Wu Chun Lung and Others v. The Queen

HCMA000710/1984

Criminal law - gambling - 2 appellants convicted of both principal and alternative charges - whether all convictions or only alternative convictions should be quashed - weight given to irrelevant matters - statutory reversal of burden of proof and statutory presumptions - whether appellate Court entitled to assume when Statement of Findings silent that the correct standard has been applied -Held 1. Where convictions entered on both alternative charges on that ground as a matter of law one only should be quashed; 2. Appellate court is entitled to assume where non-direction as distinct from a misdirection that the magistrate has applied the correct standard of proof; 3. On other grounds convictions quashed as unsafe and unsatisfactory - Sections 3, 5, 6, 15, 18, 19, 23 Gambling Ordinance, Cap. 148

BETWEEN

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Coram: Deputy High Court JudgeCruden

Date of Hearing: 30 January 1985

Date of Judgment: 14 February 1985

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JUDGMENT

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1. The Kwun Tong Club Ltd., the 2nd Appellant in these proceedings, occupies premises situate at 25-27 Yan Shum Lane, 1st Floor, Kwun Tong. On 4th July 1984 when the police entered those premises, they found present all the other appellants together with two defendants who have not appealed. All these persons were subsequently arrested and charged with various offences under the Gambling Ordinance, Cap. 148. They later appeared in the Magistrate's Court in Kwun Tong where after trial, they were convicted of the offences with which they were charged.

2. The 1st appellant was convicted of operating a gambling establishment contrary to Section 5(a) of the Gambling Ordinance and of permitting premises to be used as a gambling establishment contrary to Section 15(1)(a). The 2nd Appellant was convicted of having control of a gambling establishment contrary to Section 5(b) and of permitting premises to be used as a gambling establishment contrary to Section 15(1)(a). The 3rd to 15th Appellants were each charged with one offence, namely gambling in a gambling establishment, contrary to Section 6. From all those convictions the appellants now appeal.

3. I will deal first with the position of the 1st and 2nd Appellants. Both those appellants were charged with and convicted of two offences each. However, they were each charged with those offences in the alternative. The 1st Appellant was charged with operating a gambling establishment and in the alternative with permitting premsies to be used as a gambling establishment. The 2nd Appellant was charged with having control of a gambling establishment and in the alternative of permitting premises to be used as a gambling establishment. The learned Magistrate while convicting each of these appellants on both the first and the alternative charges they respectively faced, only imposed sentences on the first charges, which he described as the substantive charges.

4. The first ground of appeal in respect of the 1st and 2nd Appellants was twofold. It was first submitted that the learned Magistrate only had jurisdiction to convict on one of the two alternative charges and should not have convicted on both. Where offences are charged in the alternative I accept, as a matter of law, that convictions may only be entered on one of the alternative charges. Normally where the charges are defended but conviction is entered, the appropriate charge will not be evident until the evidence has concluded. Counsel for the Crown conceded that the 1st and 2nd Appellants should only have been convicted of one charge and submitted that the appropriate charge in each case was the first charge.

5. However, Counsel for the appellants went on to advance, as the second limb of the first ground of appeal, that in the particular circumstances of this appeal, both convictions entered again each of these two appellants should be quashed. This further submission was based on the ground that neither the notes of proceedings nor the statement of Findings contained any indication that the 1st and 2nd Appellants accepted or admitted facts which supported such convictions. In that event, it was submitted, where a lower Court erroneously convicts a defendant on both alternative charges, then all those convictions and not only one, must be quashed on appeal.

6. This submission was based on the decision of the English Court of Appeal in R. v. Cummerson (1968) 52 Cr. App. R. 519. In that case the appellant had been convicted by a jury of two offences under the Road Traffic Act 1960. The two counts on which the appellant had been convicted had not expressly been brought in the alternative but the Court of Appeal held that the subsequent count was merely a repetition of the prior count in different terms. The jury should therefore have been directed that if they convicted on the prior count, they would not be required to deliver a verdict on the subsequent count.

