Wong Kar-kui and Others v. The Queen

CACC000552/1982

Managing gambling establishment - not necessary to prove knowledge of nature of establishment if managing proved - inference drawn from presence of chips that gambling taking place presumption of gambling not rebutted.

BETWEEN

Coram: Bewley, J. in Court

Date: 28 July 1982

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JUDGMENT

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1. This appeal arises out of a police raid on premises where mahjong was being played.

2. This was on 28th October, 1981, but the police had visited the premises under cover on several other occasions in August and September that year. On 18th August, 4 plain clothes officers were greeted by the lst appellant, who asked them if they had come to play mahjong. When they said yes he took them to one of several cubicles into which the premises were divided. One of the officers entered his name in a membership record book and was given a membership card.

3. The cubicle was fully equipped for the playing of mahjong, including a set of chips. The police party played for an hour and, when they left, they paid $10 to the 2nd appellant for the use of the cubicle.

4. Another visit was made on 24th August, when the pattern of events was similar.

5. On 29th September, a sergeant and 4 other police officers in plain clothes visited the premises. The sergeant was given a membership application form by a staff member - there is no evidence that any of the appellants was present - which he signed under a false name and was given a membership card.

6. They were taken to a cubicle where they played mahjong and had refreshments. On leaving, they paid $78.50. The sergeant noted that there were 8 cubicles, 2 toilets, a kitchen and small bar. Sign boards were displayed outside the premises. The sergeant agreed in cross-examination that his membership card stated, "No member is allowed to gamble therein”.

7. On 28th October, the 3rd appellant enrolled one of the police party as a member and showed them to a cubicle, where they played mahjong and had refreshments. While they were playing, another police party raid the premises under a Gambling Authorization.

8. The police witnesses who had played mahjong on all these occasions admitted that at no time had they played for money.

9. The 2nd and 3rd appellants were arrested and later charged with assisting in the management of a gambling establishment, contrary to section 5(c) of the Gambling Ordinance, Cap. 148. 15 other persons were also arrested on the premises and charged with gambling in a gambling establishment, contrary to section 6. They are 4th - 18th appellants. The 1st appellant arrived while the police were still there and was arrested. He was later charged with operating a gambling establishment, contrary to section 5(a), but during the trial the charge was amended to managing a gambling establishment, contrary to section 5(b).

10. There is one other charge. This is a summons against the Good Lucky Day Association Ltd. for operating a gambling establishment, contrary to section 5(a).

11. The learned magistrate found that the sole purpose of this company was to provide for the playing of mahjong and, that the whole premises were organized to that end, the provision of refreshments being quite incidental. This is accepted by the lst appellant.

12. The lst appellant is a director of this company and one of 2 major shareholders. From his cautioned statement and from his evidence, it is clear that he managed the premises and the magistrate so found. The 1st appellant has no quarrel with this finding.

13. The magistrate found that the 2nd appellant was the cashier, who calculated the charges, received the money and dealt with applications for membership. He found that the 3rd appellant carried out similar duties and also showed customers to their cubicles and served refreshments. Consequently he concluded that both these appellants were assisting in the management of the premises. This finding is not challenged on appeal.

14. The main thrust of Mr. Eddis' argument is that there is no evidence of gambling. It is not an offence to play mahjong purely for fun. He submits, therefore, that the premises were not a gambling establishment and the appellants were wrongly convicted.

15. At the outset of the hearing, Mr. Eddis asked me to reserve the case for the consideration of the Court of Appeal in accordance with s. 118(d) of the Magistrates Ordinance, Cap. 227, on the grounds that an important question of law was involved, namely whether the offence was one of strict liability. I refused the application on the grounds that the magistrate had found that the lst appellant was actively engaged in the management of the premises.

