The Queen v. Cheung Shiu-keung
Read the full judgment text of DCCC 89/1977 on BabelCite. This District Court judgment was delivered on 20 September 1977.
1. Defendant is charged with possession of assets disproportionate to official emoluments, contrary to sec.10(1)(b) of Cap.201. The particulars of the offence allege that CHEUNG Shiu-keung, being a Crown servant, namely a Chief Inspector in the Royal Hong Kong Police, was on the 6th day of November 1972 in control of pecuniary resources and property disproportionate to his then present or past official emoluments.
|
DCCC000089/1977 IN THE DISTRICT COURT OF HONG KONG HOLDEN AT VICTORIA CRIMINAL JURISDICTION CASE NO. 89 OF 1977 -----------------
----------------- Coram: Judge Bewley, D.J. in Court. Date of Judgment: 20 September 1977 ----------------- JUDGMENT ----------------- 1. Defendant is charged with possession of assets disproportionate to official emoluments, contrary to sec.10(1)(b) of Cap.201. The particulars of the offence allege that CHEUNG Shiu-keung, being a Crown servant, namely a Chief Inspector in the Royal Hong Kong Police, was on the 6th day of November 1972 in control of pecuniary resources and property disproportionate to his then present or past official emoluments. 2. On the application of the defence the Crown was ordered to provide further partioulars of the offence. The statement of further particulars submitted is in the following form:-
3. It also originally included a para.(e), in which the prosecution alleged that defendant was in possession of a pecuniary resource of a nature unknown to the Crown, which would be evidenced by certain items of expenditure. But on the authority of Sturgeon v. R. (1), in which the Court of Appeal stated that assets and emoluments must be quantified in terms of dollars and cents, the Court ordered that para.(e) be struck out. 4. The evidence in the case is almost wholly contained in a statement of agreed facts (Ex. P1) together with annexures. There were also put in two tables of hypothetical savings (Ex. P2 & Ex. P3) in which it is agreed that the calculations are accurate. It is further agreed that the left hand column in P2 correctly states defendant's not salary from 11th January 1960 to 31st October 1972. The title deeds of the flat in Princess Terrace (Ex. P4) and the 1963 Survey of Government Wages and Salaries (the Hamilton report) (Ex. P5) were also put in by consent. 5. The only other evidence was that of Mr. White, the arresting officer, who described certain conversations and interviews which he had with defendant. Defendant preferred not to answer most of Mr. White's questions and he made no admissions. The only matter of possible significance in this evidence was defendant's remark that he was estranged from his parents. No evidence was called by the defence. 6. The statement of agreed facts is in the following form:-
The Crown very properly invites me to ignore para.9. s.10(1)(b) of the Ordinance provides:-
7. The only direct evidence of defendant's control of assets is the credit balance in his current account of $4,264.40. The Crown therefore prays in aid the presumption contained in S.10(2). This sub-section reads:-
8. The proper interpretation of this provision has given rise to difficulty in the past, but assistance is now found in the judgment of Huggins J.A. in Attorney General v. YAU Ka-ping (2). The learned judge was there concerned to distinguish the situation that arose on a submission of no case to answer and the Court's duty as a judge of fact. He said at p.2,
But he went on to say at p.3,
9. As I see it the only possible point of difficulty is whether the Court must also be satisfied beyond reasonable doubt that there is "reason to believe beyond reasonable doubt that the person is holding on behalf of the defendant. "This is the view adopted by Judge Silke in YAU Ka-ping (3) (at the resumed hearing). In R. v. CHEUNG Chee-kwong (4) (in which an appeal is pending) however Judge Liu has held that ....." while the Court will take into account whether or not it is satisfied beyond reasonable doubt that a person is in fact holding on behalf of an accused, it would be wrong to suggest ..... than in reality it must be so satisfied for a belief of that fact to be entertained." He states (at p.11) that "under S.10(2) reason to believe is to be formed on facts having regard to closeness of relationship and other circumstances bearing upon the case, and not a matter of opinion or judgment. These facts must be sufficient as would reasonably lead to the belief, and they will have to be proved beyond reasonable doubt so that the Court may be satisfied (and satisfied beyond reasonable doubt) that there is reason to believe that the person is holding on behalf of the defendant, but nevertheless it is only a state of mind induced by the proven facts." 10. I respectfully agree with Judge Liu's interpretation of the subsection. The phrase "reason to believe" is otherwise otiose. The "facts" which he refers to are those facts which are described by Huggins J.A. as "the facts laid down as giving rise to the presumption." 