HKSAR v. Tang Hoi on Barry and Another

CACC000284/2001

CACC 284/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 284 OF 2001

(ON APPEAL FROM DCCC 1016 of 2000)

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Coram: Hon Stuart-Moore V-P, Stock JA and Jackson J in Court

Date of Hearing: 28-29 November 2002

Date of Judgment: 18 February 2003

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J U D G M E N T

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Hon Stock JA (giving the judgment of the Court):

Introduction

1The applicants were architects employed by the Housing Department. Their functions included architectural supervision of building projects undertaken by that Department. There are three projects with which this case was concerned:

(1) One was at Fanling, and was called "Fanling 49A Phase 2" (Phase 2). The first applicant (D1 at trial) was the project architect. The main contractor for the project was Paul Y - ITC General Contractors Ltd ('Paul Y'). The assistant project manager for this scheme was an employee of Paul Y, Mr Ng Yee-cho. One of the subcontractors for Phase 2 was Chong Pak-cheong (PW5).

(2) The second project was at Tin Shui Wai and was called "Tin Shui Wai Phase 5" Phase 5. This was for the construction of fifteen apartments, a school, and a road. The project architect here was the second applicant (D2). The main contractor was, again, Paul Y, and the project manager for this project was a Mr Gary Tam Siu-ki. He features heavily in the case and he was the first prosecution witness, PW1. Tam's supervisor at Paul Y was Philip Siu Kin-ming, who was a senior project manager. One of the subcontractors, who was awarded a plumbing subcontract, was Raymond Wong Wing-cheong (PW2).

(3) Finally, there was Tin Shui Wai Phase 7 (Phase 7). The second applicant was its project architect. The main contractor was Penta Ocean Construction Limited (Penta). Their project manager for that development was Wilson Chu Ka-hung (PW6). For this project, there were a number of subcontractors who testified at the trial with which this appeal is concerned. They were To Hip-ming (PW7), whose job was to supply or fit false ceilings; Jack Ma (PW8) who supplied tiles; and Chow On-hing (PW9) who installed aluminium windows.

2The function of the architect in relation to building projects requires, for the purpose of this case, little description. It suffices to say that the architect exercises a supervisory function over the main contractors; issues specifications with which the contractor and the subcontractors are expected to comply; monitors works to ensure that plans and specifications are honoured; approves or refuses plans for changes to the specified work; and issues architect's certificates. The evidence in the court below demonstrated, if demonstration were necessary, some ways in which the execution of the project architect's function could impact upon the contractor and subcontractors. The evidence of the first applicant was that the project architect decided which materials were acceptable for use on the projects, and that in this case he was enabled to approve a change of materials if the cost did not alter more than a certain amount. It was also for him, he said, to monitor progress and to hurry contractors along if they fell behind; and there were spot or random checks by Housing Department officers. The evidence of Tam (PW1) was that there was much interaction between architect and contractor in relation to a project. Phase 5 alone was a project worth something in the order of $500 million. It is clear therefore that the applicants, and any other project architects in charge of a site or project, had it within their power to act favourably in a number of aspects to the main contractor and to subcontractors.

The Charges

3This is an application for leave to appeal against their convictions in the District Court by these two applicants who were each charged with conspiracies to accept advantages in the exercise of their functions as project architects. The allegation, in essence, was that each applicant was lavishly entertained by the contractors and the subcontractors of the projects for which he was responsible; that both of them were the objects or targets of extensive hospitality stretching over many months, so that a pattern developed whereby it was well understood by all concerned that the architects were to be treated frequently to hospitality at clubs where they would be indulged at the expense of the contractors and subcontractors. Such indulgence included the provision of the company of hostesses both within and outside the clubs. The pattern of indulgence (which also included travel to Macau), was such that there was to be inferred, according to the prosecution, a conspiracy between the applicants and the contractors that the applicants would accept advantages. It is the nature of the advantages allegedly agreed to be accepted which lies at the heart of this appeal.

4There were three charges. The first charge was against the first applicant alone; the second and third against the second applicant alone. Save as to their particulars, they were the same. The first charge was as follows:

Statement of Offence

Conspiracy to accept advantages, contrary to sections 4(2)(a) and 12(1) of the Prevention of Bribery Ordinance, Cap. 201 and sections 159A and 159C of the Crimes Ordinance, Cap. 200.

Particulars of Offence

TANG Hoi-on, Barry, being a public servant, namely an Architect of the Housing Department, on divers days between the 1st day of December 1998 and the 17th day of August 2000, in Hong Kong, conspired with TAM Siu-ki, Gary, SIU Kin-ming, and other persons unknown to, without lawful authority or reasonable excuse, accept advantages, namely payment, release or discharge of the said TANG Hoi-on, Barry's obligation or liability for expenses incurred for meals, night-club entertainment, hostess escort services from the said TAM Siu-ki, Gary, as an inducement to or reward for or otherwise on account of the said TANG Hoi-on, Barry performing or having performed an act in his capacity as a public servant, namely remaining favourably disposed towards the staff members of Paul Y-ITC General Contractors Limited who were involved in the development project at Fanling Area 49A Phase 2.

The emphasis has been added for reasons that will become apparent.

5The second charge was the same, save that the second applicant was the defendant and that the project in respect of which the staff of Paul Y were to be treated favourably was Phase 5. The dates of the conspiracy, the identity of the co-conspirators, and the advantages allegedly to be enjoyed in consequence of the conspiracy were the same as in the case of Charge 1.

6The third charge, against the second applicant, was again a conspiracy to accept advantages, in this case, "payment release or discharge of his obligation or liability for expenses incurred for meals, night-club entertainment, hostess escort, and prostitution services from ... [Wilson Chu (PW6)] as an inducement to or reward for or otherwise on account of the said [second applicant] performing or having performed an act in his capacity as a public servant, namely, remaining favourably disposed towards ... [Wilson Chu] and other staff members of [Penta] who were involved in the development project at [Phase 7]." It will be noted that in contrast with Charges 1 and 2, there is here alleged an additional conspiratorial objective, namely, payment for prostitution services. The date of the conspiracy was said to be between 1 February 1999 and 30 April 2000.

