Lai Man-yau v. The Queen
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CACC000632/1979
----------------- Coram: Huggins, J.A., Cons and Yang, JJ. Date of Judgment: 13 December 1979 ----------------- JUDGMENT ----------------- Huggins, J.A.: 1. The Appellant was convicted under s. 10(1)(b) of the Prevention of Bribery Ordinance. Apart from a period during the war he had served in the Hong Kong Police Force from 1935 until 1969, when he retired. The Prevention of Bribery Ordinance was passed on 14th May 1971 and eventually the Appellant was charged with an offence alleged to have been committed on 15th May 1971. It was never denied that the Appellant was on that date in possession of pecuniary resources and property disproportionate to his official emoluments. The official emoluments were proved at $228,073.98 and the assets were alleged to be $5,301,082.62 at "acquisition values" and $9,119,779.47 at the charge date values. It follows that the substantial issue in the case was whether the Appellant could give a satisfactory explanation. 2. His explanation went back to shortly before the last war. It was accepted that at that time the Appellant had bought a lorry for about $7,000, of which his brother-in-law paid part, and that the two men then went into the transportation business. The Appellant says that at the outbreak of the war he had $4,000 and his wife $4,000 by way of savings. The learned judge was uncertain whether to believe this. After the war started the Appellant took the lorry to China and carried on a transportation business there. His evidence was that this business flourished and that when he returned to Hong Kong after the war he and his wife brought with them assets totalling $1.7 million. His case was that all the assets in his possession or under his control on the charge date sprang either from his official emoluments or from the assets brought back from China. 3. The only evidence which could have proved fully the sum brought back from China was that of the Appellant and his wife, but their evidence was disbelieved: the judge was satisfied that they brought back some property but he did not believe that it was anything like as much as they said. Complaint is made that the judge did not then quantify what was brought back, but there was no evidence upon which he could do so. It was for the Appellant to adduce credible evidence to support his explanation. The most the judge could have done on the evidence before him would have been to say that, however much was brought back, he was not persuaded it was enough to produce, in the manner alleged by the Appellant, the assets which had to be explained. He did not say that in so many words, but if he had merely said that he was not satisfied with the explanation such a finding would have been implicit. 4. The difficulty is that the judge went further. He accepted the truth of the schedules of property produced by the Appellant, so far as they went. Thus he accepted that with an outlay in 1946 of only $35,000 (or perhaps a little less, depending upon the date when income from the trading in "pharmaceuticals, tinned foods etc." began to come in) the Appellant and his wife could have acquired all the assets shown in the schedules but for a sum of $468,742. On that basis there would have been a good explanation if the Appellant had established (a) that they brought back $468,742 from China after the war and (b) that the schedules included all the material expenditure. We think it is implicit in the judgment that he did not believe that the Appellant and his wife brought even that sum and kept it idle (i.e. uncommitted) for many years. However, he expressed the view that the $468,742 which, on the schedules, appeared to be unexplained might be explained by failures to record payments in fact received: he would "not be surprised if even as much as $468,742. of legitimate income had been overlooked" in view of the large sums being received. We took this at first to contemplate accidental errors in accounting and to adopt an attitude over-generous to the Appellant. However, on further consideration we think the judge had in mind items some at least of which were not overlooked but deliberately omitted from Table C - for it must be remembered that Table C was not intended to be a complete account of all income and expenditure: see paragraph 3 of the notes at p. 1860 of the record. Yet the judge refers to the Defendant's police pay and pension as part of the income "indisputably omitted" and therefore, presumably, "overlooked". 5. As it now seems to us, the judge did not ignore the figure of $468,742 on the basis that there might have been accounting errors but, in effect, sought in his mind to amend Table C so as to convert it into a complete statement of all income and expenditure. In the first instance he added all the other known sources of income. He added (i) $228,073.98 in respect of official emoluments, (ii) a sum, not quantified by him, as profit from a mahjong school in Shanghai Street and (iii) insurance commission, which, again, the judge did not quantify. In addition the judge was satisfied that the Appellant's wife had done some money lending, but there was insufficient evidence adduced by the Appellant to satisfy him as to the amount of profit which accrued therefrom. As we shall see, he obviously concluded that the amount of commission was not enough to balance the account. 