The Queen v. Walter Richard James Boxail
Read the full judgment text of DCCC 290/1980 on BabelCite. This District Court judgment.
1. The accused faces a total of 18 charges, the majority involving offences which come under the broad classification of corrupt acceptance and the remaining allege his participation in certain conspiracies designed to defraud the Hong Kong Telephone Company, Limited. For convenience I propose to consider the evidence as it relates to these charges in three categories although recognising that some of my findings will, of necessity, be relevant to more than one. The first group of charges with w
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DCCC000290/1980 IN THE DISTRICT COURT OF HONG KONG HOLDEN AT VICTORIA (SITTING IN KOWLOON) CRIMINAL JURISDICTION CASE NO. 290 OF 1980 -----------------
----------------- Coram: P.G. O'Dea, D.J. in Court. Date of Judgment : 15th May, 1980. ---------------------------------- REASONS FOR VERDICT ---------------------------------- Introduction 1. The accused faces a total of 18 charges, the majority involving offences which come under the broad classification of corrupt acceptance and the remaining allege his participation in certain conspiracies designed to defraud the Hong Kong Telephone Company, Limited. For convenience I propose to consider the evidence as it relates to these charges in three categories although recognising that some of my findings will, of necessity, be relevant to more than one. The first group of charges with which I will deal relate to the awarding and management of contracts for the cleaning of premises occupied by staff of the Hong Kong Telephone Company, Limited (here-inafter referred to as "the Telephone Company"). The second category concerns certain decoration and maintenance work carried out for the Telephone Company which is the subject matter of an alleged conspiracy set out in the 15th charge. The final group of four charges, again alleging conspiracies to defraud, are directed towards the awarding, execution and management of certain contracts for electrical instal-lation works carried out on behalf of the Telephone Company. Structure and Duties of Property Department 2. From the evidence and also from the admitted facts I am able to come to certain conclusions regarding the relevant duties and the structure of personnel within the Property Department of the Telephone Company, It is not clear exactly when this Department officially came into existence although it is sufficient for the purposes of this judgment to observe that it was recognised as such on 1st July, 1965. It was on that date that the accused was appointed as Property Manager, a position he retained until his dismissal on 2nd November, 1978. The defendant initially joined the Telephone Company on 1st May, 1962 as an Assistant Administrative Officer and it is admitted that amongst his duties was the supervision of the clearing contracts. The growth of the Telephone Company during the ensuing years not only saw the formation of the Property Department but with it additional duties for which this department became responsibe. Those which are relevant can be loosely listed as follows:-
3. There were of course many other responsibilities which this department was delegated or it assumed and numerous references were made to the fact that it became a sanctuary for a number of duties which did not clearly come within the sphere of other depart-ments within the Telephone Company. 4. In June 1967 YUNG Yiu-tong joined the department, initially as a Property Inspector but shortly after he became Assistant Property Manager, a title he retained until he was suspended in November 1978. His duties were not specifically defined although I find that he was delegated certain responsibilities in the fields of decoration, maintenance and re-fitting of premises and offices occupied or about to be occupied by employees of the Telephone Company. From the year 1973 he acted as Property Manager during those occasions when the accused was absent either on leave or for other reasons. Apart from those specific periods he was at all times responsible to the defendant. 5. WONG Hay-chi joined the Telephone Company in June 1962 as a clerk. At all material times he was the senior clerk employed in the Property Department and as such was responsible to the accused and to Yung. At some stage, and certainly well before the year 1976, the defendant delegated to Wong the supervision of most of the cleaning work carried out for the Telephone Company, although this was only one of his duties. 6. In addition to those named there were other more junior staff employed in the Property Department but the only other person who requires to be mentioned is TSOI Hung-yin who joined the Telephone Company in 1959 as a watchman. In 1970 he was promoted to Chief Watchman. A further responsibility of the Property Department was the supervision of watchmen employed by the Telephone Company and in furtherance of this Tsoi was required to report almost daily to WONG Hay-chi, who was presumably delegated this task by the accused. 7. The accused's immediate superior in the Telephone Company was the Company Secretary, Mr. Edward Hicks Wilson, who was also later to be appointed as Assistant General Manager (Administration). Mr. Wilson was in turn answerable to the General Manager. 8. The accused had, during the years, authority to approve expenditure of varying amounts. At first the figure was small but it gradually increased to $15,000 prior to his dismissal. Any expenditure in excess of his authority had to be passed to Mr. Wilson, or if it exceeded Mr. Wilson's authority to the General Manager. It is clear, from the evidence, that the majority of contracts relevant to these proceedings were in excess of the expenditure which the accused could authorise and thus were approved by more senior officers. General Observations as to the Evidence 9. During the course of the trial a large number of witnesses were called and before dealing with this evidence as it relates to the charges it would be convenient and avoid considerable repetition if I were to refer to a number of fundamental principles which I have applied to the admissibility and weight to be attached to some or all of such evidence. 10. I was always conscious of the fact that as the accused was without legal representation the danger of inadmissible evidence being left unchallenged at the time was always present. Similarly I was aware that the manner in which evidence might be adduced would not always be the subject of an objection. I endeavoured at all times to carefully monitor the prosecution evidence although as there were so many other matters that also demanded my attention. I could not promise complete success. As there are a number of conspiracy charges involved certain hearsay evidence was allowed on the grounds that it constituted an admission by a conspirator of an act performed in furtherance of a conspiracy. It is often the case that only when the evidence unfolds does it become clear whether or not the evidence in question does actually fall within that exception. There were also a number of witnesses whom the accused, quite properly in my view, invited to be led. 11. Needless to say any evidence which I now consider is not strictly admissible has been completely discounted in coming to my decision and such weight as is appropriate has been attached to any evidence that I now find may have been elicited as a result of an uninvited leading question. 