7The applicants were tried before HH Judge Wright in the District Court, and were both convicted on 30 July 2001. The first applicant was sentenced to two years' imprisonment in respect of Charge 1. The second applicant was sentenced to two years' imprisonment in respect of each of Charges 2 and 3, and the judge ordered six months of the sentence in respect of Charge 3 to run consecutively to the sentence imposed in respect of Charge 2, the rest to run concurrently, making a total of two years and six months' imprisonment. There is no appeal against sentence.

The Evidence

(1) Tam and false claims

8Those prosecution witnesses who were employed by the main contractors, or who were subcontractors, were each the beneficiary of immunities from prosecution. The evidence, which reveals an unedifying picture, was that funds were made available by the construction companies for entertainment of third parties and, in this case, the funds were expended to entertain public servants involved in the various projects. The evidence was also redolent with the suggestion that PW1 abused the system by making false claims from his employers for entertainment expenses not in fact incurred. "He was," said the judge "plainly a person seeking to milk every last cent he could from his employer, although the evidence shows that he was not the only one: he was prepared to lie to achieve that end." The judge informed him of his right not to answer any questions which might incriminate him, apart from those relating to matters in respect of which he had been granted immunity. Ms Chung Yee-kam had been Tam's secretary and she gave evidence, which the judge accepted, that on the express instructions of Tam she had manufactured receipts and submitted claims which purported to be for lunches at which the second applicant had been a guest when she knew full well that in fact such lunches had not taken place. It is not surprising, therefore, that the judge took the view that he had to regard with particular caution the evidence of Tam, as well as that of Chu (PW6). In relation to Tam, he said that: "I accept his testimony only where it is supported by other evidence."

(2) Tam's lunches

9Tam's evidence was that his entertainment of the second applicant included lunches and dinners and visits to clubs. On the visits to clubs, the first applicant was frequently present. He said that whilst he had no recollection of the meals, in other words when the meals took place, he was able to rely on receipts and annotations to documents attached to them. Whilst the judge, in view of all the evidence, took the view that the second applicant must have attended lunches hosted by Tam, he was not, given the evidence of the secretary about false receipts, prepared to rely on the evidence concerning those lunches in support of the prosecution case.

(3) Three club visits

10As for visits to clubs in Hong Kong, Tam listed seven visits and their dates, but the judge, not being prepared to accept any for which there was not corroboration, held that he was not justified in relying on Tam's memory for the first four. Given, however, supporting evidence from the observations of ICAC officers and photographs, he was satisfied that the first and the second applicants made three visits with Tam to the Mandarin Palace Club in Hong Kong. These constituted:

(1) a visit on 8 March 2000, also with Siu and Ng. The judge found that both accused took hostesses out of the club and that Tam paid the club bill;

(2) a visit on 10 April 2000 by the three (both applicants and Tam) to the same club. On this occasion, the judge held that all three took women from the club. Tam paid the club $4,030 but reclaimed $6,038; and

(3) a visit on 12 May 2000 when, again all three, so the judge found, took women out of the same club and went with them to a nearby hotel. Tam paid the club bill.

(4) Macau

11It was accepted that there were two visits to clubs in Macau, each to a club named Club Deluxe. The first was on 26 February 2000. On this occasion, so the judge found, PW2 (Raymond Wong) the plumbing subcontractor for Phase 5, paid, at Tam's behest, the cost of six package trips to that club which included ferry fares; entrance fees to the club; the cost of the company of hostesses at the club; and the cost of the hire of rooms to which women could be (and, in the event, were) taken. There were six packages because on this trip were the applicants, Tam, PW2 (Wong), Siu and Ng.

12The second trip to Macau was on 24 May 2000. The first applicant did not go. The second applicant did, with Tam and Wong. Again, Wong paid for three packages, along the same lines as in February. The judge found that Tam arranged the trips, telling Wong at first that just he and Wong were going, but arranging for the applicants to come, and then directing Wong to purchase the package tickets which Wong did.

13The evidence was that, during these visits, men would leave the club with a female partner to another room in the building, and that such services then as each may have acquired were paid for by the individual male.

(5) 7 September 1999

14In relation to Phase 2, the judge heard the testimony of Chong Pak-cheong (PW5) who was a subcontractor with a grievance. He had hoped to be awarded three subcontracts in relation to Phase 2 but was awarded only one, and he made a complaint to Paul Y and the Housing Department about that. The first applicant had apparently made an adverse comment about Chong's work on site, and Ng and Siu of Paul Y suggested to Chong that they would arrange for him to meet the first applicant who liked going to nightclubs. A meeting was arranged, and the date was 7 September 1999 at the China City Nightclub in Hong Kong. PW5 went, and Siu was there, as was Ng and a man called Lau. According to the evidence of Chong, the first applicant did not arrive, but telephoned to say that he was still working. Chong paid the bill, and his party then went to a restaurant in the Shangri-la Hotel where the first applicant subsequently arrived with a female. Chong, at Siu's indication, paid the bill for an expensive meal. The female with whom the first applicant arrived (PW14) gave evidence, and it was established that she had that evening been with the first applicant at the China City Nightclub, and that Chong had paid the bill for hostess hospitality enjoyed by the first applicant that night at that club.

(6) The first applicant's lies

15In addition to this evidence, the judge relied, in the case of the first applicant, upon lies told by him. He was interviewed on 17 August 2000 by the ICAC and he made a series of denials about visits to clubs in Hong Kong and Macau. He denied visiting any nightclub in Hong Kong, and denied having been to Macau with staff from Paul Y.

