The Queen v. Wong Kwok Wah and Others
Read the full judgment text of CACC 46/1984 on BabelCite. This Court of Appeal judgment was delivered on 14 May 1984.
1. The appellants were convicted of conspiracy to defraud and on 7 charges of attempting to obtain property by deception, contrary to section 17 (1) of the Theft Ordinance. They were each sentenced to 12 months imprisonment and now appeal against both conviction and sentence. Two co-defendants pleaded guilty to all the charges and have not appealed.
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CACC000046/1984 Magistrate's duty to make findings of fact.
BETWEEN
Coram: Hon. Bewley, J. in Court Date: 14 May 1984 ___________ JUDGMENT ___________ 1. The appellants were convicted of conspiracy to defraud and on 7 charges of attempting to obtain property by deception, contrary to section 17 (1) of the Theft Ordinance. They were each sentenced to 12 months imprisonment and now appeal against both conviction and sentence. Two co-defendants pleaded guilty to all the charges and have not appealed. 2. No loss was actually incurred by the victim of the alleged fraud, the General Electric Co. of Hong Kong Ltd., as the matter was reported to the ICAC before any payments were made. 3. The Court is concerned, in particular with the Lift Maintenance Division of the company, which employs over 100 workers and is managed by Mr. Tony Lau (PW3). His immediate subordinate is 2nd defendant (2nd appellant), who is a Senior Maintenance Engineer. He runs the whole department administratively and operationally, including the allocation of sub-contracts and workloads. Most of his work is in the office, rather than the field. 4. 1st defendant (1st appellant) is an Engineer, who is in charge of maintenance of lifts and the allocation of jobs to supervisors and foremen. He is also authorized to place work to sub-contractors. 5. There are 3 maintenance supervisors, 3rd defendant, 4th defendant (3rd appellant) and another man unconnected with the case. These men, with the exception of 4th defendant, have been with General Electric a relatively short time. 4th defendant, however, has been an employee for 20 years. Perhaps for this reason he and 1st defendant work directly to 2nd defendant, whereas 3rd defendant is subordinate to 1st defendant. 6. The gravamen of the charges is that, between 1st May and 9th August, 1983, these 4 defendants, together with 5th defendant, the registered proprietor of Glorious Engineering Co., conspired to defraud General Electric by falsely representing that certain sub-contracts had been carried out by Glorious, whereas in fact the work had been done by General Electric employees. 7. Invoices were submitted by Glorious, which particularized the work done and included the date and location. These invoices were chopped and initialled on the back by 2nd defendant to the effect that the work had been completed and accepted. Purchase orders were drawn up accordingly and submitted to Mr. Lau for approval. Believing that the work had been carried out by workers employed by Glorious, not his own employees, Mr. Lau signed these orders, but the ICAC intervened before any payments were made. 8. A mass of General Electric work records and other documents was put in evidence, but the only document found at the registered address of Glorious was a book of invoices, of which only the first seven had been issued. These were the invoices submitted to General Electric. 9. Apart from Mr. Lau, the most important prosecution witnesses were 12 workers, who described their work on the sites in question. Most were unable to testify to precise dates but they could remember what sort of work they had done. They all assumed they had been working for General Electric on those occasions; those who were asked about it said they had never heard of Glorious Engineering. 10. Also significant were the cautioned statements made by all 3 appellants to the ICAC. Those of 1st defendant were challenged on the grounds that they were not made voluntarily, but were admitted by the magistrate on the voir dire. The other statements were not challenged. 11. The main difficulty in this appeal lies in the magistrate's statement of findings, or rather in the absence of significant findings of fact. 12. The trial lasted 7 days. After an adjournment the magistrate gave a short oral judgment, in which his only finding was that the case against all the defendants was proved. 13. His statement of findings occupies 19 pages of typescript and consists almost entirely of a recital of the evidence. He does not indicate what evidence he accepts or what conclusions he draws. It is true that the defendants did not give evidence, but the Court is left in the dark as to what view he took of the prosecution witnesses, in particular those General Electric workers who gave evidence, and as to what, if any, inferences he drew from the cautioned statements. 