assessment a reasonable jury properly directed would be entitled to draw the inference against each of the defendants independently that they had conspired together to deal with D2’s proceeds of an indictable offence. Ruling 78.Based on the above, I rule that D1 has a case to answer on Charge 12, and D2 has a case to answer on all charges except Charge 11. DEFENCE EVIDENCE D2 79.It would be convenient for me to start with the case of D2. D2’s statements under caution[81] 80.Upon D2’s arrest at his residence on 17 March 2015, he said under caution that the deposits and withdrawals in his Hang Seng Bank account were the turnover of his parallel goods business. He said also D1 had given him her bank card which he used it in his parallel goods business for making payment of goods and wages. D2’s first video recorded cautioned interview[82] 81.In D2’s first video recorded cautioned interview, he said among other things the following:-
D2’s second video recorded cautioned interview[103] 82.In D2’s second video recorded interview which was also conducted on 17 March 2015, he was asked about various documents and bank records found in his residence. He also said, among other things, the following:-
D2’s third video recorded interview[107] 83.In D2’s third video recorded interview conducted on 18 March 2015, he was asked about, among other things, Charges 1 to 11. He replied that he had no impression of the matters asked of him. D2’s evidence in court 84.The gist of D2’s evidence in-chief was as follows:-
85.Under cross-examination by Ms Tso, D2 said that D1 had only repaid him part of the money she had borrowed and she still owed him money. 86.Under cross-examination by Mr Turnbull, D2 said the following:-
D1 87.I now turn to what D1 said under caution. D1’s statement under caution[108] 88.Upon D1’s arrest at her home on 16 March 2015, she said under caution the following:-
D1’s video recorded interview[109] 89.In D1’s video recording interview conducted on 16 March 2015 under caution, she said among other things the following:-
ASSESSMENT – DEFENDANTS’ ACCOUNTS 90.I am full alive that the burden of proof lies with the prosecution. However, purely for the sake of convenience I would first deal with the defence evidence. D1 91.I accept D1’s admission that she was addicted to gambling and that she had on more than one occasion borrowed money from Simon. I accept that she knew other people had also borrowed from Simon and Simon would charge his debtors interests. I accept that she agreed to give her bank account to Simon for his use in return for a $3,000 deduction of the debt she owed him. 92.I accept that she had raised with Simon her worry that her bank account would be used for “money laundering”. As to this, there is some support from what D2 said in his first video recorded interview that she asked him not to use the bank card for “so and so”.[123] I am also prepared to accept her statement under caution that she was told by Simon that he would only use her bank account for the purpose of collecting money from other debtors including interest payments. 93.However, I reject the exculpatory parts of her statement under caution and attached no weight to them. In particular, I reject her assertion that she believed that Simon would not use her bank account for money laundering. My reasons are as follows:-
D2 94.I have taken into account that there were certain matters consistently asserted by D2 throughout his various out-of-court statements and his oral evidence in court. Based on all the relevant evidence before me, I accept that he had lent money to D1. I accept that D1 and D2 were not close friends: according to D2, they would chat when they met each other on the street. Other than that, they would not contact each other. I accept that there was an agreement between D1 and D2 that she lent him the use of her bank account and at the time she had expressed some concern. I am prepared to accept that D2 had health problems. I am also prepared to accept that he had engaged in the parallel goods business using the corporate vehicle of New Oceanic at Advanced Technology Centre in Sheung Shui in around March 2010 and onwards. 95.Other than the above, however, I find that D1 is a dishonest witness and a large portion of what he said, whether under caution and in court, is not worthy of belief. I form this view of D2’s credibility partly because of my observation of him giving evidence in the witness box and also because of the following:-
