HKSAR v. Kam Susanto

CACC 542/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

criminal APPEAL NO. 542 OF 2003

(ON APPEAL FROM HCCC 214 of 2002)

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BETWEEN

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Before: Hon Stuart-Moore VP, Stock JA and Beeson J 

Date of Hearing: 15 April 2005

Date of Judgment: 13 May 2005

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J U D G M E N T

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Stuart-Moore, VP (giving the judgment of the Court):

Introduction

1.The applicant seeks leave to appeal against conviction.

2.On 27 November 2003, following a trial in the Court of the First Instance before Deputy Judge Longley and a jury, the applicant was convicted on the two counts against him and sentenced to a total of 4½ years’ imprisonment coupled with financial orders.   These alleged that the applicant had engaged in bookmaking, contrary to section 7(1)(a) of the Gambling Ordinance, Cap. 148 (count 1) and dealing with property known or reasonably believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455 (count 2).

3.The particulars of count 1 alleged that the applicant engaged in bookmaking between 31 August 2001 and 2 September 2001 at Flat A on the 6^th Floor of a building in Broadway Street, Kowloon (the flat).   The particulars of count 2 were that the applicant dealt with property knowing or having reasonable grounds to believe that the property, namely $471,619,279, in whole or in part directly or indirectly represented the proceeds of an indictable offence.  

4.Before embarking on an analysis of the evidence at trial, we observe that this was a case which lasted 42 days before a jury.  There was, it seems to us, no satisfactory reason for the case to have been sent to the High Court for trial.  In no circumstances was it likely that a sentence of 7 years or more would have been imposed on the applicant in the event of conviction following a trial or pleas of guilty.  It is plain to us that it would have been eminently more sensible for the prosecution to have sought trial in the District Court bearing in mind its size, obvious potential length and the likely sentence to be imposed.  The trial before any experienced and professional judge would have proceeded far more swiftly and efficiently.  This, in turn, has obvious cost implications as the waste of time involved in trying this relatively straightforward case of alleged bookmaking and laundering the proceeds of such activities before a jury will have led to considerable additional expenditure.  This implies, of course, no criticism of the trial judge whose task it was to try the case.

Prosecution’s case

5.Mr Reading, SC, on the respondent’s behalf, has provided us with a helpful analysis of the prosecution’s case at trial and, as  Mr Ching Y Wong SC on the applicant’s behalf accepted the accuracy of this summary, we can to some extent adopt this.

6.At about 11:55 p.m. on 1 September 2001, police officers went to the applicant’s home where, after a short delay, they were allowed entry by the applicant’s wife.  The applicant was sitting in the living room where a football match was being shown on the television.   On the corner table beside the applicant there was a notebook computer showing the odds and the outcome of football matches on the internet.   On the coffee table in front of the applicant there were blue and black ball-point pens, correction fluid, a booklet containing European football fixtures, sports pages from the Apple Daily and the Oriental Daily for 1 September and an open ‘Topics’ notebook (exhibit P15). 

7.P15 contained written notes on 5 pages as well as its back cover.  There was no dispute at trial that the applicant had written these entries.   The first page contained references to 2002 World Cup qualifying football matches played that night, the names of the teams playing in those matches, an indication of whether or not they would be televised and if so, the programme times.   Four of these matches had already been played by the time of the police raid.  

8.The second and third pages in P15 were records of bets placed by the punters, with their names represented by initials, and corresponding bets placed with bookmakers ‘H’ and ‘SUN’.  At the end of the entries relating to the 4 matches that had already been played by the time of police entry, the applicant had written down the losses and winnings in respect of the bets placed on those matches.

9.The fourth and fifth pages contained similar records relating to the English Premier League to be played a week later on 8 September.

10.The back cover contained telephone numbers against initials, including two telephone numbers for the bookmaker ‘SUN’, some of which corresponded with the initials of punters on the earlier pages.

11.It was common ground that a torn piece of paper, found in the waste paper basket (exhibit P16) was an earlier draft of some of the bets that appeared on the second page of P15.

12.Shortly after the police had entered the flat, they connected a recording device to the telephone.   The police answered the first 8 incoming calls but, when they did so, the callers hung up.   The next 4 calls were answered by the applicant who had allegedly indicated that he was prepared to cooperate with the police.   Two of these calls were made by a Mr Kwan who made enquiries relating to the forthcoming football match between England and Germany.   He then placed a bet of $20,000 with the applicant on England to win against Germany in the match which was scheduled to start at 1:30 a.m. on 2 September.

13.In an interview with the police following his arrest, the applicant stated that P15 was in his handwriting and contained records of bets he placed for his friends.   The telephone numbers of his friends were written on the back of P15.   The letter ‘H’ stood for a banker called ‘Hengky’ in Indonesia who was someone he knew as the boss of a football betting company.  ‘SUN’ was the person in charge of Hengky’s branch company in Malaysia.    The applicant identified the initials he used to represent the punters, and their telephone numbers written on the back of P15.

14.Regarding an entry in respect of a bet placed by a punter, Mr Law, the applicant said that Mr Law was a customer of the Indonesian company.  Hengky asked him to translate for both parties because Mr Law did not understand Indonesian and the staff of the company did not know Cantonese or Putonghua.  The bets were placed in Hong Kong currency.   The applicant said that no money was paid into his account.   The punters would deposit money into the account of Hengky’s company.  However, after the punters had placed bets on football matches, Hengky would pay him 0.25% of the pool as a reward.   He would go to Indonesia to collect the reward from Hengky’s company.  

