HKSAR v. Wong Kwong Shun Paul

[English Translation - 英譯本]
CACC 390/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 390 OF 2007

(ON APPEAL FROM DCCC NO. 146 OF 2007)

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BETWEEN

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Before: Hon Tang VP, Yeung JA and Barnes J in Court

Date of Hearing: 27 May 2009

Date of Judgment: 27 May 2009

Date of Handing Down Reasons for Judgment: 2 June 2009

REASONS FOR JUDGMENT

Hon Yeung JA (giving the Reasons for Judgment of the Court):

Introduction

1.The applicant Wong Kwong Shun was a Landscape Architect of the Housing Department.  His duties included making recommendations to the housing project team about construction materials to be used in Housing Department projects.  Between 25 January 2000 and 2 September 2001, in four Housing Department projects the applicant recommended using EPOX products supplied by Nikka Building Materials Limited (“Nikka Materials”).

2.The prosecution alleged that when the applicant made the above recommendations, he did not disclose his close personal friendship with Madam Wong Chui-seung (黃翠嫦), one of the directors of Nikka Materials.  The prosecution case was that the applicant’s act of recommending the EPOX products resulted in Nikka Materials enjoying an unfair advantage over other suppliers and also gave rise to conflict of interest on the part of the applicant.

3.As a result of these events, the applicant was charged with one count of misconduct in public office.  He pleaded not guilty and was tried before District Judge Patrick Li.  He was convicted after trial and was sentenced to community service for 100 hours.

4.The applicant applied for leave to appeal against conviction.  After hearing, we dismissed his application, for reasons to be set out below.

The prosecution case

5.The prosecution case was straightforward and not in dispute.  Nikka Materials was incorporated on 7 July 1999.  Its shareholders were Nikka Technology and one Smartax Limited (“Smartax”), each holding 50% of the shares.

6.Smartax was incorporated on 6 May 1999.  Madam Wong Chui-seung was a director and the controlling shareholder.  Another director was her mother Madam Law Wong Ying (羅煌英).

7.Madam Wong was a good friend of the applicant.  Before the applicant joined the Housing Department, he and his wife Ma Siu Yee (馬紹儀) were already acquainted with Madam Wong and her husband Wong Chun Kuen (黃振權).  The four of them had frequently gatherings and travelled together from time to time.

8.Originally, the agent for the EPOX products was Nikka Technology, of which Mr. Lo Tik Tsan (勞狄贊) and his wife were the directors and controlling shareholders.  In 1998, on account of the EPOX products, the applicant came to know Mr. Lo Tik Tsan.  Subsequently, Mr. Lo told the applicant that he was having financial difficulties in marketing the EPOX products.

9.Madam Wong was a housewife who had never dealt in any building materials business before, but after the applicant introduced her to Mr. Lo, she and her mother immediately set up Smartax.  Smartax and Nikka Technology jointly established Nikka Materials, which then became the agent for the EPOX products.  Soon after the establishment of Nikka Materials, the applicant recommended the EPOX products in the four Housing Department projects mentioned above.

10.As an architect of the Housing Department, the applicant was bound by the provisions in the Civil Service Branch Circular regarding “conflict of interest”.  The circular expressly provides that where a conflict of interest arises from a personal relationship/friendship between a Housing Department officer and a building materials supplier in a Housing Department project, the officer should declare the conflict and/or refrain from recommending the products of that supplier.  A civil servant should also decline to provide assistance to his relatives and/or friends so that they will not enjoy an unfair advantage, and he must not acquire any interest or participate in any investment which is in conflict with his public office.

11.The applicant did make a declaration about his investment, disclosing that he held 50% of the shares in one Centana Contracting Limited (“Centana”).  At the same time, however, he said that he did not take part in the business operation of Centana.

12.On 18 December 2000, the applicant declared that Centana was involved in certain environmentally friendly products and the merchants of those products might have some connection with the contractors of the Housing Department.  However, the applicant said that this would not put him in the position of a conflict of interest because, in his official capacity, he could not possibly decide to use those products or approve such use.

13.On 25 February 2000, the applicant applied to the Housing Department for permission to invest in the development of the EPOX products, but the application was refused on the ground that the proposed investment might involve a conflict, or might give rise to a potential conflict, with his public office.

14.Between 25 January 2000 and 2 September 2001 when the applicant on four occasions recommended the EPOX products, he never declared his personal friendship with Madam Wong or the conflict of interest arising from such relationship.  It was only on 3 September 2001 that the applicant, in a memo to the Housing Department declaring interest, stated that he and a “Mrs B Wong – a director of Nikko Building Materials Ltd” were good friends.  The applicant told the ICAC that Mr. Lo was short of money for developing the EPOX products and that the applicant had applied, although in vain, to the Housing Department for investing in the development of those products.  The applicant also admitted that he was a friend of Madam Wong and her husband, that he introduced Madam Wong to Mr. Lo, and that subsequently they set up Nikka Materials.