(7) Charge 3

16In relation to Charge 3, the assertion was that the second applicant, as project architect for Phase 7, was the beneficiary of hospitality provided by Wilson Chu and by some subcontractors involved in that project, in particular by PW7, PW8 and PW9. Chu's evidence was that over a period of fourteen months, from March 1999, he provided lunch or dinner to the second applicant on no fewer than 26 occasions. However the evidence upon which the judge convicted the second applicant concerned nightclub visits paid for by those whom he was intended to supervise. Evidence was received not only from Chu but also from the three subcontractors. The judge was satisfied that the second applicant had attended Club Paris and China City Nightclub on eight occasions between April and December 1999 and that, on none of those occasions did he pick up the bill. On at least three of those occasions the judge found that the second applicant left with a hostess. On those three occasions, that is, on 27 August, 6 October and 2 December 1999, the club bill was paid by the three subcontractors, PW8, PW7 and PW9 respectively. Those bills included, so the judge found, an amount for taking hostesses out of the club.

(8) No defence evidence

17Neither applicant gave evidence.

The Central Findings

18How then does this evidence upon which the judge relied translate into the charges which the judge found proved? What were the central findings of fact?

19In relation to Charge 1, the judge found that the evidence showed that there were three visits to nightclubs paid for by Paul Y: "... on each of those visits a substantial amount of money was spent on providing drinks, some food, singing, and the company of hostesses from all of which [the first applicant] benefited and to none of which he made any contribution; there was a similar fourth visit funded by [Chong (PW5)] a subcontractor of that main contractor: in each instance fees were paid by whoever paid the bill that permitted a hostess to leave the club with a customer and in each instance the [first applicant] left with a hostess; there was a visit similar in nature to Macau paid for by [Raymond Wong (PW2)] another subcontractor." (paragraph 68 Reasons for Verdict).

20The judge's finding on the second charge again relies on the three nightclub visits during which both applicants left with hostesses, paid for by Paul Y: "In each of those visits there were substantial amounts of money spent on providing drinks, some food, singing and the company of hostesses from all of which [the second applicant] benefited and to none of which he made any contribution: in each instance fees were paid by whoever paid the bill that permitted a hostess to leave the club with a customer and in each instance [the second applicant] left with a hostess: there were two visits, similar in nature, to Macau paid for by the subcontractor [Raymond Wong (PW2)] for Phase 5." (paragraph 69).

21The additional feature of Charge 3, namely, prostitution services, depended upon evidence of entries upon club bills which specified charges for 'wine', a euphemism, it was said in evidence, for prostitution services. But the judge was not prepared to act on that evidence and the prostitution aspect can, for the purpose of this appeal, be ignored. So too, in terms of what constitutes an advantage under the Ordinance, we can ignore the twenty six meals, the judge saying:

"In the context of Charge 3 it does not matter whether the meals themselves constituted 'entertainment' as defined ... and thus are not 'advantages' as it is the fact of their occurrence, as part of a pattern, which is relevant for the purpose of deciding whether there was any agreement in existence: their frequency and nature is admissible in evidence to establish a pattern of conduct."

However, what the judge did rely upon, for the conviction, were eight visits to nightclubs where "... very large amounts of money were spent on providing drinks, some food, singing, and the company of hostesses from all of which [the second applicant] benefited and to none of which he made any contribution: in three instances fees were paid by whoever paid the bill that permitted a hostess to leave the club with a customer and in each of those instances [the second applicant] left with a hostess." (paragraph 70).

The Central Definitions

22Having listed what the benefits were that the applicants enjoyed (and we use the word "benefits" deliberately, as being broader than "advantage" as defined), the judge then reproduced the definition of "advantage" in section 2 of the Prevention of Bribery Ordinance, as well as the definition of "entertainment". It is convenient at this juncture to repeat those definitions:

"(2)(1) In this Ordinance, unless the context otherwise requires -

"advantage" means -

(a) any gift, loan, fee, reward or commission consisting of money or of any valuable security or of other property or interest in property of any description;

(b) any office, employment or contract;

(c) any payment, release, discharge or liquidation of any loan, obligation or other liability, whether in whole or in part;

(d) any other service, or favour (other than entertainment), including protection from any penalty or disability incurred or apprehended or from any action or proceedings of a disciplinary, civil or criminal nature, whether or not already instituted;

(e) the exercise or forbearance from the exercise of any right or any power of duty; and

(f) any offer, undertaking or promise, whether conditional or unconditional, of any advantage within the meaning of any of the proceeding paragraphs (a), (b), (c), (d) and (e),

but does not include an election donation within the meaning of the Elections (Corrupt and Illegal Conduct) Ordinance (Cap. 554), particulars of which are included in an election return in accordance with that Ordinance;

....

"entertainment" means the provision of food or drink, for consumption on the occasion when it is provided, and of any other entertainment connected with, or provided at the same time as, such provisions."

'Advantages': the judge's approach

23The passages in the Reasons for Verdict which immediately precede and follow the judge's reproduction of those definitions are important:

"71. In the context of Charge 3 it does not matter whether the meals themselves constituted 'entertainment' as defined, to which I shall turn, and thus are not 'advantages' as it is the fact of their occurrence, as part of a pattern, which is relevant for the purpose of deciding whether there was any agreement in existence: their frequency and nature is admissible in evidence to establish a pattern of conduct. A court is not required to look at each portion of evidence piecemeal and in isolation from the rest: the proper course is to have regard to all of the evidence and to consider its overall effect.

72. [The statutory definitions].

73. Even if I err in the view that I take that there is evidence that what the Accused accepted in other instances were 'advantages', it is self-evident that the trips to Macao provided by PW2 cannot fall within the definition of 'entertainment'. The packages which he was required to purchase included ferry tickets and the use of a room in a hotel in Macao.

74. The definition of 'entertainment' also cannot properly be construed so as to cover the fees paid to the club so as to allow a hostess to depart the premises. Her departure from the club is not 'entertainment connected with' the provision of food or drink nor is her subsequent departure 'provided at the same time as' food or drink, even if payment for that departure is effected at that time. It seems to me that it is no answer to say that the Accused and the hostess could have remained in the club if they had so wished, as appears from the statements of WONG, Exhs. 1177 and 1178: the fact proved by the evidence is that they did not do so. Thus the fees, at the very least, for escort services paid on behalf of the Accused on the visits to the clubs in Hong Kong amount to 'advantages'.

