HKSAR v. Ho Kwok Ching and Others

CACC000150/2000

CACC 150/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 150 OF 2000

(ON APPEAL FROM DCCC 651 OF 1999)

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Coram: Hon Stuart-Moore VP, Wong and Stock JJA

Date of Hearing: 29 May 2001

Date of Judgment: 4 July 2001

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J U D G M E N T

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Stuart-Moore VP (giving the judgment of the Court):

Introduction

1.On 7 April 2000, the applicants (D1, D3, D4 and D5 respectively) were variously convicted in the District Court, following a trial before Judge Muttrie, on one or more charges relating to conspiracy "for a public servant to accept advantages", contrary to Common Law and section 4(2)(a) of the Prevention of Bribery Ordinance, Cap. 201. In addition, they were all convicted on one or more charges of conspiracy to defraud, contrary to Common Law. D1 was sentenced to three years' imprisonment and the remaining applicants received sentences of two years' imprisonment. They all now seek leave to appeal against conviction.

The charges

2.The ten charges on which one or more of the applicants were convicted covered a period of over eleven years, between June 1984 and December 1995. All the offences concerned D1. Also named in every charge was a self-confessed conspirator, Leung Chung-ping (PW1) who gave evidence under immunity from prosecution. These charges related to a pattern of activities alleged against the applicants in various combinations. There were two further charges (11 and 12) on which acquittals were recorded.

3.It suffices for present purposes to set out the particulars of charges 9 and 10, on which all the applicants were convicted, as the earlier offences were in broadly similar terms. The particulars of charge 9 were that:

"Ho Kwok-ching (D1), being a public servant, namely a Clerk of Works in the Housing Department, Hsu Shu-sin (D3), Li Yung-sun (D4) and Fung Yuk-hong (D5), on divers days between the 1st April 1994 and 31st December 1995 in Hong Kong, conspired together and with Leung Chung-ping (PW1) for the said Ho Kwok-ching (D1) to, without lawful authority or reasonable excuse, accept advantages, namely gifts, fees, rewards or commissions consisting of amounts of Hong Kong currency, as an inducement to or reward for or otherwise on account of the said Ho Kwok-ching (D1) performing an act in his capacity as a public servant, namely causing to be issued to Chung Shing Construction Co., Ltd. ("CSCC") works orders containing inflated estimates of the cost of the work required to be done by CSCC as set out in the said works orders through its subcontractor Hop Lee Engineering Co."

The particulars of charge 10 were that:

"Ho Kwok-ching (D1), Hsu Shu-sin (D3), Li Yung-sun (D4) and Fung Yuk-hong (D5), on divers days between 1st April 1994 and 31st December 1995 in Hong Kong conspired together and with Leung Chung-ping (PW1) to defraud the Housing Department of the Hong Kong Government by dishonestly causing to be issued to Chung Shing Construction Co. Ltd. ("CSCC") works orders containing inflated estimates of the cost of the work to be done by CSCC as set out in the said works orders through its subcontractor Hop Lee Engineering Co."

4.In all the earlier charges, the conspiracies alleged the dishonest preparation of "inflated draft final bills" either in addition to "works orders containing inflated estimates" or standing alone.

5.The judge convicted D1 on charges 1 to 10, D3 on charges 9 and 10, D4 on charges 3 to 10 and D5 on charges 5 to 10.

Prosecution's case

6.The prosecution's case has been succinctly outlined by Mr Blanchflower, SC, on behalf of the Respondent, to whom we are grateful. In large measure we propose to adopt his synopsis. During the period from June 1984 (to which charge 1 related) until December 1995, D1 was an Assistant Clerk of Works, and later a Clerk of Works, in the Housing Department. His duties included estimating the cost of works to be carried out at housing estates in the New Territories under Term Maintenance Contracts ("TMCs"), issuing work orders to contractors for such work, and supervising and inspecting the work carried out.

7.Clerks of works and assistant clerks of works were not permitted to perform outside paid work, such as drafting final bills on behalf of contractors unless they had first received permission to do so. Having regard to the conflict of interest, permission would obviously not be given to prepare draft final bills on behalf of contractors whose work the clerk was supervising.

8.The cost of each work order was based upon a rough cost estimate by the clerk. Maintenance work would be carried out by contractors pursuant to the TMCs which were generally for a three-year period. The main contractor would usually sub-contract the work to other companies. After the work order was completed, the process of the draft bill and the final bill for the final payment of the work would be carried out. The sub-contractor would prepare a costing of the work in the form of a draft final bill, which would be passed to the main contractor who would submit it to the Housing Department for payment.