14. The only actual findings of fact seem to be that (1) a reference to a 'Mr. Wong' in NG Mok-chi's evidence was to 1st defendant; (2) the work records show all the workers worked for and were paid by General Electric; (3) these records show that they never worked for any other company and had not heard of Glorious Engineering (though these are findings that certainly cannot be made merely from a perusal of the work records); (4) there was a common design: he does not say what it was. 15. There are no findings relating specifically to the individual charges and defendants, but nevertheless the magistrate concluded that the case had been proved against all the defendants on all 8 charges. 16. S.114(b) of the Magistrates Ordinance outlines the duty of a magistrate when notice of appeal has been given, thus:
17. Counsel for the Crown submits that the evidence is overwhelming and that the findings of fact necessary to convict the defendants are implicit. He therefore asks the court to apply the proviso, or the similar power contained in S.119(d). 18. Mr. Hampton submits that, where findings are non-existent or inadequate, a conviction must be unsafe. Mr. Keane says that a magistrate must indicate what evidence he accepts and what conclusions he draws, unless the only possible conclusion on the evidence is one of guilt. 19. This problem has been considered in a wide range of cases from R. v. Albert Wu(1) to LAI Yuk-kui v. R. (2). Most of the authorities have been cited by O'Connor, J. in LAM Kam-ming & Another(3), a Court of Appeal decision, and it is not necessary to set them out here. 20. There is no doubt that a conviction can only be sustained in these circumstances where the magistrate's failure to comply with the section can be said not to have deprived the defendant of his chance of acquittal. In other words, the evidence must point inexorably in one direction and that is to the defendant's guilt. The appeal court must not let itself be put in the position whereby it has to assess the credibility of witnesses it has not seen. The evidence must exclude all inferences except those pointing to guilt. 21. I must now look at the evidence in greater detail to see if a conviction really was inevitable. I will deal with the conspiracy charge first and the cautioned statement of 1st defendant makes a convenient starting point. 1st Defendant 22. Mr. Hampton took the point that, although the magistrate found these statements to be voluntary, he was wrong in that he failed to consider the effect that a remark by an ICAC officer - that bail would be granted pending trial - might have had on 1st defendant when he came to make his statement 1 1/4 hours after the first interview. 23. I do not agree. The reference to bail was quite unconnected with the making of a statement. 1st defendant did not know he was going to be asked to make one. All he was told was that he was being arrested and that bail would be granted. I do not think he could have been influenced by this remark in any way when he made the subsequent statement. 24. In this statement he said he was party to a plan to use Glorious Engineering as a sub-contractor, but some of the workers were to be from General Electric and some from Glorious. The profits were to be shared among all concerned, including the General Electric workers. 1st defendant then gave a work order to 5th defendant, the proprietor of Glorious Engineering, involving the replacement of 4 lifts at Wing Cheong Building. 1st defendant, 2nd defendant and 4th defendant each gave 3rd defendant $2,000 to pay the General Electric workers, who included NG Mok-chi, and also Glorious Engineering's expenses. 1st defendant then instructed 5th defendant to invoice General Electric in the sum of $10,000. 25. 1st defendant gave another work order in respect of the Ying Mei Building, in which "apart from the workers employed by 5th defendant" NG Mok-chi also took part. General Electric were to be invoiced $5,000 for this job. In fact $4,800 is the sum in the invoice. 26. A third work order was issued by 1st defendant in respect of Shun Shing Building, but this work was held up because workers employed by 5th defendant were not covered by insurance. 27. 1st defendant explained how 5th defendant made out the invoices for 5 such projects and these were delivered to himself or 2nd defendant. Purchase orders were typed by a clerk, handed to Mr. Tony Lau for signature and then posted to Glorious Engineering. 