75. Whilst it is thus not necessary for me to go any further than this, as both Counsel addressed the issue in some detail I shall briefly address their submissions as a matter of courtesy.

76. Although the definition of 'entertainment' does not contain any reference to quality or quantity of entertainment it seems to me to be common-sense that there will come a time when even the provision of the items contemplated in that definition may become an advantage: the frequency and nature of that provided cannot be wholly disproportionate to the background against which such provision is made. It will be a question of fact and degree in each instance as to whether the acceptable level of social contact within a business relationship has been exceeded. If the same person or body were able to 'entertain' the same public servant on a completely unrestricted scale the purpose of the legislation would be defeated.

77. In any event, I am of the view that the phrase '(other than entertainment)' in sec 2(1)(d) qualifies only 'favour' and neither what is called 'any other service' nor, especially, any of the items or concepts expressed in sec 2(1)(a) to (c). If that had been the intention of the Legislature, the qualification would have appeared at the end of the subsection rather than interposed, in parentheses, between commas in a single sub-subsection. Support for this is to be found in sec 2(1)(f) where specific reference is made to preceding subsections.

78. It is unnecessary to explore, or decide, what is meant by 'favour' for the purposes of this trial. The nature of the conspiracy is expressed to be 'the extinguishment of liability to effect payment for meals, nightclub entertainment and escort services' which is dealt with under sec. 2(1)(c). There was obviously an obligation or liability on the part of the Accused to pay for that which he enjoyed (whether by way of food, drink, singing, companionship, use of facilities, ferry tickets and the like) to the supplier: the payments made by their hosts, released them from that obligation or liability. It is that release of liability to make payment that constitutes the advantage, not the fact itself of the hospitality.

79. In the circumstances it is clear that what each Accused received amounted to 'advantages'."

24It is not entirely clear from the Reasons for Verdict whether the judge found that the meals and drink consumed on the 'lavish scale' which the evidence revealed were proscribed, for his reference in paragraph 71 to it not mattering whether the meals themselves constituted entertainment was expressly a reference "in the context of Charge 3", and the Charge 3 meals were not nightclub meals, but the twenty six meals enjoyed elsewhere. It seems clear enough however, from paragraph 73, that he took the view that that did not particularly matter; nor did it matter particularly whether or not the provision of hostess services within the club, as opposed to the provision of "street fees" (by which we mean the fees for taking the hostess out of the club) constituted entertainment, for there was undoubtedly the provision of other benefits which, in his judgment, fell outwith the definition of "entertainment" and these, he said, were:

(1) the trips to Macau, because the packages purchased included ferry tickets and the use of a room in a hotel in Macau; and

(2) the payment for escort services, namely, for taking hostesses out of the club.

25Item (1) above is problematic for the charges never incorporated an assertion that any of the conspiracies' objectives was to accept advantages in the form of ferry tickets, or rooms at hotels. The advantages particularised were three only, namely, meals, nightclub entertainment, and hostess escort services (plus prostitution in the case of Charge 3). Mr McWalters concedes that, in so far as the conviction relied on that advantage - item (1) - as one targeted by the conspiracy, it cannot stand, given the particulars of the charges, and he does not seek leave to amend those particulars to this specific end. That being so, one is left, so far as the 'targeted' advantages are concerned, with one only; in other words, with a conspiracy to accept advantages, namely, 'payment release or discharge of the applicants' obligations or liabilities to pay for hostess escort services' in the form of "street fees", that is, the cost of taking the hostesses out of clubs.

The Residual Findings

26There has been an attack by the applicants on those findings of the judge which we see at paragraphs 76 to 78 of the Reasons for Verdict. That attack takes this form, that the judge misdirected himself:

"1.1 in holding that the definition of advantage pursuant to the Prevention of Bribery Ordinance, Cap 201 included drinks, food, singing, the company of hostesses and use of facilities" (that, we pause to note, must be a reference to the finding at para 78);

"1.2 in holding that the exclusion of 'entertainment' from the definition of 'advantage' was a matter of fact and degree in each instance as to whether the acceptable level of social contact within a business relationship had been exceeded" (we apprehend this refers to the comments, or findings, at para 76); and

"1.3 in holding that the exclusion of entertainment from the definition of "advantage" qualified only "favour" in Section 2(1)(d) and not "any other service" nor, especially, any of the items expressed in Section 2(1)(a), 2(1)(b) or 2(1)(c) of the Ordinance" (para 77). It is, strictly speaking, not accurate to refer to "sections 2(1)(a)(b) and (c) and (d)", since several of the various definitions within section 2 each carries paragraphs labelled (a)(b)(c) and so on. Therefore, we shall refer to "paragraphs (a)(b)(c) and (d)" to be read as the paragraphs thus lettered under the specific definition of 'advantages' in section 2.

27There are three points which, at this juncture, we make about the findings at paragraphs 76 to 78:

(1) They are, save in one respect, residual, by which we mean that the suggestion by the judge that the degree of entertainment was such as to take it beyond the scope of the definition of 'entertainment' in the Ordinance was irrelevant to his decision that ferry tickets and the rooms and the street fees were advantages; and that his decision that 'other than entertainment' qualifies only 'favour' and not 'services' was also irrelevant, given the narrow basis of the conviction. Counsel for the applicants correctly does not suggest that the taking out of hostesses from a club could fall within the statutory definition of entertainment. The judge founded the conviction upon an assumption (paragraph 73) of possible error in his conclusion that, in addition to the obvious instances of ferry tickets, rooms and escort services out of the clubs, the other alleged benefits were also advantages. So, when he says at para 73 that: "Even if I err in the view that there is evidence that what the Accused accepted in other instances were 'advantages'...", the reference to "other instances" is a reference to instances other than those which, in the same paragraph, he says are self-evidently advantages, namely, ferry tickets and, in the next, payments for taking out hostesses. In so far as the applicants suggest that para 78 of the Reasons for Verdict in its various references to food, drink, singing, companionship and use of facilities, reflect findings by the judge that all of these were proscribed advantages, we think that that is to misread what the judge was there saying. What he said in para 78 was not derogating from the narrow basis of the conviction (ferry tickets, rooms, street fees), but was addressing the question whether it had been shown that what had been accepted, whatever the specific benefit, was the extinguishment, as he put it (the charge did not in fact use that word), of liabilities; and he concluded that all those benefits were in the nature of an extinguishment of a liability on the part of the applicants. Whether that was correct is a matter to which we shall later turn.