7. The Court of Appeal treating the indictment as including two alternative counts, held that a conviction should only have been entered on one of those two counts. However, the facts of that case produced more difficulties than those relating to the narrow issue of alternative verdicts. The Court of Appeal strongly criticised the wording of the two counts. Widgery L.J. in delivering judgment stated:

"As an effective means of conveying information these two counts can scarcely be beaten. In the result this Court has found it very difficult to decide precisely on what the prosecution was relying."

8. Indeed, the manner in which the counts were drafted and the unfortunate way in which the trial proceeded, which I infer included the misdirection of the trial Judge, led Widgery L.J. to go on to declare:

"... this Court would not regard the verdict of the jury as safe or satisfactory except in so far as it was supported by facts which the appellant clearly accepted and admitted in the course of her evidence. The Court would not support any conviction which depended upon a verdict of the jury in the face of a denial by the appellant, having regard to the way in which the indictment was framed, and to the general conduct of the matter."

9. Counsel for the appellant urged that while in this appeal, unlike a jury's verdict, there is a Statement of Findings giving the learned Magistrate's reasons for verdict, it is still unclear from that statement what evidence he relied on in respect of each of the alternative charges on which he convicted. More importantly, the appellants had not at any stage during the trial "clearly accepted and admitted" any facts which supported the convictions. In those circumstances I was invited to apply the Court of Appeal's decision and quash all four convictions.

10. This submission was attractively advanced and was never really grappled with by the Crown. Before going on to analyse it further, it is useful to consider the course ultimately adopted by the Court of Appeal. After making the general statement of principle, that in regard to the circumstances it recited, a conviction on either of the alternative counts should not be upheld, it went on to quash the conviction on the subsequent count but upheld the conviction on the prior count. The Court was able to arrive at that conclusion by holding that the prior count charged an absolute offence and that the facts giving rise to that offence were uncontested. As the offence did not require mens rea, any evidential denials were insufficient to invoke in favour of the appellant the general principle the Court of Appeal had earlier enunciated.

11. Counsel for the appellant before me recognising that in R. v. Cummerson only one of the two convictions was in the event quashed, sought to distinguish that qualification to the Court of Appeal's judgment, by pointing out that neither of the 4 charges on which the first two appellants were convicted, is an absolute offence and that mens rea had to be established in each. Accordingly, in view of the appellants evidential denials all 4 convictions should be quashed.

12. In my view the Court of Appeal's judgment does not go that far. A consideration of the judgment of Widgery L.J. makes it clear, that even if the other offence had not been absolute, the mere fact that convictions had been entered on each of two alternative offences would not, by itself, result in both convictions being quashed. The conclusion that two such convictions would not be upheld was clearly reached only after taking into account the several important factors mentioned in the judgment. These included the poor drafting of the counts; the doubt as to which evidence the prosecution was relying on in relation to those counts; and the judge's misdirections. It seems to me that it was the exceptional cumulative effect of all those factors, which led the Court of Appeal to hold that in such circumstances, in the absence of clear admissions by an accused, both convictions would be unsafe and unsatisfactory. Strictly, of course, in those circumstances one conviction would be wrong in law and the surviving conviction would be unsafe and unsatisfactory.

13. In the present case there are a number of differences and far fewer difficulties. The charges were clearly framed and expressly brought in the alternative. The potential evidential difficulty, of which evidence was relied on in respect of each charge, did not arise. There was no jury and the magistrate sitting alone has given his written Statement of Findings which disclose his reasons for verdict.

14. As a matter of law it was open to convict on one only of the two alternative charges. I reject the appellants submission that in accordance with R. v. Cummerson the convictions on all four of the alternative charges are wrong in law. The first ground of appeal that all 4 convictions should be quashed therefore fails. At this stage it would be premature to determine which particular convictions on the alternative charges should on this ground be quashed. For that will depend on the evidence which falls to be considered under the next ground of appeal.

15. The second ground of appeal was that the convictions were unsafe and unsatisfactory. This ground of appeal applied not only to the 4 convictions imposed on the first two appellants but also the convictions entered against the 3rd to 15th appellants of gambling in a gambling establishment contrary to Section 6. The submissions made in support of this second ground of appeal were advanced under three separate heads.