15.On 3 September 2001, the police searched the applicant’s office and found further documents including 5 pages of written notes (exhibit P22) containing records similar to P15.   There was no dispute that these were written by the applicant.  The first 3 pages related to bets on football matches held on 31 August, the day before the police raid.   The fourth page related to bets on the English League.  In addition, there was a written note dated 1 September 2001 (exhibit P23) containing:

(i)  The bank balances of the applicant’s accounts with the Hongkong & Shanghai Banking Corporation (HSBC) and the Hang Seng Bank on 31 August; and

(ii)  figures alongside the initials of certain punters and the bookmakers ‘H’ and ‘SUN’.  (Identical figures were found on P22.   These figures represented the total losses or winnings of the punters and bookmakers on the 31 August matches as recorded on the first 3 pages of P22).

Also found in the office were items of correspondence (exhibits P24, P25A, P26 and P27) between HSBC and a person called ‘OEI Hengky Wiryo’ (Hengky) and an Indonesian document (exhibit P60) marked ‘Detail Transaction Report’, dated 27 August 2001, which referred to matches played on 26 August 2001.  The ‘Total per HK Currency’ of ‘317,250’ appeared in the column marked ‘Win/Loss’.  Bank records produced by the prosecution revealed that $317,250 was paid in cash into Hengky’s Hang Seng Bank account on 27 August.  A cheque-book (exhibit P61) on Hengky’s account with HSBC was also found.  This contained 32 signed blank cheques.

16.The prosecution called a gambling expert, Sergeant Ling, to testify as to the mode of off-course soccer betting in Hong Kong and to analyse the documents seized from the applicant’s home and office.   In  his opinion P15 and P22 were typical of the records kept by a ‘small boat’ to record his betting transactions.  The records revealed in a large proportion of cases that the odds offered by the applicant to the punter were the same as the odds offered by the bookmaker to the applicant.  In return the applicant earned a 0.5% commission of the betting amount from the bookmaker.  In some cases the applicant earned money by the difference between the odds that he offered to the punter and the more favourable odds that he obtained from the bookmaker.  In other cases the applicant accepted the risk of the bet because either the bet he placed with the bookmaker did not cover the whole risk of the bet he had entered into with the punter or he received bets from the punter without placing a corresponding bet with the bookmaker.

17.The judge summed up the expert’s evidence as follows:

“Sergeant Ling’s view was that the figures preceded by a plus or minus at the end of the entries against the bookmakers indicates the amounts owing to the defendant by the bookmaker or owed by the defendant to the bookmaker after deduction of a [0.5] per cent commission for the benefit of the defendant.

Now, in a large proportion of the cases, the odds offered by the defendant to the punter was the same as the odds offered by the bookmaker to the defendant, and the defendant’s earnings in those situations, according to Sergeant Ling, would be his [0.5] per cent commission.

But in a significant number of other cases, the terms agreed with the punter were not the same as the terms offered by the bookmakers.  These bets, members of the jury, are ones that you might think significant because if the defendant was simply acting as an interpreter, you might expect the entry against the bookmaker to be the same as the entry against the punter.  I have already given you the example of Lo 1, which Sergeant Ling said corresponded with H9, and on Sergeant Ling’s analysis the defendant has offered the punter worse odds than he himself has obtained from the bookmaker.

The other cases, on Sergeant Ling’s analysis if you accept it, the defendant has not been able to obtain the same odds from the bookmaker that he has offered the punter.  In these circumstances, in a number of cases the defendant has had to increase the stake on the bet he places with the bookmaker to endeavour to cover the risk of the bet that the defendant has entered into with the punter.  But on his evidence, in a number of cases, the bet the defendant placed with the bookmaker did not cover the whole risk of the bet he had entered into with the punter.” (Appeal bundle p. 32)

18.P15 involved a total of 9 punters and the 2 bookmakers ‘H’ and ‘SUN’.  According to Sergeant Ling, the total bets placed by the punters in P15 amounted to $3,554,000.   The total bets the applicant placed with bookmakers ‘H’ and ‘SUN’ was $3,585,000 and in relation to the 4 matches that had already been played by the time of the police entry, the applicant had entered a calculation of his own income as $12,452.                            

19.Sergeant Ling said that the total of the bets placed by the punters in P22 amounted to $4,970,600 and that the total the applicant had placed with the bookmakers was $5,020,000.  In P22 the applicant had again made a written calculation of his income from the recorded bets, namely $33,422.

20.Sergeant Ling further stated that in off-course soccer betting, punters did not need to produce any money at the time bets were placed.  Settlement would be effected through bank accounts later, mostly by cash deposits.   The time allowed for settlement depended on the relationship between the parties, especially when matches were held almost every day.

21.During his interview, the applicant gave the police the telephone number of Hengky’s company in Indonesia.  The telephone numbers of the bookmaker ‘SUN’ were written on the back of P15.  A number of telephone records relating to IDD calls made in the months before September 2001, either from the applicant’s home number or from his mobile telephone showed frequent calls to Hengky’s company and a number of calls to ‘SUN’.

22.The applicant had spoken of himself during his interview as being employed as a technical advisor by Harbourpoint Industries Ltd. (‘Harbourpoint’) and also the director and a major shareholder of a private company Draway Ltd. (‘Draway’).  The office address of Harbourpoint was the same as the registered address of Draway.   The prosecution, in this regard, produced the applicant’s tax returns as well as the profits tax returns submitted by Harbourpoint and Draway during the relevant period.  These revealed that the annual assessable income of the applicant ranged from $436,000 to $548,000.  Harbourpoint and Draway had reported losses since the fiscal year 1997/98.

