HKSAR v. Ip Tin Wong and Others

CACC 241/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 241 OF 2003

(On Appeal From District Court Criminal Case No. 964 of 2002)

Coram: Hon Stuart-Moore VP, Hon Cheung JA and Hon Hartmann J in Court

Date of Hearing: 23 April 2004

Date of Judgment: 23 April 2004

Date of Reasons for Judgment: 30 April 2004

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REASONS FOR JUDGMENT

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Hon Cheung JA (giving reasons for judgment of the court) :

1.We dismissed the applicants' application for leave to appeal against conviction at the conclusion of the hearing. These are our reasons.

The charges

2.The applicants were convicted by Deputy Judge Candy in the District Court of a joint charge of bookmaking (Charge 11) contrary to section 7(1)(a) of the Gambling Ordinance Cap. 148 and individual charges of dealing with property known or reasonably believed to represent proceeds of an indictable offence, contrary to sections 25(1) and (3) of the Organized and Serious Crimes Ordinance Cap. 455. These charges are as follows. 1st applicant : Charges 1 and 9; 2nd applicant : Charges 4, 7 and 10; 3rd applicant : Charge 6; 4th applicant : Charges 2 and 3; and 5th applicant : Charge 8).

Application for leave to appeal

3.The applicants now apply for leave to appeal against conviction.

Bookmaking : Evidence

4.In respect of the offence of bookmaking, the evidence revealed that on 5 January 2002, the police conducted a raid at Flat B, 1st Floor, No. 2 Nam Hong Street, Shaukeiwan, Hong Kong ('the premises').

5.The five applicants were found seated around two folding tables which had been pushed together to form one large table. The television in the flat was showing racing programmes.

6.On the table there was a fixed line telephone, mobile phones, cassette recorders and calculators. In front of each applicant were racing newspapers. In front of the 2nd, 3rd, 4th and 5th applicants were A-4 sized sheets of paper. These pieces of paper contained entries which the prosecution said were records of bets ('the betting slips') (Exhibits P3-P7). There were also pens and a ruler on the table. One of the cassette recorders was connected to the telephone which was in front of the 3rd applicant. This recorder had a tape inside. Another recorder together with three cassette tapes and connecting cables were found in a paper bag in the flat.

7.The following items were found in the 1st applicant's wallet : a piece of paper containing telephone numbers (Exhibit P45); a piece of paper with numbers of what appeared to be bank accounts (Exhibit P46) and five Hong Kong Jockey Club betting tickets with numbers written on the back (Exhibit P47).

8.A comparison of Exhibit P45 with the betting slips showed that 10 of the entries on Exhibit P45 corresponded with entries on some of the betting slips.

9.Inside the wallet of the 4th applicant was a business card (Exhibit P50) with names and figures on the back. Three of the names on the business card also appeared on some of the betting slips.

10.During the police raid, several of the mobile phones kept ringing for a period of 20 minutes. Two of the phones belonged to the 2nd applicant and the other two belonged to the 3rd and 6th applicants.

11.Earlier, on 10 November 2001, which was a race day, the police had also kept observation on Flat B and Flat C of the premises. These two flats were connected by a shared balcony. Five men were seen inside the flats receiving phones calls and making records on paper after receiving the calls. Some of them also used the calculators. The 2nd and the 5th applicants were among the five men that were being observed.

The prosecution experts

12.The prosecution called two experts on gambling. They were PW13 and PW17. Their expertise was challenged by the defence. Inquiries were conducted of their expertise and the judge held that their evidence was admissible as expert evidence.

13.PW13 stated that the betting slips were records made by a bookmaker of bets received on the races held on 5 January 2002.

14.He had listened to the tapes. Certain entries in the betting slips matched some of the taped conversations. Some of the conversations indicated that bets were refused and in some instances, they indicated that the amount of the bet was negotiated between the maker of the call and the receiver. He was of the view that the bets were placed with and received by an illegal bookmaker.

15.He had examined Exhibits P45, P46 and P47. Exhibit P45 contained names or code names and telephone numbers. Some of the names on Exhibit P45 also appeared on some of the betting slips and on some of the taped conversations. Exhibit P47 (Jockey Club betting tickets) contained figures in red. He said that they were records of money owed by the maker of the record. There were also entries in blue. He said that they were records of money owing to the maker of the records.

16.PW17 stated that bookmakers commonly employ agents known as 'Tang Jai' through whom bets are received. Bookmakers commonly received bets by the telephone and the conversations are tape-recorded. 'Tang Jais' are on commission, based upon a percentage of the bets laid with the illegal bookmaker.