9.PW1, along with D3, D4 and D5, were partners in private engineering companies that carried out sub-contracting work under TMCs. During the period covered by the charges they set up companies for different TMCs. These were as follows :

(a) Shun Shing Construction and Engineering Company Limited between November 1983 to October 1985 (Charges 1 & 2);

(b) Hop Lee Engineering Company "No. 1" between November 1985 to March 1988 (Charges 3 and 4);

(c) Hop Yick Engineering Company (Hop Yick) between April 1988 to March 1991 (Charges 5, 6 and 7);

(d) Hop Lee Engineering Company "No. 2" between April 1991 to March 1994 (Charge 8); and

(e) Hop Lee Engineering Company "No. 3" between April 1994 to March 1997 (Charges 9-10).

10.The prosecution's case on the charges where D3, D4 and D5 were convicted was that they agreed to bribe D1 to issue inflated works orders and/or to draft inflated final bills in respect of TMCs with which their companies were involved. In return for his corrupt services, D1 was paid a percentage of the inflated amounts shown on the works orders and final bills.

11.The first conspiracy was said to have begun in 1984 when PW1 and D3 were having cash-flow problems. With D3's agreement, or so it was alleged, PW1 asked D1 to inflate the estimates in the works orders he issued. One result of this agreement was that PW1 was able to obtain a larger sum in advance of the fees for the work. After the work was done, they would then prepare an inflated final bill of costs.

12.The other conspiracies were separate and related to different periods and TMCs. These involved the other applicants. Although separate, they shared similar characteristics. D1 would be paid by the companies for inflating works orders and, save in charges 9 and 10, drafting final bills of costs containing inflated estimates. Ultimately, D1's draft bills of costs were used in the preparation of final bills of costs presented to the Housing Department for payment.

13.D1 formally retired from the Housing Department in June 1997. On 24 July 1997 ICAC investigators searched his residence and they found a number of documents including Housing Department works orders.

14.The evidence supporting the offences on which the applicants were convicted relied heavily upon PW1. His evidence did not, however, stand entirely by itself.

15.Chow Siu-mui (PW5) joined Hop Lee No. 1 in 1985 as a clerk when only PW1 and D4 were principals of the company. Her evidence covered most of the period during which the various companies carrying out the TMCs were in operation. She left the company in February 1988, and rejoined it in October 1989 at PW1's request. At that time Hop Lee No. 1's name had been changed to Hop Yick, and the principals of Hop Yick were PW1, D3, D4 and D5. Before she took over Hop Yick's accounts in 1990, D3 had handled them.

16.In order to take advantage of a new housing contract, in 1991 Hop Yick cancelled its registration and Hop Lee No. 2 was established. Its proprietors were D4 and D5. PW5 did the accounts for Hop Lee No. 2. After the contract in respect of Hop Lee No. 2 finished in March 1994, another housing contract commenced in April 1994 and Hop Lee No. 3 was established. The proprietors included PW1, D3, D4 and D5 and PW5 became responsible for the accounts of this company.

17.In 1989 when PW5 worked at Hop Yick, she came to know D1 who came to the office. She also saw him during the period Hop Lee No. 2 operated (1991-94), and later when she worked at Hop Lee No. 3. She also went with PW1, D1, D3 and D4 on a holiday to Australia.

18.PW5 identified a number of cash cheques signed by D4 and D5, whom she regarded as her bosses, which had been given to her by them while Hop Lee No. 2 was in operation. Amongst these were:

(a) a cheque for $1,200, dated 16 May 1992. She deposited this into her mother's account because it was "convenient". Later, she transferred this amount to D1's bank account. At the time she did not know it was D1's account, but she was given a slip of paper by someone and was told to deposit the cheque into the account shown on the paper. She was instructed by her bosses to record this cheque in the company's ledger as "bills preparing fees".

(b) A cheque for $2,900, dated 25 February 1993. She recorded it in the ledger as "preparing figure".

(c) A cheque for $20,200, dated 12 July 1993. She recorded it in the ledger as "preparing figure". She deposited this cheque into her account and gave the cash to her boss.

(d) A cheque for $4,100, dated 25 August 1993. She recorded it in the ledger as "preparing figure". She cashed this cheque and gave the cash to her boss.

PW5 identified several other cash cheques she was given by D4 and D5 while Hop Lee No. 3 was in operation including:

(e) A cheque for $5,700, dated 10 May 1994. She recorded it in the ledger as "preparing figure".

(f) A cheque for $8,700, dated 2 August 1994. She recorded it in the ledger as "fee for old figures" since it belonged to the previous Hop Lee No. 2.