15.The prosecution took the stance that, by failing to declare his relationship with Madam Wong, the applicant was in breach of the Civil Service Branch Circular on “conflict of interest”.  The prosecution also alleged that the recommendation of the EPOX products by the applicant would give Nikka Materials an unfair advantage over other suppliers.

16.The Housing Department officers stated clearly in their evidence that the applicant did not declare his friendship with Madam Wong when he recommended the EPOX products, and that, had the applicant made the declaration, someone else would have been assigned to replace him in respect of the relevant projects and his recommendations would have been more closely scrutinized.

Applicant’s evidence

17.The applicant argued that even though they were two to three times more expensive than other applicable products, the EPOX products should still be recommended because they were of superior quality.

18.The applicant said that Mr. Lo had asked him whether he was interested in investing in his company and the applicant had replied in the negative.  In early 1999 Mr. Lo asked him whether he was willing to invest in the EPOX products.  He indicated that Mr. Lo did not have to wait for his decision, but at the same time he introduced Madam Wong to Mr. Lo.  Subsequently the applicant learnt that Madam Wong’s mother was interested in investing in the EPOX products, and Mr. Lo informed the applicant that the company’s financial problems had been resolved by reason of assistance from Madam Wong.  Mr. Lo had asked the applicant whether he would like to be given some benefits from the patent, but he politely refused to take them.

19.The applicant explained that when he applied for permission to invest in the development of the EPOX products, he did not have a detailed investment plan, because he wanted to obtain permission from the Housing Department first.  He said that he had intended to donate to the Housing Department the benefits from the patent of the EPOX products.  However, he admitted that he hoped he could invest in the development of the EPOX products and at the same time continue to work in the Housing Department.

20.The applicant asserted that when he recommended the EPOX products to the Housing Department, he neither sensed that he was giving any advantage to his good friends nor obtained any benefit for himself, and hence he did not feel that any conflict of interest was involved in this matter.

21.The applicant maintained that in recommending the EPOX products to the Housing Department, he did not deliberately give any advantage to Madam Wong. He recommended the EPOX products not because he knew that Madam Wong invested in Nikka Materials, but purely because the products were of a high quality and suitable for the projects.

22.The applicant said that subsequently he had misgivings over the above matter, following a talk on corruption issues given by ICAC officers who visited the Housing Department. As a result, in September 2001 he declared his relationship with Madam Wong.

23.The applicant emphasized that he neither participated in the establishment of Nikka Materials nor invested in the EPOX products. He said he had no knowledge of Madam Wong’s investment in Nikka Materials or her directorship in that company. He said he was under the impression that Madam Wong and her mother had lent money to Mr. Lo. He also said that during the ICAC interview, he was misled by ICAC officers into saying that Madam Wong and her mother invested in Nikka Materials.

24.The applicant called witnesses to prove the good quality of the EPOX products. There were also witnesses who testified that the applicant was efficient at work and that his designs were of a very high standard.

The trial judge’s findings

25.Following the cases of Shum Kwok Sher v HKSAR (2002) 5 HKCFAR 381 and Sin Kam Wah & Another v HKSAR (2005) 8 HKCFAR 192, the trial judge set out the five elements of the offence, namely: (a) a public officer, (b) in the course of or in relation to his public office, (c) wilfully misconducts himself or wrongfully and wilfully fails to perform his duty, (d) without reasonable excuse or justification, and (e) such misconduct is serious.

26.The trial judge pointed out that there was no dispute as to elements (a) and (b). The judge also found that the applicant wilfully failed to declare his friendly ties with Madam Wong, even though he must have known he was under a duty to declare his relationship with a supplier for the Housing Department.

27.The judge found that in 1999 the applicant learnt that Madam Wong invested in Nikka Materials, but when he recommended the EPOX products he wilfully failed to declare his relationship with Madam Wong. The judge found that such conduct constituted misconduct for which the applicant was unable to put forward any reasonable excuse or justification.

28.The judge rejected the applicant’s evidence, saying that he merely wanted to use such evidence to strengthen his case. The judge found that the applicant had dishonestly misconducted himself and that such misconduct was serious, and convicted the applicant accordingly.

Ground of appeal

29.The only ground of appeal put forward by Mr. Wong SC, Counsel for the applicant, is that although the trial judge found that the applicant had misconducted himself, he neither made it clear that such misconduct was serious nor explained the evidential basis for that conclusion.