(2) We do not, for reasons we shall provide, agree with the finding that in this case the benefits, whether the full panoply listed in paragraph 78, or merely the street fees to which Mr McWalters presently finds himself restricted, were properly categorized as the release of obligations or liabilities incurred by the applicants (this is the 'one [non-residual] respect' of the findings to which we refer at the outset of (1) above); and

(3) In so far as it might be contended, as some fall back position, that the 'residual' findings at paragraphs 76 and 77 are correct and that the respondent's concession to the contrary, to which we refer at [28(1)] below, ought not to have been made, we say that we agree with the submissions by counsel for the applicants that the learned judge erred in his construction of paragraph 2(d). Our reasons are later provided.

Concession and Amendment

28At an early stage of the hearing of this appeal, we were much exercised by the fact that the charges upon which the prosecution had proceeded, and upon which the applicants were convicted, had been framed as conspiratorial advantages under paragraph (c) of the definition for, in the first place, we were puzzled and concerned at the inclusion in the charges of 'meals' and of 'nightclub entertainment' when each appeared to us to have been expressly excluded by the Ordinance from the definition of 'advantage'. Not only did it seem to us, prima facie, that the prosecutor who had framed the charge had deliberately and inappropriately chosen paragraph (c) to circumvent a clear statutory exception, but that the judge's approach to the case was premised on too narrow a view of the breadth of the exception, as evidenced by his findings at paragraph 76 and 77 of the Reasons for Verdict. There was a further matter which had not been raised by the grounds of appeal, but which emerged from a consideration of the evidence and of the terms of paragraphs (c) and (d) of the definition, namely, whether there was a proper basis in this case for saying that any of the benefits were payments for obligations or liabilities incurred by the applicants. Quite how these various concerns were to be answered, and what flowed from them, if they proved well founded, was not then clear; but we voiced them, and Mr McWalters, for the respondent, considered them. As a result of his deliberations, there emerged two developments:

(1) He accepted on the respondent's behalf that 'entertainment' in paragraph (d) did not merely qualify or constitute an exception to "favour" but also to "service" and that, as he put it, entertainment was never intended to be an advantage for the purposes of the Ordinance, no matter how lavish or corruptly offered. He said that this concession applied to paragraph (c) as well, in respect, that is, of those benefits properly within the definition of 'entertainment', by which we understand him to mean that it is not appropriate to import, engage or categorize acceptance of entertainment as an advantage by couching it as the payment of an obligation or liability under paragraph (c). In short, he accepted that the acceptance of entertainment as defined by the Ordinance was not an advantage as defined and proscribed by the Ordinance.

(2) He applied to amend the charges. The power of the Court to do so in appropriate circumstances is not challenged. The effect of the proposed amendment is:

(i) to expunge references to "meals" and "nightclub entertainment", so that the sole particular of the advantage to which each conspiracy was thereby directed was "hostess escort services"; and

(ii) to describe that advantage in each case, not as payment release or discharge of an obligation or liability, but as a service or favour.

29Mr McWalters was, he told us, primarily motivated in his concession as to the proper construction of section 2, and the place within it of the entertainment exception, by the apparently unequivocal stand of the Acting Attorney General in the Legislative Council on 16 December 1970, as reported for that day by Hong Kong Hansard, when the Attorney informed the members of that Council that:

"The first amendment to this clause [clause 2] would have the effect of removing entertainment from the definition of advantage. This will mean that it will not be a criminal offence to accept entertainment, even if this is both offered and accepted for corrupt reasons."

Other passages are to similar effect, making it clear that even lavish entertainment was not intended by the promoter of the amendment to fall within the definition of 'advantage'; but that such would be covered by regulations governing the conduct of public servants. Mr McWalters, cognizant of that statement, felt it inappropriate to advance before this Court a different contention, and was, additionally, no doubt encouraged in that stand by the scepticism expressed by this Court in the course of argument as to the construction placed upon the relevant provisions of the Ordinance by the judge in paragraphs 76 and 77 of his Reasons for Verdict. In the event that the application to amend did not succeed, Mr McWalters wished to maintain his position that the provision of the company of hostesses within a club does not fall within the definition of 'entertainment', and, further, that the facts of this case and the terms of paragraph (c) are such that paragraph (c) was an appropriate umbrella under which to categorise the advantages accepted in this case.

Analysis

30The Court takes the view that the concessions made Mr McWalters were properly made, as reflecting the correct construction of the section; in other words, without regard to the statements by the Attorney General in 1970, although had there been the need to have recourse to Hansard, those statements would have carried considerable weight.