17.PW17 stated that the betting slips were bookmaking records by a 'Tang Jai'.

Other evidence

18.The 4th and 5th applicants each held a telebet account with the Jockey Club. These accounts did not show any transaction for 5 January 2002. The other applicants did not have accounts with the Jockey Club.

Dealing with proceeds of indictable offence

19.In relation to the charges of dealing with proceeds of an indictable offences which is commonly referred to as money laundering, the bank accounts of the applicants were examined. There were huge deposits and withdrawals of funds from these accounts. Apart from the 3rd applicant who did not file any tax returns, the tax returns of the other applicants showed modest incomes.

1st applicant

20.In respect of the 1st applicant, the 1st charge showed that between 1 January 1999 and 29 September 2000, $47.5 million went through the account, 76% of the deposits and 74% of the withdrawals were made on the first working day after a race day.

21.Charge 9 relates to transactions in excess of $24.7 million conducted between 19 January 1999 and 19 January 2002 in respect of two accounts. In the savings account, 72% of the deposits and 72% of the withdrawals were made on the first working day after a race day. In the current account, 65% of the deposits and 60% of withdrawals were made on the first working day after a race day.

2nd applicant

22.In respect of the 2nd applicant, Charge 4 relates to transactions in excess of $71.7 million that were conducted between 1 January 1999 and 4 January 2002. 75% of the deposits and 72% of the withdrawals were made on the first working day after a race day.

23.Charge 7 relates to transactions in excess of $77.8 million made between 2 January 1999 and 3 January 2002. 82% of the deposits and 83% of the withdrawals were made on the first working day after a race day.

24.Charge 10 relates to transactions in excess of $17.4 million made between 31 December 1999 and 30 January 2002 in respect of two accounts. In the savings account, 80% of the deposits and 73% of the withdrawals were made on the first working day after a race day. In the current account the figures were 67% of deposits and 72% of withdrawals.

3rd applicant

25.In respect of the 3rd applicant, Charge 6 relates to transactions in excess of $6.2 million made between 1 January 1999 and 5 January 2002 in his account. 69% of the deposits and 65% of the withdrawals were made on the first working day after a race day.

4th applicant

26.In respect of the 4th applicant, Charge 2 relates to transactions in excess of $24.5 million between 1 January 1999 and 29 September 2000. The account shows that 56% of the deposits and 53% of the withdrawals were made on the first working day after a race day.

27.Charge 3 relates to transactions in excess of $83.4 million made between 1 January 1999 and 29 September 2000. 82% of the deposits and 82% of the withdrawals were made on the first working day after a race day.

5th applicant

28.In respect of the 5th applicant, Charge 8 relates to transactions in two accounts in excess of $54 million made between 19 December 1999 and 11 September 2000. In the savings account 66% of the deposits and 63% of the withdrawals were made on the first working day after a race day. In the current account, 66% of the deposits and 67% of the withdrawals were made on the first working day after a race day.

The defence

29.The applicants did not give evidence but called a witness, Mr. Kwong Ko-chiu ('DW1') who gave evidence as an gambling expert. His expertise was accepted by the prosecution. This witness agreed that Exhibit P3 to P7 were betting slips which recorded bets. He, however, found it difficult to decide whether these records were kept by a bookmaker, by a 'Tang Jai' or by a punter based on the betting slips alone. He said that in a bookmaking operation, the operators would record the bets on water soluble paper or toilet paper or other type of paper which could have the entries washed from them. As to entries by blue and red pens on the documents, this witness said that no significance should be attached to the use of different colour pens. He also said that he could find no evidence on the betting slips of bets having been laid off. He agreed that the entries in the betting slips and some of the tape recorded conversations related to bets placed on races which were run on 5 January 2002.

Bookmaking (Charge 11)

30.In respect of the bookmaking offence, the judge accepted the evidence of PW13 and PW17 that the betting slips were bookmaker's records. He found that the applicants were engaged in receiving bets on 5 January 2002. They were acting together, at the very least, as 'Tang Jai' in receiving bets. Considering the sheer volume of bets and the amount wagered, they were receiving the bets by way of a trade or business.

31.The judge recognized that there was no direct evidence as to who made the betting slips. He also recognized that there was no direct evidence where the taped conversation were made. The voices were not identified and the contents of the tapes were fragmented.