30.Mr. Wong SC stresses that EPOX products were undoubtedly suitable for the relevant purposes, and one of the witnesses had indicated that even if he were aware of the relationship between the applicant and Madam Wong, he would still have approved the use of the EPOX products because the project in question was only a small-scale pilot project.

31.Mr. Wong SC asserts that, in recommending the EPOX products, the applicant did not depart from his job duties; on the contrary, had the applicant not recommended the EPOX products, he would have departed from his job duties because the Housing Department would have been deprived of the opportunity to use the most suitable materials.

32.Mr. Wong SC maintains that when the applicant recommended the EPOX products, he was properly discharging his responsibilities and was not doing anything which went against “the importance of the public objects”, and therefore his conduct did not constitute “misconduct”.

33.Mr. Wong SC points out that even if what the applicant did was “misconduct”, such “misconduct” did not bring about any serious consequences and, not being serious in nature, could not form the basis of the offence of “misconduct in public office”.

34.Mr. Wong SC cites one of the sentences in point (1) of the summary of holdings in AG’s Reference (No. 3 of 2003) [2004] 2 Cr App R 366 to support his argument.  The sentence reads as follows:

The misconduct complained of had to be serious misconduct, the seriousness of which might depend on the seriousness of the consequences that followed the act or omission.

35.Mr. Wong SC emphasizes that as EPOX products were new products, it was not easy to obtain similar materials as substitutes, and that Nikka Materials was the sole supplier of the EPOX products.  That being the case, the recommendation of the EPOX products by the applicant would not, it is submitted, give any unfair advantage to Nikka Materials.  For this reason, it is submitted that even if the applicant’s “conduct” was misconduct, it was not sufficiently serious to constitute the offence of misconduct in public office.

Discussion

36.In Shum Kwok Sher, the Court of Final Appeal held that one of the elements of the offence of misconduct in public office is that the defendant culpably misconducts himself.  The Court of Final Appeal further explained that the misconduct must be wilful and intentional and must also be serious in nature.  The Court of Final Appeal made it clear that whether the misconduct is serious is to be determined by having regard to, apart from the seriousness of the consequences of the conduct complained of, the responsibilities of the office and the officeholder, the importance of the public objects which they serve, and the nature and extent of the departure from those responsibilities (see paragraph 86 of the judgment).

37.As the trial judge was well aware and pointed out in his judgment, it was never the prosecution’s case that the applicant had been influenced by self interests into recommending substandard or unsuitable products to be used in the Housing Department projects.

38.The EPOX products were certainly suitable products which were up to par, but it did not follow that they were unique and irreplaceable.  There was evidence that the EPOX products were not only expensive but could also be replaced by other products.  Some witnesses had pointed out that had they been aware of the friendly ties between the applicant and the directors of Nikka Materials, they might have used other materials or would have transferred the applicant away from the projects in question before deciding whether the EPOX products were to be used, so as to avoid a conflict of interest.

39.In any event, the public objects referred to by the Court of Final Appeal are not confined to the question of whether a certain product recommended by a public officer in the course of his public office is up to standard and suitable.  The public objects referred to by the Court of Final Appeal are more extensive and profound.  The culpable misconduct referred to by the Court of Final Appeal includes “wilfully and intentionally” neglecting or failing to perform a duty to which a public officer is subject by virtue of his office or employment; or with an improper motive, intentionally misusing a power or discretion which a public officer has by virtue of his office or employment.  Misconduct is not restricted to a wilful violation of the rules by a public officer in the performance of his public duties, but includes any other misconduct committed in any matter relating to his public office.  In paragraph 47 of his judgment in Sin Kam Wah, Sir Anthony Mason NPJ remarked as follows:

As it was argued in the courts below that the conduct complained of was not in the course of or in relation to the 1st appellant’s public office and was neither culpable nor serious, it is appropriate to say something about these matters.  To constitute the offence of misconduct in public office, wilful misconduct which has a relevant relationship with the defendant’s public office is enough.  Thus, misconduct otherwise than in the performance of the defendant’s public duties may nevertheless have such a relationship with his public office as to bring that office into disrepute,

40.In order that Hong Kong can continue to be a corruption-free, fair and just community, any public officer in the execution of his public duties must not only be impartial and avoid doing anything in conflict with his personal interests, but must also ensure that his conduct will not lead to any reasonable criticism, cause any suspicion or bring his office into disrepute.  Otherwise, the public will lose confidence in public administration and social stability and harmony will be perturbed.  In performing his public duties, a public officer must never harbour any selfish motive and must not intentionally benefit himself or his friends or relatives in any way, for instance, by providing any assistance to them so that they would enjoy an unfair advantage.  Any conduct of a public officer which contravenes the above principles is serious misconduct.