(g) A cheque for $5,300, dated 5 September 1994. She recorded it in the ledger as "old Hop Lee Engineering Company" and the particulars as "preparing old figures".

(h) A cheque for $20,000. The particulars written for this cheque were "casual work".

(i) A cheque for $10,500, dated 21 November 1994. She recorded it in the ledger as "casual worker" and the particulars as "fees for preparing figures".

(j) A cheque for $1,900. She recorded it in the ledger as "fee for preparing fees in relation to old orders", that is, for Hop Lee No. 2.

(k) A cheque for $4,900. She recorded it in the ledger as "preparing figures HD 174". This related to Hop Lee No. 2.

19.Although PW5 was instructed to fill out these cheques, she was not given any supporting documents such as invoices. She was merely told to make out cash cheques and was given suggested purposes for them to have been drawn, such as "preparing figures" or "casual worker". She did not, however, know what the term meant, or to whom the fee was payable, or who the casual worker was. She was sometimes asked not merely to prepare cheques made payable to "cash" but also to cash them. Sometimes, she first deposited them into her account and the money from the cheques was then returned to her boss. With other cash cheques, her boss sometimes told her to give them to another clerk in the office, Chan Chun-cheong (PW6), who worked for Hop Yick and was the nephew of D1.

20.PW6 said he saw his uncle, D1, come to Hop Yick and chat with the bosses, namely, PW1, D3, D4 and D5. He saw draft final bills being handed to D1 for preparation. These were for "blue orders" which represented large work orders. At Hop Yick, PW1 asked him to do work preparing final bills. He said that a stack of "blue orders" would be given to him and that he had to reproduce them neatly and make calculations in relation to small sums or items. To carry out this task, PW1 gave him draft final bills which had already been prepared by his uncle. Sometimes he would help D1 prepare draft final bills for Hop Yick.

21.In addition, following a voir dire, the judge admitted a video-recorded interview with D1 which contained a number of damaging admissions. We will deal with this evidence in the context of D1's sole ground of appeal. Suffice it to say, D1 did not admit corruption or having issued overestimated works orders. However, he admitted preparing draft final bills for PW1, D3 and Hop Lee.

22.D1's attitude, as expressed in this interview, was that he had been "moonlighting" to earn fees which anyone with the required expertise could have done. He admitted that, when asked to do this work, the subcontractors would expect him to be less strict in supervising the works for which he was responsible. D1 also gave a full explanation about written records found at his home which related to payments he had received for bills he had prepared going back to 1984. The records, including Exhibit P.719 to which we shall turn again later, were demonstrated to have tallied very closely with the total figures for works orders between 1988 and 1994.

23.Amongst the damaging admissions in this interview, the judge found that it contained:

".... various matters such as that bills were typed so that the author would not be recognised, the method of receipt of rewards 'upstairs' on site and the like which are generally consistent with the evidence of PW1."

Defence case

24.None of the applicants testified in his own defence.

D1's ground of appeal

25.In his only ground of appeal, Mr Paul T.Y. Tse, on D1's behalf, submitted that the judge was wrong to have admitted D1's first record of interview. The judge, he suggested, should have exercised his discretion to exclude this record of interview and had "failed to consider that when a firm of solicitors was ready to attend [D1 during the interview] this constituted a change of [D1's] position and that [D1] was not [made] aware of the change."

26.D1 was arrested at about 7.00 a.m. on 24 July 1997 by ICAC officers. His daughter, who happened to work for ICAC, was told to report for duty at ICAC headquarters. In fact, she took a half-day off work in order to find a lawyer for her father.

27.D1's first interview took place on the day of his arrest between 2.43 p.m. and 4.53 p.m. It was videotaped. Shortly after it began, D1 was asked if he needed to have a lawyer present. He replied: "In the meantime, there is no such need".

28.Before the prosecution were permitted to lead evidence of this interview, a voir dire was held to determine its admissibility and also the admissibility of a second interview which was conducted after D1 had been given a rest. For these purposes, the judge heard the evidence of eight prosecution witnesses and three defence witnesses. Those called in the latter category were D1, a clerk from a firm of solicitors (DW2) and D1's daughter (DW3). In the event, the judge ruled that the second interview should not be admitted on the ground that it had been unfairly obtained. The judge set out, in his Reasons for Verdict, why he had come to this conclusion and had made a distinction between the two interviews:

"I was satisfied that after the first interview, the solicitor's clerk, Miss Heung, who had by then contacted the ICAC, had been told to send a faxed letter from her firm to confirm her instructions and had sent such a faxed letter. She spoke to the interviewing (officer), Mr Yang (PW1), after the end of the first interview. He told her that the interview was finished and that there was no need for her to attend. He had in fact told D1 that the interview was merely suspended. Notwithstanding that D1 had elected to proceed with the first interview without representation, the situation changed once a solicitor was instructed and that fact was made known to the interviewing officer. Mr Yang should at least have told D1 that a solicitor's clerk was ready to attend him and given him the option to wait for such attendance. To continue with the interview without doing that was, in my view, unfair." (Appeal bundle p. 52).