31We do not think that the construction of 'advantage' as defined in section 2(1) is as difficult as argument has suggested. It was pointed out that the exception "other than entertainment" appears only in paragraph (d) and is conjoined with "favour" and not "service", because there is a comma after "service"; so that a service which is in the form of entertainment is not exempted, but that a favour which is in the form of entertainment is. The argument would then necessarily travel to dictionary definitions of "favour" and "service", and to the prospect that those affected would be faced with having to divine, on each occasion when faced with entertainment, whether it be a favour or a service. Then it is said that had it been intended that entertainment never be an advantage, the exemption would have appeared not merely within the confines of paragraph (d) but as a proviso to the entire definition, as does the proviso for election donations. So the contention, as put in the respondent's written argument, was that: "Where there is evidence that the entertainment was not provided as a favour but as a service or in the form of one of the other categories of the advantage and where the evidence otherwise establishes the elements of a POBO offence, then that offence can be charged." Emphasis, said Mr McWalters, was to be placed upon the purpose of the Ordinance, which is to prevent corruption, an insidious cancer against which rigidity of attack is a necessity from which none should shy, to be reflected, therefore, in a purposive approach to the Ordinance. The principle that "in doubtful cases a penal provision ought to be given that interpretation which is least unfavourable to the accused" is one which applied only where there is doubt (DPP v Ottewell [1970] AC 642), and that principle does not displace the purposive interpretation which is required by section 19 of the Interpretation and General Clauses Ordinance, Cap 1 (R v Soo Fat-ho [1992] 2 HKCLR 114). It is unnecessary to have recourse to Hansard and to the statements of the Attorney-General in 1970 because the conditions precedent for doing so (Pepper v Hart [1993] AC 593) are not in this case met; for it is said that there is no ambiguity, and that the statements of the Attorney-General were not clear. Then there is the argument which we find at para 77 of the Reasons for Verdict in this case, the effect of which is to say that there comes a point where entertainment is so lavish and extensive that it must fall outside the definitions; in other words, as Mr McWalters wished to put it before his concession, it can no longer be said to be entertainment. HH Judge Gould's reasoning in R v Yu Ka-foo District Court Criminal Case 1134 of 1995, 25 June 1996, unreported, was that entertainment qualified only "favour" and where the "giver" of the benefit expected something in return, what was given could no longer be described as a favour. These, very broadly, were the arguments.

32Save for the proposition that there is no call for recourse to Hansard, we do not agree with these arguments. To construe the section in this way would be to introduce considerable uncertainty in the application of the Ordinance and, furthermore, would empower prosecutors with a choice of proceeding under paragraph (c) where the acceptance of the very same benefit, if couched as a favour under paragraph (d), would not constitute an offence. When one applies the enjoinder in section 19 to construe a statute purposively, one should assume that part of that purpose is certainty, not confusion. There is a principle that "a person should not be penalized except under clear law ... " (Bennion "Statutory Interpretation" 3rd ed. Page 673). If there is a choice between two interpretations, then the interpretation which leaves the individual, the public servant say, wholly uncertain as to when the line is crossed from legality to criminality, is an interpretation to be avoided. The court in Soo Ho-fat commented, at page 120, that there was in England no statutory provision equivalent to section 19 of the Interpretation and General Clauses Ordinance, Cap 1. That is so, but the principle of interpretation that the "sense of the words is to be adopted which best harmonizes with the context and promotes in the fullest manner the policy and object of the legislature" is a principle of interpretation in any event (see Maxwell on Interpretation of Statutes 9th ed. p 279, referred to in Gluchowska v Tottenham Borough Council [1954] 1 QB 439, 442) and does not sit uncomfortably with the rule against doubtful penalisation, as it is called in Bennion. The matter is put thus in Gluchowska:

"It is true that in penal as well as in other statutes words should be read in their widest sense if to do otherwise would result in failure to suppress the mischief aimed at by the legislation. At the same time, to use the words of Wright J. in London Country Council v. Aylesbury Dairy Co., the court 'ought not to do' violence to its language in order to bring people within it, but 'ought rather to take care that no one is brought within it who' is not brought within it in express language." (pp 443-444). (Emphasis added)

33It is as well, when considering the impact of the respondent's early submissions and of the judge's "residual" findings, were they correct, to recall the provisions of section 3 of the Ordinance by which the mere receipt by a public servant of a proscribed advantage is a criminal offence, requiring no bargain in mind, or anticipated quid pro quo, of the type found in sections 4 and 9. It is no answer, when analyzing that impact in that light to say, as Mr McWalters suggested, that the Chief Executive, and the Governor before him, has by notice given general permission for the acceptance of a host of advantages. The extent of the permission to be found in the Acceptance of Advantages Notice is not incorporated in the legislation, nor a matter for the sanction or disapproval of the legislature. The extent of permission, as opposed to the power to grant it, is by its very nature (see section 3) not fixed; it is not an integral part of the legislative provisions themselves. Looked at thus, we see that the interpretation for which Mr McWalters contended would mean that (but for the current extent of the permission granted) it would be open to the prosecuting authority successfully to prosecute the public servant for accepting a meal, or a dinner theatre invitation, if the prosecutor chose to frame the charge under (c), but not if he were to frame it under (d). That cannot have been intended. Nor can it have been intended that there would "... come a time when even the provision of the items contemplated in that definition [of 'entertainment'] may become an advantage ..." so that it will be "... a question of fact and degree in each instance as to whether the acceptable level of social contact within a business relationship has been exceeded" (para 76 Reasons for Verdict). This approach flies in the face of the Ordinance's definition of entertainment, a definition which is not thus qualified; and it is an approach which would lead to uncertainty, not simply in the context of business relationships but in the course of the ordinary life of, in particular, the public servant. Section 3 does not cover only business relationships. It covers that which a public servant may and may not accept from acquaintances and colleagues in his everyday life. It would, under this suggested approach, be an offence (but for whatever permission may be "live" at any given time) for him to accept lavish entertainment (which may be lavish by reason of its style on only one occasion, or lavish because it is repeated) even though reciprocal. Nor can it have been contemplated that payment by a host, properly so called, for entertainment of his guest, also properly so called, is the meeting of a liability contemplated by paragraph (c), for if that were so - and quite apart from the analysis of liabilities to which we later turn - paragraph (c) could always be used to circumvent paragraph (d).

34On the other hand, we agree that entertainment in paragraph (d) does not qualify "payment, release, discharge or liquidation of any loan, obligation or other liability" in paragraph (c), and that the draftsman must be presumed deliberately to have inserted the exception in (d) rather than as a proviso to the entire definition.

