HKSAR v. Yuen Moon Chung

HCMA000752/1999

HCMA752/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO.752 OF 1999

(ON APPEAL FROM WSSC 1940-42 OF 1999)

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Coram: Deputy Judge Tong in Court

Date of Hearing: 23 February 2000

Date of Handing Down Judgment: 6 May 2000

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J U D G M E N T

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1. The appellant was summonsed under sections 50(1)(a) and (2) of the Securities Ordinance, Cap.333; and section 89 of the Criminal Procedure Ordinance, Cap.221. The particulars alleged that the appellant, Yuen Moon Chung, alias Wallace Yuen, over the period from 1 October 1997 to 16 January 1998 in Hong Kong, did aid and abet Lai Chi Ching, Steven, to act as a dealer's representative of C.A. Pacific Securities Limited without being registered under the Securities Ordinance, Cap.333.

2. The appellant pleaded not guilty to the summons but was convicted after trial. The learned magistrate imposed a fine of $2,000. The appellant sought to appeal against the conviction.

3. There were two other summonses against the appellant at the trial but the magistrate ruled that there was no case to answer and they were dismissed. The appellant then asked for costs in relation to these summonses. However, the magistrate eventually ordered the prosecution to pay a nominal amount of $1 each for the two summonses. The appellant sought to appeal against such an order also. As to the order of costs against the appellant, counsel informed this court that it would not be pursued, unless the appeal on conviction is allowed.

4. At the trial, the prosecution had called a number of witnesses to testify and the record of interview of the appellant was admitted into evidence. The main witness was obviously PW1, Steven Lai. In his Statement of Findings, the learned magistrate had given a clear summary of the prosecution case as follows :-

" Prosecution's case on Summons WSS1940/99 was that PW1 made known to a friend his interest in work at dealing with securities. The friend introduced PW1 to a Mr. Simon CHAN. They met in Zuhai. As a result of that meeting PW1 went to the offices of C. A. Pacific at 9 Queen's Road, Central. PW1 eventually entered into a contract of employment with C. A. Pacific (Exhibit P5). A few days after PW1 started working at C. A. Pacific, PW1 was with Simon CHAN at the Queen's Road office. The Defendant passed by. Simon CHAN then told the Defendant that PW1 was to follow the Defendant and that the Boss knew about it. Though reluctant to do so, the Defendant did introduce PW1 to an 'Account Executive' at C. A. Pacific called Jason WONG. The Defendant told Jason WONG that PW1 would take advantage/ make use of Jason WONG's licence as a dealer's representative. The Defendant told him if PW1 had Clients then PW1 could place orders (for those Clients). The Defendant told PW1 to observe how PW1's colleagues worked. According to PW1, the Defendant had given him documents for Clients of C. A. Pacific Securities to sign. On 2 occasions the Defendant had given him cheques explaining to PW1 that they were for his commission (see Exhibit P1 and exhibits referred to therein as Exhibit No.HSBC-10 and HSBC-11).

It was clear from PW1's evidence that whilst he worked at C. A. Pacific, he had acted as a dealer's representative within the meaning of the Ordinance. I understood Defence did not challenge this. The bone of contention was whether the Defendant had aided and abetted PW1 in so acting. It was also clear from Prosecution evidence that C. A. Pacific was a 'dealer' and Jason WONG was a 'dealer's representative' as defined under the Ordinance. I again understood Defence as not challenging these aspects."

5. As to the defence case, the appellant had elected not to give evidence but called a defence witness. Having taken time to consider the evidence and submissions, the magistrate convicted the appellant and gave his oral reasons on the 11 June. He stated, inter alia, that :-

" I accept PW1's evidence in relation to the defendant's role vis-à-vis PW1's work at CA Pacific Securities Limited. In short, the role of the defendant was that the defendant introduced PW1 to a person surnamed WONG, Jason WONG, and said that PW1 would make use of WONG's licence. According to PW1, the defendant had also said that if PW1 had clients then PW1 could place orders. The defendant asked or told PW1 to look at how other colleagues work. The defendant gave PW1 a number or copies of agreements for him to take to clients to sign. According to PW1, the defendant had given cheques to PW1 on two occasions explaining that the cheques were for PW1's commission."

6. Against the conviction, the appellant raised a total of 10 points in the grounds of appeal. The first three points related to the fact that the magistrate's acceptance of the honesty of PW1 was too subjective and uncritical. Points 4, 6 and 7 raised the issue of the motive of PW1. It was said that the magistrate had ignored this aspect of PW1's evidence and that PW1's dislike for the appellant could have affected his testimony. Point 5 argued that PW1 had already been working at the company for two to three days before he met the appellant. Point 8 contained a complaint against the magistrate for having intervened 42 times during the evidence of PW1, 33 of them were during his cross-examination. Point 9 asserted that the magistrate had failed to consider the evidence of PW3 adequately and Point 10 covered the use of the contents of the record of interview. The argument was that the learned magistrate had, unfairly, taken a selective approach.