96.Based on the above, I reject what D2 said about the loan sharking charges; that it was D1 who proposed that he be given the use of her bank card; that he had told D1 that her bank account would only be used for making transfers to employees; that he had not charged D1 any interest for her loans and had not offered her anything in return for his use of D1’s bank account; that he took part in parallel goods business first as an employee and subsequently in his own name. I also reject what he said about Ah Shing and his evidence that the transactions in D1’s bank account (after he had obtained the use of it in 2009) related solely to his parallel goods business. Similarly, I attach no weight to those exculpatory parts of his various statements under caution. ASSESSMENT – PROSECUTION EVIDENCE 97.I now turn to the prosecution evidence. I am fully alive that even though that I do not accept the defence case, it does not mean that I have to accept the prosecution case. The prosecution still bears the burden of proof beyond reasonable doubt. Charges 1-10 98.Despite the difficulties concerning the borrowers’ evidence discussed above, having considered their evidence and having observed them giving evidence in the witness box I find that they are in general reasonable and credible witnesses trying their best to recollect the incidents concerning their respective cases. I find that their evidence as to the amounts and dates of their respective loans is strengthened by the bank evidence so that I can satisfied beyond doubt that the loans they testified about were those as particularized in their respective charges. In particular,
99.As regards Charges 1 to 9, I draw the inference which I find to be the only reasonable one that the transfers from D2’s personal Hang Seng Bank account to the respective bank accounts of PW1, PW3,[128] PW5,[129] PW6 and PW8 were in fact loans. Furthermore, having considered the evidence on each charge separately, I draw the inference which I find to be the only reasonable one that D2 was the lender of the loan in relation to each charge. 100.As regards Charge 10, I am satisfied beyond reasonable doubt that the transfers from PW7’s direct bank account to D1’s HBSC bank account were his repayments of the loan he borrowed from Simon. I have found D2 was at the material time using D1’s HBSC bank account for collecting repayments from PW7. I draw the inference which I find to be the only reasonable one that D2 was the lender of the $20,000 (Charge 10) referred to as Simon by PW7. Besides, concerning the transfers by phone to D1’s bank account on 15 September 2009, 22 September 2009 and 31 December 2009 mentioned at §52(a), (b) & (g) above, I note that it was not the case of D2 that he had received any payments by phone transfer in relation to his parallel goods business. D2 said his business was conducted on cash basis. In the absence of any explanation from D2 as to the nature of those phone transfers, I draw the interference, which I find to be the only reasonable one, that they came from PW7’s bank account withdrawn by phone on those same days and also that they were PW7’s repayments to D2. 101.As regards the effective interest rates in respect of each of the charges, I note that PW11’s evidence is basically not challenged by the defence. I have taken into account that PW1 gave a range rather than a precise figure for the amount of interest he had paid in respect of Charge 3, Charge 4 and Charge 6. However, in view of the effect of PW11’s evidence as summarised in the discussion above, I am satisfied beyond doubt that in any event in respect of all of the charges the effective rate of interest were well in excess of 60% per annum. Charge 12 D1 102.As regards D1, having considered all the relevant evidence, I am sure and I find that the person she referred to as “Simon” was in fact D2. I rely on the cumulative effect of the following evidence:-
103.Based on those inculpatory parts of D1’s admissions which I have accepted, there can be little dispute, as against D1, that she had agreed with D2 to lend him the use of her bank account. As such, she must have expected that D2 would cause monies to be deposited to and withdrawn from her HSBC bank account. 104.As regards D1’s state of mind, I have taken into account that D1 was aged 67 in 2009 and that she was a housewife. I have also taken into account there was no explicit admission from D1 that D2 was lending her or other people money at an excessive interest rate. However, as discussed above I find that at the material time D1 was alive to the risk of money laundering when D2 asked for the use of her bank account. D1 said, and I accept, that D2 would charge her interest for her loans. She also said that she knew that D2 would charge other people interests. It is telling in my view that she agreed to lend her bank account to D2 in return for a $3,000 deduction of the debt she owed him. It is also telling that after some time she was “scared” and she asked D2 for the return of her bank card. 105.As to the contention that D1 believed in D2’s assurance that her account would not be used for any illegal purposes, I find that she did not in fact believe D2. From what D1 said in her cautioned interview, she was introduced to him for the purpose of borrowing money and she did not even know D2’s full name.