32.Nonetheless, he found that the bookmaking charge was proved, having taken into consideration the circumstances in which the betting slips were found; the other exhibits that were found on two of the applicants and also in the flat; and the agreement of both the prosecution and defence experts that the betting slips and the taped conversations contained entries that related to bets placed upon the races which were held on 5 January 2002. There was also no suggestion that the applicants were merely acting as conduits for the bets i.e. receiving the bets from a punter and merely passing them on to a bookmaker.

Dealing with proceeds of an indictable offence

33.The judge also found that the charges of dealing with proceeds of an indictable offence was proved.

34.He took into account the number of transactions in the bank accounts of the applicants and the amount of money involved in the transaction on the first working day after a race day. Such transactions constituted a large proportion of the total transactions. Further the entire amounts deposited on the first business day after a race day were withdrawn on the same day. He also took into account his finding that the applicants were engaged in bookmaking on 5 January 2002.

35.He held that an ordinary and right minded citizen would have known and would have reasonable grounds to believe that that moneys flowing through the bank accounts of the applicants, represented, in whole or in part, proceeds of bookmaking, which is an indictable offence.

Bookmaking

36.Before the individual grounds of appeal are considered, it is necessary to consider the law on bookmaking and the position of the applicants.

37.Section 7(1)(a) of the Gambling Ordinance provides that,

‘ Any person who engages in bookmaking, whether on one occasion or more than one occasion commits an offence.'

38.Bookmaking is defined by section 2 as meaning 'soliciting, receiving, negotiating or settling of a bet by way of trade or business.'

39.The Court of Final Appeal in the recent case of HKSAR v. Chu Kam Yiu and others (FACC No. 3 of 2002) held that anyone who received bets from a punter as a conduit for the purpose of passing it on to a bookmaker would not be guilty as a bookmaker, because he did not accept the money from the punter as his own bet. A bet would create a relationship between the two whereby each of them would take opposite positions in respect of an uncertain event so that if one wins the other loses.

40.In this case the applicants did not give evidence at the trial. As found by the judge there was no suggestion that the applicants were merely acting as conduit for the punters. There was also no suggestion that the money received was not received as bets. This case is different from Chu Kam Yiu and others.

41.This leaves two possibilities. First, the applicants were merely punters in the sense that what they were doing on 5 January 2002 was betting on horses as punters only. Second, they were bookmakers receiving bets from punters. In this latter capacity they may either be bookmakers of their own or agents for bookmakers ('Tang Jai').

1st ground

42.The first ground of appeal is that the judge erred in accepting PW13 and PW17 as experts.

43.Section 20(3) of the Gambling Ordinance provides that,

‘ If in any proceedings under this Ordinance a court is satisfied that by experience or otherwise a police officer has expert knowledge of any practice or device used in or for the purpose of the commission of any offence under the Ordinance, the court may receive evidence from that police officer as to the nature, effect or purpose of the practice or device.'

44.This section gives statutory recognition to the use of expert evidence in gambling offences. It is for the judge to decide whether someone is an expert in a particular field. There are two issues involved. The first concerns the nature of the evidence to be given by the expert. The second concerns the expertise of the witness.

45.On the nature of the evidence, the court is concerned with whether someone without knowledge or experience in a particular field would be able to form a sound judgment on the matter without the assistance of an expert of that field. Further the court has to decide whether the opinion of the expert is based on knowledge or experience which is recognized as a reliable source of knowledge or experience and which would assist the court.

46.On the question of expertise, it depends on how the expert has acquired such knowledge i.e. either by study or experience, see R. v. Bonython (1984) 38 S.A.S.R. 45.

47.In our view section 20(3) does not radically change these requirements. It merely gives statutory recognition to the use of expert evidence in gambling offences.

48.In this case the knowledge of the operation of bookmaking and the methods used by bookmakers in carrying out the operation are matters which required study or needed to be gained by experience. The opinion given by a witness based on such knowledge clearly falls within the ambit of expert evidence.

49.The situation is different from R. v. Barker (1988) 34 A. Crim R. 141 where the court draws a distinction between expert evidence and evidence of actual observation and experience. In that case a shop sold paraphernalia associated with the use of cannabis, including pipes and clips. The prosecution called evidence of a police officer that these items were commonly used for the smoking of cannabis.

50.In this case both of the prosecution's experts had attended training courses on horse racing bookmaking. PW13 had testified in three cases involving gambling although not in bookmaking. He had, however, given expert opinion in three bookmaking cases. PW17 had likewise attended courses on gambling practices. He had analysed cases on gambling since 2000. He had given evidence in 200 cases on gambling, 160 of which were about bookmaking. 40% of the 160 cases were about bookmaking on horse races.