16. The first head was that the learned magistrates finding that the gambling was unlawful was based on an evaluation of extraneous and irrelevant matters. It was pointed out that in his Statement of Findings the learned magistrate in finding the gambling to have been unlawful had taken into account the fact that the 1st Appellant, when the Police entered the premises had told the 3rd to 15th Appellants not to say anything; had wrongly accepted statements made by the 7th Defendant and the 6th Appellant to two police officers as evidence against all the appellants and not merely against the respective makers of those statements; and had drawn an adverse inference from the fact that during the prosecution evidence the 7th Defendant, who has not appealed, absented himself from the trial. I accept that the learned magistrate erred in including these findings as grounds for holding that the gambling was unlawful.

17. The second head was that the learned magistrate failed to consider properly or in any way at all whether the gambling observed was lawful. The general thrust of Counsel for the appellant's submission was that at the trial not only the learned magistrate but also Counsel who appeared for the prosecution and defence Counsel had proceeded under the fundamental misconception that in Hong Kong all gambling is unlawful. Certainly that was the general position until 1977. However, the enactment of the Gambling Ordinance in 1977 introduced major changes. While Section 3(1) affirmed that gambling generally is unlawful the Ordinance provided that in the 7 specified circumstances set out in Section 3, gaming or betting are lawful. One of those exceptions, which may be relevant for the purposes of this appeal, is contained in Section 3(2) which provides:

"(2) Gaming is lawful if the game is played on a social occasion in private premises and is not promoted or conducted by way of trade or business or for private gain of any person otherwise than to the extent of a person's winnings as a player of or at the game."

18. The Gambling Ordinance while on the one hand introducing new species of lawful gambling goes on in Part IV to provide procedural assistance in the prosecution of persons suspected of being involved in unlawful gambling. Section 18 provides that in any proceedings for an offence under Sections 5, 7, 9 or 10 the burden of proving that the gambling was lawful is on the defendant. So the burden rested on the 1st and 2nd Appellants to establish, under the first of the alternative charges they faced, that the gambling was lawful.

19. Section 19 provides that in the circumstances therein set out it shall be presumed, until the contrary is proved, that the premises are a gambling establishment, "Gambling establishment" is in turn defined in Section 2 as including premises opened, kept or used for unlawful gambling. One of the factual circumstances which raises the presumption is where gambling equipment is found on premises entered pursuant to an authorisation under Section 23(2)(a).

20. The learned magistrate found that when the police officers entered the premises the 3rd to the 8th Appellants were seated at two tables playing mahjong including the use of chips. The 9th to 16th Appellants were also in the premises and were aware that the 3rd to 8th Appellants were playing mahjong with chips. The learned magistrate further found that the 1st Appellant was also present.  The police officers had entered the premises pursuant to an authorisation under Section 23(2)(a). The door to the premises was opened by the 1st Appellant for the police officers without any delay.. In addition to observing the two tables of mahjong, the prosecution evidence was that the 7th Defendant stated that the different coloured chips represented different sums of money and the $8 was drawn from each player as commission by the 1st Appellant. The 6th Appellant also told the police the chips were equal to money and that commission of $8 per round was paid by each player to the 1st Appellant. None of the other persons present made any admissions.

21. The 1st Appellant gave evidence stating that he was a director of the 2nd Appellant and the Club had been established for families and friends. He accepted that mahjong equipment was on the premises but denied that any unlawful gambling took place. The Club, he alleged, supplied Television, newspapers, Chinese chequers and refreshments. The prosecution witnesses agreed that some of these facilities were supplied. In relation to the mahjong played the 1st Appellant stated that he did not charge for tiles and took no profit. He only charged for refreshments.  He further stated that when mahjong was played the players took turns as banker and that only members were admitted to the club.