[130] Her relationship with him was only that of a borrower and a lender.[131] Similarly, according to D2’s oral evidence in court, he and D1 were not close friends. I find that she was willing to let D2 use her bank account only because of the $3,000 loan deduction he promised her. 106.In view of all the relevant evidence available relating to D2, based on HKSAR v Wong Chor Wo & Anor, I draw the inference, which I find to be the only reasonable one, that D1 had grounds for believing that D2 would use her bank account for the purpose of receiving, concealing or disguising his proceeds of an indictable offence and that those grounds are reasonable. That is, that anyone looking at those grounds objectively would so believe. With that state of mind, she agreed with D2 to lend him the use of her bank account. D2 107.There is, as against D2, little dispute that he had agreed with D1 for her to lend him the use of her HSBC bank account and that agreement would entail D2 causing monies to be deposited and withdrawn from her bank account. There is also little dispute that the monies subsequently deposited into her bank account in fact belonged to him. 108.As regards D2’s state of mind, the prosecution case against him is in fact one of knowledge, although they also rely on the “reasonable grounds to believe” limb. Of course, if D2 was engaging in loan sharking during the alleged conspiracy period, then he would have the requisite knowledge. As to this, I note that of all the loan sharking charges proven against D2, only Charge 8 and Charge 10 fall within the alleged conspiracy period. Furthermore, only Charge 10 relates to D1’s bank account. Nevertheless, the prosecution has established that D2 had used D1’s bank account for collecting his proceeds of loan sharking at least in relation to PW7. Moreover, the evidence relating to Charge 8 is still relevant in that it shows that D2 was engaging in loan sharking in May 2009. 109.In addition to the above, there is also the following agreed bank evidence:
110.Although I am prepared to accept that D2 had conducted parallel goods business using the corporate vehicle of New Oceanic, the use of that company could not have happened before March 2010. It might be that at some stage during the charge period D2 had also engaged in parallel goods business. However, this does not mean that D2 could not have engaged in loan sharking. 111.Based on all the evidence as a whole, I also draw the interference, which I find to be irresistible, that during the period between 4 May 2009 and 14 May 2011, besides the payments from PW7 there were other payments into D1’s bank account which were also proceeds of D2’s loan sharking activities. Even if I were wrong about this, it would not affect the validity of the conviction of D2 on this charge. As I have said, the charge can still be supported by PW7’s repayments into D1’s bank account. 112.Also, I am satisfied beyond any reasonable doubt that at all material times D2’s intention was to use D1’s bank account (at least partly if not solely) for the purpose of receiving, concealing or disguising the proceeds of his loan sharking activities which is an indictable offence. Conclusion 113.Based on the above, I find that during the charge period there was an agreement between D1 and D2 for D2 to deal with payments that would be made to D1’s HSBC bank account. In addition, each of them had the respective guilty state of mind. In the case of D1, she had the requisite reasonable grounds to believe and in case of D2 the requisite knowledge. Therefore, I find that the prosecution has proven its case against D1 and D2 on Charge 12 beyond reasonable doubt. CONCLUSION 114.D1 is convicted of Charge 12. 115.D2 is convicted of Charges 1 to 10 and 12.
Schedule
DCCC 1088/2015 Annex C
Breakdown of Cash Deposit of A/C 1 as follows:
DCCC 1088/2015 Annex C