23.The prosecution employed the services of a Chartered Accountant, Mr Bowra to conduct an extensive financial investigation into 11 bank accounts.  Seven of the accounts were the applicant’s bank accounts, 2 of them were his wife’s and 2 of them were the accounts of Hengky.  The analysis covered the period of just over 5¹/₂ years referred to in the 2^nd count and was confined to transactions of HK$50,000 or more (‘identified transactions’).   The Report (exhibit P56) which Mr Bowra prepared revealed in essence that the total deposits into the applicant’s 7 bank accounts during the relevant period was $471,619,279, the sum particularised in the count 2.   $144,879,232 of these deposits had been made in cash.  The total identified withdrawals from the applicant’s accounts amounted to $464,671,146.  $27,050,797 of those withdrawals were made in cash.  Upon analysis of the deposits and withdrawals on the applicant’s 7 accounts in 6-monthly periods over the 5¹/₂ years, Mr Bowra found the withdrawals from the accounts were invariably greater than the deposits.            

24.Mr Bowra also analysed the identified transactions between the applicant and 7 others including Hengky.  He provided a summary of these transactions in Chart 5-1 of his Report, a copy of which was given to the jury during the prosecution’s opening address.  During the relevant period, the applicant had 98 transactions totalling over $84 million in which he transferred money to Hengky and there were 126 transactions totalling over $70 million in which Hengky transferred money to the applicant.  The identified transactions between the applicant and Hengky were the largest in both value and numbers.

25.Mr Bowra’s analysis also covered four suspected punters whose names appeared in code in the applicant’s records but whose proper names were detected by tracing their telephone numbers.

26.It is not necessary to dwell upon the banking evidence produced by the prosecution.  Suffice it to say, the HSBC and Hang Seng Bank records revealed that the applicant had very substantial financial transactions with Hengky.  In particular, the bank records revealed that on 27 August $317,250 in cash was deposited into Hengky’s account, the amount being exactly the same as the winnings of the bookmaker recorded on exhibit P60.

Defence case

27.The applicant elected to give evidence. 

28.In essence, it was his case that he was not accepting bets on his own account or as an agent of a bookmaker, but that he merely acted as an interpreter for Chinese-speaking clients when passing on the bets to an Indonesian soccer-betting company he called ‘IndoSoccer’.   It was contended that all he received from acting as an interpreter were bonus points representing 0.25% of the winnings or losses of the bookmaking company.  The company would credit the bonus points to his membership account with IndoSoccer, and he could then use the bonus points for gambling.  In this regard, it is notable that the applicant was unable to produce any document to show that he had been engaged as an interpreter.    

29.According to the applicant, “members”, as he called punters who bet with IndoSoccer would call him to ask for the odds on a particular match.   He would provide the odds taken from his computer and note down the indication of the bet which the member wanted to place.  He would then make a third party call to Indonesia or Malaysia and, according to him, he performed the role of an interpreter between the member (speaking in Cantonese or Putonghua) and the overseas operator.  The odds quoted by the operator might be different from the odds shown on the website as these were adjusted from time to time.  Afterwards he would record the terms of the bet actually placed by the member. 

30.The applicant agreed that he was unable to make third party calls on his mobile telephone.  In this regard, the telephone records showed that most of the applicant’s IDD calls had been made using his mobile number and, so far as most of the other calls were concerned where third party calls might have been made, these were too short in duration for this to have been a practical reality.

31.In respect of the betting records (P15 and P22) the applicant said that ‘H’ referred to an Indonesian soccer betting company called IndoSoccer.  ‘SUN’ was the person in charge of the Malaysian office of IndoSoccer.  The bet recorded against the name of the punter was simply an ‘indication’ of the bet prior to the punter being connected to Indonesia.  The bet recorded against the name of the bookmaker was the ‘actual bet’ placed with the bookmaker.   On the records, he appeared to be credited with a 0.5% commission because that was the commission received by the whole sales team in the marketing department of IndoSoccer.  He would only receive half of that commission in terms of bonus points.

32.By recording the winnings and losses he could see the bonus points he had earned and check his translation against the transaction report.  However, in this regard, P15 and P22 did not actually record the bonus points he received.  When there was a difference between the terms recorded against the punter and the bookmaker, the reason was either that the bookmaker was offering different odds to those originally quoted to the punter when he answered the telephone or the odds were expressed in a different way called ‘conversion betting’ for a Mainlander who did not like the concept of negative odds. 

33.The applicant said that Sergeant Ling had misunderstood the significance of negative odds.  He denied that in some cases where there were negative odds he had accepted the risk himself because his risk would have been covered by the bet he placed with the bookmaker.  In addition, for those bets with no corresponding entries, the applicant denied that he accepted the bets himself, claiming that he had either recorded the corresponding bet on another piece of paper or added on his own bet.   

34.The applicant admitted that some of the bets on P15had been made on 1 September, the day of the police raid.  He said that some of the telephone numbers written on the back of the exhibit were those of members and others were simply the telephone numbers of friends and acquaintances.  He described P60 as a transaction report faxed to his office by IndoSoccer.  A similar report would have arrived on 3 September in respect of the bets recorded on P15 and P22, but the company knew about his arrest and had not sent the report to him.  He had not kept the transaction reports for earlier transactions.

35.In respect of his interview, the applicant claimed that he signed the notebook post-record (exhibit P31) after he had answered the 4 incoming calls and not, as alleged by police, before he spoke to these punters having indicated any willingness to assist them.

