The Queen v. Kan Ping

DCCC000055/1974

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT VICTORIA

CRIMINAL JURISDICTION

CASE NO. 55 OF 1974

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Coram: Judge Liu, D.J., Q.C. in Court.

Date of Judgment:

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JUDGMENT

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1. The Accused is a retired driving test examiner with the Transport Department. On the 23rd February 1974, his home and safe deposit box were searched. Two days later, on the 25th February 1974, he was charged under S. 10(1)(b) of the Prevention of Bribery Ordinance, Cap. 201 which sub-section reads as follows: -

shall, unless he gives a satisfactory explanation to the Court as to how he was able to maintain such a standard of living or how such pecuniary resources or property came under his control, be guilty of an offence."

2. The material date at which the Accused is said to be in control of pecuniary resources or property disproportionate to his official emoluments was the day when his home and safe deposit box were searched, i.e. the 23rd February 1974. It would not be impertinent to set out verbatim below S. 10(2) of the same Ordinance: -

"10(2). Where a Court is satisfied in proceedings for an offence under sub-section (1)(b) that, having regard to the closeness of his relationship to the accused and to other circumstances, there is reason to believe that any person was holding pecuniary resources or property in trust for or otherwise on behalf of the accused or acquires such resources or property as a gift from the accused, such resources or property shall, until the contrary is proved, be presumed to have been in the control of the accused."

3. The Accused joined the civil service on the 29th October 1962 and retired on the 20th January 1973. On the 23rd February 1974, the Accused's total official emoluments stood at $205,946.41 comprising: -

4. At the close of the case for the prosecution, it was conceded that the Crown established prima facie "control" by the Accused over divers pecuniary resources and property held in his name or alias or for his apparent benefit. In the absence of clear evidence of the quantum of his other possible sources of income (e.g. stock trading profits, share dividends, bank interests and gold dealings profits) and even on the assumption that his expenditure was nil over this period of almost 11 years and 4 months, it was then virtually incontestable that the obviously disproportionate value of these conceded pecuniary resources and property would saddle the Accused with the task of giving a satisfactory explanation therefor. It is part of the Crown's case that some shares and bank deposits were not in the Accused's control at the material time, namely (1) half of the 400 shares of Jardine Matheson Company, Limited registered in the name of the Accused, (2) half of the 1,000 shares of Union Bank of Hong Kong, Limited registered in the name of CHAN Yam-kay, and (3) some salaries in his daughter's account No. 288-6-022058 with the Hang Seng Bank. As for the remaining pecuniary resources and property in the name of one LAU Chung, the Accused's wife, one LAU Kwai-yau (otherwise spelt as LAU Kee-yue), the Accused's brother-in-law, and one KAN Kwok-wah, the Accused's elder brother, I have held that at the close of the case for the prosecution but without a submission of "No case to answer", the Court is under no obligation to make a ruling as to whether the prosecution has established a case in any of these remaining pecuniary resources and property calling upon the Accused to give a satisfactory explanation and that if my ruling had been erroneous, I should have held that the Crown had established prima facie control against the Accused in each case. At the close of the prosecution's case, the evidence in respect to these remaining pecuniary resources and property was as follows: -

5. I am, as I was, satisfied beyond reasonable doubt by the evidence of the prosecution that the Accused had prima facie control of these remaining pecuniary resources and property set out in (1) to (8) above at the material time. Apart from matters establishing a nexus of these remaining pecuniary resources and property with the Accused, the close relationship of Madam LAU Chung, LAU Kwai-yau and KAN Kwok-wah with the Accused and the known circumstances in this case would provide good cause for invoking the statutory presumption under S. 10(2) of the Ordinance, and there is ample reason to believe that the Accused was in control of these remaining pecuniary resources and property set out in (1) to (8) above. With the exception of (i) a moiety of the 400 shares of Jardine Matheson Company Limited registered in the name of the Accused, (ii) half of the 1,000 shares of Union Bank of Hong Kong Limited registered in the name of CHAN Yam-kay, and (iii) the daughter's salaries, I am, as I was, also satisfied beyond reasonable doubt by the evidence of the prosecution that on the 23rd February 1974 the Accused was in prima facie control of all the other pecuniary resources and property as alleged. This was in fact conceded by the defence. It falls, therefore, on the Accused to satisfy me upon the balance of probabilities that there is a satisfactory explanation to each of these pecuniary resources and property so as to bring his proven assets within the reach of his official emoluments.