29.Mr Tse submitted that as D1's daughter had first informed ICAC at 3.00 p.m. that she had found a lawyer to act for her father, the "unfairness" started at that point because, although the first interview had commenced before 3.00 p.m., nothing of an incriminating nature had been said by that stage. Mr Tse also pointed out that there were various opportunities to break off the first interview to enable the interviewing officer to be informed of this development so that the interviewer could again ask D1 if he wished to have a lawyer present.

30.We should say in this regard that Mr Tse had pitched his submission a little optimistically. The evidence had been that the solicitors' clerk (DW2) was contacted at some time after 3.00 p.m. and that she had telephoned PW6 who was employed in the control room of the ICAC centre at "around 3.00 p.m." PW6 then made enquiries and discovered that D1 was under arrest and was being interviewed. He then rang DW2 at "around 3.30 p.m." to inform her of the position, telling her that she was "welcome to come to ICAC". (p. 878).

31.It was only after the first interview with D1 had terminated that DW2 managed to speak to the officer who had conducted the interview. He invited DW2 to confirm her instructions by fax. This was done at 5.07 p.m. The faxed letter (Exhibit P.766) made no request that D1 should not be further interviewed or that D1 should be given the opportunity to speak to a representative of the firm of solicitors. The letter merely stated:

"We write to inform you that we have received instructions from our client, Mr Ho Kai-chiu, to act for the above-named Mr Ho Kwok-ching. If you have any queries please contact our Miss Heung."

32.Nevertheless, the change in circumstances was not brought to D1's attention and it was this factor which led the judge to exclude the second interview.

33.The judge, in making his ruling, had plainly given full consideration to all the relevant evidence called during the voir dire which it was for him to evaluate. The decision that both interviews had been given voluntarily, but that it would have been unfair to D1 for the prosecution to be allowed to introduce the second interview, is one which demonstrates that the judge had fully applied his mind to his discretionary powers.

34.Nothing which has been advanced by Mr Tse in the course of argument, all of which had been fully ventilated in the court below, has caused us to doubt the validity of the judge's ruling. Accordingly, this ground must fail.

Grounds of appeal for D3, D4 and D5

35.Mr Ching Y. Wong, SC, on behalf of D3 who was convicted on charges 9 and 10 only, has advanced what amounts to two grounds of appeal.

36.Mr Macrae, on behalf of D4 and D5, advanced grounds which supported and, to some extent, amplified those which Mr Wong had argued.

37.Mr Wong submitted, with Mr Macrae's support, that justice had not been done or seen to be done because "immediately after counsel for the respective defendants had completed their final submissions" the judge announced that he had "already written 32 pages" before he had heard counsel's final submissions.

38.The case had involved complex evidence. Helpfully, at the conclusion of the evidence, counsel for the prosecution and the defence had prepared detailed written submissions. After the submissions had been developed in oral argument in court on 31 March 2000, a discussion took place with a view to fixing a convenient date for delivery of the verdicts. At this stage, which was by then about 4.45 p.m., the judge said:

"What I'll do - I mean, the thought of reading out - I've already written 32 pages on this and that's even before I heard what counsel had to say about it. What we will try and do is cut down what is read out in court and give you the full version on paper. I should think we can probably do that if everybody consents to it. So we'll put it down for Friday (7 April 2000) at 9.30." (Appeal bundle p. 547I-K).

39.Mr Macrae pointed out that on 7 April 2000 the judge, who had throughout the trial made notes on a portable word-processor, handed to counsel a 33-page document on which the Reasons for Verdict were set out. This, he submitted gave the "unmistakable impression" that the judge had already resolved the issues to be decided in the trial before final submissions were made because of the judge's remark a week earlier that he had written 32 pages.

40.It was not suggested that the judge had, in fact, failed to take into account the final submissions made on behalf of D3 but it was contended, relying on R v Lai Chuk-ting [1977-1979] HKC 230, that the principle that "justice must manifestly be seen to be done" had been breached. In Lai Chuk-ting, the reasons for verdict were delivered immediately after counsel for one of the defendants had made his final submissions to the judge in circumstances where it could be said that insufficient consideration had been given to counsel's final speech.