6. Whilst there was clearly no evidence upon which the judge could have quantified the sum brought back from China once he disbelieved (as he did) the evidence that it was $1.7 million, there was evidence upon which he could have quantified items (ii) and (iii). There was evidence that the Appellant had a one-third share in the mahjong school in Shanghai Street and that it made a profit of $500 a day. The judge said generally that he "ended up with feelings of less than confidence in what [he] heard from some of [the defence] witnesses", but from what he said later it appears that he was referring there to the witnesses who spoke to the wealth brought back from China. He did not expressly disbelieve the evidence as to the profits from the mahjong school and Mr. Yu asked us to take them as being $216,000. We think that is fair. Then the judge did say that he believed Mr. Yeung Kwai-for to be a truthful witness, and on his evidence it was possible to quantify the insurance commission at $30,000. 7. At a later point in his judgment the judge considered the items which he thought needed to be added on the other side of the balance sheet. There were the living expenses of the Appellant and his dependants, including expenses relating to his car but excluding foreign travel of the Appellant himself, which is shown as a debit in Table C at p. 1899. It is clear that the judge thought the Appellant was not living within the means accruing to him from official sources, for he said at p. 1116:
It has never been contested that the Appellant and his wife lived in their own house and did not have to pay rent. At one stage of the argument it was suggested that the judge refused to hear evidence as to the Appellant's style of living, but later it was agreed that what was excluded (at the instance of the defence) was evidence in the course of cross-examination of the Defendant about further property under his control, i.e. evidence of capital acquisitions, not of living expenses. However, the judge's conclusion as to the style of living is supported by the evidence that the Appellant was paying a minimum of $300 a month to his concubine until her death shortly before the charge date and that the wife employed a servant. It is probably generous to enter the living expenses at the same figure as the official emoluments. 8. The final calculation is then as follows:
It is implicit in his finding that the judge was satisfied that any other unquantified income - the burden of proof of which was anyway on the Appellant - could not possibly be accounted for by (1) the sum in fact brought back from China in 1946 and (2) any other unquantified income, such as interest on money lent. It follows that, even disregarding the Appellant's failure to discharge the burden of proving specific items of income and expenditure, the overall result is a failure to discharge the burden of giving a satisfactory explanation of assets amounting at the least to some $200,000 in 1971. 9. It should be mentioned that complaint was made of the judge's statement that "the court does not allow itself to be mesmerized by the arithmetic in this type of case" and his citation in this connection of Sturgeon v Reg. 1975 H.K.L.R. 677. The statement itself seems to us unobjectionable, but the judge did not make it entirely clear how he thought the case cited was relevant to the circumstances of the present case. Sturgeon v Reg. is authority for the proposition that s. 10 is not concerned with a purely arithmetical disproportion, but once disproportion is established its explanation must be purely a matter of arithmetic or, more accurately, of accounting. Here the disproportion was admitted and there could be no danger of the court's being mesmerized by the arithmetic into finding disproportion where it did not exist. A possible danger was that a court might think that, if "the balance for the month of the charge date in Table D was not minus", that would "mean that the Defendant's explanation should be treated as satisfactory". That was an error which the learned judge certainly did not make. Whatever relevance he may have thought Sturgeon v Reg. had to the present case, he relied upon it only as supporting his view that a balancing of the figures in Table D would not be a satisfactory explanation of the admitted disproportion between the assets and the official emoluments. It is sufficient answer to the objection raised that the view sought to be supported was correct for other reasons. 10. The application for leave to appeal against conviction is dismissed. 13 DEC 1979 |