28. 1st defendant admits they were wrong in what they did, but excuses himself on the grounds that it expedited the company's work and increased the workers' income. I do not consider this to be a damaging admission; it may mean only that he knew he was breaking company rules. 29. This statement amounts to an admission of conspiracy to defraud only if it is also proved that the work was to be carried out by General Electric workers in that company's own time. The representation alleged would certainly be false if it was not intended that Glorious should employ the workers itself. And clearly, if they were working for Glorious, at a time when they were not being paid by General Electric, there was no fraud. 30. Counsel submits that there is no evidence that Glorious Engineering was a 'paper' company. Yet the evidence of Miss CHAN Suk-wai (PW13), who had no reason to lie, shows that 5th defendant never worked in the office that he had given as Glorious Engineering's registered address. He merely paid a fee to Miss Chan's employer, in return for which Miss Chan would take telephone messages and receive mail on his behalf. The only documents found there by the ICAC was the invoice book, only 7 invoices of which had been issued, and one of the General Electric purchase orders. Had Glorious employed its own labour, or indeed any of General Electric workers in their free time, one would have expected a record to have been kept. On the other hand, there is evidence from the worker, Leung, that there was a man, Ah Kwan, at the Cheung Sha Wan Post Office site who he supposed was a sub-contract worker. I presume he means he was not an employee of General Electric. It is not, therefore, an irresistible inference that Glorious was an empty shell or a paper company. 31. 1st defendant said NG Mok-chi worked at Wing Cheong and Ying Mei Building. Ng confirms this. He and 3 other General Electric employees were the only workers changing lift machinery at Wing Cheong in May/June. It took them 10 days and they worked late. They were promised a bonus if they finished quickly. Of these workers, Ng is the only one who admits receiving a bonus from 3rd defendant. 32. 2 - 3 days later he and one of these 3 workers worked at Ying Mei Building, installing safety nets and covers, again doing overtime. He had not heard of Glorious Engineering and he did not know who was going to pay the bonus. 33. The invoice for Wing Cheong is dated 30th May and refers to 4 workers changing machinery. The Ying Mei invoice is dated 16th June, but does not specify the number of workers. It refers to installing mesh guards, but also quite a lot of other work. 34. Whatever one may say about Ying Mei Building, there can be little doubt that the Wing Cheong job is the one referred to by both 1st defendant and Ng. The Crown does not have to prove this as a 100% certainty, merely to the normal standard of beyond reasonable doubt. If 2 lifts were repaired at the same location at the same time, that would be an extraordinary coincidence. The prosecution can only prove that one lift was repaired. 1st defendant might have thrown light on this himself, had he given evidence. In the absence of such evidence, the court is entitled to find that only one lift was involved. 35. Referring then to the pay sheets and work records, it can be seen that, 22nd May - 4th June, Ng earned $1,296 overtime and, between 5th June - 18th June, $1,466. He was working 14 hours per day and clearly had no time to do any work for Glorious outside the company's time, and this is irrespective of any view that the magistrate might have taken of Ng's evidence. Whatever the reason for the bonus given to Ng, the work was clearly done in the time paid for by General Electric. In this connection I pay no attention to Ng's reference to his suspicion that 1st defendant was the Mr. Wong who was the authority for the bonus. There could have been other Wongs involved in the conspiracy. 36. Can it be said that 1st defendant intended anything other than a fraudulent and false misrepresentation as alleged? I do not see how the magistrate could have come to any other conclusion. 