[1] (2004) 7 HKCFAR 600 [2] [1979] HKLR 1 [3] [2004] 3 HKC 279 [4] (2000) 3 HKCFAR 322 [5] [1998] AC 124 [6] [2010] 2 HKLRD 580, at §§30-32 [7] (1997-1998) 1 HKCFAR 107 [8] (1) Subject to the following provisions of this Part, if a person agrees with any other person or persons that a course of conduct shall be pursued which, if the agreement is carried out in accordance with their intentions, either- (a) will necessarily amount to or involve the commission of any offence or offences by one or more of the parties to the agreement; or (b) would do so but for the existence of facts which render the commission of the offence or any of the offences impossible, he is guilty of conspiracy to commit the offence or offences in question. [9] [1986] AC 27, at 39E [10] (1803) 4 East 164, at 171 [11] [1967] 1 All ER 497, at 500B [12] (2001) 4 HKCFAR 29 [13] (2007) 10 HKCFAR 98 [14] FACC 6/2015, at §§31 & 90 [15] (2014) 17 HKCFAR 98. [16] [1999] 2 HKC 833. [17] See HKSAR v Pang Hung Fai, ante,at §§59-89 and HKSAR v Yeung Ka Sing, Carson, ante,at §§92-128. [18] HKSAR v Yeung Ka Sing, Carson, ante, at §§115-120 [19] FACC 8/2015 at §14 [20] CACC 184/2013 [21] CACC 314/2006 [22] ante, at §108. [23] CACC 321/2014 (27.10.2016) [24] [P3], B6 [25] dated 9.11.2011 [26] [P2] (banker affirmation re D2’s account with Hang Seng Bank A/C No 284-45795-882), B11 [27] [P2], B25 [28] [P4], B1 [29] [P4], B2 [30] [P4], B4 [31] [P2], B3 [32] [P2], B7 [33] [P2], B15 [34] [P2], B22 [35] 8.9.2016 [36] 9.9.2016 [37] [P2], B18 [38] [P8], B19 [39] [P1], B9 [40] [P8], B21 [41] [P1], B10 [42] [P8], B24 [43] [P1], B14 [44] [P8], B27 [45] [P1], B16 [46] [P8], B29 [47] [P1], B18 [48] [P8], B33 [49] [P1], B24 [50] [P8], B35 [51] [P1], B26 [52] [P8], B41 [53] [P1], B37 [54] [P9], B1 [55] [P1], B5 [56] [P9], B3 [57] [P1], B17 [58] Dated [59] At Annex C [60] [P93], at §20. [61] Mr Davies omitted Charge 8, apparently because it did not involve the use of D1’s bank account. [62] [1981] 1 WLR 1039 [63] at p1042B [64] (1975) 65 Cr App R 287, 288 [65] [1988] 1 HKLR 229 [66] [1990] 1 HKC 1, at p12H [67] [2008] UKPC 56 [68] (No 2 of 1993) (1993) 61 SASR 1 [69] [2006] EWCA Crim 2694 [70] CACC 304/2013 [71] Even omitting for the moment the bank transactions operated by phone banking. [72] [P39], Counters: 34-35 (Charge 1); 126-127 (Charge 2); 36-37 (Charge 3); 128-129 (Charge 4); 130-131 (Charge 5); 132-133 (charge 6); 134-135 (Charge 5); 40-41 (Charge 8); 52-53 (Charge 9); 88-89 (Charge 10); and 98-99 (Charge 11). [73] [P3], at §23. The significance of the bank evidence is discussed below. [74] ibid, at §30 [75] [P22], at §97, §147 [76] [p19]; [P22], at §49, §117 [77] [P37], at §49 & §51 [78] see for example: [P33]; [P37], at §§694-695, [79] ibid, at §§27-28. D2 had acquired 6 properties and had only sold one of them during the period between February 2003 and July 2012. [80] [P93], at §32 [81] [P33] [82] [P37] [83] ibid, counter 49 [84] ibid, counter 81 [85] ibid, counter 175 [86] ibid, counter 211 [87] ibid, counter 585 [88] ibid, counters 640-643 [89] ibid, counters 703-707 [90] ibid, counter 709 [91] ibid, counters 713-715 [92] ibid, counters 749 & 755 [93] ibid, counter 763 [94] ibid, counters 767 & 769 [95] ibid, counters 771-785 [96] ibid, counters 813-817 [97] ibid, counters 945-950 [98] ibid, counters 957-968 [99] ibid, counters 869-887, 1005-1046. It appears that the $300,000 D2 referred to in his statement was the purchase price rather than just the deposit. In his oral evidence, D2 said $300,000 was just the deposit. [100] ibid, counters 884-891 [101] ibid, counters 904-913 [102] ibid, counters 1039. That seems to be the one at Flat 8J, Hoi King Mansion, 26 Yuet Wah Street. Actually its purchase price of which was $903,000 rather than $300,000: see [P93], at §28(i) [103] [P38] [104] ibid, counters 33-38 [105] ibid, counters 295-298 [106] ibid, counter 299-324 [107] [P39] [108] [P19] [109] [P22] [110] ibid, counter 413 [111] ibid, counter 49 [112] ibid, counter 51 [113] ibid, counters 117, 155 [114] ibid, counter 49 [115] ibid, counter 117 [116] ibid, counter 199 [117] ibid, counter 205 [118] ibid, counters 267-277 [119] ibid, counter 345 [120] ibid, counter 347 [121] ibid, counter 351 [122] ibid, counters 217 & 465 [123] There is evidence against D1 that Simon was in fact D2. See the discussion below. [124] [P93], at §26(i) [125] [P87] [126] [P93], at §28. [127] At which time, D2’s apartment on Tin Heung Street (Property (iv)) had not yet been sold. D2 purchased that apartment in February 2003 and resold it in July 2011, making a profit of $2,612,000. [128] PW2’s evidence, which I accept, is that had had caused the loan he borrowed to be deposited into the bank account of his former wife (PW3) [129] There is no dispute that PW4 was using the bank account held in the name of PW5 at the material time. [130] [P22], at counter 51. [131] ibid, counter 54-112. [132] See Annex C (copy attached) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under DCCC 1088/2015