6. The word "Control" is "wide enough to include many types of possession which are not commensurate with full ownership". See Johnson Fear v. The Commonwealth (1). The relevant legislation under consideration in that case was inter alia Regulation 4(1) of the National Security (Supply of Goods) Regulations in Australia which referred to "the person who deals in or has control of any goods", and at page 332 of the judgment Williams J. observed that "a person who.... has control of goods need not necessarily be a person having the sole or even any proprietory interest in the goods." The majority judgment in Dollfus Mieg Et Compagnie S.A. v. Bank of England (2) was in favour of the construction that control "will cover the right to tell the possessor what is to be done" with the property. I am not unmindful of the fact that S. 10(1)(b) of the Prevention of Bribery Ordinance, Cap. 201 must be construed strictly but there is really no magic in the preposition used in the phrase "in control of". In the proviso to the very same sub-section, the phraseology is slightly modified to "under his control", and no significance seems to have been intended by the legislative choice of preposition in paragraph (b) of this sub-section which was designed to expose a corrupt civil servant from his ill-gotten gains. In my judgment, for the purpose of S. 10(1)(b), "Control" includes the right to possession and the right to direct the possessor what to do even without any proprietory interest.

7. This meaning of "Control" does not seem to be in conflict with the language of S. 10(2). In the absence of direct evidence of a trust, an agency, a bailment or a gift, the closeness of relationship with the accused and other circumstances may afford the Court reason to believe that a trust, an agency, a bailment or a gift exists, and such belief will give rise to a presumption of control. S. 10(2) does not exclude evidence of trust, agency or bailment from establishing "control", but it rather introduces a statutory presumption based on circumstantial evidence of a trust, an agency, a bailment or a gift. Naturally, the inclusion of a gift or circumstantial evidence of a gift as being capable of raising a rebuttable presumption of "control" would, in effect, cast a wider net for the Independent Commission Against Corruption.

8. The more extensive meaning of the word "control" would hardly work any injustice. An accused person who has the right to possession of pecuniary resources or property or the right to give directions therefor ought to be called upon to explain; little difficulty should be experienced by him in the process of giving a bona fide explanation, and any real obstacle would receive sumpathetic judicial consideration. I comment on the meaning of "control" merely out of respect to the arguments addressed to me. Here, there is sufficient evidence to establish or infer ownership in the Accused, and unless otherwise indicated, in this judgment the words "in the control of" denote ownership, immediate or inferred.

9. Save for Mr. CHAN Yam-kay, I accept the evidence of all the prosecution witnesses whose evidence is impartial and factual. The Accused has given evidence and called Madam LAU Chung, his wife, LAU Kwai-yau, his brother-in-law, LAU Man-wai, his wife's uncle, KAN Kwok-wah and KAN Puck-yau, his two brothers, KWAN Tung, the former manager of Liberty Trading Company, and NG Kam-pui, a partner of AU Wai-lam Company. At the request of the defence, Mr. CHAN Yam-kay (PW40) was recalled by the Court. I accept the evidence of Messrs. KWAN Tung and NG Kam-pui which explains in part the Accused's activities before he joined the civil service. I am not impressed by the Accused's evidence which is, in most parts, as evasive as it is unconvincing. Madam LAU Chung, Mr. LAU Kwai-yau, and the Accused's two brothers gave an equally poor performance. It is plain to see that none of them has the decency to come close to the truth on contested issues. From beginning to end, it was a conspiracy to deceive this Court, and I find them utterly unreliable. Mr. LAU Man-wai's recollection offers little assistance, and he was obviously at great pains of attempting to corroborate some of the evidence in this case. There was a pathetic display of loyalty and solidarity by these witnesses. Mr. CHAN Yam-kay is a close friend of the Accused. He joined the Hong Kong Government as a driving test examiner in 1969 and resigned in August 1972. On the contested issues, he was obviously biased, and I do not find him to be a truthful witness.