2nd Defendant 37. In his statement 2nd defendant admits that everything concerning lift maintenance is his responsibility. He knows Glorious Engineering and says it carried out work for General Electric; small-scale to start with, major work later. This is clearly nonsense. It was then put to him that he was a shareholder in Glorious Engineering. He said 3rd defendant asked him to join a company that he was forming to do engineering work and he agreed. Later he paid his share, $2,000, for the expenses of forming the company, but said it had not yet been formed. This also does not make sense, because he was answering a question about a company that he knew was already in existence. It is also contradicted by his answer to the charge, in which he said he regarded the $2,000 as a loan. The only possible conclusion that the magistrate could have formed on reading this statement was that 2nd defendant was lying to the ICAC. 38. The only other evidence against 2nd defendant was his position at the centre of things. He was the man in the office in charge of administration and presumably knew what was going on. He was friendly with 1st defendant, who worked directly to him. He chopped the invoices submitted by Glorious Engineering and passed them on for payment, certifying that the work had been completed and accepted. There is evidence that he did not himself personally have to check minor jobs; he could consult the supervisors. He also knew, from the work records and pay sheets that, during this period, his workers were earning a lot of over-time and that they had no time to work for any other firm. But how was he to know that these particular men were working on the projects covered by the invoices? 39. Lies do not prove guilt. At most they can support and confirm other evidence that tends to establish guilt. Is there such evidence? Crown counsel submits that, because he was in charge of administration and was the supervisor of 1st defendant and 4th defendant, he must have known what was going on. 40. I am not sure that this follows. He was aware that Glorious Engineering was a sub-contractor, but these were minor works, which apparently 1st defendant and 3rd defendant had authority to sub-contract. 2nd defendant, therefore, did not necessarily have to speak to 5th defendant when the work was put in hand. The only evidence on this point is in his cautioned statement, to the effect that they met for the first time long after all the invoices had been submitted. 41. There does not appear to be any dispute that the work described in the invoices was actually carried out. All the workers testified to this effect and they were not cross-examined on the point. Whether it was done properly is irrelevant. Thus the fact that 2nd defendant approved the invoices and submitted them to Mr. Lau is not in itself of great significance. 42. Only if 2nd defendant knew that the work was actually carried out by General Electric workers in time paid for by General Electric, and agreed that this should happen, is he guilty of these offences. 43. The only evidence that he agreed to such a scheme is in the cautioned statements of 1st defendant and 4th defendant and, of course, such evidence is not admissible against 2nd defendant, as these are not statements in furtherance of the conspiracy. 44. According to the relevant work records, which were compiled by 1st defendant and 3rd defendant, the workers concerned were working at such places as Shatin Hospital and San Tsui Chuen on the dates covered by the invoices. How was 2nd defendant to know that the work records were not accurate? Even if he had discovered this, he had no means of knowing that the same workers were working on the invoiced work, unless the other defendants told him. As I have said, there is no admissible evidence of this. 45. The mere fact that 2nd defendant was at the centre of administration and friendly with the other defendants does not lead to anything more than suspicion that he was a party to the plot. I, therefore, allow his appeal and quash his conviction on each charge. 4th Defendant 46. 4th defendant's cautioned statement is on similar lines to that of 1st defendant; the General Electric workers were to do the work and the profits paid to the 'contractor' were to be shared by the workers and the defendants. The $2,000 put up by him and the others was to pay the workers on completion of the job, without waiting for the paper work to be completed, which would keep the workers happy. 47. 4th defendant admits he knew that the work was actually carried out by General Electric workers in General Electric time, but he did not know that 3rd defendant had paid these workers, except in the case of NG Mok-chi. 48. This evidence is not consistent with all the workers having been employed by both General Electric and Glorious on the same jobs. If the workers were paid twice, there would necessarily have been no profit for 4th defendant or anyone else. The arguments in relation to 1st defendant apply with equal force to 4th defendant. 