36.With regard to a passage in his interview where the applicant had spoken about ‘placing bets for friends’, he had meant, he said, that he was assisting them by his interpretation service.  He claimed also that he had mentioned ‘IndoSoccer’ in his interview but the police insisted on calling it ‘Hengky company’ because he had made reference to the position of Hengky who was the only shareholder of IndoSoccer.  He said also that he had told the police that he had to split the commission with the sales staff and obtained 0.25% bonus points as a reward.   It was not recorded on the statement because the police officer could not understand what he meant.  He added that he had spoken of going to Indonesia ‘to get the reward’ because, when he wanted to make a withdrawal, a transfer had to be made into his bank account in Indonesia.

37.The applicant alleged that the police had used threats and violence to force him to answer the incoming calls from punters.   During the eleventh call, he was unable to connect the caller to Indonesia by way of a conference call because the police had attached a recording device to the telephone.   After this, he looked at his family members who were present and decided to be subservient.   During the twelfth call he was asked to quote the odds from a piece of paper brought along by the police as he believed the police would not let him go if he did not follow their instructions.  He agreed that both of these calls were made by a Mr Kwan who, he said, was a member of IndoSoccer.

38.The 12 incoming calls recorded by the police were forwarded  from the applicant’s mobile phone to his home number.  He admitted, as we have said, that no third party call could be made from his mobile phone but the reason why the punters would call this number to place bets was, according to him, that they would have known that as soon as he arrived home, he would forward all the calls to his home number.

39.In respect of the many calls he made to IndoSoccer in the early hours of the morning, the applicant stated that he called to have a chat with company salesmen or to obtain odds on matches to be played in one or two weeks’ time.  The reason why none of the calls on the telephone records was made to Hengky’s home number was, as he put it, that “Hengky was somewhat like a boss of mine; on most occasions it was he who contacted us.”            

40.In his report, Mr Bowra prepared a summary of all the transactions in the applicant’s bank accounts.   Exhibit D4, which the defence adduced in evidence, was a copy of this summary on which the applicant made various markings of his own in different colours to illustrate the nature of his bank transactions.   Essentially the applicant’s explanation was that none of the transactions had any connection with his bookmaking on soccer matches.  They related to other matters such as a garment business, the transportation of goods, payments to his wife, a food business, buying birds’ nests, currency exchange, loans to friends, payments to singers and casino dealings.  No independent documentary evidence of these transactions was produced.     

41.In respect of his financial transactions with Hengky, the applicant stated that Hengky had left the signed blank cheques with him so that he could issue cheques on his behalf.     Hengky would use the bank account to transfer money into Hong Kong for the benefit of visiting friends to facilitate their money exchange, to pay the gambling debts and to transfer the winnings of gambling friends.

42.A very substantial portion of the funds passing through the applicant’s account related to casino gambling by Indonesian gamblers in Macau, most of whom were referred to him by Hengky.  He would have to reimburse the chip dealers in Macau for losses incurred by these gamblers.   Apart from this, there were a number of transactions where the gamblers’ winnings were transferred to the applicant in several sums.  He said that he did not keep any personal records of his dealings with gamblers or with Hengky.  There were occasions when amounts of $1 million or more were paid into the applicant’s accounts from Hengky’s accounts and then withdrawn in cash.

Grounds of appeal

43.Mr Wong, who did not appear in the court below, asserted that the conviction on each count was unsafe or unsatisfactory on the basis of five grounds of appeal.

(I)  Inferences

44.In the 1^st ground it was contended that the judge erred in directing the jury that if they found that there were “other conclusions just as compelling as the fact that [the applicant] was guilty of the charge that [they] were considering, then [they] could not be satisfied of the guilt of the [applicant on] that charge beyond a reasonable doubt.”

45.The thrust of this ground was that in a case where the prosecution’s allegations were wholly dependent on the drawing of inferences from the surrounding circumstances, the judge failed to make it plain to the jury that, for an adverse inference to be drawn against the applicant, there should be no other reasonable explanation open to them on the facts giving rise to the inference.  Mr Wong submitted that the jury may, in the light of the direction given by the judge have: “rejected the innocent inference that the [applicant] had merely acted as an interpreter (as submitted by trial Senior Counsel) because it was not ‘as compelling as’ the guilty inference of ‘putting the punter on hold’ in order to ascertain odds (that is, the [applicant] was bookmaking) as suggested by the judge”. 

46.Having regard to this criticism, it is necessary to look at the directions which the jury were given about inferences in their full context. The judge said :

“You may, however, draw inferences from facts that you find proved beyond reasonable doubt….. In so far as inferences are concerned, members of jury, you must always bear in mind that you may only draw inferences of guilt or inferences adverse to the interests of a defendant if you are satisfied that those are the only reasonable inferences you can draw.  Otherwise you may not draw those inferences.” (Emphasis added)(Appeal bundle P.5 ).

There then followed the passage which contains the phrase about which complaint is made:

“Obviously, if the facts that you found to be proved beyond reasonable doubt lead to other conclusions just as compelling as the fact that he was guilty of the charge that you were considering, then you could not be satisfied of the guilt of the defendant of that charge beyond a reasonable doubt.  That is just common sense.” (Appeal bundle P.6).

47.It is plain to us that the judge was merely using his second observation as an example of what he had just moments before directed the jury upon, namely that adverse inferences could only be drawn against the applicant where they were the “only reasonable inferences to be drawn.”

48.In fact, as it happens, the judge chose to direct the jury a second time on inferences so that these could be looked at in the context of the facts relating to the 2^nd count.  As to these later directions, the judge had the following to say :

“ …..If you were satisfied, on all the evidence in the case, that the only reasonable inference in the absence of a credible explanation from the accused as to the money was that it, or part of it, was the proceeds of bookmaking, and if you did not believe the defendant’s explanations, then you would be entitled to draw the conclusion that it was the proceeds of bookmaking.  But it would be a matter for you.