35How are these apparent tensions to be reconciled? There are, in our opinion, no tensions to reconcile, for the sensible interpretation is one that recognizes that the benefits specified in (a), (b) and (c) of the definition of "advantage" were not intended to be viewed as benefits in the nature of entertainment or payment for entertainment. It is sensible and correct to describe the provision of entertainment as the provision of a favour or, in some circumstances, of a service, rather than, say, a gift; and it is artificial to say that when a meal or other entertainment is provided, the recipient, but for the generosity of the provider, would have to pay for the entertainment himself and that, therefore, he is accepting the payment or discharge of a loan or obligation. Whilst we do not intend here to provide an exhaustive analysis, (c) is directed primarily at situations in which the recipient of the benefit has incurred a debt, and a third party discharges that debt on his behalf, or the creditor releases him from his contractual obligation. Mr McWalters says that the paragraph must also apply to prospective debts and obligations. We will assume, without deciding, that there are circumstances in which that might be so. But in all such circumstances it is easy enough to see what it is in the first instance that has been offered and accepted. So too with favours or services. Almost every favour or service provided will have incurred cost for the provider, but he nonetheless is providing no more than a favour or service, and there is no need to go behind that to see whether one can construct an advantage under another paragraph of the definition. Where entertainment is provided, there will often be incurred by the recipient guest no obligation or debt at all as between the guest and the establishment where the entertainment is to be, or has been, provided. If a host reserves a table in a restaurant for a number of guests, and the circumstances are such as to show that as between himself and the restaurant, the host is assuming liability to pay, where is the obligation or debt of his guests for which he is paying? It would be otherwise where, for example, X has incurred a liability for, say, a banquet which he has thrown or hosted and D pays off that liability. In such a circumstance it is artificial to say that D has entertained X. This is not such a case. We note in this case that the hosts (and the judge actually refers to them as "hosts" in para 78 of the Reasons for Verdict) were well known to the clubs; and it is more likely than not that, as between the clubs and the construction companies, the clubs looked to PW1 and PW6 to meet the bills, which may be why the applicants who often left first were not called upon by the club to pay before leaving. Be that as it may, there has been no analysis by the judge illustrating why he has decided that, despite being guests, the applicants had nonetheless incurred obligations or liabilities from which the applicants were released (and we would add - although the point is of less significance - that, in any event, "release" of an obligation flows from a creditor and not from a third party).

36The resulting fact is that the prosecutor chose, in his formulation of the charges, to couch the advantages inappropriately as payments for obligations and liabilities. This was significant because it permitted him, or so he thought, to include in the particulars of the advantages in respect of which the conspiracy developed, advantages which he could not have included had he correctly applied the definition. That is why we find "meals [and] nightclub entertainment" in the charges. Those benefits - two of the three specified - would not have been there had the advantages been described as favours or services, for counsel drafting the charges would at once have recognised that under the umbrella of "favours", they were not proscribed advantages. One may be forgiven for thinking that it was precisely to 'bring in' food and entertainment that paragraph (c) of the definition was deliberately chosen.

37It follows that in so far as the judge relied upon ferry tickets and hotel rooms as part of the object of the conspiracy, they were not alleged as such by the charges; and in so far as he concluded that the (remaining) advantages were received in the form of payments of, or release from, obligations or liabilities, he was in error. We agree that the taking out of hostesses from the clubs was not entertainment as that is defined in the Ordinance, but there was not the evidence, and certainly not the analysis, to support the finding that the applicants had themselves incurred obligations to the clubs to pay for these items. These were favours, or services, and should have been framed in the charge sheet as such. Payment for the companionship of hostesses within the club (upon which the judge did not seem to rely for the narrow basis of conviction) (see paragraph 74 Reasons for Verdict) but upon which Mr McWalters wishes to rely should his application to amend fail, suffers from the same lack of analysis and evidence in this case to show the applicants' liability to the clubs to pay. In any event, the evidence seems to suggest that this was part of entertainment provided at the same time as food and drinks.

The Question of Amendment

38The fact, on its own, that an advantage has, in a charge, been framed as the payment for a liability rather than as a favour, is not of itself fatal to a conviction. It is a matter of particularisation of the offence under section 4 of the Ordinance which, in many instances, will readily lend itself to amendment. The question is whether that is permissible in this case.

39The route by which this Court is empowered to amend a charge upon appeal is traced in HKSAR v Huynh Bat Muoi [2001] 4 HKC 643, 659-660, and it is conceded by Mr Whitehead SC that we have that power. But section 23 of the Criminal Procedure Ordinance, Cap 221 which, with section 79(1) of the District Court Ordinance, Cap 336 and section 13(4) of the High Court Ordinance, Cap 4, gives this Court that power, enables the court to make an amendment if "... necessary to meet the circumstances of the case unless, having regard to the merits of the case, the required amendments cannot be made without injustice."

40Mr Whitehead prayed in aid the proposition enunciated in R v Chen Ta-hoi and others [1986] HKLR 1189, and endorsed by the Court of Appeal in HKSAR v Chan Pun-chung and another HCMA 364 of 1999, 3 February 2000, unreported - both appeals from Magistrates' decisions - that, save in exceptional circumstances, a charge should not be amended on an appeal except in respect of minor particulars, as it would deprive an accused of the protection of section 27 of the Magistrates Ordinance, Cap 227 which requires the magistrate to provide leave, upon an amendment, to call or recall or further examine witnesses. The same principled approach should, in our judgment, govern amendments on appeals from other levels. In Chan Pun-chung Keith JA said:

" We recognise without reservation the need for persons who are facing amended informations to enjoy fully the protection afforded to them by section 27(3) and to be properly tried on the amended informations. Thus, the course suggested by the court in Fai Ma should apply to all those cases in which the amendment of an information by the appellate court would have had an impact on the trial before the magistrate if the amendment had been made at the trial. That would occur, for example, where the amendment changes what the prosecution would have had to prove or what would have amounted to a defence, or where the amendment might have resulted in additional evidence being called or evidence which might have been called not being called, or where the amendment might have affected tactical decisions which were made in the trial. That is not an exhaustive list of the ways in which amendments might have had an impact on the trial, but it illustrates why in most cases justice would not be done if an amendment could be made on appeal without at the same time a new trial being ordered.