16. At the time I had not directed my attention to S.19(l); it had not been referred to in the magistrate's statement of findings and Mr. Eddis did not mention it at that stage of his submission. The subsection states:

17. As the conditions of (c) were complied with in this case, the presumption applies. What is now clear, though I did not appreciate it at the time, is that Mr. Eddis was asking the court to say that, even though the defence should have failed to rebut the presumption, the prosecution must go on to prove beyond reasonable doubt that the 1st appellant knew that what he was managing was, in fact, a gambling establishment.

18. His authority for this submission is LAI Lai-yuk v. R.⁽1) . In that case the appellant was charged under S.15(1)(a), which provides:

19. An important difference between this section and S.5 is the presence of the word 'knowingly'. Mr. Eddis relies on Silke, J's conclusion that S.19(1) can only be used to erect the presumption that the premises were a gambling establishment and that it cannot be used to presume knowledge on the part of the appellant. Obviously not. As Silke, J. observed earlier, knowledge is an essential ingredient of the offence and must be positively proved.

20. The section is aimed at occupiers of premises that permit gambling therein. It includes a safeguard to protect those in the position of the innocent Miss Sweet. (See Sweet & Parsley⁽²⁾ .)

21. S.5 on the other hand is designed to ensnare the operator or manager, that is to say the person in charge of the activity. I do not see how such a person can either 'operate' or 'manage' without being aware of the nature of the activity.

22. The point may not have been argued in R. v. Leung Shui and others⁽³⁾ , but having found that the premises in question were a gambling establishment and that the appellants were assisting in their management, Cons, J. dismissed the appeal forthwith.

23. It would, in my view, be absurd to hold that, though it was proved that the lst appellant had managed a gambling establishment, he is guilty of no offence because he did not know it was a gambling establish-ment.

24. The crucial question in this appeal is whether mahjong was being played for money or for fun. 'Gambling' includes 'gaming, betting and bookmaking'. 'Gaming' means 'the playing of or at any game for winnings in money or other property whether or not any person playing the game is at risk of losing any money or other property'.

25. By virtue of S.19(1), the burden is on the 1st, 2nd and 3rd appellants to prove that the premises were not a gambling establishment. The latter is defined in S.2 as:

"... any premises or place, whether or not the public or a section of the public is entitled or permitted to have access thereto, opened, kept or used, whether on one occasion or more than one occasion, for the purposes of or in connexion with unlawful gambling or an unlawful lottery."

26. There are thus 2 main elements: gambling and unlawfulness.

27. Of those who were arrested while playing mahjong on 28th October, only 4th, 5th, 6th and 7th appellants gave evidence. The learned magistrate did not find them credible witnesses and, on the balance of probabilities, rejected their explanation that they were playing merely to see who was the most skilful player and to kill time. He went on to say, 'It defied all commonsense to believe that they had gone to the premises to play for fun or to test their skills, and the inescapable inference was that they were playing for winnings.'

28. Was this the only reasonable inference to be drawn? Mr. Eddis points to the fact that none of the police officers played for money. I think it would have been very surprising had they done so. They were there, after all, to look around and gather evidence, not to commit an offence themselves. Once they were inside the cubicle, they were left alone, so it would not have taken matters any further had they in fact played for money.

29. What about the membership cards, which stated that gambling was not allowed. There is also evidence from the defence that there were similar warning notices in the cubicles. These are neutral in my opinion. One would expect to find them whether it was intended that gambling should or should not take place. In the former case, those responsible can point to the notices and say they had prohibited it.

30. If that was the case, however, one wonders why it was necessary to have the rigmarole about membership cards. Clearly this was a sham. Anyone could join. No proof of identity was required. If the management really intended that there should be no gambling, there was no need for membership. It would have been perfectly legal to have invited anyone off the street and charged them $10 for the room.

31. This company had been set up for only one purpose, namely the playing of mahjong. It is hard to imagine that such premises could be profitable if persons who wished to gamble were excluded. If the management took the view that it was a matter for the players to decide whether or not they gambled, they must have realized that only a very small proportion of members would not do so.