41.The position in the case presently before us was very different.

42.Firstly, as we have stated, the judge adjourned the case for consideration of his verdicts.

43.Secondly, in such a complex case, involving difficult factual conflicts of evidence, it was incumbent on the judge to make a detailed summary of the evidence as the trial proceeded. No competent judge could have failed to do so and neither the defendants nor their counsel would have expected otherwise. There is no proper basis for suggesting that an impression was created that the judge had reached a final conclusion about his verdicts before counsels' speeches had ended.

44.Thirdly, if more needed to be said, it is apparent from subsequent events that the judge had in fact worked on his Reasons for Verdict in the period between the speeches and his delivery of the verdicts. After the verdicts were announced on 7 April 2000, the case was adjourned to 10 April for mitigation. On that date, D3's counsel correctly pointed out that the judge had erroneously entered guilty verdicts on charges 7 and 8 as this appeared to be inconsistent with his findings. The judge immediately agreed and corrected himself by recording verdicts of not guilty on those charges saying, by way of explanation:

"Because what happened - I mean I lost a whole lot of corrections that I'd made on Thursday night and Friday early morning by reason of a computer glitch, and then I had to go back and sort of re-do things". (p. 74S).

45.It suffices to say that the judge had adjourned his consideration of the verdicts for a week and it was abundantly plain for all to see that he had worked on his findings in the meantime. In addition, it is apparent from a thorough reading of the Reasons for Verdict that the judge had, as both leading counsel accepted, given meticulous care to his consideration of the evidence and the issues which had arisen in the trial.

46.This ground lacked any substance and fails.

47.In his second ground, which was also advanced on behalf of D4 and D5, Mr Wong submitted that the judge had wrongly relied upon D1's statement under caution "as evidence to establish the conspiracies".

48.Plainly, if the judge relied upon D1's statement to the police as evidence against D3 or any other applicant apart from D1, this would have amounted to a material irregularity. In these circumstances, we have needed to look with care at how the judge approached this evidence in order to determine whether or not D1's statement was taken into account as evidence which supported the involvement of D3, D4 and D5 in the conspiracies alleged against them.

49.Some of the passages about which Mr Wong complained related to the way the judge appeared to have relied upon what D1 had said in his interview about Exhibit 'P.719'. This exhibit was a handwritten document showing figures, work order numbers and dates which D1 had told the ICAC interviewing officer referred to works orders for which he prepared the final bills. One of the pages specifically referred to "BE" which D1 had admitted in his statement was a reference to the Butterfly (Wu Tip) Estate. Other evidence in the case established that the work at that estate had been carried out by Hop Lee No. 3.

50.In his Reasons for Verdict, the judge set out his approach to D1's lengthy statement and he also described the effect of some of the salient parts to be found in it. He had this to say:

"As to the statement of D1, it is a mixed statement. Having admitted it, I have to consider whether or not its contents are true. I have to consider the incriminating as well as the exculpatory parts, bearing in mind that the former are likely to be true (otherwise why say them?) whereas the latter do not have the same weight.

The statement contains various matters such as that bills were typed so that the author would not be recognised, the method of receipt of rewards 'upstairs' on site and the like which are generally consistent with the evidence of PW1. Obviously such matters would corroborate PW1's evidence against D1. It has been suggested that what D1 said in the statement corroborates PW1 generally. I do not think I can regard it as doing so on any matter which specifically relates to another defendant. Corroboration is evidence from an independent source which confirms in some material particular not only the evidence that the crime has been committed, but also that the defendant committed it. What a defendant says about a co-defendant in a statement is not evidence against that co-defendant except to the extent that he adopts it. So logically, D1's statement cannot corroborate PW1's evidence against any co-defendant. However, in general terms, where what D1 says is consistent with the evidence of PW1, it must be regarded as providing some support for PW1." (Appeal bundle p. 55).

51.The last sentence in this passage was particularly relied upon by Mr Wong and by Mr Macrae to illustrate that the judge had in fact, despite what he had said earlier that the statement could only be evidence against D1, used the statement's general effect against D3, D4 and D5 because it provided "some support for PW1". He did not, as Mr Wong submitted, go on to say that the support related only to D1, although by the same token we observe that the judge did not specifically state that the support extended to the other defendants on trial.

52.Mr Blanchflower submitted that Mr Wong had given this passage undeserved weight because what the judge in reality was saying, loosely though he may have expressed it at this point in his Reasons, was that D1's statement gave some support "in general terms" to the existence of the conspiracies between PW1 and D1. We notice, in this context, that the judge had earlier, in the passage we have just cited, expressly stated that he did not think he could regard D1's statement as evidence which corroborated PW1 "generally" against any other defendant.