10. It is more convenient to begin with the Accused's bank accounts and deposits. As early as 1962, for receiving his Government pay he had an account opened with the Liu Chong Hing Bank which was closed and replaced by a savings account opened in January 1966 with the Choi Hung Estate Branch of the Chartered Bank. In December 1970, he opened a savings account with the Mongkok Branch of the Dao Heng Bank with a false address and in the name of an alleged assumed marriage name which he had never used for some 20 years. The purchase of 500 shares of the China Light and Power Company, Limited in or about 1972 was the only other known subsequent occasion on which this alias was used. The Accused explained that it was adopted in his marriage to Madam LAU Chung, but such explanation was unsupported by the Statutory Declarations seized at his residence. In his own Statutory Declarations for his aliases dated 25th November 1966 and 7th February 1974 respectively, the only alias referred to is "KAN Hon-yau". In the joint Statutory Declaration for proving his marriage dated 7th February 1974, there is a complete silence on the alleged marriage name of "KAN Hoi-yuen", to which his children's birth certificates also make no reference. Mr. KAN Kwok-wah's Statutory Declaration for proving the Accused's marriage to Madam LAU Chung has also failed to disclose this alleged marriage name. I am not satisfied that the Accused assumed this or any other name for his marriage. Furthermore, it is admitted that since his marriage in 1950 the Accused had never used this name until the opening of his Dao Heng Bank savings account in December 1970. I also cannot accept the Accused's explanation that the use of the false address in this savings account was unknown to him. I find that the Accused used or caused to be used the false address and the alias of "KAN Hoi-yuen" with a view to concealing his assets and the source thereof. In September 1972, he caused to be opened an account in the name of his daughter, KAN Wai-chun, with the Tsuen Wan Branch of the Hang Seng Bank into which funds from the Accused by himself or through his wife as well as his daughter's teacher salaries from September 1972 to July 1973 were deposited. In December 1972, he caused to be opened an account in the name of his son, KAN Kei-wai, with the Kwun Tong Branch of Hang Seng Bank. Apart from the daughter's salaries, these two bank accounts of the Accused's children were admittedly his. He retired on the 20th January 1973, but in fact he went on leave prior to retirement on the 1st October 1972. On the 10th January 1973, i.e. ten days before his official retirement date, he opened a current account and a savings account with the Kwun Tong Branch of the Hang Seng Bank. A fortnight later on the 24th January 1973, his wife, Madam LAU Chung, opened a savings account with the Tsimshatsui Branch of Hang Seng Bank. At the end of February 1973, he opened a joint account with Mr. CHAN Yam-kay with the Union Bank. In March 1973, his wife opened another savings account with the Mei Foo Sun Chuen Branch of Chartered Bank. In April 1973, he opened a further joint account with CHAN Yam-kay with the Kwun Tong Branch of the Hang Seng Bank. By the 23rd February 1974, this second joint account with the Hang Seng Bank had been closed, and the other joint account with the Union Bank had been inactive and left with a credit balance of 60 cents since mid February 1974; the son's account and the daughter's account had also been closed; the Accused's savings account in his alias with Dao Heng Bank had no longer been in use since August 1972, and his savings account with the Chartered Bank mainly for Government emoluments had also been dormant apart from pensions payments. On the 23rd day of February 1974, there were left four accounts operational, namely, the Accused's current account and savings account with the Kwun Tong Branch of Hang Seng Bank and his wife's two savings accounts one primarily for the mortgages with the Tsimshatsui Branch of the Hang Seng Bank, and one primarily for applications for new share issues with the Mei Foo Sun Chune Branch of the Chartered Bank, and in addition the Accused had five fixed bank deposits, and his wife had one. The Accused's explanation is: he had saved up about $42,855.08 at the end of 1962, and assuming the Accused kept his entire 1962 salary of $2,054.84 intact, his estimated savings were about $40,800.24 near the end of 1962; up to the end of 1970 he had savings of $86,566.97; by the end of 1972, he had saved up about $90,588.67 (i.e. his estimated savings of $90,021.67 as at the end of 1971 plus his alleged estimated savings of $576.10 for 1972), but in fact, from Exhibit "P135", and as subsequently admitted by the Accused, there were no savings in 1972, and instead the Accused overspent $4,989.32; therefore as at the end of 1972 he could have saved up no more than $85,032.35 (i.e. his estimated savings of $90,021.67 for 1971 less the sum of $4,989.32 overspent in 1972); from 1st January 1973 to 23rd February 1974, he received $18,262.53 from the Hong Kong Government, and his total expenditure for the same period was $73,806.30; therefore from 1st January 1973 to 23rd February 1974 there was again a deficit of $55,543.77; his total savings from his working income must be accordingly reduced thereby yielding a balance of $23,488.53 (i.e. $85,032.35 - $55,543.77). These