12. A number of the witnesses clearly fall within the category of accomplices. The three principal witnesses namely YUNG Yui-tong, WONG Hay-chi and LEUNG Chi-wan together with TSE Fat, TSE Cho-wing, CHAN Tak-fai, HUI Kwok-leung, LO Wai-tak, WU Cheung-yip, LEUNG Cho-kwong and FUNG Kwok-hing are all named conspirators in the various offences charged and are to be regarded for the purpose of assessing their evidence, as accomplices. It is also apparent that a number of other witnesses must be regarded as persons who at a material time were in some way co-operating with other persons in the commission of an offence or offences, participis criminis. These include MAK Siu-wang, KWONG Kau, TSOI Hing-yin, TAM Cheong-hing, MAN Hing, YEUNG Kau, CHIK Wing and NG Yiu-chun. 13. When considering the evidence of each of these witnesses I have warned myself of the danger of accepting their evidence in the absence of corroboration. I have also taken into account other underlying possibilities which might prompt them to wrongly incriminated the accused not the least being, in the case of most of them, the desire to co-operate with the I.C.A.C. in the hope that they will avoid prosecution themselves. Whilst intending to con-sider individually the reliability of certain witnesses at a later time it remains uppermost in my mind that the whole of the evidence adduced by the prosecution directly incriminating the accused is built on a series of tainted witnesses, none of whom can corroborate or lend any credibility to another and each of whom must be regarded with the greatest suspicion as to his motives and general reliability. 14. I am satisfied that not one of those witnesses named comes within the ambit of section 22 of the Prevention of Bribery Ordinance which provides that a person giving a bribe may not necessarily be an accomplice. 15. I need hardly stress that, with one exception, the burden of proving all the ingredients of each and every charge falls on the prosecution, a burden which can only be discharged by my being satisfied beyond all reasonable doubt. The exception occurs only in the event of certain statutory presumptions arising when the onus of rebutting them is one for the accused to discharge on the balance of probabilities. These presumptions are provided for in the Prevention of Bribery Ordinance and I will refer to them when they become relevant. 16. There were a number of documents and records provisionally marked for identification purposes only. These were documents or records made by or on behalf of alleged co-conspirators and were only referred to by them to refresh their memories while giving evidence. These documents or records and their contents are not, in themselves, evidence against the accused and I do not propose to refer to them again during the course of this decision. Application of Independent Commission Against Corruption (Amendment) Ordinance 1978 to Those Charges Alleging Offences Committed Prior to 1977. 17. Section 18A of the Independent Commission Against Corruption Ordinance provides that the Commissioner shall not investigate alleged or suspected offences of corruption committed before 1st January, 1977. Three exceptions are then laid down although in this case only one is relevant and applies to:-
18. It is not disputed that the accused was interviewed by an officer of the I.C.A.C. on the 18th March 1977 but it is disputed as to what was said during the course of that interview. The question of what is meant by "an offence" is also in issue as the correct construction of this provision has a direct bearing on eleven charges all alleging offences of corrupt acceptance having occurred before 1st January, 1977. 19. The officer who interviewed the accused in March 1977, a Mr. Batty, based his evidence on certain notes which he made shortly after the interview was concluded. They were compiled some 15 to 20 minutes later with the assistance of another officer who was also present. The latter had subsequently left Hong Kong and was not available to give evidence. Mr. Batty indicated that the notes were based on his recollection of what was said during the interview. The accused did not refer to his version of the interview. when giving evidence but made it abundantly clear during his cross-examination of Mr. Batty that he disagreed with much of what was alleged to have been said. 20. Mr. Gregory, a solicitor who accompanied the accused to the interview and was present throughout was called to give evidence by the defence. He recalled a number of allegations being put to the accused, none of which form the subject matter of the present charges. When he was referred to a general allegation contained in Mr. Batty's notes to the effect that the accused was corrupt and obtained money from various sources he stated that he did not recall and was entirely satisfied such an allegation had not been put during the course of the interview. 21. I find no reason to believe that Mr. Gregory was being anything other than honest with the Court. He was, however, being asked to recall a conversation which occurred over three years before and as he himself believed that once the interview was concluded that was the end of the matter he had little reason to refresh his memory of the conversation. This is aptly demonstrated by the fact that although he also made notes at the time he destroyed them shortly afterwards. He agreed that he could not recall one of the specific allegations put to the accused despite the fact that it was the first to be put and was one which the accused himself did not dispute. 22. In my view the notes made shortly after the interview upon which Mr. Batty based his evidence must be accorded greater reliance. I reject the suggestion that they were only compiled after the accused's arrest in England to satisfy a request from his legal advisers and to provide evidence which might bring the accused within one of the exceptions to Section 18A. For these reasons I am satisfied beyond reasonable doubt that Mr. Batty's evidence relating to this interview is the correct account. 23. Notwithstanding this finding the position still remains that none of the allegations put at that interview specifically refer to an offence which now forms the subject matter of any charge presently faced by the accused. 24. At the interview the accused was informed that enquiries were being made into allegations concerning the Property Department. Then specific allegations of corruption were put followed by a general allegation that the accused was corrupt and obtained money from various sources. The question is whether such allegations are sufficient to bring the accused within the exception provided for in section 18A(1)(b) of the Ordinance. Is my mind they are as they bear sufficient proximity to the charges now brought to put the accused on notice at the time that he was being alleged of receiving corrupt money from various sources in his position in the Telephone Company. 25. If, however, a more rigid construction of this provision is to be applied it has also been argued that irrespective of whether the accused comes within the exception to Section 18A or not this Court is unable to look behind the consent of the Attorney General to institute the prosecution of the accused for these offences. It is relevant here to consider the judgment of the Court of Appeal in CHEUNG Sou-yat v. Reg.(1) which takes a comprehensive look at the nature of the office of the Attorney General in Hong Kong and the power of the courts to intervene or control the discharge of the functions of that office. In relation to Section 18A Huggins J.A. said:-