32. After all, chips were provided at each table and they were of different colours. It is a reasonable inference that each colour represented a different value. The players, in their cautioned statements to the police, admitted that the 'basic' chip was worth 50 cents. But in their evidence they say it was only possible to tell who was the most skilful player if the winnings were notional represented in dollars and cents. It did not mean that it was intended that any money should change hands.

33. I think the magistrate was perfectly entitled to take the view that this evidence was unbelievable. As Cons, J. said in Leung Shui⁽³⁾ :

"No actual cash was found on any table, only chips. But it would be naive to close one's eyes to the realities of the situation. These were not families having a night out with the children. They were groups of men who had deliberately gone to the hotel to play. The chips were down. In these circumstances it would in my view be an unreasonable doubt to think that in none of those games was the enjoyment of the finer niceties of play not spiced by the addition of some financial interest.''

Not all gambling is unlawful. S.3(1) provides:

"Save as provided in subsections (2), (3), (4), (5), (6), (7) and (8), gambling is unlawful."

We are only concerned with subsection (2): the others have no application in this case. Subsection (2) states:

"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 the private gain of any person otherwise than to the extent of a person's winnings as a player of or at the game."

34. The important words here are 'promoted or conducted by way of trade or business'. Here I would respectfully adopt the approach of Cons, J. in Leung Shui⁽3) , where he said:

"This part of the subsection has given me consider-able anxiety, for there is no doubt that the guests of the hotel that evening were not guests in the normal sense in which that word is used in relation to hotels, that is, they were not genuine travelers or persons having no other accommodation for the night. They were persons who had gone there deliberately for the purpose of gaming. And this fact was well known to the hotel. Yet on the other hand all that the hotel did outside its normal line of business was to lay in an unduly large stock of mahjong tiles. Does this then amount to 'promoting by way of trade or business''? The answer, I think, is to be found in subsection (4). The words 'promoted or conducted by way of trade or business' are to be found three times in section 3, that is in subsections (2), (3) and (4). Each time the phraseology is identical, until we come to the last. There the words are followed by the qualification

'otherwise than to the extent of the charging of a fee not exceeding the prescribed amount for the hire of any set of tiles'.

This indicates that the legislature intended the general use of the words in question to cover the hiring out of tiles and other gaming equipment. Otherwise there would be no need for this last specific exception. It does not follow that every hiring will necessarily take a hotel keeper outside the provisions of the subsections. It is perhaps a matter of degree and will have to be decided in each case according to the circumstances. In the present case equipment had been hired to at least four of the five rooms occupied. The evidence showed this to be a regular feature of the hotel's business. These factors are sufficient."

35. Bearing in mind that the company was set up for the purpose of mahjong playing and that as charge was made for the use of the room and paraphernalia, there can be no doubt that gaming was 'promoted or conducted by way of trade or business'. It was, therefore, unlawful gaming and the premises were a 'gambing establishment'.

36. This disposes of the appeals of the 1st,2nd, 3rd and 19th appellants. The latter was clearly under the control of the 1st appellant.

37. The remaining appellants were caught by the presumption in S.19(2). This subsection states:

''Where in any proceedings under section 6 it is proved that a person was found in a gambling establishment or that a person escaped from a gambling establishment on the occasion of its being entered under section 23(2) (a), such person shall until the contrary is proved be presumed to have been gambling therein.''

38. Thus they had to prove,on a balance of probabilities, that they were not gambling. The magistrate did not believe the evidence of those appellants who testified. Having regard to what I have said above, I am satisfied that he was justified in concluding that 4th - 18th appellants were gambing.

The appeals of all 19 appellants are dismissed.

(1)    C.A. No. 668/79

(2)    1970 AC 132

(3)    1977 H.K.L.R. 544

Representation:

Mr. F. Eddis (Hoosen & Co.) for appellants

Mr. J. Bolton, C.C., for respondent