11. In CHAN Siu-shing and others v. R. (5) the Court considered the burden of proof where the presumption of possession in S.47 of the Dangerous Drugs Ordinance Cap.134 is raised. Huggins J. stated at p.498, "In truth the burden of proof is always on the Crown to establish the guilt of a defendant beyond all reasonable doubt. Guilt is something which has to be inferred from primary facts and the burden of proving beyond reasonable doubt such of those primary facts as have to be proved is, equally, always upon the prosecution. Sometimes one or more of the primary facts from which guilt could be inferred do not have to be proved at all because a statute prescribes that upon the fulfilment of prescribed conditions those facts are to be presumed. In so far as those conditions consist of the proof of facts the burden of proof is, once more, upon the prosecution and the standard of proof required is proof beyond all reasonable doubt. The effect of a presumption which is not rebutted is, therefore, to allow an inference of guilt to be drawn from facts which would not otherwise justify such an inference: the fact presumed does not have to be proved beyond all reasonable doubt but the guilt of the accused does." In the present case these "primary" facts are largely agreed. If the presumption is to arise therefore I must be satisfied beyond a reasonable doubt that (1) the closeness of the relationship between defendant and his wife and (2) other circumstances together give reason to believe that she is holding the flat at Princess Terrace and the funds in the savings account on behalf of defendant. If I am so satisfied, the contrary not being proved, these assets will be presumed to have been in the control of defendant. 12. The Crown sought to lead evidence as to the market value of the Princess Terrace flat on 6th November 1972. Following objection by Mr. Corrigan to this approach I ruled that the relevant figure was the purchase price of the flat. It is true that Huggins J.A. in CHAN Ching-cheung v. R. (6) stated (obiter) "We have difficulty in understanding how an offence under this paragraph can be satisfactorily proved without evidence of the value as at the date specified in the charge of the pecuniary resources and property controlled by defendant (whether or not the relevant value is "the value to the defendant"). " But the Court did not hear argument on the point. The reasons given by Judge Liu in R. v Kan Ping (7) at p.21 and in R. v. CHEUNG Chee-kwong (4) at p.28-29 for the former approach are persuasive and I respectfully adopt them. The total assets alleged to have been under defendant's control on 6th November 1972 are therefore (excluding the $730.30 in account No. 10804676):
13. I agree with Crown Counsel that the proper figure to set against this total is that representing defendant's net emoluments from 1st January 1960 - 6th November 1972, namely $235,324.23. 14. The next matter to be considered is whether HUNG Lan-fong's savings account was under the control of defendant. It is open to me to find that a close relationship existed between defendant and his wife and I so find. This is a fact that is proved beyond reasonable doubt. 15. What are the "other circumstances"? Annexures D8 and C3 reveal transfers to the wife's account during 1971 and 1972 of a total of $51,600. Annexure D3 shows a single reverse transfer to defendant's current account on 2nd May 1971 of $50,000 (it was agreed during the trial that this was the destination of this withdrawal). In 1971 when defendant was in receipt of a total net salary of $22,822, he transferred no less than $25,600 to his wife's savings account. In the ten months of 1972 with which we are concerned he transferred $26,000 out of $41,694. These transfers are agreed and are therefore proved beyond reasonable doubt. Their frequency and their substantial nature, though not conclusive in themselves, tend to show that defendant had control over his wife's savings account. This is so even if HUNG Lan-fong was the person solely entitled to the rental for the flat. 16. When these facts are considered in the light of defendant's close relationship with his wife they undoubtedly give the Court reason to believe that she was holding the funds in this account on defendant's behalf. This is a matter that has been proved beyond reasonable doubt in the sense referred to above, namely that I am sure that there is reason so to believe. The contrary has not been proved. The only evidence of HUNG Lan-fong's personal wealth, apart from the rental, is her earnings from 1966-68, namely $8,200. There is no other evidence as to how much money, if any, she brought into the marriage. But this is a matter of defence. It is not for the Crown to lead evidence as to the wife's premarital financial standing. The contrary not being proved, this money is presumed to have been in the control of defendant. 