26. I am satisfied that this court is unable to look behind the consent to prosecute given by the Attorney General in order to ascertain whether the consent was or may have been based on evidence which was unlawfully obtained. 27. For the reasons given I rule that this Court must now consider whether or not the charges have been proved irrespective of the date on which they are alleged to have been committed. Charges which Relate to Cleaning Contracts 28. This category of charges can be sub-divided into two groups, firstly those alleging offences committed prior to 1st January 1976 when the cleaning firm employed by the Telephone Company was initially the Health Washing Company and latterly the Health Washing Company Limited. As from that date Quality Cleaners Company carried out cleaning work on contract for the Telephone Company. 29. The charges relevant to the first period are enumerated as the 1st and 3rd to 10th (inclusive). They are similar in nature and each relates to a particular year between 1966 to 1975. I was satisfied that sufficient particulars were disclosed to ensure that the accused was not prejudiced or embarrassed in his defence. 30. From the evidence I was able to find that at some time prior to the accused joining the Telephone Company the cleaning of exchanges and office premises was carried out by Health Washing Company. They were paid on a monthly basis after submitting an invoice. In 1961 a person named LEUNG Chi-wan joined Health Washing Company as a clerk and in later years became a partner in the firm. Because of his ability to speak some English LEUNG began to deal, on his firm's behalf, with the work carried out for the Telephone Company and as a result he met the accused. 31. Leung's evidence of certain meetings with the accused and the resultant course of conduct whereby he paid each month certain sums of money to him based on a percentage of the amount paid by the Telephone Company to Health Washing Company for cleaning services forms the basis of the charges which I am now considering. It is encumbent upon me, therefore, to examine the evidence of this witness carefully in the light of the observations I have earlier made con-cerning an accomplice's reliability and the dangers which exist. 32. This witness gave a lengthy account of his dealings with the accused and other employers of the Property Department. The circumstances of his initial meetings with the accused while reasonably clear as to where and what was said have been questioned because of his inability to remember when they took place and the conflict which arose as to who else was present. It was put to Leung that in his affirmation prepared for the purposes of the accused's extradition he clearly stated that the meetings took place in the Hilton Hotel in 1962. In his evidence Leung would only say that they took place sometime in 1962 or 1963. The significance of the year becomes apparent when the evidence of an employee of the Hilton was later adduced to the effect that the hotel did not open to the public until June 1963. This witness further indicated that at the second meeting a partner of Health Washing Company, MAK Yeung, was also present. This evidence was in conflict with an account given by KWONG Nau, also a partner in Health Washing Company, who clearly indicated that only ...(illegible) accompanied Leung to this meeting. I propose to refer again to these discrepancies when I weigh up the evidence of this witness as a whole. 33. LEUNG said that as a result of the meeting he began paying the accused a sum of money each month. These sums were generally calculated at 10% of the amounts paid to Health Washing Company by the Telephone Company. Leung handed the money, which was enclosed in an envelope, to the accused either in his office or at the site of the cleaning work. After some years he discontinued handing the money to the accused and instead gave it to WONG Hay-chi who was employed in the Property Department as Chief Clerk. The witness informed the Court that this came about as a result of the accused advising him that he was going on leave and that he was to pay the money to WONG Hay-chi. That arrangement continued even after the defendant returned until Health Washing Company eventually lost the cleaning contract at the end of 1975. 34. The witness described the method by which these payments were entered into the books of his company being disguised under the description of expenses or wages for casual labour. 35. KWONG Kau gave evidence of attending a meeting with Leung at the Hilton Hotel. He was there introduced to a person named Mr. Boxall. He was unable to understand the conversation as it was in English but on returning to his office he agreed to 10% of the amount received from the Telephone Company being given to Leung, an arrange-ment that continued until 1975. MAK Siu-wang, a director of Health "ashing Company Limited also referred to cash payments to the Telephone Company from his firm which had to be described as wages for casual labour in the company's books. LUK Po-ping, an employee of Health Washing Company, gave evidence that from about July or August 1974 she began keeping the books of the company. She received vouchers from Leung relating to payments for casual workers' wages and was surprised at the large amounts being paid out. This witness indicated that when her company lost the Telephone Company contract the amounts paid out for casual labour diminished. 36. Finally, there is the evidence of WONG Hay-chi who told the Court that several years after he joined the Property Department while the accused was on overseas leave Leung gave him money which he remitted to a bank in England the name and account number having been given to him by the accused prior to his departure. He indicated that he sent money to England at this time on two or three occasions. After the accused's return to Hong Kong he continued to receive payments about once each month, from Leung which he handed to the accused. This continued over a number of years and as time went on the amounts increased. He also agreed that about 1974 or 1975 he began receiving payments from Leung for himself. These ranged from $50 to $100. This witness estimated that by the time the Health Company lost the cleaning contract from the Telephone Company the amounts he was paying to the accused were between $4,000 to $6,000 each. 37. This evidence in its totality and if wholly accepted, establishes that at the accused's instigation he was to receive from Leung Chi-wan either directly or through Wong Hay-chi a sum of money which, each month, represented 10% of the amounts paid to the Health Company by the Telephone Company for cleaning services provided. These payments were disguised in the books of the cleaning company as being payments of wages for casual labour. The arrangement continued from sometime shortly after 1963 until December 1975 when the Health Company lost the contract. 