But having regard to the reasons relied upon in Fai Ma for requiring an amended information to be heard de novo, we do not think that the Court of Appeal was addressing what would be appropriate if the nature of the amendment sought was such that the course of the original trial would not have been affected at all. In our view, the course proposed in Fai Ma was not intended to apply to such a case. Such a case would come within the category of "exceptional circumstances" referred to in Chen Ta Hoi. What, we ask rhetorically, is the point of ordering a new trial on an amended information where, had the information been amended during the original trial, the course of that trial, having regard to the nature of the amendment, would have been identical?

In the present case, had the information been amended - whether before, during or at the end of the trial - to charge the Appellants with conspiracy at common law, the course of the trial would have been identical. This case, therefore, is one of the exceptional cases in which a re-trial need not be ordered. We have earlier in this judgment directed that the information be amended. We now vary the magistrate's decision by setting aside the convictions on the first charge of statutory conspiracy, and substituting for the convictions on that charge convictions for conspiracy at common law."

The reference to Fai Ma was a reference to Fai Ma Trading Co. Ltd v Lai [1989] 1 HKLR 582, with its emphasis on the need to order a retrial if an information were amended on appeal.

41In this case, Mr McWalters argues that there is no need for a re-trial; that this is a case, such as Huynh Bat Muoi and Chan Pun-chung, where the amendments, had they been reflected in the original charges, or made at trial, could not possibly have affected the manner in which the trial was approached by either party, or the outcome. The offence charged remains the same, he says, an offence under section 4; the issues at trial were factual; and none of the factual findings made by the judge could have been different in the face of the proposed new particulars.

Conclusion

42We recognise that the judge's primary finding of guilt was on the narrow basis of two suggested advantages, namely, first, the Macau ferry trips and rooms; and, secondly, the payments of fees for taking out hostesses - discounting therefore the meals and the nightclub entertainment which were two of the three (four in the case of Charge 3) particulars; and that it was always open to the judge on the evidence presented to base a conviction on some, rather than on all, of the advantages particularised. We recognise too, that the mere change of description of the advantages to that of favours, rather than as payments of liabilities, is of itself neither here nor there. The difficulty, however is this, that because the prosecutor chose, wrongly as we find, to describe the advantages as liabilities, he enabled himself to proffer, in the charge, a range of advantages the subject of the conspiracy, so that it was that full range that the applicants were required to address as being the particular objectives of the conspiracy. Had the charges been correctly framed - and for present purposes we must proceed on the basis that the proposed amended charges represent the correctly framed charges - one cannot, we have concluded, dismiss the possibility that the defence might have approached their task differently by a more specific concentration on the sole alleged advantage targeted by the conspiracy, the taking women out of the club and, perhaps, by calling evidence on that disputed issue. True it is that the prosecution evidence as a whole would have been admissible to prove the more limited conspiratorial object now asserted, but there is some merit in the suggestion advanced by Mr Whitehead that it would have been open to the defence to contend that, whatever the pattern of meals and nightclub entertainment that developed, the limited number of occasions on which women were taken out - if that fact was then found against the applicants - might have evidenced spasmodic, or spontaneous, events and might therefore not have sufficed to found the conspiracy to accept those particular advantages. Where, on the other hand, the taking out of women is but part of a host of suggested unlawful objectives, the need to develop or advance such a contention is less obvious. Mr Whitehead appeared at the trial. He does not say that the conduct of the defence at the trial would inevitably have been different, but merely that it may have been different. We are loathe in the circumstances to second-guess that assessment.

43This is a case in which we would normally have been minded to allow the amendment and to order a re-trial. That, however, is not an acceptable solution, for the first applicant has now served the term of imprisonment imposed, and the second applicant has almost done so. Since we cannot properly order a re-trial, we will not permit the amendment to be made. In other words, this is not a case such as Huynh Bat Muoi and Chan Pun-chung in which it would be appropriate to make an amendment without ordering a re-trial. It follows that we grant the applicants leave to appeal against their convictions and, treating the hearing of the applications as the appeal, the appeal is allowed, and the convictions are quashed.

Addendum

44It is in the circumstances unnecessary, strictly, to address the several remaining grounds of appeal, save to say that none would have succeeded on the bases advanced. They attack the judge's findings of fact. So, for example, it is said that the judge should have rejected the evidence of Tam as to what occurred inside the nightclubs because what happened inside those clubs was not itself specifically supported by independent evidence. In our judgment, the judge was entitled not to require support for each aspect of Tam's evidence, and he was cautious enough in the approach he took. The attack on the finding that hostesses were taken out of the club, rather than their simply leaving the room within the club when the male client departed, is to ignore the reality and the sense of the evidence of those who were there; and the attack on the accuracy of bills issued for this service is to ignore, in most instances, other documentation which tallied with those bills. Finally, the suggestion that the conduct of the parties was equally consistent with the mere utilisation of funds available to construction company employees but only if third parties were entertained, without an ulterior corrupt motive, is to ignore the fact that there may be more than one motive for conduct, and is to ignore the reality of the case and the relationship of the parties involved. Whilst for the unusual reasons we have provided, the convictions must, we feel, be quashed, the evidence disclosed disgracefully inappropriate conduct on the part of these applicants.

Representation:

Mr Robert Whitehead, SC leading Mr Sanjay A Sakhrani instructed by Messrs Barlow Lyde & Gilbert for the Applicants (D1 and D2)

Mr I C McWalters, SADPP and Ms Winnie Ho, SGC of the Department of Justice for the Respondent