49. The cautioned statements of 1st and 4th defendants admit that there was a meeting to set up the scheme. The admissions, to my mind, necessarily import an agreement falsely to represent that Glorious had done the work, knowing that it was really to be done by General Electric, in General Electric time, and therefore paid for by General Electric. This amounts to conspiracy to defraud. 50. I, therefore, uphold the convictions on 1st charge against 1st and 4th defendants. 2nd Charge 51. This alleges a dishonest attempt to obtain $14,000 on or about 30th May, 1983, by the same deception as in the conspiracy charge. Indeed the deception alleged is the same in charges 2 - 8. 52. This transaction is reflected in invoice No. 1151, dated 30th May, and is the one at Wing Cheong Building already considered under the conspiracy charge. 53. The supervisor involved here is 3rd defendant, whose supervisor was 1st defendant. The evidence as to the work done on this job is provided by the workers Ng, Leung, Man and Tsang, whose work records and time sheets confirm that they could not have been working for anyone but General Electric during that period. The work records are in fact signed by 3rd defendant. The statement of Tsang reveals that he also had never heard of Glorious Engineering and that only General Electric workers were employed on this job. 54. Invoice 1151 was approved by 2nd defendant and the purchase order was submitted on 9th June and was duly signed by Mr. Lau. Thus the dishonest deception is clearly proved in the case of 1st defendant and his appeal is dismissed. There is, however, no evidence that 4th defendant played any part in this offence and his appeal on this charge is allowed and the conviction quashed. 3rd Charge 55. This charge concerns invoice 1153 for $4,800. The work done is the replacement of a hoist rope at Wo Lok Estate. The invoice is dated 30th May and the purchase order 9th June. 3rd defendant is again the supervisor. 56. The workers involved were Ng, Tsang, Leung, Man and Shiu. Their evidence is that they changed cable wire in the body of the machinery a few days after the Wing Cheong Building job and no other workers were involved. 57. The work records and pay sheets for June show that, except for 13th and 15th June, when 3 of the workers had holidays, they were all working an average of 4 hours overtime daily. This, together with the oral evidence, proves that they could only have been working for General Electric. 58. Again, 1st defendant must have been involved in this offence and I dismiss his appeal. 4th defendant had nothing to do with this job and his appeal is allowed and his conviction quashed. 4th Charge 59. This concerns the Ying Mei Building job referred to in invoice 1154, dated 16th June, for $4,800. 1st defendant and 3rd defendant are again the defendants involved. 60. The workers were Ng and Leung. They worked on their own for 10 - 14 days and there were no workers from other firms. Both men were working 5 hours overtime throughout June. 61. The same considerations apply as in 3rd charge and I dismiss the appeal of 1st defendant and quash the conviction of 4th defendant. 5th Charge 62. This concerns work at Kin Wah Street described in invoice No. 1155, dated 19th June. The sum involved is only $900. 63. This work was done by General Electric employees Wong and Chau between 6 - 8th June. They received nothing but their wages and have not heard of Glorious Engineering. 64. 4th defendant was the supervisor in this case and gave the necessary instructions to the workers. He signed the work records of both men that week, which also show that they could not have worked for anyone else but General Electric. 65. 1st defendant is not involved in this offence. 66. 4th defendant's appeal is dismissed and 1st defendant's conviction is quashed. 6th Charge 67. This concerns invoice No. 1156, dated 27th June, which is for $2,100. It relates to the replacement of a gate and platform at an unspecified abattoir. 4th defendant was in charge of the work. The purchase order, dated 14th July, refers to Kennedy Town Abattoir. 68. The workers were again Wong and Chau. They recall 3 days work between 16th - 18th June, involving the replacement of a door and floor tiles at Kennedy Town Abattoir. No other workers were involved. The work record, signed by 4th defendant, shows that both men worked 4 hours, or more, overtime each day. 69. I consider the possibility that Glorious Engineering had in fact sub-contracted such work on those days at some other abattoir as too remote for serious consideration. 70. 1st defendant had nothing to do with this project either and his conviction is quashed. The appeal of 4th defendant is dismissed. 7th Charge 71. This charge concerns invoice No. 1157 dated 29th June, which is for $3,300. The purchase order, relating to both this and invoice No. 1156, is dated 14th July. 4th defendant was again the man in charge. 