figures illustrate the Accused's alleged savings from his working income at various times - approximately $40,800.24 before he joined the civil service in 1962, $86,566.97 at or about the time when he was preoccupied with the more sophisticated recreation in the local stock market commencing from the end of 1970, and $23,488.52 as at the 23rd February 1974. From the overall evidence, it is quite unacceptable that the Accused had any substantial legitimate savings at the time when he joined the Hong Kong Government in 1962. The Accused's disposition of his two shares in the Liberty Trading Company in 1960 thus voluntarily terminating a high interest yield investment is indicative that he had to resort to a comparatively meagre sum of $5,000.00. The Accused was not free from family responsibilities. In 1962, he opened an account with the Liu Chong Hing Bank, and it is inconceivable that he would have kept as much as $40,800.24 ready cash in hand. The Accused would have the Court believe that he was in the habit of keeping in his flat considerable sums of cash. I am far from being persuaded by his bare assertion that he had no confidence in banks. It is most extraordinary that his wife has never seen his alleged cash savings at home, and it is equally incredible that she was not even aware where they were kept. I find that the Accused had no or negligible savings at the time when he joined the civil service in 1962. However, in the Accused's savings account for his emoluments with the Choi Hung Estate Branch of the Chartered Bank, from its opening in 1966 to the end of 1971, there was a credit balance of $17,685.47, and the prosecution concedes that by the end of 1971 the Accused had saved $17,685.47. To this concession, I will revert later in my judgment. The Accused's total emoluments up to the 23rd February 1974 amounted to $205,946.41, and his total expenditure for the corresponding period from the 29th October 1962 to the 23rd February 1974 came to approximately $216,296.30. Therefore, it would seem that the Accused could not have saved anything from his official emoluments in the employ of the Crown. From this state of financial affairs for his entire civil service, the irresistible inference is that the Accused had also no savings from his legitimate working income for the period from the beginning of 1972 to the 23rd February 1974. This is a comparison of his total emoluments with his total expenditure over more than a decade from late 1962 to early 1974, and it would not be beyond the realm of possibilities that the Accused might have been able to set aside moderate funds for share investment at any given time, but such investment could not have been on any seizable scale. I find that there was no additional savings from the Accused's working income after 1971, and that the huge amounts of idle cash allegedly kept at home came from an unexplained source or sources. It ought to be pointed out that had the sum of $17,685.47 not been conceded by the prosecution. I would have found that the Accused had no or negligible savings from his official emoluments as at the 23rd February 1974. The possibility that the Accused might have subsidized his expenditure from share profits or other income leaving his official emoluments or a part thereof intact has little relevance. If a man lives above his means from his regular income, he cannot be truly said to have any savings, although he may be, from an extrinsic source, financially capable of meeting his extraordinary items of expenditure. The Accused made his debut in the local stock market in December 1970, and there is every indication that the said $17,685.47 could have been honest earnings spared by subsidy from stock profits or other income. The evidence is certainly inconclusive, and I accept, but not without some reluctance, the Crown's concession to the said $17,685.47. From the Accused's savings account for his official emoluments with the Choi Hung Estate Branch of the Chartered Bank, there was one withdrawal for an unsuccessful application for new share issue in October 1972, and, according to the Accused, the withdrawals of $6,200.00 in February 1972, $4,000.00 in April 1972, and $3,000.00 in August 1972 might well have been for the purposes of share investments. It follows that of this $17,685.47 savings in that account, only about $6,200.00, $4,000.00 and $3,000.00 could have been used in the local stock market. I am driven to the conclusion that apart from these and perhaps other trivial sums, there was no investment capital from an untainted source available for the Accused's alleged share activities. Of course, the above figures have not taken into account these alleged share activities of the Accused who explained that with his 1970 savings of about $86,566.94, he embarked on local shares investments, and that his profits in shares, share dividends, gold dealings, and bank interests were more than sufficient to explain the difference between the pecuniary resources and property in his control and his official emoluments. There is evidence that the Accused began to play the stock market at the end of 1970 and virtually became a full-time speculator after his retirement. In addition to the fact that we know not the source or sources of his capital, it is difficult to quantify his profit, if any, made in the stock market. The Accused's share activities may be described as follows:-