But remember, members of the jury, you would not be able to draw that inference just because you found that the defendant had lied about the money.  You would have to be satisfied that there was no other reasonable inference you could draw than that the money, or part of it, was the proceeds of the defendant’s bookmaking.  If, looking at the banking transactions, you saw features that were inconsistent with bookmaking, then that might lead you to conclude that the prosecution had not proved that the money coming in and out of the defendant’s accounts was the proceeds of bookmaking.”(Appeal bundle P.70)

49.In the context of the directions taken as a whole, the topic of inferences was, in our opinion, covered by the judge in a way which would have been properly understood by the jury.

(2) Lies

50.In the 2^nd ground, Mr Wong made two complaints about the directions given to the jury about ‘lies’. He submitted, firstly, that the judge had erred when he told the jury that “any lie told by the [applicant] to the jury or to the police about anything could be used to strengthen the prosecution case” (emphasis added) and, secondly, that he failed to direct the jury that they could not rely upon any lie told by the applicant “unless such has been admitted by [the applicant] or proved to them beyond a reasonable doubt as [a] lie (or lies)”.

51.Again it is necessary to go to the summing up to see how the jury was directed.  This was as follows :

“There is one final general observation I would like to make about the evidence and that is I would like to warn you to exercise great caution if you were to come to the conclusion that the defendant has lied either to you or to the police about anything.  Bear in mind that a defendant may lie for many reasons, not necessarily because he is guilty of the offences he is now charged with.  He may lie because he wants to cover up some other activity.  He may, for instance, lie out of panic.  He may not be strictly accurate about certain matters because at the time he did not think that that part of his account was particularly relevant.

If you find that he did lie, but you think he may have lied for some innocent reason – and by innocent, I mean an explanation other than that he is guilty of these offences with which he is charged – then you should not take any notice of the lie.  But if you are satisfied that he did not lie for some such innocent reason, then his lie can be used to strengthen the prosecution case.” (Appeal bundle P.6)

52.The judge then helpfully gave the jury an example which was particularly relevant to the facts of this case to illustrate his directions by saying :

“In this case, for instance, members of the jury, you might come to the conclusion that the defendant has lied to you about money coming in and out of his bank accounts.  If you thought, for instance, that it was possible that he was lying about those matters because he had not declared his true income to the tax authorities here, then you should ignore those lies.  They would not be relevant to the charges before you today.” (Appeal bundle P.7)

53.We were told by Mr Reading, and Mr Wong accepted that this was so, that the terms of the ‘lies’ direction were discussed with Senior Counsel for the defence at trial and agreed by him in advance of the summing up.  It is apparent that there was no departure from what had been agreed as defence counsel made no comment about these directions after they had been given.  

54.There was, in our opinion, no need for further elaboration on this issue by the judge who had directed the jury in sufficient conformity with the guidance offered in HKSAR v Mo Shiu-shing [1999] 2 HKLRD 155 at 169.  The prosecution had not sought to rely on lies to support the case for the prosecution and the judge made no suggestion to the contrary by, for example, directing the jury’s attention to any particular lie as amounting to a material lie.  Only in such circumstances would it have been necessary for the jury to consider whether the lie was a proved or admitted lie.  Instead, it is apparent that the judge and trial counsel for the defence were alert to the fact that the jury may well have disbelieved the applicant on certain aspects of his evidence (which occupied 11 days) and were anxious to ensure that the jury, with a direction on lies, would not fall into the trap of regarding lies as evidence in themselves of guilt.  Just before the jury retired, the judge also stated (appeal bundle pp. 93-94), to reinforce the point, that if the jury was satisfied that the applicant had been lying they would then have to consider whether they were “satisfied that the money going into the bank account, or part of it, was the proceeds of (his) bookmaking”, making it plain that the prosecution had to prove its case whether or not the applicant had been lying.  We perhaps should add that it would have been better, as we suggested in Mo Shiu-shing (above), if the judge had specifically directed the jury that lies could never prove guilt in themselves but this was not a point taken by Mr Wong, rightly we consider, as this was implicit in all the judge had said.

(3)  Ingredients of bookmaking

55.At the time of the offence alleged in count 1, section 7 of the Gambling Ordinance provided, so far as it is relevant to these proceedings, that:

“(1)  Any person who –

(a)     engages in bookmaking, whether on one occasion or more than one occasion;

(b)     holds out in any manner that he solicits, receives, negotiates or settles bets by way of trade or business; or

(c)     in any capacity assists, either directly or indirectly, another person in bookmaking,

commits an offence …”

56.In the 3^rd ground of appeal, it was submitted that:

“(a)    In relation to the first count of bookmaking, the judge erred in directing the jury that upon the basis of the Prosecution’s case being one of “receiving bets” [p. 7U]:

(i)      ‘before you could be satisfied that the defendant had committed the offence of bookmaking, you would have to be satisfied not only that he accepted the bet, but also that he either had a personal stake in the outcome of the match or alternatively that in accepting the particular bet he was acting as agent with the authority of, and on behalf of, a bookmaker who did have a financial interest in the outcome of the bet’ [p. 9J-N & p. 11E-I];

(ii)     ‘a person may receive a bet as his own even though in order to obtain commission from a bookmaker or in order to protect himself and as a hedge against losing the bet, he goes on after receiving the bet to place a similar bet with a bookmaker’ [p. 9T-p.10T and particularly p. 10H-K].

(b)   The judge erred in directing the jury that an agent who received a bet for and on behalf of his principal would be receiving such bet ‘by way of trade or business’ [p.14B-Q].”