7. These points were further elaborated in the written submission. I am indebted to counsel for such a well-prepared skeleton which had rendered me much assistance in following his arguments.

8. The respondent also prepared a written submission that attempted to deal with all the points put forward by the appellant. Basically, the respondent argued that the grounds of the appeal was just an attack on the magistrate's finding of facts but the principle must be that the appellate court should not substitute its own evaluation of the evidence unless it was shown that the trial judge had in same way failed his duty. It was submitted that this court had to ask whether the trial judge's evaluation had been shown to be absent, irrelevant, lacking, careless or flawed in any substantial way (R v Li Chun Yue, Crim App No.240 of 1996).

9. More specifically, in the written submission, the respondent made the following points regarding the complaint against the magistrate's decision to accept PW1's evidence :-

"6. The Appellant says the Learned Magistrate erred in ignoring the motive PW1 would have to protect one Simon Chan and as a result his evidence might be tainted (Ground 4).

7. It is submitted that there was no evidence that PW1 was trying to protect Simon Chan. That suggestion was merely the defence case put to PW1 and which the witness denied (Bundle p437I).

8. The Appellant says that PW1 had worked in the company for two or three days before he met the Appellant which might suggest the commission of the offence by PW1 prior to meeting the Appellant (Ground 5). It is submitted this is irrelevant to the guilt or otherwise of the Appellant in aiding and abetting PW1 as the offence committed by PW1 was a continuous one.

9. It is alleged that PW1's credibility was in question when he claimed he was gambling at work (Ground 6). This is factually incorrect. PW1 gave evidence that during the two or three days at work 'they' (i.e. other people) were gambling (Bundle p442BC).

10. The Learned Magistrate was also said to have failed to consider that PW1 may have allowed a 'personal dislike' of the Appellant to affect his evidence (Ground 7). There was no evidence that PW1 harboured a 'personal dislike' of the Appellant. This is mere conjecture on the part of the Appellant."

10. I have taken time to go through the transcript and the arguments carefully. In the end, I have to say I agree with the submissions by the respondent.

11. Not all the points raised by Counsel now were argued before the magistrate. The transcript revealed that at the trial, defence counsel's submission was more on the issue of whether the elements of the offence had been proved, even assuming PW1's evidence was accepted. In the final submission stage, the relevant exchange in this regard could be seen at pages 413 and 414 of the transcript :-

"COURT: But if I were to accept Mr LAI's evidence, PW1's evidence that the defendant did take PW1 to Jason WONG But-sit (?) and then told Jason, this Mr WONG, 'Oh, he's going to make use of your licence,' and I accept Mr LAI's evidence that Mr LAI then went on to deal in shares, in securities, he received commission, the cheques for the commissions were given to him, physically handed to him by the defendant, do you still say that it's not aiding and abetting?

MR IP: No, sir, because I would submit this...

COURT: You will say that even...

MR IP: It's not aiding and abetting, even if you accepted the evidence of... (PW1)"

12. However, it was apparent from his oral judgment and the Statement of Findings that the magistrate had analysed what he perceived as the salient points regarding the evidence of PW1 before he found him an honest and credible witness. I took the view that he had adequately dealt with the reasons why he had accepted PW1's evidence. As to the contents of the record of interview, the magistrate was entitled to assign different weight to different parts of its contents and he had rightly pointed out that the appellant's denial was not tested. I cannot say there was any error of principal in this regard. As to PW1's status as an accomplice, the magistrate had acknowledged this fact but declined to give himself any particular warning on this matter. The requirement for a warning was indeed unnecessary by virtue of section 60 of the Criminal Procedure Ordinance. In these circumstances, I could not find any reason to fault the magistrate's acceptance of PW1's evidence and his treatment of the record of interview.

13. I now come to the complaint that the magistrate had intervened too many times during the evidence of PW1. I had, with care, gone through the relevant parts of the transcript and looked at the interventions. My conclusion was that it was an unfair criticism against the trial magistrate. Apparently, he was just trying to clarify matters when PW1 gave his testimony and to ensure that there was no misunderstanding and irrelevance. None of the interventions appeared to have the purpose or effect to obstruct the cross-examination by defence counsel. In fact, at one stage, the magistrate was assisting the defence by rephrasing the questions. Defence counsel thank the court for that. It was true that the number of interventions in this case seemed to be more than usual. But it should be remembered that this case involved rather technical affairs of business transactions and company matters. It should not be surprising that there were more questions or clarifications by the bench. The important thing was that the interventions should not be unfair or hostile to either side. More specifically, it must not have the effect of hindering the cross-examination by the defence. Here, I could see no such unfairness or problems arising. This ground must fail.