38. I now turn to review the evidence which relates to the 11th, 12th, 13th and 14th charges. During the final stages of the Health Washing Company Limited's dealings with the Telephone Company an increasing volume of complaints were received as to the standard and quality of the work being carried out. Both Leung and Wong gave evidence that they were aware that as a result of these complaints it was likely that other firms would be invited to tender for the cleaning work of the Telephone Company and they agreed to form a cleaning firm for the purpose of carrying out this work. The firm of Quality Cleaners Company was eventually registered in late 1975 in the names of Leung's wife and a friend of WONG Hay-chi. Although there was no evidence from Leung as to any involvement of the accused in this firm, Wong has stated that the accused was to be regarded as a partner in the firm and was also to receive a proportion of the profits. Wong advanced the accused's share of the capital in the partnership and as a result of a tendering exercise carried out by the Telephone Company Quality Cleaners was awarded the cleaning contract as from 1st January, 1976. There was no evidence to suggest that the tendering procedure adopted was anything but fair and genuine and I must conclude that Quality Cleaners Company was successful because it submitted the lowest acceptable tender sum. 39. During the years 1976 and 1977 Leung has given evidence that 10% of the contract amount received from the Telephone Company was paid each month to Mr. Wong. Initially the payments were made in cash but late in the year 1976 they were made in the form of cash cheques drawn on the account of Quality Cleaners Company in the Bank of Communications, Kwun Tong sub-office. Leung said he was not sure who these payments were for. The witness produced a series of photocopies of cheques issued between the months of October 1976 and February 1977 which he identified as being cheques paid to Wong representing 10% of the contract amount received from the Telephone Company. 40. Wong gave evidence that during those years he received payments calculated at 10% of the turnover from income initially in cash and later in the form of cash cheques from Leung which he gave to the accused. 41. In February 1978 the evidence indicates that a chief watchman employed by the Telephone Company was asked to collect the payments from Leung and give them to Wong. This person, TSOI Hung-yiu, gave evidence that he met Leung and Wong at a restaurant early in 1978 where he was informed of this and subsequently he would arrange to meet Leung, usually at the end of each month, where he would be given an envelope containing one or more cheques. Sometimes he was required to cash the cheques before passing the payment on to Wong. He identified a number of cheques which were given to him by Leung some of which had the character Tsoi endorsed on the back. He identified these as his signature. 42. Evidence relating to the final charge in this category (i.e. 14th charge) has been adduced from Leung, Wong and to a lesser degree. Tsoi. It is admitted by the accused that he was on leave between 8th August, 1978 to 19th August, 1978 Wong told the Court that before the accused went on leave he collected $25,000 from Leung as an advance commission which was paid to the accused although it did not exactly represent the commission which would be due to him for the period of such leave. He stated that he changed most of this amount at the accused's request into sterling. Leung stated that he agreed to pay Wong $25,000 and identified five cheques dated 27th, 28th and 29th July 1978 totalling $25,000 which he said he gave to Wong. 43. Tsoi stated that he met Leung at a restaurant with WONG Hay-chi when Wong was to borrow $25,000 from Leung. He left, however, before the money was paid over and little weight can therefore be attached to this evidence. 44. Again, if all the evidence is accepted, it establishes that the accused, together with Leung and Wong, were involved in the formation of a firm which was successful in obtaining the contract from the Telephone Company for its cleaning work. During the course of the next few years the accused accepted payments from Leung through Wong based on a percentage of the contract sum payable monthly by the Telephone Company. In particular the accused accepted a sum of $25,000 from Leung around the beginning of August 1978 which was in the form of an advance on the monthly payments he had been receiving. I am satisfied that on the basis of this evidence being accepted it is sufficient to establish those charges which allege the accused of corrupt acceptance on account of his favouring Quality Cleaners Company. 45. If after considering all the evidence I am satisfied beyond all reasonable doubt that the accused accepted monetary advantages either in relation to Health Washing Company or Quality Cleaners, the presumptions provided for in section 11 of the Prevention of Corruption Ordinance 1948 and section 25 of the Prevention of Bribery Ordinance arise where applicable. It is clear from the evidence that the accused by the very nature of his defence has called no rebuttal evidence in the event that it was needed and accordingly any advantages or money proved to have been accepted or received are presumed or deemed to have been accepted or received as such induce-ment or reward as is alleged. 46. I am in some doubts that the prosecution, even on its own evidence, have proved that in the formation and subsequent activities of Quality Cleaners there was a conspiracy to defraud the Telephone Company. As indicated there is no evidence to suggest that Quality Cleaner's tender was the subject of any manipulation and the firm was apparently awarded the contract on the basis that it was the lowest acceptable tender. Each month the Telephone Company paid Quality Cleaners an amount equivalent to that contract price plus the cost of any agreed additional work. The fact that the price may have been calculated to accommodate certain corrupt payments to the accused may not, of itself, prove a conspiracy to defraud. Unlike the evidence relating to other contracts for decoration work and electrical installation there is not present here a deliberate attempt to conceal the fact that certain tenders are not what they appear to be. 47. I propose to resolve my doubts in the accused's favour and will dismiss that charge (i.e. 11th charge). Charge Which Relates to Decoration and Maintenance Contracts 48. The 15th charge alleges that the accused was a party to a conspiracy to defraud the Telephone Company in relation to a number of aspects concerned with decoration and maintenance contracts. 49. All the named co-conspirators gave evidence and I have no hesitation in finding that a conspiracy did exist which grew in size as time passed. Its early beginnings can be traced to the time YUNG Yiu-tong joined the Telephone Company in June 1967 as a Property Inspector. Prior to this time it appears that a considerable amount of the decoration and maintenance work had been carried out by the Telephone Company staff employed in the company's workshops. 