57.Mr Wong realistically accepted that even if he was right on this ground, this court might be justified in substituting under section 83A of the Criminal Procedure Ordinance, Cap. 221, a conviction under section 7(1)(c) which was a possible alternative offence that had been available to the prosecution until the repeal of that provision on or about 1 June 2002.

58.Mr Wong’s submission amounted to an assertion that the allegation on count 1, as it stood, was indistinguishable from the situation which had arisen in the appeal to the Court of Final Appeal by the prosecution in HKSAR v Chu Kam-yiu and Ors [2003] 1 HKLRD 326 where it was held that where a defendant’s conduct constituted “receiving” a bet, the prosecution had to prove that he not only received the bet but had accepted the bet as his own, so that he had a stake in the outcome of the event in respect of which the bet was made.  Furthermore, on the element in the offence relating to “by way of trade or business”, it was held that the prosecution must prove, with regard to the person receiving the bet, that the opportunity for gain or the risk of loss arose upon him physically receiving the bet from the punter and that his position in respect of the outcome of the event upon which the bet was made was the opposite of the punter’s.

59.These holdings were in response to the two-part question before the court (at pp. 330-331) which was framed as follows:

“I.   For the purpose of proving the relevant elements of “bookmaking” as defined in s. 2 of the Gambling Ordinance (Cap. 148):

(i)      where in relation to a charge of “bookmaking” [contrary to s. 7(1) of the Gambling Ordinance] or “conspiracy to engage in bookmaking” [contrary to common law and s. 7(1)(a) of the Gambling Ordinance (Cap. 148) it is alleged that the conduct of the defendant constitutes ‘receiving’ a bet, is it necessary for the prosecution to also prove that the defendant had not only physically received the bet, but had accepted the bet as his own, so that he had a stake in the outcome of the event in respect of which the bet was made?

(ii)                in relation to the element of “by way of trade or business” is it necessary for the prosecution to prove, in regard to the person receiving the bet:

(a)    that the opportunity for gain or the risk of loss, arose immediately upon him physically receiving the bet from the punter?

(b)   that his position in respect of the outcome of the event upon which the bet was made, was the opposite to the position of the punter?”

60.Silke NPJ, giving the principal judgment of the court stated (at pp 335-336) as follows:

“27. None of [the respondents] were shown to be employees or agents of a bookmaker.  Had they been then the position would be different.  In R v Lam Shek Yiu [1982] HKC 314 – a criminal appeal – the appellant had said in an admitted statement “I received bets on horses but I was not the boss” and he was proved to have been an employee of a bookmaker.  Macdougall J, as he then was, thought little of a submission at trial that the appellant could not be convicted of engaging in bookmaking because he had admitted that he was only an employee.  At p. 318G the judge said:

… it is abundantly clear to me that it is irrelevant whether the employer or his employee receives the bet or bets.

and again at I:

An employee who receives a bet or bets on behalf of his employer who runs a bookmaking business receives it or them no less in the way of trade or business than does his employer.  The words [of s. 7(1)(a) of the Gambling Ordinance (Cap. 148)] relate to the purpose for which the bet or bets are received, and this is so irrespective of whose trade or business it is by way of which it or they are received.

28. The same reasoning would apply to the agent of a person who runs a bookmaking business but not, as Mr Ching Y Wong submits, to the agent of the punter which is all the respondents here, if anything, were.

29. … There was no evidence of any business reward arising from the actions of the respondents relating to the wagers made.  They were not shown to be agents of the bookmaker with whom they made bets.  Their interest lay in whether their own bets either won or lost and, for the outsiders’ bets, whether they would have to collect winnings from the bookmaker and pay them out to the outsiders or collect money from the outsiders to pay to the bookmakers.  If Chow could not collect on losing bets from the outsiders then, as he had made the bet on their behalf, he would have to pay those losses to the bookmaker concerned.  While the bet was physically received the respondents were not shown to have accepted that bet as their own, whether or not they followed the bet separately themselves.

30. I would answer the point of law set out in para. 1(i) of the question in the affirmative but with the caveat, necessary because of the way in which the question is framed, that “accepted the bet as his own” would not exclude an agent of or an employee of a bookmaker who receives a bet on his principal’s, or his employer’s, behalf.

31. I would answer the point of law set out in para. 1(ii) in the affirmative though the use of the word “immediately” does not, I consider, add anything to the main phrase of “by way of trade or business”.  If the bet is with a bookmaker then that bookmaker, once he accepts the bet, does have the opportunity for gain or the risk of loss on that bet as it then stands.”

61.In his agreement with the judgment, Chan PJ added (at p. 329):

“5. If receiving a bet were the only element of bookmaking, many might find themselves easily regarded as bookmakers since people do sometimes bet among themselves on a friendly basis.  That is clearly not the intention of the legislation.  Hence, for the purpose of the Ordinance, it is also necessary to prove that the person alleged to be engaged in bookmaking is receiving bets by way of trade or business.  What amounts to a trade or business depends on the facts of each case.  An important factor is whether it involves the opportunity of making profit or the risk of incurring loss.  Other factors include the set-up and the operation in question, the nature of the activities, the records kept and equipment used.”

62.The careful analysis of the evidence which the judge gave concerning the evidence of the expert witness, Sergeant Ling, in the matter presently before us included the following passage which provides a clear illustration of how this case differed from the facts in Chiu Kam-yiu and Ors:

“… [the expert] said that P15 and P22 were typical of the records kept by a “small boat” to record his bettings.  And he said that those records, P22 and P15, reveal that the maker of the record, who we know is the defendant, was using methods typical of “small boats” to make money.