11. In conclusion, none of these alleged transactions is accepted to explain the pecuniary resources and property in the control of the Accused.

12. I turn next to the Accused's share dividends, bank interests and gold dealings.

13. The amounts for share dividends and bank interests are comparatively inconsequential. I would arbitrarily include all the share dividends for explaining the Accused's assets by reason that that Accused did at one time or another speculate in shares without capital and possibly with small capital from his savings account with the Choi Hung Estate Branch of the Chartered Bank and might have received some dividends therefrom and that since it is a laborious, if not an impossible, task to ascertain what, if any, these dividends were, it would be unjust to deprive the Accused of all of them. I exclude the bank interests in all the accounts found by me to have been primarily associated with the Accused's unexplained assets, but I would include the Bank interest in the Accused's savings account with the Choi Hung Estate Branch of the Chartered Bank for his emoluments, and it is set out in "D11" as $2,036.69. Interest on the daughter's salaries is unknown and would not be substanital enough to warrant a pursuit with painstaking diligence. As for the 100 taels of gold, from the Settlement Receipts Nos. 9247 and 9251 in "D1", apparently 70 taels were purchased with proceeds of sales of some shares. I accept that 5 taels out of these 70 taels were purchased for one LAU Chak-kong whose share of the profit was subsequently set aside for settlement. The source for the purchased price of these 65 taels which belonged exclusively to the Accused came from the proceeds of sales of shares in "D1" which related to part of the Accused's unexplained assets. The remaining 35 taels comprised 5 taels of Madam Lau's and 30 taels which, I find, belonged to the Accused. In all, I find that the Accused had 95 taels. The proceeds of 65 taels in the sum of $48,178.90 ($43,030.00 + $5,148.90) are admitted to be under the control of the Accused on the 23rd February 1974. The proceeds of the other 30 taels out of the 35 taels sold on the 18th February 1974 were inter alia deposited into the Accused's current account with the Kwun Tong Branch of the Hang Seng Bank. There is no evidence that the capital for these gold dealings came from any of the Accused's explained assets, and it is therefore excluded.

14. In the result, the Accused has satisfactorily explained his assets to the extent of $133,577.27 as follows: -

15. The expenditure for the period from 1st January 1972 to 23rd February 1974 is selected because all the expenditure previous to 1972 must have been taken account of in the Accused's $17,685.47 savings as at the end of 1971.