50. WONG gave evidence that sometime in 1966 he set up a firm called Camelot Decorators which carried out a number of jobs for the Telephone Company using the services of a skilled painter employed in the company's workshops. Allegations were made by Wong that he inflated the actual cost of doing the work and passed on part of the inflated amount to the accused. As the activities of the firm known as Camelot are not encompassed by the conspiracy charge now being considered I do not propose to make any rulings on such allegations or take them into account further. It is sufficient to note that Camelot Decorators ceased to operate during the year 1967 owing to the dismissal of the painter who did the firm's work from the employment of the Telephone Company. 51. It was at this stage that Yung became active and it was his evidence that he and Wong formed another firm called Sun Lee Decorators registered in Yung's mother's name. Both Yung and Wong have given similar evidence as to the way in which Sun Lee Decorators operated. A person by the name of TSE Fat was introduced by Yung to carry out the actual work allocated to Sun Lee by the Telephone Company. TSE Fat employed a group of workers and each time work was to be carried out a price was determined which was always higher than the actual cost involved. After completion of the work the Telephone Company would pay Sun Lee Decorators and either Wong or Yung would receive the cheque. A lesser amount was then paid to TSE Fat and the balance or the amount by which the price had been inflated was retained. Both Wong and Yung have said that this balance was divided into certain proportions; the larger being the accused's share which was handed to him by Wong and the rest was divided equally between them. Yung indicated that the accused's share was 50% while Wong thought it was two-fifths but added that he was not certain about this. 52. Sometime later another firm was formed and named Wing Cheong Decoration Work Company. This seems to have been prompted by the increase in the work required to be carried out by the Telephone Company which had been expanding rapidly. Yung indicated that the accused had suggested or implied that another firm be available to do maintenance work. 53. Wing Cheong was registered by TSE Fat at Yung's request and although the same labour force was used to carry out the work a different procedure to that employed for Sun Lee was implemented. When work was to be done TSE Fat would indicate to Yung the cost of the work and Yung would calculate a higher amount which would be submitted to the Telephone Company. On completion of the job a cheque would be sent by the Telephone Company to Wing Cheong and TSE Fat would in turn p y Yung a sum equivalent to the amount by which the price had been inflated. This inflated balance had been so calculated, according to Yung, so as to enable him to pay the accused 10% of the contract price and retain a share for himself. On ach occasion Yung stated that he himself paid these moneys to the acused by way of cash placed in an envelope. 54. In about 1976 it was stated that it became the Telephone Company's policy to compare prices tendered by other companies and to introduce some competition for the maintenance and decoration contracts. Yung was infomed of this by the accused and after discussions with TSE Fat form ...(illegible) two new firms; one known as Kawa Construction and Deceration Company was registered in the name of Yung's godmother and On Hing Construction and Decoration Company in the names of two apprenties employed by TSE Fat namely CHAN Tak-fai and HUI Kwok-leung. At about this time or shortly afterwards a firm known as Man Hing Decoration Company allowed tenders to be submitted in its name for Telephone Company contracts although the evidence showed that the tender prices submitted in the name of Man Hing were always high enough to ensure that it was not a successful tenderer. 55. The situation had thus developed to a stage where four firms, Sun Lee, Wing Cheong, On Hing and Kawa each began tendering for the decoration and maintenance contracts offered by the Telephone Company. Each firm used substantially the same work force all of whom were employed by TSE Fat. As Yung told the Court it didn't matter which one got the contract as all tender prices were worked out beforehand by Yung and TSE Fat on the same basis as had been done for Wing Cheong when it was operating alone. The tenders, says Yung, were inflated to a sufficient extent to enable the accused to be paid 10% of the contract price and further smaller percentages being paid to both himself and Wong. 56. This was generally the way in which the system operated to the end. TSE Fat has given evidence which, while I must stress cannot corroborate in any way the evidence of either Yung or Wong, is consistent on all material matters with those two principal witnesses. So too with the other witnesses called and I am able to find from this mass of evidence a conspiracy formed and designed to defraud the Telephone Company over a number of years. 57. It is, however, not a conspiracy which necessarily required the participation and knowledge of the accused. 58. There are aspects which emerge from the evidence which are favourable to the accused and which I have also considered fully. Not least amongst these are the actions of the accused in inviting an independent company Interswiss Limited, to tender for a number of contracts sometimes successfully. An action which, if Yung is to be believed, would have the result of effectively cutting off a lucrative source of income. There is also his efforts to have installed a secure tender box which would again restrict the ability of Yung and others to manipulate tenders to their benefit. 59. What I have found from the evidence at this stage is no more than the existence of a conspiracy which I am satisfied operated in the manner described by the witnesses with the clear intent of defrauding the Telephone Company. The question of whether or not the accused was a party to the conspiracy I have found to be in existence depends upon a number of factors but principally rests on the weight to be attached to the evidence of YUNG Yiu-tong and to a lesser degree WONG Hay-chi and like his alleged involvement in certain corrupt activities involving cleaning contracts must remain to be finally determined when I consider the weight to be attached to the evidence of these principal witnesses. Charges Relating to Electrical Installation Contracts 60. The last four charges each allege a conspiracy to defraud the Telephone Company in relation to four contracts of electrical installation carried out on behalf of the Telephone Company on various floors of both Princes Building and the Tai Sang Bank Building. 61. The evidence as adduced by the Prosecution comes from a number of witnesses all of whom undoubtedly fall within the category of accomplices. It is, I think, not in dispute and in any event my finding that during the years 1977 and 1978 the Telephone Company decided to take additional office space in both the Princes Building and the Tai Sang Bank Building. There was a degree of urgency attached to this additional space and some of the electrical installation work was awarded without obtaining other tenders. 