17. I turn now to the question of the Princess Terrace flat. The property is registered in the name of defendant's wife and, except for 4 mortgage payments, the whole purchase price was paid with funds from her savings account. An initial payment of $32,153 was made on 7th December 1968 and there were legal costs of $2,754.60. A mortgage loan in the sum of $44,000 was obtained from the Hang Seng Bank and this was repaid between 4th June 1969 - 13th August 1971 by 27 monthly instalments of $776.75 and one final payment of $33,620.93. The particulars of these repayments are set out in schedule A. It is agreed that the final cash payment was made with funds withdrawn from the wife's savings account on 12th August 1971. Defendant himself was responsible for only 4 mortgage repayments and on the dates shown in Annexure D4 he drew cheques on his current account each for $776.75. 18. From March - December 1968 defendant and his wife lived in police quarters. They then moved into the Princess Terrace flat where they remained until March 1970. Thereafter they let the flat and lived once more in police quarters. When they resided at Princess Terrace defendant paid the water charges in respect of the flat. Between February 1969 - June 1970 he made 6 payments totalling $116.45 as set out in Annexure D1(b). These payments appear to cover the total water charges payable during their period of residence. 19. From April 1970 - October 1972 defendant also paia, on a regular basis, the rates and property tax in respect of the flat. These payments totalling $4,390.36 are shown in Annexure D1(a). 20. I now have to decide whether these "other circumstances" together with the closeness of the relationship, which has already been established, give me reason to believe that defendant's wife was holding the property on his behalf. 21. Mr. Litton relies on Gissing & Gissing (8) as authority for the proposition that evidence of small-scale contributions by one spouse to the purchase price and outgoings of the matrimonial home is insufficient to establish a beneficial interest in the property. He submits that it would be wrong to infer from defendant's four mortgage repayments and his payment of rates, taxes and water charges that there was an intention on the part of the spouses that HUNG Lan-fong should hold the property in trust for defendant. At most, he argues, defendant obtained a small beneficial interest, which would be quite insufficient for the purposes of subsection 2. 22. I would agree that we are not here concerned with a degree of beneficial interest. Either the property was being held in trust for or otherwise on behalf of defendant or it was not so hold. In Gissing the Court held that an intention on the part of the spouses to create a beneficial interest could not be inferred from the wife's contributions to household expenses. 23. In that case however it was the cestui que trust who was the plaintiff. She was seeking a declaration that she held a beneficial interest. Here the boot is on the other foot. Defendant - the cestui que trust in this case - asks the Court to say that his wife was not his trustee. 24. There is another vital difference. Subsection 2 enjoins the Court to look at the closeness of the relationship between the trustee and the cestui que trust. The inference is that such closeness will tend to establish that there is reason to believe that a trust situation exists. In a case such as Gissing it is clear that the closeness or otherwise of the relationship takes the matter no farther. 25. In my judgment, with the greatest respect to learned counsel, Gissing's case is of no assistance when considering subsection 2. 26. It is true that there is no direct nexus between the two accounts to show that HUNG Lan-fong paid the balance of the purchase price with money deposited in her account by defendant. Between 14th January 1971 - 7th August 1971 6 transfers amounting in all to $17,800 were made from his account to her account. Midway through this period $50,000 was paid back into defendant's account. Then on 12th August 1971 $34,000 was withdrawn from her account and applied to pay off the mortgage loan from the bank. These transfers are however some of the circumstances which have given me reason to believe that HUNG Lan-fong's account was held on behalf of defendant. It follows that a substantial payment made from this account in settlement of the mortgage loan must also be a circumstance giving me reason to believe that the flat was held on his behalf. 27. Even if this final mortgage payment is disregarded, the regular payments of rates and property tax by defendant over a 2 ½ year period convince me - when his close relationship with his wife is taken into account - that there is reason to believe that the property was being hold on his behalf. The four mortgage payments are a further circumstance to be considered but, being so few in number, they carry less weight. The water charges I disregard in this connection. I would equate them with, for example, electricity bills payable by the wage-earning occupier. I therefore find that it has been proved beyond reasonable doubt that there is reason to believe that defendant's wife was holding the Princess Road flat on his behalf. The contrary has not been proved and the flat is accordingly presumed to have been in the control of defendant. 28. The next question is to consider whether defendant's pecuniary resources and property are disproportionate to his official emoluments. This is a matter which the Crown must prove beyond reasonable doubt. 