41.Being an architect of the Housing Department, the applicant occupied an important post.  As he worked very efficiently and produced high quality designs, the Housing Department reposed great trust in him.  He was entitled to recommend building materials to the housing project team, and his recommendations were accepted on many occasions.  It was against this background that the applicant, without disclosing his relationship with Nikka Materials, recommended to the housing project team the EPOX products supplied by Nikka Materials to be used in four Housing Department projects.

42.The applicant obviously had a close relationship with the EPOX products.  He was acquainted with their agent Mr. Lo and, on his invitation, he had considered investing in the development of the EPOX products.  When the applicant made such an investment, he introduced Madam Wong, who was a good friend of his family, to Mr. Lo.

43.Notwithstanding that Madam Wong was merely a housewife who had never run a business in building materials or products, she and her mother set up Smartax and speedily partnered with Mr. Lo to establish Nikka Materials which, in place of Nikka Technology, became the agent, and indeed the sole agent, for the EPOX products.  But for the close friendship between Madam Wong and the applicant, Mr. Lo would not have come to know her, let alone partnered with her in the operation of Nikka Materials.

44.The undisputed facts showed that the applicant had very close ties with the EPOX products and their agent but, without making any application or disclosure, he recommended those products to the Housing Department in the course of his public office.  As found by the trial judge, it was evident that the applicant was intentionally hiding some dishonest conduct in the course of his public office.  Had he not been dishonest, he would certainly have disclosed his close relationship with the agent for the EPOX products, namely Nikka Materials, when he recommended those products.

45.As a high-ranking civil servant, the important public objects which the applicant had to serve were not confined to utilizing his professional knowledge to recommend certain products.  It was the applicant’s duty to uphold the integrity of a civil service in which the public had confidence.  The decisions he made in the course of his public office should not have been influenced by his own interests or the interests of his relatives and friends.

46.It is clear that the applicant recommended the EPOX products in the hope that those products would be used by the Housing Department, so that their usage and competitive edge would be enhanced and the applicant’s friends would directly benefit therefrom.  But for the applicant’s recommendation, the Housing Department might not even have known about the EPOX products and, instead of agreeing to use those products, might have used other products.  It is plain as a pikestaff that the applicant’s conduct was capable of conferring an unfair advantage on Nikka Materials, which was run by his friends.

47.What the applicant did was not only misconduct in the form of a serious breach of his duties, but it also deviated from the public objects which he was required to serve.  By wilfully recommending the products which his good friends dealt in without making the requisite disclosure, the applicant had failed to perform the duties imposed on him by his office and had misused the discretion conferred upon him by his office.  With an improper motive, he had wilfully exercised the said discretion in such a way as to benefit his friends.  The applicant’s misconduct was extremely serious whether or not it would cause the Housing Department to use unsuitable products and suffer serious consequences as a result.

48.Mr. Wong SC submits that the trial judge neither made it clear that the applicant’s misconduct was serious nor explained the reasoning behind his conclusion.  With respect, we do not agree.

49.What the applicant did was misconduct, and such misconduct was serious in nature.  These were so plain and obvious that it was simply unnecessary for the trial judge to elaborate on them.  As Mr. Lee, SADPP for the respondent, has correctly pointed out, the abovementioned case of AG’s Reference (No. 3 of 2003) merely indicates that, while the consequences of a misconduct may be relevant to the seriousness of the misconduct, they are merely one of the criteria — and not the sole criterion — for assessing the seriousness of the misconduct.

50.In any event, in his judgment, having set out and canvassed the background of the case and particularly the applicant’s misconduct, the trial judge came to the following conclusion (at paragraph 49):

As a Landscape Architect, the defendant had a lot of contacts with suppliers, and he was under an important duty to act fairly in dealing with matters such as selecting materials.  The defendant’s conduct, which impaired the trust reposed by the public in the relevant mechanism of the Housing Department, constituted serious misconduct.

The judge’s findings are justified and correct.  We see nothing improper in the applicant’s conviction, and the application for leave to appeal against conviction is dismissed accordingly.

Mr. Wong Ching Y., SC and Mr. Michael Leung, instructed by Herman H.M. Hui & Co., for the Applicant.

Mr. Alex Lee, Senior Assistant Director of Public Prosecutions, for the Respondent.

Translated by the Judgment Translation Unit of the Judiciary and approved by Mr. Edmund Cham, Solicitor.