53.Mr Blanchflower went on to submit that a fuller reading of the Reasons for Verdict did not support what either Mr Wong or Mr Macrae had alleged. In fairness to them, neither Mr Wong nor Mr Macrae had sought to avoid the passages to which Mr Blanchflower referred. They simply placed a different emphasis upon them. These passages are to be found in the appeal bundle, commencing at page 65, where the judge was considering charges 9 and 10 to which the work on the Butterfly Estate related.

54.In order to do justice to Mr Wong's submission, we can set out these portions of the Reasons for Verdict, laying emphasis on the words he stressed:

"For the term maintenance contract from 1994 to 1997, the 9th charge alleges that D1 was taking bribes to increase the estimates. The 10th charge alleges fraud in respect of increased estimates. PW1's evidence is that D1 came to him and his partners to tell them that there was a project for $9.5 million at Wu Tip (Butterfly Estate). It was D3 who asked D1 to inflate the estimate ...." [pp. 65S-66B]

"... PW9, who worked under (D1) and actually issued the works orders and variation orders in respect of re-roofing at Butterfly Estate, Exhibits 711, 712, 713, the total of these orders came to $9,364,000. D1 prepared the rough indications of cost on which the orders were based. So he was obviously in a position to inflate the estimates.

According to PW1, Hop Lee No. 3 employed its own quantity surveyor surnamed Liu to draft the final bills for this contract. D1 had asked about drafting bills but had been told that. However, D1 admitted in his statement that 'BE' (eg BE 2.00) in his record, Exhibit 719, referred to payments for the final bills at Wu Tip, ie Butterfly Estate. He also explained that the figures represented 10,000s ..." [p. 66D-K]

"I have no doubt ... that D1 did not draft final bills for Hop Lee No.3. The figures in Exhibit P719 could not have been payments for drafting bills for Butterfly Estate. Granted that 2 per cent of $9,364,000 should be $187,280, it is still difficult to see what these figures can refer to except payments for inflating estimates ...

This provides support for the evidence of PW1. I am driven to the conclusion that there was a conspiracy to inflate estimates in respect of Butterfly Estate and a concurrent conspiracy to defraud, which involved D1." [pp. 66S-67D]

55.Furthermore, the judge referred to PW1's evidence that, at the relevant time, Hop Lee No. 3 employed its own quantity surveyor, called Liu, to draft the final bills so that D1 could not have carried out this particular work himself. In this respect, the judge found that the evidence of PW1 was supported by PW5, Miss Chow. It followed from this evidence that despite D1's assertion that he had prepared the final bills for the Butterfly Estate, this was a false assertion although the judge was satisfied, from his summary in the passages just cited, that Exhibit P.719 referred to work estimates which had been inflated.

56.Looked at in overall context, therefore, the judge had reviewed the evidence against D1 and found that conspiracies existed between him and PW1. More precisely, he said in relation to D1:

"So there is some support for the existence of the conspiracies charged involving D1 as far back as 1988. There is less support for the periods before that but it is clear that as far back as 1984, D1 was drafting the final bills. That is his admission and his own records support it.

Overall, having regard to the support which is to be found in the other evidence for that of PW1, I am satisfied that the conspiracies charged started in 1984 and they involved PW1 and D1. The next question is, who else was involved?" (p. 67P-U).

57.It was then that the judge examined the evidence against D3 in respect of each charge. In the light of the particular circumstances of the case, the judge had found it "wise" to look for evidence which supported PW1 before he relied on what PW1 had had to say. This was because the judge, in what Mr Macrae called a "polite understatement", had found PW1 to be an "unsatisfactory witness". Taking heed of his concern for caution regarding this witness, the judge acquitted D3 on the allegations contained in charges 1 to 8 where no support for PW1's evidence was to be found.

58.The reasons for the judge's dissatisfaction with PW1 had been set out early on in the Reasons for Verdict. He expressed the matter in these terms:

"PW1 is an unsatisfactory witness. He admits that he was initially moved to report the matters concerning Tung Tau Estate by his grudge against his partners for expelling him from the partnership. He now candidly admits what drove him. His approach, however, was obviously less than candid in the beginning because he was seeking to use the authorities in a limited way to gain the advantage he desired over his former partners rather than to make a clean breast of things. He has been demonstrated to have been less than honest in other matters .... Matters have come out in evidence which are inconsistent in detail with what was said in statements. There are also inconsistencies between the evidence of this witness and that of others, with which I will deal more fully in due course.