22. The 1st Appellant was the only witness called by the defence. He denied any knowledge that the chips represented money. The learned magistrate found it was difficult to place credence upon the 1st Appellant s evidence. After reading the evidence this conclusion is not surprising. The 1st Appellant's evidence was generally a blanket Rave denial of any matters which he may have inferred were material. However, it may be noted that under the species of gaming lawfully permitted by Section 3(3) if mahjong is played a fee may be charged for tiles and the players may gamble for money provided the game does not involve playing against a bank by one or more players exclusively of the others and the game is not promoted for the private gain of any person otherwise than to the extent of a person's winnings as a player. Mahjong may similarly also be lawful played for money under Section 3(2) but under that provision a fee may not be charged for tiles.

23. Counsel for the appellant pointed out that in his oral judgment the learned magistrate only held that the presumption operated against the 3rd to 15th Appellants. I was invited to accept that the magistrate considered that the presumption did not apply against the 1st and 2nd Appellants, It was submitted that as these appellants were convicted without invoking the presumptions, if the evidence itself did not establish the offences then there was no need to consider on appeal whether the presumptions had been rebutted. It was conceded that the presumptions were invoked against the other appellants.

24. The difficulties the 1st and 2nd appellants face on this submission are at least twofold. I do not find that the learned magistrate considered the presumptions did not apply. In any event they operated as a matter of law, once the magistrate found that gambling equipment was found on the premises. Secondly, quite independently of any of the Section 19 presumptions, once the 1st and 2nd Appellants were charged under Section 5, the burden passed to them under Section 18 of proving that any gambling was lawful.

25. The combined effect of Sections 18 and 19 is that the burden rested on all the appellants to prove that the gambling which occurred was lawful. In determining that issue the learned magistrate was obliged to consider the whole of the evidence. In addition to considering the evidence of the sole defence witness it was of course also open to the magistrate to find from the prosecution evidence, that elements of that evidence might assist in discharging that burden. The crucial question was whether, on the whole of the evidence, the 1st Appellant had discharged that burden.

26. If the 1st Appellant received, as alleged, commission of $8 per round from each player, the gambling was unlawful. The 1st Appellant denied receiving the commission or any other sums in relation to the mahjong games for private gain. The prosecution evidence to the contrary was the evidence of the police officers who stated that the 7th Defendant and 6th Appellant had made that allegation. The learned magistrate was entitled to accept the evidence of the police officers that those statements were made. However, these statements were apparently not made in the hearing of the 1st Appellant.  Although I note the learned magistrate's comment that in the event that as he had heard the 1st Appellant later giving evidence, he was not concerned with whether the 1st Appellant heard the 7th Defendant's and 6th Appellant's statements.

27. Clearly, those statements were evidence against the makers but not against the 1st Appellant - Archbold (41st Edn), 859, 860, 957; Cross on Evidence (4th Edn.) 447, 449. On the issue of whether the 1st Appellant received commission or other private gain the sole admissible evidence in respect of him was therefore his own denial. The learned magistrate was entitled to reject that denial and infer that commission was paid. That finding would have been sufficient for him to find that the burden had not been discharged by the 1st Appellant and to hold that the charge against him under Section 5 had been established. However, in reaching that finding he was obliged wholly to ignore the statements made by the 7th Defendant and the 6th Appellant.

28. In attacking that finding Counsel for the appellants submitted that the fundamental misconception as to statutory recognition of lawful gambling affected the whole approach of the magistrate to the evidence. It was submitted that the evidence clearly established that the 2nd Appellant premises were private in terms of Section 3, yet this important fact did not appear to have been directly considered. I noticed that Counsel for the prosecution submitted to the magistrate that there had been no evidence that the 2nd Appellant was exempted from registration under the Societies Ordinance. However, while that fact would have been very relevant to an attempt to establish lawful gaming under Section 3(3) it would not be relevant to a similar attempt under the different provisions of Section 3(2).

29. Further evidence of a wrong approach, it was submitted, was the reference in the Statement of Findings to the premises being those of a social club and the rejection of that possibility. Counsel pointed out that the criteria for lawful gambling under Section 3(2) do not include a requirement that the gaming must be played in a social club but the quite different requirement that it be played on a social "occasion."

30. The third head of the second ground of appeal was that learned magistrate had failed to indicate the standard of proof placed on the appellants to satisfy the learned magistrate that the gambling was lawful. The correct standard of proof was, of course, the lesser standard of the balance of probabilities.

