HKSAR v. Lui Mei Chi and Others

CACC 248/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 248 OF 2007

(ON APPEAL FROM DCCC NO. 801 of 2006)

____________

BETWEEN

____________

Before: Hon Ma, CHJC, Stuart-Moore VP and Wright J in Court

Date of Hearing: 30 July 2008

Date of Judgment:  30 July 2008

_______________

JUDGMENT

_______________

Hon Wright  J (giving the judgment of the Court):

1.The three applicants seek leave to appeal their convictions, after trial, by Deputy Judge Andrew Chan on a single charge of conspiracy to defraud contrary to common law which was particularised in the following manner:

“... between about 4 June 2004 and 28 October 2004, [they] conspired together to defraud the Government of the Hong Kong Special Administrative Region, its employees or agents by dishonestly representing that:

(i)         WU Yim-fan, Catherine was in the employ of Megaluck International Limited ("Megaluck”) as a transcription production supervisor;

(ii)        WU Man-lai, Raymond was in the employ of Megaluck as an audio recording supervisor;

(iii)       Megaluck had installed a conference and recording system and provided interpretation and transcription services to Dolphins Engineering and Trading Limited for the one-off contract value of $380,500... and on-going annual contract value of $234,000;

(iv)       Megaluck had installed a conferencing and recording system at... and provided system maintenance to Aquamax Pool Services Ltd for the one-off contract value of $86,000... and an on-going annual contract value of $30,000; and

(v)        for the period 15 October 2003 to 31 May 2004 the service revenue of Megaluck amounted to $2,100,000...;

so as to induce the Government of the Hong Kong Special Administrative Region to enter into an agreement with Megaluck for the provision of digital audio recording and transcription services (DARTS).”

2.The proceedings arose from tenders submitted by Megaluck for the award of one of two contracts to be awarded by the Government for recording and transcription services to be provided throughout the judiciary.  We do not propose to go into the detail of that tender procedure which the judge considered with commendable clarity in his Reasons for Verdict.  Suffice it to say that the tender process required that a tenderer supply certain specific information, the nature of which is reflected in the charge, which it warranted to be true and to form the basis of any subsequent contract concluded between the Government and a successful tenderer.  At the conclusion of the tender process one contract was awarded to Megaluck.

3.The three applicants challenged the admissibility of their records of interview but elected not to give evidence either in respect of that issue or in respect of the general issue: the judge correctly found the contents of the interviews to be admissible and mixed in nature.

4.In his reasons for verdict the judge reviewed with care all the evidence given by the prosecution witnesses and found, as he was fully justified in doing, that the prosecution had proved, firstly, in respect of particulars (i) and (ii), that the persons named therein had not been employed by Megaluck at any stage but simply had applied to it for employment whereupon their personal particulars and curricula vitae were hijacked, altered and then used in support of Megaluck’s tender; secondly, the claims made by Megaluck in the tender particularised in (iii) and (iv) were, respectively, "not true" and "fictitious ".  He found that the prosecution had failed to prove particular (v).

5.The judge detailed the proven level and extent of involvement of each applicant in the fraud.  Unsurprisingly, he found their conduct to be dishonest.  He also expressed himself satisfied, as he inevitably would have been, that they had acted in such a manner in order to secure the award to Megaluck of one of the contracts.  He found that the prosecution evidence satisfied him that that contract would not have been awarded to Megaluck had Megaluck not supplied the information which is reflected in the charge or had the Government been aware that the information supplied was false.

6.The Amended Perfected Grounds of Appeal do not seek to challenge the judge's findings of fact.  Two grounds are advanced although the second tautologically asserts that the conviction is "unsafe and unsatisfactory" for the reasons expressed in the first ground.  It adds nothing.  Ground one reads:

“1.1   The learned judge erred in convicting the applicants of the offence of "Conspiracy to Defraud" in that he failed to direct himself that for such offence, part of the requisite mens rea was the common intention to cause economic loss to another (or to put another's economic interests at risk) and/or to cause a person to act contrary to his public duty.

1.2   The learned judge erred in failing to direct himself that upon the evidence, the common intention:

(i)         to cause the Judiciary (HKSAR) economic loss (or put its         economic interest at risk); and/or

(ii)        to cause the Judiciary (HKSAR), by entering into the     agreement with Megaluck, to act contrary to its public     duty

were not proved beyond a reasonable doubt.”

7.The complaint appears to be that the judge failed adequately to address the issue of mens rea.  Certainly, he did not set out in tabular form just which of his very detailed findings of fact related to which element of the offence.  For him to have done so would have constituted unnecessary repetition.