51.In our view the judge was clearly right to admit the evidence of PW13 and PW17 as expert evidence.

2nd ground

52.The second ground argued that the judge erred in accepting the expert evidence which both fell short of independence and impartiality, and was biased.

53.Section 20(3) expressly allows the court to treat a police officer who has the necessary expertise to be an expert. Even in the absence of this provision, the fact that these experts were police officers does not mean that their evidence is inadmissible or that no weight should be attached to their evidence. A police officer like any witness can acquire such specialized knowledge by study or experience.

54.The decision in R. v. Kai Tai Construction Engineering Co. Ltd. M.A. 1123 of 1995 was disapproved in R v. Chung Chen-hsin [1996] 2 HKC 156 and we consider that the former case was decided wrongly. In our view the only real question to consider is what weight should be attached to the evidence given the relationship of the expert and the prosecution authority. This will depend on the evidence of the individual case.

55.Further there is no rule to prevent two experts being called. Again, whether the evidence of these experts was merely an attempt to 'boost up' each other's evidence was a matter of weight to be considered by the judge.

56.In this case there is no basis for the allegation that the prosecution experts were partial or biased in their evidence.

3rd ground

57.The third ground of appeal is that the judge erred in rejecting the expert evidence of the defence and in making no or no adequate attempt to satisfactorily resolve the conflicting opinion of the prosecution and defence experts.

58.The experts of both sides agreed that the betting slips (P3-P7) were records of betting. The difference in their accounts was whether these records were that of a punter or a bookmaker (including his agent or 'Tang Jai'). The defence expert stated that based on these documents alone he would have difficulty in making such a decision.

59.In accepting the evidence of the prosecution experts, the judge made it plain that he did not simply make the decision solely on the contents of the betting slips. A group of sophisticated punters may well have records similar to that used by bookmakers. One cannot rule out this possibility. But, when the contents of the betting slips are considered in the light of all the evidence of the case, the judge cannot be faulted in accepting the evidence of the prosecution experts that the betting slips were indeed records of a bookmaker.

60.It was argued that the judge simply rejected the evidence of DW1 on the basis that he did not have the benefit of the complete set of exhibits that were available to the prosecution experts. Mr. McGowan, counsel for the applicants, pointed out, by reference to the transcript, DW1 actually had the exhibits.

61.In our view, reading the judgment as a whole, what the judge was doing was really taking an overview of the evidence adduced when he decided to accept PW13 and PW17's evidence and reject DW1's evidence. His comment that DW1 was not supplied with all the exhibits did not really affect the finding by the judge on bookmaking.

4th ground

62.The fourth ground is that the judge's interventions during the course of trial amounted to material irregularities.

63.Improper judicial intervention had been the subject matter of many court decisions : see R. v. Yeung Mau Lam [1991] 2 HKLR 468, HKSAR v. Chan Kwan Kan CACC 530 of 1996. It is not necessary to restate the principles. The ultimate question is whether a defendant was deprived of a fair trial as result of the intervention. The matter is to be considered from the view point of an informed bystander.

64.Mr. McGowan stated there are at least 680 instances out of 236 pages of the transcript of PW13, PW17 and DW1's evidence where the judge spoke to counsel or witness, many of which amounted to interventions and comments, not mere clarifications. In particular he drew three instances where the judge interrupted the evidence of DW1 when he was trying to explain a point or why he disagreed with the views of the prosecution experts (page 295 E, 305 D and 314 P).

65.In the three examples cited by Mr. McGowan, DW1 actually had given an explanation to his answer or managed to give an explanation after the interruption. This particular ground of appeal was very properly not strongly pressed by Mr. McGowan.

5th ground

66.The fifth ground of appeal is that the judge had adopted a 'broad brush' approach and convicted all the applicants as bookmakers when there was insufficient evidence to draw the necessary inference to convict them all.

67.Mr. McGowan pointed out that the four of the applicants were brothers. He argued that they, together with a friend, were at the home of one of the brothers (i.e. the 2nd applicant) and conducted their affairs in an open manner with the curtains of the flat open. There were no admissions and given the inconclusive nature of the evidences such as the tapes and the contents of the betting records, it was unsafe for the judge to convict them all.