62. The evidence adduced discloses that the first work was required for the 15th floor of Princes Building. YUNG Yiu-tong approached a foreman employed in the Telephone Company workshops who had some responsibility for electricalmmaintenance work. This person, named FUNG Kwok-hing, was asked by Yung if he could recommended an electrical contractor to carry out the work. Fung in turn asked a fellow employee LEUNG Cho-kwong who referred him to a firm named Everbright Electric Company operated by WU Cheung-yip. It was said that Leung and Wu had been friends for many years. 63. Fung advised Yung of this and later was asked to arrange for Everbright Electrical Company to quote for the work. A price of around $10,000 was eventually submitted. Fung added a few hundred dollars to the quote and passed it on to Yung who also inflated the amount and asked Fung to get Wu to submit a tender for the larger amount. Wu gave evidence that he finally put in a price of $13,000 odd and produced the document which contained such a quotation. This quotation was accepted and after completion of the work Wu received payment from the Telephone Company. He banked the cheque in his firm's bank account and several days later paid a sum of approximately $3000 in cash to LEUNG Cho-kwong. LEUNG Cho-kwong gave evidence of receiving a sum of about $1,000 in cash from Wu which he handed to Fung. Fung said that he extracted the amount by which he had originally inflated the cost and paid the rest to Yung. Yung stated that he in turn paid the accused an amount equivalent to 10% of the contract price and kept some for himself. It is apparent that if LEUNG Cho-kwong and FUNG Kwok-hing were correct the amount of $1,000 received would not have been sufficient to enable the accused to be paid such a percentage. Without ruling, at this stage, as to whether the accused did receive any sum from this contract I much prefer the evidence of WU Cheung-yip when he assessed the cash payment as being around $3,000. 64. A similar procedure was adopted for electrical installation work on the 17th floor of Princes Building when Everbright Electrical again carried out the work after an inflated price was submitted. 65. The following year, 1978, the Telephone Company decided to take over 5 floors of the Tai Sang Bank Building. Wu estimated the cost of the electrical installation work at about $100,000 but was told by Fung to inflate this amount by $40,000 and submit a quotation to the Telephone Company. He was later informed that further tenders were required by the Telephone Company. He approached two electrical firms and on their letterhead stationary prepared two further quotations both higher than the one he had submitted under the name of the Ever-bright Electrical Company. The proprietors of both these other firms gave evidence that they had given WU Cheung-yip a sheet of their stationary. Everbright Electrical was duly awarded the contract and after receiving payment from the Telephone Company Wu paid a cash sum of about $40,000 to Leung who in turn handed it to Fung. The latter having deducted his share passed it to YUNG Yiu-tong who, if he is to be believed, paid the accused his agreed percentage. 66. A similar procedure was also disclosed as having been employed for the electrical work carried out on the ground floor and 2nd floor of Princes Building. 67. As in the case of the decoration and maintenance contracts I am satisfied beyond all reasonable doubt that the conspiracies to defraud the Telephone Company did exist as described in relation to the electrical installation contracts. I am also satisfied that such conspiracies can only be found to involve the accused as a party if the uncorroborated evidence of YUNG Yiu-tong is to be believed and accepted, not forgetting the warnings which I must heed as to the dangers of doing so. Existence of Corroborating Evidence. 68. As I have stressed throughout this decision the danger in accepting the evidence of accomplices in the absence of corroboration it is now incumbent upon me to consider whether the prosecution have adduced any evidence which could be accepted as corroboration. 69. I have carefully considered the evidence which relates to each and every charge alleging a conspiracy and I am unable to find anything which might be regarded as corroborating the evidence of any one or more of the witnesses involved. 70. As to those charges brought under section 4(2)(c) of the Prevention of Bribery Ordinance, Cap. 201 I must refer to section 21 of that Ordinance which provides that in any proceedings against a person for an offence under Part II which includes section 4(2)(c), the fact that the accused was at the time of or since the alleged offence either in possession of pecuniary resources or property disproportionate to his known sources of income or obtained an accretion to his pecuniary resources or property and for which he cannot satisfactorily account may be proved and taken by the Court as corroborating the testimony of any witness giving evidence that the accused accepted any advantage and as showing that such advantage was accepted or solicited as an inducement or reward. 71. A considerable amount of time was spent during the course of the trial in attempts to ascertain the accused's means by references to his standard of living, his investments and other general expenditure. The accused equally attempted to show that by means of share dealings and other forms of income he was able to satisfactorily explain any pecuniary resources which might be regarded as being disproportionate to his income or any other accretion to his pecuniary resources or property. 72. I first wish to deal with the evidence as it relates to the possible sources of regular income received by the accused. The principal source was, of course, the salary and related payments which he received from the Telephone Company. This was, fortunately, not in dispute and is set out fully in the memorandum of admitted facts. The accused also disclosed his association with a company operated in the United Kingdom by his relatives and referred to as I.M.C. Since 1965 he maintained that he had received a salary of £1,000 per annum from this company together with a commission on all sales made by the company in Hong Kong or the Far East which amounted to £3,000 to £4,000 per annum. 73. This income would add up to something in the vicinity of HK$40,000 to $50,000 per year and is not an insignificant amount. The fact that this income was paid to him by means of traveller's cheques given by a relative involved with the company and who fre-quently visited Hong Kong might seem to be somewhat unusual but the complete absence of any documentary evidence of any kind to support the receipt of this income casts considerable doubt on this evidence in the absence of an acceptable explanation. The explanation tendered appeared to be that attempts had been made to get the relevant records from the company in England without success. I cannot accept this explanation. The accused well knew that this trial would be deeply concerned with his means and the explanations which might account for them. The English company is operated by relatives of the accused and there was no suggestion that they refused to make any records available. There was ample time for documents to be made available for this trial. While not doubting that the accused had some association with I.M.C. and possibly received certain income as a result I am unable to find that it was anything like the amount suggested by the accused in his evidence. 