And he said that there were three methods which were typical of the way “small boats” made money.  The first way was that having received [bets] from a punter, the “boat” F would earn commission from a bookmaker by placing a corresponding bet with the bookmaker, earning a commission. In this case, he says that was [0.5] per cent, and you see it was [0.5] per cent in all cases, looking at these particular records.

He said that a small boat would also earn money by the difference in odds between the odds that he offered to the punter and the odds that he got from the bookmaker.  And just one example he gave, members of the jury – and you can see that on page 1525 of P15, would you look at Lo 1 – Sergeant Ling said that Lo 1 corresponds with H9.  He said it can be seen that the defendant was only offering the punter odds of 90 per cent in Lo 1, but he was getting more favourable odds of 95 per cent from the bookmaker H in H9.

… The third method which he said was typical of small boats and used by the defendant was to earn money by a combination of the two methods and by receiving bets from punters which he did not pass on to the bookmakers.

On Sergeant Ling’s evidence, a punter placing a bet with a small boat would not have to produce any money at the time he had placed the bet.  He told you that that was the reason why off-course betting was so attractive and that is why people use off-course bookmakers.  He said settlement would be effected through bank accounts later.  And you may think this is important, members of the jury.  He said that in other cases he had been involved in, mostly the settlement through bank accounts had involved cash deposits into bank accounts.

Now, that may well be significant or something you should bear in mind when you consider the cash deposits that you see in the defendant’s bank account.  He said that if a punter placed a bet directly with an overseas bookmaker, he would be required to pay money in advance.” (Appeal bundle pp. 29-31)

63.On any view, the applicant was receiving a commission from the bookmakers whereas in Chiu Kam-yiu and Ors there was no evidence that any single one of the respondents was receiving anything for his efforts in receiving bets from others which were passed on to the bookmaker other than the winnings which were received from their own betting activities.  In the present case, this difference was made abundantly plain to the jury when the judge directed them that:

“             What the prosecution alleges in this case is that the defendant committed the offence by receiving the bets.  They say he received the bets on the outcome of soccer matches.  Before you could be satisfied that the defendant was guilty of the charge of bookmaking, you would have to be satisfied firstly that within the time alleged in the count – that is, 31 August and 2 September – he received a bet or bets, and secondly you would have to be satisfied that he did so by way of trade or business.

For there to be a bet, members of the jury, there must be a future event, the outcome of which is uncertain.  It may, for instance, be a horse race or, as in this case, a soccer match.  There must also be two people who take an opposite view as to the outcome of that future event and who agree that dependent upon the outcome of that future event, one shall win from the other the amount staked.

Subject to the exception I will tell you about later, the law provides that a person does not receive a bet unless he or she accepts the bet as his own, so that he or she has an interest in the outcome.  In other words, a person does not receive a bet unless he or she himself may win or lose, dependent on the result of the future uncertain event, the horse race or the soccer match.

If you, for instance, members of the jury, gave your amah $500 and told her to go to the bookmaker and place that $500 on a particular horse in a particular race, she would not be “receiving the bet” for the purpose of the law, not only because she would not have taken an opposite view from you as to the outcome of the bet, but also because she would not have a financial interest in the outcome of the race.  It would be the bookmaker who would receive the bet because he would either win or lose, dependent on the outcome of the race.

The exception to this principle, that the person receiving the bet must receive it as his own so that he has a personal financial interest in the outcome of the bet, is where an employee or agent of the bookmaker, with authority to do so, accepts the bet on his employer’s or principal’s behalf.  The employee or the agent – in other words, the person acting on the bookmaker’s behalf and with his authority – would as a matter of law “receive the bet” even though he, the employee or agent, did not himself have a direct financial interest in the outcome of the race or match, so long as his employer or principal did.

So for instance, members of the jury, if you went into a bookmaker’s office and said to the person sitting behind the desk – who was an employee of the bookmaker – that you wanted to bet $500 on the winner of a particular race, and that person agreed, then that person – the employee sitting behind the desk – would have “received the bet” even though he did not have a direct financial interest in the outcome of the race because his employer did have such an interest and he was acting on his employer’s behalf when he accepted the bet.

The same would apply if it was a friend of the bookmaker who was sitting behind the desk or somebody else who was acting on the bookmaker’s behalf who accepted the bet on his behalf.  That person would have received the bet.  So in this case, members of the jury, before you could be satisfied that the defendant had committed the offence of bookmaking, you would have to be satisfied not only that he accepted the bet, but also that he either had a personal stake in the outcome of the match or alternatively that in accepting the particular bet he was acting as agent with the authority of, and on behalf of, a bookmaker who did have a financial interest in the outcome of the bet. …

In this case, if you are satisfied that the defendant had agreed to accept a bet from the punter, there is evidence from which you might conclude that the defendant had a personal stake in the outcome.  The prosecution say that there are some bets which he did not pass on to the bookmaker or where there is a difference in odds between the odds that he offered to the punter and the odds on the bet that he placed with the bookmaker indicating that he was taking a risk.

But you would not have necessarily to be satisfied of either of those situations if you came to the conclusion after analysing the relationship between the bookmaker, the defendant and the punter, the reality of the situation was not that the defendant was acting as agent of the bookmaker when he received the bet from the punter, but that he was in fact receiving the bet from the punter himself and then entering a separate, similar bet with the bookmaker, either because he knew that he could earn commission by placing such bets with the bookmaker or in order to protect himself against the possibility that he lost the bet with the punter, or indeed for both reasons.” (Appeal bundle pp. 7-10)

64.There was, in our opinion, an abundance of evidence on which the jury was able to conclude that the applicant was engaging in bookmaking by way of trade or business.  Furthermore, we are satisfied that the judge’s directions accurately and fairly reflected the law and the facts as they applied to this case.