29. Deducting the proved assets of $196,208.24 from net emoluments of $235,324.28, one arrives at a figure of $39,116.04. To this mast be added bank interest and rental in the sum of $51,800. In the absence of any other apparent sources of income, it must be assumed that this total sum, $90,916.04, was the money available to defendant for his living expenses from the date he joined the service to the charge date i.e. 11th January 1960 - 6th November 1972. 30. There is no evidence as to defendant's pattern of living during this period, except that he lived with his parents from 1960-68. It may be inferred that his expenditure during these years was proportionately a great deal less than after his marriage and the birth of his two children, and his opportunity for saving correspondingly greater. 31. The test is "..... whether the property controlled by the defendant is such that it is questionable whether that particular defendant could have acquired it with his official emoluments", per Huggins J. in Sturgeon v. R. (1) at p. 686. The learned judge went on to say, "Applying all this to the present case we ask ourselves, 'Do we think that, having regard to all we know about the appellant and his way of life from the evidence, it is doubtful whether he could have acquired his bank balances totalling $58,366.61 from official emoluments of $475,587.32 in the absence of other sources of income?' The sum is equivalent to just over one year's earnings at the rate of salary he was being paid at the date of the charge, but he had had that salary for only 8 months, and for a great part of his service he was earning very much less. We cannot say the judge was wrong to conolude that there was evidence of control of property "disproportionate" to the appellant's official emoluments." 32. Here we have no evidence about appellant's way of life. I am prepared to deal with defendant on the basis that he is a man of average wants and needs, but farther than that I cannot go. As I have indicated in another context, it is not for the Crown to provide this sort of evidence. 33. At the charge date defendant's salary was at the rate of just over $3,000 per month. At the date of his marriage it was approximately $1,350 per month. For the first 8 years of his service it averaged approximately $1,150. The overall average is $1,528. To suggest that he could have lived at an average rate of something like $590 per month over the entire period, which would have been necessary to enable the assets to have been acquired from salary, is manifestly unrealistic and I do not accept it. These figures are in fact distorted in defendant's favour since the rental income began to accrue only on 1st January 1969. Substantial monthly savings before that date would have been even more difficult, Such a rate of saving, unsupported by evidence, is not within ordinary human experience. I find that the Crown has proved beyond reasonable doubt that defendant's assets are disproportionate to his official emoluments. 34. Mr. Litton urges me to find that, in spite of the fact that defendant refused to answer the I.C.A.C.'s questions and has elected not to give evidence, there is nevertheless an explanation for the disproportion. He submits that the caloulations in the schedule of savings (Ex. P2) indicate that it was possible for defendant to have built up his assets by shrewd investment. He concedes, I think, what it would have been necessary for this to have been done on a monthly basis and that the investment must then have been realised and lodged in his wife's savings account. Apart from the sheer improbability of this - on the scale of saving needed to build up such assets on such a salary - it is pure conjecture. There is no evidence that there was any saving at all, apart from that indicated by his wife's savings account. 35. Mr. Litton referred to the intolerable strain on a Government servant who is compelled to explain his whole professional life in an attempt to establish his pattern of saving. He is certainly right when he says, "The longer the service the greater the burden." This ordinance was enacted "to make further and better provision for the prevention of bribery and for purposes necessary thereto or connected therewith." Formerly it was notoriously difficult to prosecute with success those suspected of corrupt activities: Draconian measures were necessary and this is such a measure. 36. Once disproportion is proved, the burden of giving an explanation - on the balance of probabilities - lies on defendant. He has failed to give one. The whole case has therefore been proved beyond reasonable doubt and I convict defendant as charged.
Representation: Mr. T.M. Gall, C.C., for Crown. Mr. H. Litton. Q.C. & Mr. A.J. Corrigan instructed by C.T. Chan & Co. for accused. (1) (1975) H.K.L.R. 677 (2) Criminal Appeal No. 984 of 1976 (3) V.D.C. Criminal Case No. 149 of 1975 (4) V.D.C. Criminal Case No. 269 of 1976 (5) (1974) H.K.L.R. 493 (6) Criminal Appeal No. 600 of 1976 (7) V.D.C. Criminal Case No. 55 of 1974 (8) 1971 A.C. 886 |