74. I now turn to the sources of irregular income referred to during the trial. Again I am faced with an almost complete dearth of documentary evidence which might support any of the assertions made. There have been numerous references made to profits from share dealings but there is no concrete evidence which assists me in pinpointing when, how or what these profits were derived from. This may, to some degree, be explained by the extremely informal manner in which the accused and his investment adviser, Mr. Bayliss, operated. It could also be attributed to the fact that the accused seems to have preferred dealing in cash rather than by cheque. Much has been said of an investment group named T.G.I.F. of which the accused was a member. A number of witnesses were called who were also members. Despite this the Court was never informed as to exactly what, if any, were the profits realised by this group and the gains individual members received. 75. The court is left with vague references to profits from share dealings generally unsupported by any records or documents which one would expect stock-brokers and investment advisers to possess in the course of their business. 76. Turning now to the evidence directed at the accused's expenditure during the relevant years certain conclusions can be drawn. During the years 1971 to 1978 an analysis has been prepared of the accused's current account with the Chartered Bank. His official salary from the Telephone Company has been measured against incoming funds from other sources. Also his expenditure as reflected in his bank statements has been categorised over those years. I was invited by the accused to discount this analysis as being an inaccurate record which contained at least one fundamental mathematical error. I have not deemed it necessary to comply with this invitation but have approached the analysis with caution bearing in mind that it is only a document prepared for the prosecution by someone who was setting down what he believed to be the various categories in which incoming and outgoing funds represented. 77. Certain items of expenditure during the relevant years were put to the accused as to outgoings on such things as club bills, supermarket accounts, servants wages and other payments. While the figures themselves were not challenged I accept that some of the items such as payments to hotels and clubs in respect of theatre parties were substantially reimbursed to the accused at a later date. Nevertheless, taking into account other normal expenditure not reflected in accounts or bills, I am satisfied that the accused was not far short of living up to his official salary from the Telephone Company. 78. Evidence was given that between March 1973 and October 1978 the accused gave to Mr. Bayliss a total sum of $364,167. In 1976 the accused either alone or with his wife purchased land in Spain for £12,210 although this was subsequently sold. As I have found that it has been proved that the accused's official salary was almost entirely used to meet his outgoings the question arises as to the addition source which would enable him to invest such a large amount with Mr. Bayliss. 79. As indicated I do not believe that his income from I.M.C. has been shown to be nearly as much as the accused indicated. The inability of the accused to do other than make vague references to profits from share dealings does not, to my mind, constitute a satisfactory explanation in itself. I do not believe that moneys inherited by his wife formed a significant addition to the accused's means and am left in the position of ruling that he did have in his possession pecuniary resources disproportionate to his known sources of income for which he has not given a satisfactory account. 80. This ruling enables me to take that fact as corroboration to the extent to which it was proved of the evidence of certain witnesses that the accused accepted an advantage as an inducement or reward in respect of those charges brought under the Prevention of Bribery Ordinance Cap. 201. 81. The application of this ruling to section 12 of the Pre-vention of Corruption Ordinance 1948 which applies to the first four charges now remaining is not so clear. I have not been in a position to consider the accused's means in relation to his known income prior to 1973 and as these alleged offences relate to the years 1966, 1968, 1969 and 1970 I do not consider it proper to take my earlier findings into consideration when deciding on whether these charges have or have not been proved. It is also correct to say that the evidence given as to the offences charged under the Prevention of Corruption Ordinance 1948 remains uncorroborated. Evidence Directly Incriminating the Accused 82. From the evidence so far considered I have found as proved the existence of a number of conspiracies designed to defraud the Telephone Company. The accused's participation in these conspiracies and the corrupt activities alleged must be proved by the Crown beyond reasonable doubt and it principally relies for this on the evidence of three witnesses, YUNG Yiu-tong, WONG Hay-chi and LEUNG Chi-wan. 83. Yung pleaded guilty to a charge of conspiring to defraud the Telephone Company and was sentenced to a term of imprisonment, which sentence he was still serving when he gave evidence. He was in the witness box for nearly two days during which time he gave evidence, which if it is correct, would place the accused squarely in the conspiracies relating to decoration and maintenance and also electrical installation contracts. His evidence pointed not only to the accused's involvement and knowledge of the manipulations of the conspirators but also to his knowingly receiving sums of money calculated at a certain percentage of the contract prices. 84. The possibility must be considered that Yung had reasons to wrongfully incriminate the accused. He might well have thought or, indeed, the suggestion could have been planted in his mind that by doing so he would receive more lenient treatment. These considera-tions equally apply to Wong and Leung. 85. It was suggested that these witnesses may net have foreseen when they made such false allegations that the accused could be brought back to Hong Kong to face trial and that they would have to repeat them to him face o face. 86. These ...(illegible) a number of other possible motives are directly relevant when considering the weight to be attached to this evidence. I am mindful also of certain discrepancies which arose as a result of the evidence given by these witnesses. Leung clearly indicated that is was MAK Yeung who accompanied him to the Hilton Hotel to meet the defendant. KWONG Kau says that he went with Leung. It is, perhaps, pertinent to remember that these witnesses were talking of an event that occurred over 15 years before. If such a meeting never took place then it would be probable that Leung and KWONG Kau have colluded together to invent its occurence and it is inconceivable that they would have made such a fundamental error. I believe that Leung made an honest mistake when he said MAK Yeung was present. I am also satisfied that a meeting did take place and found KWONG Kau's evidence that this was the first and last time he had been inside the Hilton Hotel convincing. 