I must obviously warn myself that it would be wise to look for some supporting material before acting on PW1's evidence, in particular his evidence against D3 ... Overall the question must be whether it is possible that PW1 has made up all or any of this full and detailed evidence because of the grudges he bears his partners. That is why support must be sought ....

As I have indicated, the rest of the witnesses were generally believable." [Tr. pp. 54H-55D] [Emphasis added].

59.Both Mr Wong and Mr Macrae contended that although the judge had purported to have relied upon PW1 only where his testimony was supported by evidence from another source, in fact, in the light of his strong reservations about PW1, the judge must in reality have convicted on the supporting evidence, some of which was inadequate, and some inadmissible against D3, D4 and D5.

60.So far as charges 9 and 10 were concerned, the judge had heard evidence from PW5 about D3's involvement in Hop Lee No. 3. PW5 was a clerk at Hop Lee No. 3 who stated that D3, D4 and D5 were principals there. D3 had co-signed a number of cash cheques which had been given to PW5 to cash. In this regard, the judge said:

"It is only when we come to Hop Lee No. 3 that we can be sure that D3 was a partner. He was on the registration documents, he was on the bank documents, he was on the agreement which terminated PW1's partnership. There is no doubt that he was a partner in Hop Lee No. 3.

Now, it is PW1's evidence that when the conspiracies in charges 9 and 10 were set up, it was D3 who actually asked D1 to inflate the estimates. PW1 himself was very much a sleeping partner in Hop Lee No. 3. He was spending all his time and energy on Broadway at Tung Tau Estate. I have found that these conspiracies existed and involved D1. It does not make sense that they would only involve PW1 and D1 if PW1 was merely a sleeping partner taking no part in the management. Given that there is support for PW1's evidence of D3's involvement in the business, I am satisfied that he is telling the truth about D3's involvement in the conspiracies. In the absence of support in respect of the earlier businesses, I think that such a finding in respect of D3 and the earlier conspiracies would be unsafe." (Emphasis added)

61.It is in our view plainly apparent that when the reasons for convicting D3 are put into their full context, the judge was endeavouring to rely upon the admissible evidence against him.

62.The same can be said about the judge's approach to D4 and D5. Mr Macrae submitted, however, that the judge had allowed himself, when considering D3's case, to use the support he had found in Exhibit P.719 for PW1's evidence against D1 to influence his decision against D3, albeit unintentionally. He also submitted that the judge was wrong to have found support for PW1 merely from the evidence that D4 and D5 were partners with PW1 in the businesses in which they all had an interest at the material times.

63.Dealing with the first aspect to this argument, Mr Macrae suggested that without D1's admissions in his statement under caution, the figures which D1 had written in Exhibit P.719 were meaningless. However, it was from these figures that the judge, he submitted, had found support for PW1's claim that a conspiracy existed between D1 and PW1 because he found that although the figures were described as payments for preparing 'Draft Final Bills', they were in fact for inflating estimates because the evidence had established that D1 could not have drafted the final bills at that particular stage. It was, Mr Macrae submitted, an error on the judge's part to have concluded, on evidence admissible only against D1, that a conspiracy "existed" when considering the cases of D4 and D5 and then to have looked to see whether evidence could be found to support PW1's evidence that D4 and D5 were also parties to it. Mr Macrae's argument was that the only evidence of the existence of a conspiracy in the terms set out in the charges, beyond PW1's testimony itself, was to be found in D1's confessions.

64.Putting the matter shortly, the judge had found as a fact that PW1 and D1 had conspired together. PW1 had testified that D3, D4 and D5 were also conspirators. The judge then looked to see whether, aside from his testimony, there was evidence to support PW1 in his allegation that D3, D4 and D5 were also parties to the conspiracies. He found that there was independent, credible evidence that D4 was a "core partner" in all the relevant businesses. Importantly, in this context, he took notice also that PW2 who, like PW1 who had given evidence under immunity from prosecution, had been a partner at one stage who had been unaware of bribery and that this supported "the possibility that even a partner might not be privy to everything".

65.In view of D4's position in each of the businesses, the judge concluded that PW1 was to be believed as to D4's involvement. D5's position differed only in that there was no independent evidence of his involvement in Hop Lee No. 1. The judge concluded that as PW1 was effectively "out of the business" it was impossible that the conspiracies only involved PW1 and D1. The judge adopted a similar line of reasoning with regard to D3.