(4)  Banking evidence

65.In the 4^th ground, it was alleged that the judge erred in directing the jury that the evidence relating to the large sums of money moving into and out of the applicant’s bank accounts (or accounts under his control) over the period particularised in the 2^nd count was relevant to the 1^st count, and that, alternatively, even if the banking evidence was relevant to the 1^st count, the judge ought to have directed the jury that they must disregard its prejudicial effect.

66.Initially, the banking evidence was placed before the jury as material which was relevant to the 2^nd count on the indictment to show the movement of approximately $471.60 million over the space of about 5½ years.  Sensibly, it has at no stage been suggested that this count was improperly joined in the same indictment as the 1^st count.  It was the evidence on the 1^st count about the applicant’s activities which enabled the prosecution to say that the massive sums of money passing through his bank accounts were the proceeds of an indictable offence.  Dealing, therefore, with the last of Mr Wong’s contentions under this ground, it is difficult to see how the judge could, in the context of his directions on count 1, have warned the jury about the prejudicial effect of the banking evidence when this was crucial to the 2^nd count.

67.However, the principal basis of Mr Wong’s argument on this ground was that the prosecution may have strayed from their intended use of the banking evidence merely to prove count 2 by using it, once the applicant had testified, to rebut his story that he was only an interpreter as opposed to a bookmaker.  This suggestion was dealt with by the judge in terms which Mr Wong criticised.  The direction was as follows:

“… and from the prosecution’s point of view [the significance of the accountant’s evidence] insofar as charge 1 is concerned, they say that the only reasonable inference you can draw on the totality of the evidence is that these funds, or at least a substantial part of them, were connected with the [applicant’s] bookmaking activities.  Now, although it is not suggested that the funds resulting from the bets placed on 31 August 2001 and 1 September 2001 appear on these bank statements, the prosecution say that the evidence is relevant to the role played by the [applicant] on 31 August and 1 September.

The prosecution say that this money in his bank accounts, or at least a substantial part of it, was money that must have been connected to betting and that as interpreters do not receive money from betting they say that the [applicant] is not telling you the truth about his relationship with the bookmakers when he says that his relationship was one of an interpreter.” (Appeal bundle p. 69)

68.Mr Wong submitted that this direction conflicted with the decision in R v Gordon [1995] 2 Cr. App. R 61 in that it went to the applicant’s propensity to commit crime.  In R v Gordon, the appellant, who had been driving a BMW car, was charged with the possession of crack cocaine with intent to supply.  Subsequent to his arrest, savings books revealed that he had a credit of £10,500 to his name and a total of £4,200 under a mattress and in various jacket pockets.  Considerable cross-examination during the trial had been directed at how the appellant had acquired his wealth.  The English Court of Appeal stated that the jury had been given no help by the judge in analysing whether or not that evidence was probative and applied the following principles which were set out by Henry LJ in the course of the judgment:

“1.   The intention to supply must relate to the parcel of drugs that the appellant was found to be in possession of.

2.   In order to be admissible, the evidence would have to be relevant to that intention.

3.   To be relevant, that evidence would have to be logically probative of that intention, i.e. that the evidence made his intention to supply those drugs more or less probable.

4.   Evidence of marginal relevance may and should be excluded if it would lead to a multiplicity of subsidiary issues.

5.   It is the duty of the judge, whether objection is taken or not, to ensure that irrelevant evidence (particularly when it is prejudicial to the defence) be not received in court.  Should such evidence have been received, then the judge has the special responsibility to direct the jury either to disregard it or how to treat it, as the circumstances require.”

69.In Gordon’s case, it is apparent that the evidence about the applicant’s finances went to his intention to commit the offence, which stood alone, of possession of a Class A drug with intent.  In the present case, the position was quite different.  Not only were there two properly linked counts for the jury to consider, the applicant’s defence was that he was merely acting as an interpreter between Chinese clients on the one hand and bookmakers who could not speak the clients’ language on the other.  As the judge said, in a passage to which we have referred: “the prosecution say that the evidence is relevant to the role played by the [applicant] on 31 August and 1 September … as interpreters do not receive money from betting, [the prosecution] say that the [applicant] is not telling you the truth about his relationship with the bookmakers when he says that his relationship was one of an interpreter.”  This amounted, in our opinion, not to evidence the purpose of which being to demonstrate propensity but to a legitimate rebuttal of the defence which the applicant had raised.

(5)  Directions on 2^nd count

70.In the fifth and last ground, Mr Wong submitted that the judge erred in his directions to the jury in respect of count 2 when he told the jury (at p. 18 of the appeal bundle) that although the applicant may have acted as an agent of an overseas bookmaker, nonetheless, he “would have committed an indictable offence of bookmaking”, and “the proceeds of the applicant’s bookmaking would amount to the proceeds of an indictable offence”.

71.We do not need to dwell on this ground.  It was accepted that the judge fairly and properly told the jury that if they decided that the applicant should be acquitted on count 1, they should also acquit on count 2 and the only real significance of this ground was said by Mr Wong to be that if he succeeded in his submissions on count 1, count 2 ought necessarily to be quashed.  However, as we have indicated already, the submissions on count 1 fail.

Conclusion

72.We are satisfied that the verdicts were neither unsafe nor unsatisfactory.  Accordingly, the application is dismissed.

Mr John Reading, SC, DDPP, Ms Anna Y K Lai, SGC and Ms Ada Chan, GC, of the Department of Justice, for the Respondent.

Mr Ching Y Wong, SC and Mr Derek Chan, instructed by Messrs Leung, Chan & Pang, for the Applicant