14. In all the circumstances, I could not say that the magistrate's evaluation of the evidence had been shown to be absent, irrelevant, lacking, careless, or flawed in any substantial way. The magistrate had seen and heard the witnesses. He had adequately analysed the testimonies and made his decision on whom to believe. I was not prepared to disturb the magistrate's factual findings. With the evidence before him, the magistrate was entitled to come to the conclusion that the offence was proved beyond a reasonable doubt. I shall dismiss the appeal on the conviction accordingly.

15. Regarding the issue of costs against the prosecution, what had taken place was that after the magistrate had given his verdict on 11 June 1999, he adjourned the sentence to 25th June and also invited the defence to provide an estimate on the amount of costs. However, on the return day the defence had failed to come up with a figure upon enquiry by the magistrate.

16. Hence the magistrate made the nominal cost order. He gave the following reasons :-

"As far as the defence application for costs on the two summonses dismissed, I think reasonable time had been given to the defence to indicate what sort of costs are involved here. In any event there is still no such information. I am not minded to have the matter adjourned or to send it for taxation. Those summonses were dismissed and I think in principle the defence is entitled to costs, but given the present situation I will order a nominal sum to be awarded to the defendant on each of those summonses and that nominal sum will be $1 on each."

17. The appellant now argued that justice was not done or not seen to be done. The magistrate should have allowed the costs to be taxed or adjourn the matter further for assessment, otherwise, the appellant himself would suffer. It was also said that the magistrate should have made his views known so as to give the defence the opportunity to be heard.

18. On this issue, the respondent gave the following reply in his written submissions :-

"The Principles

23. Section 3(1)(c) of the Costs in Criminal Cases Ordinance Cap.472 gives a Magistrate the discretion to allow costs for an acquitted defendant.

24. Section 3(2) gives the Magistrate a further discretion to award costs of up to HK$30,000:

'(2) An order for costs under subsection (1) shall not exceed $30000, unless-

(a) the defendant and the prosecutor have agreed upon the terms of any order to be made by the magistrate for costs exceeding that sum; or

(b) the magistrate, in the absence of any such agreement, orders that those costs be taxed.

25. It is submitted that the Magistrate has full discretion to award fixed costs of up to HK$30,000. That means, from HK$1 to HK$30,000.

26. It is further submitted that the Magistrate has no power to order taxation if the costs fall below HK$30,000. The discretion to order taxation under Section 3(2)(b) arises only where the costs applied for exceed HK$30,000 and in the event that there is no agreement between the Prosecution and the Defence on the amount.

Exercise of the Discretion

27. It is submitted that the discretion exercised by the Learned Magistrate in awarding nominal costs of HK$1 for each of the dismissed summonses was unimpeachable.

28. The Appellant was given an opportunity to indicate the costs involved after a two-week adjournment for the purpose of allowing the Learned Magistrate to make a costs order. The Appellant failed to do so. He was not entitled to have a further adjournment on the basis of his own default.

29. Neither was the Appellant entitled to an order for taxation. In any event, it was not open to the Learned Magistrate to make an order for taxation on 25th June 1999 in accordance with Section 3(2)(b).

30. In order to make an order for taxation under Section 3(2)(b), the Learned Magistrate must first be satisfied that the costs required exceed HK$30,000. Further he had to be satisfied that there was no agreement between the Prosecution and the Defence on the amount.

31. In the absence of any indication from the defence what the costs were and whether they exceeded HK$30,000, the Learned Magistrate's discretion to order taxation under Section 3(2)(b) was simply not triggered."

19. I tend to agree with the respondent's analysis of the law. On the other hand, I could appreciate why the magistrate felt frustrated by what had transpired. However, I agree that before imposing the $2 cost order, he could have made known his views first and provide the defence with an opportunity to address the court on this possible order. The appellant should not be penalized because of what his solicitor had done or had not done.

20. I would therefore allow the appeal on the nominal cost order against the prosecution. I was told by counsel that the estimated amount was about $60,000 for all the three summonses. I took it that there was no agreement on the exact amount. In the circumstances, I shall order that the costs for the acquitted summonses be to the defence, to be taxed, if not agreed. Further, I shall make no order as to costs for this appeal.

Representation:

Ms Po Wing Kay, instructed by the Securities and Futures Commission, for the Respondent

Mr Edward Laskey, and Victor K.C. Lee, instructed by Messrs K.B. Chau & Co., for the Appellant