Conclusion

66.While Mr Blanchflower valiantly sought to argue that the judge was entitled to have convicted D3, D4 and D5 on the evidence before him, we have concluded that unwittingly the judge had fallen into the trap of allowing evidence, admissible only against D1, to have provided the foundation for deciding that ongoing conspiracies were in existence, based upon D1's interview and the support this gave to PW1's evidence. If D1 had, for example, pleaded guilty, his interview could not have formed any part in the trial of the remaining defendants. This would have left PW1's evidence, that conspiracies in the terms set out in the charges were in existence between himself and D3, D4 and D5, unsupported. There was no other admissible evidence, independent of PW1, which was capable of giving this crucial testimony any real support despite a number of highly suspicious circumstances which tended to show that dishonesty of one kind or another was afoot.

67.When dealing specifically with D3, D4 and D5 in his Reasons for Verdict, the judge made a point in each individual case of saying that a "conspiracy existed" between PW1 and D1. He went on in each case to find that it was "impossible" or "made no sense" that only PW1 and D1 would have been involved when PW1 was effectively "a sleeping partner" or "out of the business". He found that D3, D4 and D5 were running the various businesses responsible for carrying out the work which related to the alleged inflated draft final bills and/or work estimates overlooking the fact that the supporting evidence about inflated figures came only from D1's confession statement.

68.The judge had very properly in the circumstances been at pains to find some support for PW1 before placing total reliance on his word. However, the support which the judge found was minimal and can be summarised in his words:

"If there is evidence that a person was a partner (of one of the relevant businesses) it will tend to support PW1's evidence that he was a conspirator as well (as PW1 and D1)." (p. 68)

69.As we have said already, there was positive evidence in the trial, which the judge had accepted, which established at least one of the partners to have been unaware of the conspiracies alleged by the prosecution.

70.The position which has arisen in this case is in many respects similar to that which arose in R v Jelen and Katz [1990] 90 Cr. App. R. 456. It suffices to read part of the headnote at 457:

"The appellant K and the applicant J were charged with conspiracy to commit false accounting. Evidence in the form of a tape recording was in issue. A witness, who was questioned by the police, agreed to tape-record a conversation with the applicant J, without the latter's knowledge, who at the time had not been questioned by the police. The trial judge ruled that the tape recording was admissible, that it was not evidence against the appellant, K; but might shed light on the general trustworthiness of the witness. Both K and J were convicted. On appeal by K and on an application for leave to appeal by J on the grounds that the tape recording was not admissible against K, inter alia, that evidence of the tape recording should have been excluded by the judge as unfair under the discretion given to him under section 78(1) of the Police and Criminal Evidence Act 1984; further that evidence should have been excluded under section 76(2) of the 1984 Act as being a confession obtained in circumstances which rendered it unreliable:

Held, dismissing the appeal and refusing the application, that the tape recording had been properly admitted in evidence; that the judge's statement that the tape recording was not evidence against the appellant, K, was correct; nevertheless, subsequent comments on the tape recording in relation to the general trustworthiness of the witness should have been omitted, for it had wrongly blurred the distinction between that evidence which was capable of amounting to corroboration in the case of J and K, and that which was not. The judge's comment was tantamount to saying that the tape recording, although not formally admissible in or corroborative against the co-defendant, was nevertheless capable of being both in the sense of independently supporting the witness's general veracity. That was clearly wrong for only evidence admissible against a co-defendant could throw light on the truthfulness of the witness's evidence against him." (Emphasis added).

The judgment makes plain that the dismissal of the appeal of Katz and the application of Jelen was because the verdicts could not be shown to have been unsafe or unsatisfactory.

71.In the present case, by finding support, admissible only against D1, for PW1's evidence that the alleged conspiracies "existed", the judge had in our view inadvertently permitted this fundamentally important feature to spill over into his consideration of the cases of D3, D4 and D5. Without that support, there was no other admissible evidence against D3, D4 and D5 to confirm PW1's testimony that the conspiracies, as alleged, existed.

72.Accordingly, we shall give leave to D3, D4 and D5 and, treating the hearing in each case as the appeal, we allow their appeals and quash their convictions and the sentences which were imposed.

73.In the case of D1, we refuse leave to appeal and his application is dismissed.

Representation:

Mr M.C. Blanchflower, SC, SADPP, of the Department of Justice, for the Respondent.

Mr Paul T.Y. Tse, instructed by Messrs Martin Law & Co. for D1.

Mr Ching Y. Wong, SC, and Mr David Ma, instructed by Messrs Au Yeung, Cheng, Ho & Tin for D3.

Mr Andrew Macrae, SC, instructed by Messrs Y.T. Wong & Co. for D4 and D5.