68.In our view each of the applicants was clearly taken part in the operation. While only four of the applicants had a betting slip in front of them at the table, the one without the betting slip (i.e. the 1st applicant) had Exhibits P45, P46 and P47 in his wallet. The whole set up justifies a finding that all of them were involved with the activities.

6th ground

69.The sixth ground is that the judge erred in rejecting and/or failing to consider adequately the evidence which contradicted the prosecution case and/or supported the defence case.

70.It is a fact that the evidence of PW13 was that he could not tell that the person who wrote on the betting slips was someone receiving off course betting or was laying bets. He said that he believed that that was a record of someone receiving bets.

71.This aspect of PW13's evidence must be considered in the context it was made and also in the light of the whole of the evidence adduced at the trial. PW13's conclusion was not simply based on his 'belief'. He did explain that the records in this case were in the form kept by bookmakers and also there were entries that supported bookmaking such as entries of discounts. The judge had clearly recognized the inconclusive nature of individual pieces of evidence but considering the evidence as a whole he was able to find the charge proved against the applicants. The judge had not failed in his consideration of the evidence.

7th ground

72.The seventh ground is that by the reasons advanced the applicants' conviction was unsafe and/or unsatisfactory.

73.Having considered the reasons that have been given this ground must fail.

Overview on bookmaking

74.Commonsense has to be applied in dealing with the evidence in this case. On a racing day the five applicants were found sitting around a table with records of betting and racing newspapers in front of them. These records contained bets placed on the races held on that day. Details of the horses and the odds on the betting slips matched that of the official Jockey Club record of that day. The television was broadcasting the races. There were a number of telephones on the table and some of them were ringing during the duration of the police raid. One of the tape recorders was connected to the telephone and contained a tape. The tapes found in the flat contained records of bets being received. They also recorded discussion of negotiation and refusals of bets. The entries on the documents found on the 1st and 4th applicants matched some of the entries on the betting slips and also the information on the taped conversations.

75.There was also evidence as stated by the prosecution experts that the betting slips showed that discounts had been given to the punters. This is a feature one finds in a bookmaking operation. There was a background of monetary transactions on a massive scale in the accounts of the applicants. A large proportion took place one day after the race day.

76.In our view there was overwhelming evidence of the business of bookmaking being carried out by the applicants in that they were receiving bets from punters. The documents containing the names and telephone numbers of persons and documents containing the names and bank accounts of persons are clearly indications that the applicants were not simply placing bets as punters but were actually receiving bets from the punters whose names and bank account details were contained in the seized documents. If notwithstanding such evidence, the applicants wished to contend that they were merely placing bets of their own on that particular day, then evidence to that effect would need to be called to explain their presence and activities they were conducting in the flat to avoid the inevitable inference being drawn. In the absence of any such evidence, the judge was clearly entitled to characterise the claim that the betting slips were made by enthusiastic punters as being a 'speculation'.

77.The judge had clearly found that the applicants were bookmakers. He also said that they were 'at least' operating as 'Tang Jai'. In our view whether they were 'Tang Jai' or merely agents for bookmakers is irrelevant for the purpose of the conviction. Even as agents for the bookmaker the applicants would be guilty of the offence of bookmaking : See Paras. 27 and 28 of the judgment of Silke NPJ in Chu Kam Yiu and others.

78.In this case there was sufficient evidence to support a finding that bets were received by the applicants as bookmakers. The sheer scale of the operation further supports the finding that the operation was in the nature of trade or business.

Dealing with proceeds of an indictable offence

79.The applicants have not advanced any specific ground of appeal on the charges of dealing with the proceeds of an indictable offence. In addressing the seventh ground relating to the bookmaking charge it was submitted by Mr. McGowan that these charges were dependent on the bookmaking charge being established against the applicants.

80.In our view the evidence on the bookmaking clearly supports the conviction on the charges of dealing with proceeds of an indictable offence.

81.It was argued that the Macau Jockey Club Races are also midweek and at weekends, so the significance of the 'first working day' evidence is seriously weakened.

82.In our view the Macau races are irrelevant. The prosecution established that after a Hong Kong race there were substantial deposits to and withdrawals from the applicants' bank accounts. This is clearly a relevant consideration that such funds were related to illegal bookmaking and the handling of such funds constituted the relevant offences that were laid against the applicants.

Conclusion

83.These applications for leave to appeal against conviction were accordingly dismissed.

Representation:

Mr. John Reading, SC, DDPP, and Mr. Raymond Cheng, GC, of Department of Justice for the Respondent

Mr. James H. M. McGowan, instructed by Legal Aid Department for the Applicants