87. The other discrepancies are of a more minor nature and were not, in my view, such so as to discredit the witnesses or cast reason-able doubt on any material fact. 88. LEUNG Chi-wan was, for reasons unknown to me, never prosecuted. Was this in return for his promise to incriminate the accused? This again is a factor which must be taken into account. 89. In the face of all these underlying possibilities do I accept the evidence of LEUNG Chi-wan, YUNG Yiu-tong and WONG Hay-chi, each being uncorroborated and mindful, therefore of the dangers in doing so. 90. It is difficult to record why one believes or disbelieves any individual. Often it is not what the witnesse said but the way in which he said it. A person's demeanour in the witness box is a valid and essential means of judging where the truth lies. I notes with each of these three witnesses a certain reluctance to give evidence which directly incriminated the accused and yet they displayed a ready enthusiasm to agree with meet other matters put to them by the accused in cross-examination. It might be validly argued that this reluctance could be attributed to the fact that few persons would enjoy facing an accused and making false allegations of an incriminatory nature. 91. This was not the impression that I gained from my observa-tions of these witnesses. Their long associations with the accused, and in the case of Wong and Yung his seniority, had led them to respect his power and position and be wary of upsetting him. This attitude had not abated and as witnesses they were required to dis-close what they knew of the accused's involvement; a task which they obviously still found somewhat disconcerting. They were not, to my mind, witnesses who were either enthusiastic or untruthful, in incriminating the accused. 92. Yung and Wong were both convincing witnesses. Neither was prepared to make guesses or indulge in wild estimates but preferred to stick to the facts as they knew them. Leung, was if anything, holding back on evidence which involved the accused. His evidence that he was not sure to whom the payments made by Quality Cleaners to Wong representing 10% of the contract price, were to eventually go to was somewhat unrealistic in view of the fact that he had been paying similar amounts to the accused whilst employed by Health Washing Company. 93. Turning to the accused I observed him to be an extremely intelligent and shewd man. He conducted his own defence and when giving evidence anticipated many difficulties well before the average person could have. Having observed his capabilities and insight during the course of this trial I am unable to accept that he would not have been as equall perceptive while carrying out his duties in the Telephone Company. I find it highly improbable, therefore, that the intrigue and plotting which was going on around him could have escaped his attentions. He was ready to point to a number of instances where he took steps to some wasteful or unnecessary expenditure by his company. Is it likely that the same person would close his eyes and accept as competitive tenderers small side-door firms who did little more than repair home-appliances for a $100,000 contract? 94. I am satisfied beyond all reasonable doubt that the evidence of Leung, Wong and Yung is honest reliable and accurate and that their accounts of the accused's involvement in corrupt acceptance and the conspiracies to defraud the Telephone Company are truthful and I accept them as such. 95. It is inevitable in a lengthy trial such as this that many points are raised which could be said to favour either the prosecution or the defence. While I have taken then into account, to record and comment on every one in this decision would have rendered it so unwieldy and lengthy as to be impractical. 96. My finding would have been identical even without the corroboration which exists as a result of my puling which invoked section 21 of the Prevention of Bribery Ordinance. 97. I find all the remaining 17 charges proved.
Representation: (1) (1979) Criminal Appeal No. 16 (unreported) IN THE DISTRICT COURT OF HONG KONG HOLDEN AT VICTORIA (SITTING IN KOWLOON) CRIMINAL JURISDICTION CASE NO. 290 OF 1980 -----------------
----------------- Coram: P.G. O'Dea, D.J. Date of Judgment : 15th May, 1980. --------------------------------------------------- REASONS FOR SENTENCE --------------------------------------------------- The facts as I have found proved reveal that the accused was prepared and did use his position in the Hong Kong Telephone Company to corruptly and criminally better himself financially. I was able to observe from the evidence that the Telephone Company could provide a lucrative source of income for any firm or company that was fortunate enough to receive regular work from it. It was this factor which the accused exploited to the full, at first on his own and later with the assistance of two subordinates employed in the same department. By introducing these two men into the possibilities for enrichment which he had seen existed he recruited two faithful lieutenants who readily set about establishing ways and means by which they could not only reap rewards for themselves but continue to ensure that their overseer was also adequately com-pensated. The fact that a number of these schemes were profitable to the detriment of the company employing him only adds to the accused's gross abuse of the trust which was placed in him. It is also reprehensible that the defendant who only a few days after learning that one of his subordinates who he had originally involved in his corrupt activities was being questioned by the I.C.A.C. should turn his back and abruptly flee from the colony. The extent and evils of corruption in Hong Kong became patently evident a number of years ago and due notice was given that it would no longer be tolerated and offenders would be dealt with harshly. Despite this the accused continued to accept corrupt payments knowing full well what the consequences could be. It is not possible to gauge accurately just how much the accused has gained from his illegal activities. From the evidence it is apparent that it runs into hundreds of thousands of dollars. As to the question of sentence I believe we are dealing with three categories of offences. The first relates to a series of charges which involve the corrupt acceptance of amounts related to cleaning contracts held by Health Washing Company and latterly by Quality Cleaners Company. The second involves a conspiracy to defraud the Hong Kong Telephone Company over the awarding and execution of decoration and maintenance contracts and finally the four conspiracies dealing with electrical installation work. Concurrent sentences of two years imprisonment will be imposed on each charge brought under the Prevention of Corruption or Prevention of Bribery Ordinance. The conspiracy which is the subject of the 15th charge will merit a term of imprisonment of one year. The final four charges will be the subject of concurrent sentences of one year's imprisonment. Unless otherwise stated all terms are to be served consecutively making a total sentence of four years imprisonment.
Representation: |