72. The work was at Wang's building and concerned the installation of an emergency exit, plus lighting units and switches. The workers were Poon and Lo. They say they worked alone at Wong's Building - not Wang's Building - off and on from the middle to the end of June, but no one else was working on the job. They describe the work as replacing lift parts. According to the work records, Lo worked every day in June, except 12th, 13th, 15th and 16th, and Poon only missed 12th. 73. In this case there are too many discrepancies for the convictions to be safe. Lift parts do not seem to have much to do with emergency exits and lighting. In addition the names of the buildings are not the same, though, of course, that may be a typographical error. 74. In these circumstances I quash the convictions of both appellants on this charge. 8th Charge 75. This charge relates to invoice No. 1159, dated 28th July, for $6,900. 1st defendant was the person in charge of this project. 76. The invoice refers to the work being done at Cheung Sha Wan Abattoir Staff Quarters, whereas the purchase order, dated 30th July, puts it at Cheung Sha Wan Post Office and Quarters. The work in each case is apparently the same, the replacement of a lift and landing apron. Counsel for the Crown submits that 'Abattoir' is a clerical error and that the correct invoice number is written on the purchase order. 77. That is true, but it is in longhand, there is no evidence as to when it was added and this is the only invoice in which this has been done. Furthermore, Miss Kwok, the Chief Accountant, says she has not received this purchase order. 78. The workers were Ng, Leung and Man, plus one other man, unknown to the others, who had apparently been recruited by 3rd defendant. This may have been Ah Kwan, who Leung saw at the Cheung Sha Wan Post Office site and assumed to be sub-contract worker. Man says there was one other General Electric worker there, namely LO Kwok-wah, who was not a witness. 79. It is not clear from the workers' evidence when this work was done, except that it was some time in June. All agree however that they did work at Cheung Sha Wan Post Office, but they were not asked if they had worked at the abattoir. 80. In view of the apparent conflict regarding the month, location and number of workers, I do not think it would be right that I should make a finding of fact where the magistrate has failed to do so. The conclusion is far from obvious in my judgment. 81. The appeal against conviction on this charge is, therefore, allowed and the convictions quashed. 82. Having heard counsel for 1st and 3rd appellants, I allowed the appeals against sentence and suspended the concurrent terms of 12 months immediate imprisonment that had been imposed by the magistrate. 83. Guidance from the Court of Appeal in this type of case has been provided by R. v. Fung Hoi Chi and Another(4). This was a motor insurance fraud that netted $5,000 for the appellants, which was subsequently repaid. The court indicated that there was no 'tariff' for commercial fraud, given the wide variety of such offence, and rejected the trial judge's view that there was a tariff of 2 - 4 years for conspiracy to defraud. 84. There were several persuasive mitigating factors in Fung's case(4) that were not before the trial judge, which clearly played an important part in the court's decision to suspend the sentence. 85. In this appeal, the mitigating factors were before the magistrate. Nothing new has emerged during the hearing of the appeal. 86. Nevertheless I am persuaded that these offences do not merit an immediate sentence of imprisonment. No loss was incurred by General Electric. There was no threat to the financial well-being of the company, such as adumbrated by the magistrate. It was a small scale attempted fraud by junior staff. 87. The appellants have already suffered severe punishment in the fact of conviction and loss of their jobs. I do not think a spell in prison is also necessary to punish them for what they did. I am satisfied, therefore, that a sentence of 12 months imprisonment suspended for 2 years on each count, to run concurrently, is the proper penalty in the case of these 2 appellants.
(1) 1961 HKLR 467 (2) 1981 HKLR 691 (3) Crim.App. 607/79 (4) Criminal Appeal No. 53 of 1984 Representation: Mr. D.S. Kilgour, Senior Crown Counsel for respondent Mr. Gordon Hampton and Mr. Llewellyn (of Hampton, Winter & Glynn) for 1st appellant. Mr. K. Bokhary, Q.C. and Mr. K.H. Suen (instructed by Johnson, Stokes & Master) for 2nd appellant Mr. Desmond Keane, Q.C. and Mr. Peter C.T. Lee (instructed By P.T. Yeung & Co.) for 3rd appellant |