31. Counsel for the appellant acknowledged that generally an appellate Court was entitled to infer that a professional magistrate would apply the correct standard in such fundamental matters unless the other circumstances suggested otherwise. Here it was submitted the learned magistrate had already procedurally erred in convicting the first two appellants of both of the alternative charges so it was open to the Court to hold when the Statement of Findings was silent on that issue, that it was unsatisfied whether the correct standard had been applied.

32. I was referred to Ng Man-ken v. The Queen Cr.App. No.256/82 where a conviction was quashed on the ground that the Statement of Findings did not indicate that the magistrate was aware of the need to look for corroboration of the evidence of young children: It was held that it was not appellate practice, in the absence of an express indication by the magistrate, to assume that he had applied the proper relevant principle of law.

33. I recognise that there are some other appellate decisions which also have not been prepared to make similar assumptions in favour of professional magistrates. However, here I am dealing with standards of proof which are more fundamental concepts than the varying and more complex principles relating to matters such as corroboration. In this more fundamental area the wider appellate practice where there is no express misdirection but rather a non-direction, is to make such assumptions in favour of a trial judge or magistrate. Examples of the latter practice are R. v. Tam Shik-lam Cr. App. No. 752/74; R. v. Ngo Ngan-ting Cr. App. No.1065/75; R. v. Shui-sing (1980) H.K.L.R. 310 C.A.

34. I accept that in the Statement of Findings there is no express reference to the standard of proof the magistrate considered rested on the appellants. However, the record does show that the learned Magistrate made a minute that a closing submission of Counsel for the defence, was that the presumption had to be rebutted on the balance of probabilities. When later the learned Magistrate recorded that the 1st Appellant had failed to satisfy him that the gambling was lawful, I am well satisfied that he applied the correct standard, namely that the 1st Appellant had failed to satisfy him on the balance of probabilities. This final ground of appeal is therefore rejected.

35. The question whether the convictions were unsafe and unsatisfactory consequently narrows down to the findings I have made in respect of the first and second heads of the second ground of appeal.  In considering those grounds I also recognise that the direct evidence of the alleged unlawful gambling in this case was minimal. In addition the prosecution evidence was not supported by any evidence led from a police officer under Section 20(3) on the issue of illegality. Fact in each case necessarily differ, but evidence of that kind was found to be material in R. v. Yuen Chi-ming Cr. App. No.214/81 in providing a basis for inferences of illegality to be drawn by the magistrate.

36. I have already found that the learned magistrate wrongly relied on extraneous and irrelevant matters in reaching his finding that the gambling was unlawful. I further take into account the fact that on the crucial issue of whether the 1st Appellant received private gain by way of commission or otherwise, the magistrate's rejection of the 1st Appellant's denial does not stand in isolation but has to be considered in the light of his earlier acceptance of the statements of the 7th Defendant and 6th Appellant. The latter statements, as a matter of law, were not evidence against the 1st Appellant.

37. The cumulative effect of these matters satisfies me that the conviction against the 1st Appellant for either of the alternative charges he faced would be unsafe and unsatisfactory. I arrive at the same conclusion in respect of the 2nd Appellant.

38. The Crown submitted that ever if all the convictions against the first two appellants were quashed, the convictions of the other appellants under Section 6 had to be considered separately. I agree. However, when I turn to consider the other appellants convictions of gambling in an gambling establishment the same principal issue of whether the gambling was unlawful remains relevant. In view of my earlier ruling I also consider the findings that the other appellants gambled in a gambling establishment are unsafe and unsatisfactory.

39. I record that I have, as requested by the Crown, considered whether even if the convictions were unsafe and unsatisfactory I should exercise my wide discretion under Section 119(d) of the Magistrates Ordinance and still uphold the convictions. I am satisfied that this is not a proper case to exercise that power. All the appeals are therefore upheld and the convictions quashed.

Representation:

Mr. A. Sanguinetti with him Mr. T. Iu instructed by David K.W. Tsang & Co. for appellants.

Mr. J.S. Conyngham, Senior Crown Counsel, for the Crown.