16. I turn next to the assets in the control of the Accused. The market value of assets, if arbitrarily taken as at the 23rd February 1974, may lead to absurdity. There is nothing computatively objectionable in adopting the market value prevailing at the material date in the Charge: an accused person should not run into any real difficulty in explaining the capital gain, but any capital loss as at such material date would be, in the absence of any satisfactory explanation, to the unjustifiable advantage of an accused person. What is so inherently unsavoury in adopting the market value prevailing at the material date in the Charge is that civil servants may be exposed to harassment at the peak of the market by the arbitrary selection of the material date for the Charge against him which could possibly put an innocent civil servant through a period of unwelcome publicity and anguish. In my view, the bona fide market value of the property at the date of its acquisition is the proper yardstick for measurement which has the advantage of eliminating uncertainty.

I. Landed Properties

17. In conclusion, the value of the properties in the control of the Accused at the material time was $297,485.00. I have ignored, for the purpose of calculation, the trivial sums for solicitors' fees and other attendant charges in the region of over $5,000.00.

II. Shares in the names of the Accused, LAU Chung and CHAN Yam-kay

18. In conclusion, the value of shares in the control of the Accused as at the 23rd February 1974 is $359,564.00.

III. Bank Accounts

19. On the 23rd February 1974, subject to the deduction of $10,495.85 the Accused had control of $31,966.87 from these (a), (b), (c), (d) and (f) accounts. In conclusion, $21,471.02 was in the control of the Accused at the material date.

IV. Fixed Deposits

20. In conclusion, the Accused had in his control $261,014.04 in fixed deposits at the material date.

V. $50,000.00 Shares in Mei Lun Restaurant

21. I do not propose to repeat the aforesaid undisputed facts in respect to this partnership shareholdings. It was disclosed in cross-examination that on the 11th or 12th October 1972 the remaining $20,000.00 capital contribution was also paid by another cashier order of Madam LAU Chung allegedly for KAN Kwok-wah. It is inexplicable why the first $10,000.00 had to be paid through Madam Lau on the 17th August 1972 allegedly for Mr. KAN Kwok-wah who had then at least $8,000.00 with the Accused in cash in the KAN Hoi-yuen's Savings Account with the Dao Heng Bank. The case for the defence is that Mr. KAN Kwok-wah left $40,000.00 with the Accused for share investments and that he was ultimately paid back about $53,100.00. Mr. KAN Kwok-wah told us that he paid the Accused for share investments $20,000.00 in cash through the YUE Mou-yee's account on the 15th September 1971 and a further $20,000.00 in cash into the KAN Hoi-yuen's account on the 30th October 1971, that he was at no time given full information by the Accused, that he was not at all concerned for some 9 months thereafter until June or July 1972, that he was repaid $50,000.00 in late 1972, and that the final account was not settled until some 16 months after the initial payments in January or February 1973 when Mr. KAN Kwok-wah was paid $3,100.00 odd. According to Mr. KAN Kwok-wah's evidence, in early 1973, he invested about $29,000.00 through the Accused ($8,000.00 for Safety Godown Shares, $6,000.00 for Wah Tai Estate Shares, and $15,000.00 for Overseas Trust Bank shares), but he was either given the share scrips or the proceeds of sales within a reasonable time after each transaction. I am not satisfied that Mr. KAN Kwok-wah did so invest. However, on his own evidence, it is difficult to believe that Mr. KAN Kwok-wah would have adopted a different attitude in an earlier similar investment. The alleged deposit of $40,000.00 by Mr. KAN Kwok-wah with the Accused for share speculation was in September and October 1971, but from KAN Hoi-yuen's account with the Dao Heng Bank, it may be observed that from the end of October 1971 to the middle of July 1972, there were no activities. It has never been explained satisfactorily or at all why Mr. KAN Kwok-wah would allow his alleged $40,000.00 to be left inactive for some 9 months. If in fact Mr. KAN Kwok-wah had personally invested about $29,000.00 through the Accused in 1973, his keen interest in and the prompt settlement of those alleged 1973 transactions would have been striking contrasts to his alleged 1971 dealings. The explanation from the Accused and Mr. KAN Kwok-wah of the presence of the annual statement of partnership account in the Accused's home was hopelessly naive. Although Mr. KAN Kwok-wah told us in his examination-in-chief that he received a copy annual statement of partnership account at the meeting of the Money Loan (Chit Fund) Association held on the 4th February 1974, when his evidence was tested under cross-examination, he said in no uncertain term that he attended the annual partnership meeting on the 15th January 1974, that at this meeting of the 15th January 1974 he was given "P10(1)", the annual statement of partnership account, that at the meeting of the 15th January 1974 he was able to calculate the chit fund contributions only by reference to a chit for the 17th Money Loan Association meeting, "P10(2)", which was in fact given to him on the 4th February 1974, that during the meeting on the 15th January 1974 he made certain calculations from the chit "P10(2)" on a piece of paper "P10(3)" and there and then stapled these three documents together, that he put them in his jacket pocket, that he had forgotten about these documents for some time until the 12th February 1974 when he took them out for the first time and showed them to the Accused and subsequently left them at his residence quite by accident. This cannot be the truth, as he could not have attached the chit "P10(2)" which was received on the 4th February 1974 to the annual statement of account "P10(1)" at the meeting of the 15th January 1974. It is obvious that the annual statement of partnership account must have been taken out from his jacket pocket after the meeting on the 15th January 1974, used for the calculations on the piece of paper, "P10(3)", and thereafter stapled together. The calculations on the piece of paper, "P10(3)", suggest that Mr. KAN Kwok-wah was accounting to his principal. It is plainly unacceptable that the net figure of $3,080.00 in the calculations "P10(3)" was for the purpose of Mr. KAN Kwok-wah's tax return, as $3,080.00 represents the balance of income after a capital investment in chit fund contributions which were not trade expenditure and could not have been, in any sense, taken as tax deductible. Total income less trade expenditure is the only conventional computation for tax return purposes. Having seen and heard the witnesses for the defence, I was no longer unexpectedly astonished by this exceedingly noval proposition that income less other capital investment could form the basis of taxable profit. I have also had the opportunity of observing Mr. KAN Kwok-wah in the course of his testimony, and I have come to conclusion that no weight whatsoever should be attached to his evidence. I have no hesitation in rejecting the evidence of the Accused, his wife, and Mr. KAN Kwok-wah and finding that the Accused is in fact the beneficial owner of these partnership shares and was on the 23rd February 1974 in control of them.