8.The argument in support of the ground extended, as we understand it, into two areas: first, a failure on the part of the judge to address the issue of economic loss or the exposure to risk of the Government's economic interests; secondly, a failure by the judge to make a finding whether the conduct of the applicants caused the Government to act contrary to its public duty.

9.The fact that the judge accepted, in dealing with mitigation in his reasons for sentence, that the Government in the end suffered no economic loss is not the point.  The submission that the judge’s acceptance, for the purpose of mitigation, that no economic loss eventuated in some way calls into question his finding on mens rea is without foundation.  It is self-evident that wilfully putting forward documents which are known to be false in order to secure a contract to which one would not otherwise be entitled puts at risk the economic interests of the other party to the contract.

10.In  MO Yuk Ping v HKSAR (2007) 10 HKCFAR 386 Sir Anthony Mason NPJ. delivering the Judgment of the court said:

“40. ... there is no formulation which amounts to a comprehensive definition of the common law offence [of conspiracy to defraud]... the offence is constituted by becoming a party to an agreement with another or others to use dishonest means: (a) with the purpose of causing economic loss to, or putting at risk the economic interests of, another; or (b) with the realisation that the use of those means may cause such loss or put such interests at risk.

He continued:

43. In the context of conspiracy to defraud, it is becoming a party to the agreement to use dishonest means that constitutes the material element of dishonesty.  Dishonesty involves a state of mind.  Most cases of agreement to use dishonest means are cases of deceit.  In other cases of dishonest means a defendant may agree to do something which he knows he has no right to do or believes that he has no right to do or he agrees to do something which is dishonest and he knows or believes that it is dishonest.

44. Dishonesty apart, conspiracy to defraud involves another state of mind - the intention or purpose of inflicting economic loss on another or the realisation that the action agreed upon will or may put that person's economic interests at risk, the element to which Lord Goff referred in The Queen v Wai Yu Tsang [1992]1 HKCLR 26 at p 33. This state of mind may well involve dishonesty.  It is preferable however to treat it as a separate element.” [Emphasis provided]

11.The judge found that documents were submitted in support of the tender which the applicants knew to be false; that "there was only one reason for all the false representations to be put forward in Megaluck’s tender proposal, that was to induce the Government to award the contract to Megaluck”  [para 377 of the Reasons for Verdict, p 124/125 of the Appeal Bundle]; that the Government was in fact induced into entering into the agreement with Megaluck [para 391 of the Reasons for Verdict, page 127 of the Appeal Bundle]; that he was "... satisfied [the applicants] did intend to induce and defraud the Government.”; and that "... because of the various clauses stipulated in the tender documents, the three [applicants] must have realised the consequences of their acts and declarations.".

12.The final finding relates to precisely the situation contemplated in paragraph 44 of the decision in MO Yuk Ping.

13.Having made those findings the only inference which could have been drawn was the intention to cause the Government to act in a manner that it would sustain economic loss or that its economic interests would be put at risk and/or to act contrary to its public duty. 

14.The judge, in paragraph 402 of his Reasons for Verdict, stated explicitly:

“The defendants in this case clearly dishonestly agreed to bring about a state of affairs which they realised …would deceive the victim into acting in a way that caused risk to itself.”

It is perfectly clear, therefore, that the judge found the charge proved on the basis that the applicants had intended to put at risk the economic interests of the Government.  It is hard to envisage what he could further have said without resorting to prolixity.

15.The judge’s finding renders superfluous the second leg of the applicant's submissions, that relating to the judge's failure to make a finding as to whether the intention of the applicants was to cause the Government to act contrary to its public duty.  Even assuming that the applicant's conduct had the effect of causing the Government to breach a duty, be it public or private, that was merely one consequence of their conduct, coincidental with and in addition to putting at risk its economic interests.  That their conduct may have had the added consequence of leading to a breach of a duty does not derogate from the fact that that same conduct exposed the Government's economic interests to risk.  (See  TAI Chi-wah and Another v HKSAR CACC497/2006)

16.The application is devoid of merit: it fails and is dismissed.

Loss of time

17.There was never any sustainable ground of appeal. In the circumstances we order pursuant to section 83W of the Criminal Procedure Ordinance, Cap. 221, that 4 months of the time that each applicant has spent in custody will not count towards the sentence presently being served.

Mr Robert S.R. Lee, SC, SADPP & Mr Jonathan Man, SPP, Department of Justice, for Respondent

Mr Ching Y Wong, SC, & Mr Phillip Wong, inst’d by M/s Raymond Chan, Kenneth Yuen & Co for the Applicants