VI. Other assets of the Accused

22. These were admitted by the defence.

To summarise the above figures: -

23. I have found that the Accused has satisfactorily explained his pecuniary resources and property to the extent of $133,577.27. Therefore, it leaves unexplained $911,230.69 which is grossly in excess of the Accused's past and present official emoluments, and I find him guilty as charged.

Representation:

(1) (1943) 67 C.L.R. 314 at P. 324 per Rich J.

(2) [1950] Ch. 333.

(3) Criminal Appeal No. 810 of 1973, the judgment of which was delivered on the 15^th February 1974. Vide page 22 of the written judgment.

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT VICTORIA

CRIMINAL JURISDICTION

CASE NO. 55 OF 1974

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Coram: Judge Liu, D.J., Q.C. in Court.

Date of Judgment:

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REASONS FOR THE VERDICT

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It is distressing to have to pass sentence on a retired civil servant. It is undeniable that nothing short of a custodial sentence will be commensurate with the seriousness of this offence and that a strong element of deterrence must be reflected in the sentence. I do not find the sentence in the Hunt's case which was under S. 10(1)(a) of any particular assistance. You betrayed the trust on you, and you must have been consistently following a course of corrupt conduct which has unjustly enriched yourself but considerably damaged the image of the administration. There is absolutely nothing which may be said in your favour except, perhaps, your age and your state of health. I have taken into consideration that the pecuniary resources and property found to be in your contract may be confiscated and that you may be ordered to make a substantial payment to the Crown. I have also borne in mind that part of your unexplained assets is or may very well have come from share profits. In the circumstances, I would be failing in my duty if I were not to have you serve a long term of penal servitude. Taking all into consideration, I sentence you to a term of imprisonment for 2 ½ years.

Representation: