HKSAR v. Chan Ngan Lau and Another

[English Translation - 英譯本]
CACC 213/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 213 OF 2008

(ON APPEAL FROM DCCC NOS. 1008 AND 1009 OF 2007)

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BETWEEN

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Before: Hon Cheung JA, Yuen JA and Tong J in Court

Date of Hearing: 23 June 2009

Date of Judgment: 3 August 2009

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JUDGMENT

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Hon Cheung JA (giving the judgment of the Court):

1.Initially, the present application for leave to appeal involved three applicants, namely the 1st, 2nd and the 3rd Applicants, who were respectively the 1st, 2nd and 3rd Defendants at trial.  On the day of the hearing, Counsel for the 3rd Applicant applied for an adjournment of the case and we allowed the application. It followed that we were only concerned with the applications of the 1st and 2nd Applicants.  We now deliver the judgment on the relevant applications.

The 1st Applicant

2.The 1st Applicant was indicted for four charges.  Three of them (i.e. Charges 1, 3 and 5) were for the offences of ‘offering advantages to an agent’, contrary to section 9(2)(a) of the Prevention of Bribery Ordinance (Cap. 201 of the Laws of Hong Kong); the remaining one (i.e. Charge 7) was for the offence of ‘conspiracy to defraud’, contrary to the common law.

3.The 1st Applicant pleaded guilty to the charges before Deputy District Judge Albert Wong (hereinafter ‘Judge Wong’) and was sentenced to imprisonment for 40 months.  The 1st Applicant applied for leave to appeal against sentence.

The 2nd Applicant

4.The 2nd Applicant was charged with two counts of ‘accepting advantages as an agent’ (i.e. Charges 8 and 9), contrary to section 9(1)(a) of the Prevention of Bribery Ordinance.  He pleaded not guilty to the charges.  After trial, Judge Wong convicted the 2nd Applicant on Charge 8 and acquitted him on Charge 9.  For Charge 8, Judge Wong sentenced the 2nd Applicant to imprisonment for 3 years.  The 2nd Applicant applied for leave to appeal against conviction.  Originally, the 2nd Applicant also applied for leave to appeal against sentence, but on 11 June 2009 he filed a notice of abandonment of application for leave to appeal, and we dismissed the application on the same day.

The 2nd Applicant’s application in relation to sentence

5.We begin by dealing with the 2^nd Applicant’s application for leave to appeal against conviction on Charge 8.

Background

6.The 1st Applicant was Managing Director of Centaline Property Agency Limited (hereinafter ‘Centaline’) and, as such, was responsible for the sale and purchase and leasing of industrial and commercial premises and shop premises.  The 2nd Applicant was General Manager of Li & Fung Trading Limited (hereinafter ‘Li & Fung’) and, as such, was responsible for property transactions of the Li & Fung Group.  It was alleged that in a property transaction involving Jebsen Motor Group Building (hereinafter ‘Jebsen Building’), the 1st Applicant offered a bribe of $800,000 (i.e. Charge 1) to the 2nd Applicant, who then accepted the bribe (i.e. Charge 8).

7.In his Reasons for Sentence against the 1st Applicant, Judge Wong summarized the relevant property transaction as follows:

3. In mid 2005, [Centaline] was engaged as the agent in a property transaction.  Subsequently, in response to the request of the 2nd Defendant, the 1st Defendant took $800,000 from the commission payable to Centaline by the employer of Li & Fung and then gave that sum to the 2nd Defendant as rebate.  For that purpose, the 1st Defendant, having made a false claim to [Centaline] that his own company Wang Him (宏謙) had rendered services to [Centaline], took $1,000,000 as consultancy fee, of which $800,000 was given to the 2nd Defendant and the remaining $200,000 was retained for tax payment by the company that had been used as the vehicle of swindling the money.

The prosecution’s case against the 2nd Applicant

8.The third prosecution witness (PW3) was an agent in the employ of Centaline.  In February 2006, she came to know that the owner of Jebsen Building intended to sell the property.  She informed the 2nd Applicant of that and went with him to the building for an inspection.  Thereafter, the 2nd Applicant negotiated with the vendor’s representative about the purchase of Jebsen Building, and Centaline was appointed as the agent in the transaction.  On 4 May 2006, i.e. when the vendor and the purchaser were about to sign the purchase proposal, the vendor indicated that he was not prepared to pay commission to Centaline.  PW3 had a dispute with the vendor.  The 2nd Applicant persuaded PW3 to sign the contract as soon as possible, saying that if PW3 did not do so, the vendor would ignore them.  In order to make Centaline a party to the contract, PW3 asked his subordinate (the fourth prosecution witness) to sign the relevant documents for and on behalf of Centaline.  The contract provided that the Purchaser would pay Centaline 1% of the purchase price (i.e. $2,400,000) as commission.

9.Subsequently, the Independent Commission Against Corruption (hereinafter ‘ICAC’) entered the scene.  On 9 May 2006, when the 1st and 2nd Applicants met in a hotel in Kowloon, ICAC officers covertly took video and audio recordings of the meeting.  The following is an account of the conversation between the two Applicants during the meeting, as summarized by Judge Wong:

Initially, the 1st Defendant mentioned that a commission was payable for the Jebsen Building transaction and asked what should be done.  The 2nd Defendant replied that the vendor refused to pay a commission to Centaline and also criticised Salomy for mishandling the matter (note: Salomy is the English name of PW3).  Then the 1st Defendant told the 2nd Defendant that commission from only one party had been received and then asked the 2nd Defendant whether he considered an adjustment necessary.  The 1st Defendant said that Salomy once told him that a lot of people had to be given a share of the commission in this transaction, and that she was a bit aggrieved and requested him to discuss the matter with the 2nd Defendant.  The 2nd Defendant replied, “I have done what I have to do.”  When the 1st Defendant suggested a 10% reduction, the 2nd Defendant replied, “10% means as much as $200,000.  A reduction of only $100,000 will be fine with me.” In the end, the 2nd Defendant suggested a reduction of $150,000.  The 2nd Defendant did some calculations and asked, “That means 100?”  The 1st Defendant replied “100” and further said “also in cash.”  The 2nd Defendant then mentioned Hang Fat and said “You people have already received it?”  The 1st Defendant indicated that he had no idea and would seek confirmation from the company.

10.On the agreed facts, the end purchaser of Jebsen Building was Li & Fung (1937) and Centaline was the agent of that property transaction.

11.On 9 August 2006, Centaline paid $1,000,000 to one Wang Him Investment Company Ltd (宏謙投資有限公司) (hereinafter ‘Wang Him’) for the transaction.  The 1st Applicant was a shareholder and director of Wang Him.  The bank records showed that on 11 August 2006 the 1st Applicant withdrew cash in the sum of $800,000 from his bank account.

12.On the same day, the 2nd Applicant asked the sixth prosecution witness (PW6) to fetch something for him and PW6 did so accordingly.  They had been friends for 7 to 8 years and also had business dealings with each other.

13.On the afternoon of the same day, one Mr. Chan phoned PW6 and made an appointment for a meeting, and they met afterwards.  They were tailed by ICAC officers.  PW6 boarded a vehicle driven by the 1st Applicant.  The 1st Applicant handed to PW6 a paper bag containing banknotes and told him to pass the paper bag to the 2nd Applicant.  PW6 then alighted the vehicle and went to a bank.  He counted the banknotes in the bag, the total amount of which was $800,000.  He phoned the 2nd Applicant, asking him how the money was to be dealt with.  The 2nd Applicant instructed him to deposit the money with the bank.  PW6 kept cash in the sum of $240,000 for his own use and deposited the remaining cash into nine different bank accounts in his name or in his wife’s name.

14.When the 2nd Applicant asked PW6 to fetch something for him, he gave PW6 $500 to buy a calling card to facilitate communication.  PW6 then purchased a calling card for a phone number 67482689.  The records of the telephone company showed that at 1:29 p.m. on 11 August 2006 PW6 phoned the 2nd Applicant using that phone number.  In addition, before PW6 met the 1st Applicant, i.e. between 2:14 p.m. and 3:12 p.m., he phoned the 1st Applicant thrice using the same phone number.  PW6 confirmed that he had telephone conversations with the 1st and 2nd Applicants in the said period of time and that he phoned the 2nd Applicant using the said phone number at 5:17 p.m. of the same day.

15.Acting on the 2nd Applicant’s instructions, between 12 August and 5 September 2006, PW6 gave money totalling $130,000 to the 2nd Applicant on three occasions, transferred a sum exceeding $170,000 to five persons who had lent money to the 2nd Applicant, repaid (on behalf of the 2nd Applicant) sums owing by the 2nd Applicant to two banks, and deposited $50,000 into a bank account held by the seventh prosecution witness (PW7).  PW7 testified that upon PW6’s request he opened a bank account for use by the 2nd Applicant.  PW6 said that apart from borrowing approximately $200,000 from the 2nd Applicant, he had already returned to the 2nd Applicant the remaining sum.

16.The 2nd Applicant neither gave evidence in court nor called any witness.

Judge Wong's assessment of PW6

17.In paragraph 54 of his judgment, Judge Wong wrote:

Having considered the evidence as a whole, although in my view PW6 had indeed concealed certain facts, his testimony that in receiving and handling the sum of money he was merely acting upon the 2nd Defendant’s instructions is, in my view, credible and reliable.

18.Before making the above findings, Judge Wong had taken into account the fact that PW6 was a witness under immunity and might have given false evidence in order to protect his own interest.  Judge Wong had also considered the following parts of the evidence given by PW6 which were unreasonable and incorrect:

(1) When the 2nd Applicant asked him to collect something for the 2nd Applicant, he did not enquire of the 2nd Applicant about what it was that he had to collect.

(2) When he discovered that it was banknotes that he had collected, he did not immediately contact the 2nd Applicant or return home.  Instead, he went to a bank and counted the banknotes thereat.

(3) He testified that after he counted the banknotes he phoned the 2nd Applicant.  However, according to the telephone records, the two of them did not have any telephone conversation during the relevant period.

(4) When the 2nd Applicant instructed him to deposit the received sum into a bank account, he unilaterally decided to deposit the sum into nine different bank accounts for the reason that ‘[using] bank accounts would appear to be better, safer and more convenient.’

(5) He admitted that from the said sum he had taken more than $200,000 to his residence.  When being cross-examined as to whether he was the owner of the said $200,000 odd, he prevaricated.

(6) He did not clearly indicate whether he had given the 2nd Applicant a written record showing how the said sum had been handled.

(7) He could not tell the exact date on which he gave the sum of $50,000 to the 2nd Applicant.

(8) He exercised his right of silence and refused to answer the question of whether his evidence in court was false, and when Defence Counsel put to him that the 2nd Applicant had never instructed him to collect the $800,000, he again exercised his right and refused to respond.

19.In respect of the absence any telephone record to show that PW6 and the 2nd Applicant had any telephone conversation during the relevant period, Judge Wong said:

40. … While not thinking lightly of the significant of the situation, I have considered the possibility that the two of them might have used another phone number and the possibility that the instruction alleged by PW6 was in fact not obtained at that stage.

20.Judge Wong opined that PW6 did not candidly recount the truth in court because he was well aware that the sum that he handled was obtained by improper means.

21.As regards PW6’s evidence that he took upon himself the decision to deposit the sum of money into nine different bank accounts, Judge Wong said:

41. … In my view, he merely failed to explain candidly why he had done so.  His conduct was akin to that of many people who know that the money they are handling is of dubious origin and are determined to conceal how the money has been handled.

22.As to when PW6 gave the sum of $50,000 to the 2nd Applicant, Judge Wong took the view that he might have made a mistake in recalling the date of the incident.

The first ground of appeal

23.The first ground of appeal advanced by the 2nd Applicant relates to whether he had received $800,000 from PW6.  Mr. Wong Man Kit SC and Mr. Edwin Choy, Counsel for the 2nd Applicant, submitted that Judge Wong had not only made an erroneous finding on PW6’s credibility but had also adopted speculative evidence and a wrong standard of proof.  The 2nd Applicant highlighted the following two points:

(1) The telephone records did not show that during the material period PW6 had any telephone conversation with the 2nd Applicant.

(2) PW6 refused to answer questions put to him by defence lawyers in court.

Ong Chun Ying v. HKSAR

24.The 2nd Applicant relied on the Court of Final Appeal case of Ong Chun Ying v. HKSAR (2007) 10 HKCFAR 318.  The defendant in that case was charged with and convicted on one count of assault occasioning actual bodily harm.  At trial, the victim gave unequivocal evidence that she was attacked by the defendant 10 minutes after she returned to a certain unit at 10 a.m. on the day of the incident.  On the other hand, the defendant put forward an alibi that between 10 and 11 a.m. on the material day he was physically at a restaurant and it would take approximately 30 minutes for him to travel to the scene of the crime from the restaurant.  The magistrate convicted the defendant but said that it was ‘not possible to be sure as to exactly when this assault is alleged to have taken place’ and concluded that the defendant’s alibi covered ‘only part of the material period’.

25.The Court of Final Appeal allowed the defendant’s appeal and quashed the conviction.  The views of the Court of Final Appeal can be found in paragraph 1 of the summary of holdings:

When a court says in a criminal case that it was not sure of something, that is normally said in the context of acquitting an accused on the basis of a reasonable doubt.  Here, the view that it was “not possible to be sure as to exactly when this assault is alleged to have taken” formed a vital part of the thought process by which the Magistrate convicted the defendant, which represented a view of the facts that was unsupported by evidence.  Thus, the defendant was denied the benefit of a reasonable doubt on a crucial matter.  [see paras. 11, 15]

26.The 2nd Applicant pointed out that whether PW6 had phoned him or not was highly crucial to the prosecution case because the prosecution wholly relied on PW6’s evidence to prove that PW6 had collected and handled the $800,000 for and as instructed by the 2nd Applicant.  Thus, the communication between the 2nd Applicant and PW6 during the material period was highly crucial to that allegation.

27.The 2nd Applicant submitted that, in respect of this issue, Judge Wong had erred in the same way as the magistrate in Ong Chun Ying had.  In face of the inconsistency between PW6’s evidence and the telephone records, Judge Wong had not only denied the 2nd Applicant the benefit of doubt but had also held, in the absence of evidence and upon sheer speculation, that PW6 and the 2nd Applicant might have used another phone number or that the 2nd Applicant might have instructed PW6 at some other point of time.  The 2nd Applicant contended that, as Judge Wong could not be certain at what time and using what number PW6 had talked to the 2nd Applicant on the phone, the telephone records relied on by the 2nd Applicant should have been accorded substantive reasonable doubt in the same manner as the alibi put forward by the defendant in Ong Chun Ying had been, but Judge Wong had failed to give the 2nd Applicant the benefit of doubt.

28.The 2nd Applicant further submitted that, given PW6’s refusal to answer the question of whether he had given false evidence, Judge Wong was not accepting PW6’s evidence beyond reasonable doubt.

Our views

29.In fact, in the circumstances of the case as a whole, the prosecution had in our view provided sufficient evidence to support the allegation that the 2nd Applicant had received the bribe of $800,000.  First, as mentioned above, the 1st Applicant met the 2nd Applicant on 9 May 2006.  Apart from giving a brief summary of the particulars of the meeting (see the extract above), Judge Wong made the following findings on the details of the conversation at the meeting:

61. In their conversation, the two of them mentioned the transaction over Jebsen Building.  The 1st Defendant told the 2nd Defendant that as no commission could be obtained from the vendor, he requested the 2nd Defendant to lower the amount.  During the conversation, the 2nd Defendant said that the sum could be reduced by $150,000.  The 1st Defendant mentioned “231” and the 2nd Defendant, who seemed to be making some calculations, said “just take 230, that is 115, that is 100.”  Subsequently, the 1st Defendant also suggested 80%.’

62. The prosecution submitted that “231” was the $2,310,000 commission that Centaline was supposed to receive in the first place (note: the vendor had all along agreed to pay Centaline 1% of the purchase price, and prior to reaching a final agreement, the vendor and purchaser had once agreed that the purchase price of the property upon completion was $231,000,000).  “230” meant $2,300,000, a round figure of the purchase price of the property.  Half of this amount was “115”.  Reduced by $115,000, the figure would become $1,000,000, and 80% thereof would be $800,000.  $800,000 was precisely the amount the 2nd Defendant received from the 1st Defendant.  In my view, this was no sheer coincidence but was precisely the benefit that the 2nd Defendant received from the 1st Defendant as a result of the transaction.  The fact that he arranged for PW6 to collect the money indicates that he knew the 1st Defendant would give him the money.

The above conversation lent support to the prosecution’s case that the 1st Applicant had agreed to give the 2nd Applicant $800,000 as commission.

30.According to PW6’s evidence, as instructed by the 2nd Applicant, PW6 met the 1st Applicant, collected $800,000 from him and deposited the money into bank accounts (except that he retained $240,000 for his own use) and gave the money to some other people.

31.The following items of evidence reinforced the credibility of the above testimony:

(1) Before he met PW6, the 1st Applicant went to a bank to withdraw $800,000 in cash.  This fact was consistent with the earlier testimony that the 1st Applicant had discussed with the 2nd Applicant about offering the 2nd Applicant a bribe of $800,000 and that PW6 had collected $800,000 from the 1st Applicant.

(2) The telephone records showed that on the day PW6 collected the sum, he had a number of telephone conversations with the two applicants.

(3) As PW6 and the 1st Applicant had never met, it was reasonable to infer that the meeting between the two of them had been arranged by the 2nd Applicant and that it was the 2nd Applicant who had instructed PW6 to participate in the matter.

(4) PW6 subsequently transferred the money to the accounts of other people who, as it transpired, were all related to the 2nd Applicant.

32.This being the case, Judge Wong’s finding that PW6 had contacted the 2nd Applicant using another phone number was not based on speculation.  We do not think that the propositions in Ong Chun Ying applied to the present case, because the point of time when PW6 obtained the 2nd Applicant’s instructions was not a key issue in the present case.

33.It is true that the witness’s refusal to answer the question of whether he was giving false evidence, as well as his failure to respond to the allegation that the 2nd Applicant had never instructed him to collect the $800,000, would materially affect the credibility of his evidence.  That said, we have to consider the relevant factual background.  The offences in respect of which PW6 had been granted immunity related merely to the charges pertaining to the present case.  The immunity did not cover the offence of perjury as a prosecution witness.  In putting forward the relevant allegations, Defence Counsel cross-examined PW6 about the nature of the immunity and requested Judge Wong to give appropriate warning to PW6.  The Judge reminded PW6 of his right to seek permission from the court not to answer a question if he considered that the evidence he was to give in answering the question might incriminate him.  The Judge then asked PW6 whether he would exercise his right and seek permission not to answer the relevant question or whether he was prepared to answer the question.  In these circumstances, we take the view that PW6 might have refused to answer questions or enquiries because he thought that he was entitled not to answer them, not because he was giving false evidence.  Obviously, it was only after observing PW6’s manner and demeanour when he testified at trial and considering various items of forceful circumstantial evidence of PW6 having followed the 2nd Applicant’s instructions that Judge Wong held that PW6’s evidence on major issues was credible and reliable.  We see nothing improper with the Judge’s findings.

The second ground of appeal

34.The 2nd Applicant submitted that in the absence of any evidential basis, Judge Wong found that the 2nd Applicant, as an agent of Li & Fung Trading, had received advantages so the Li & Fung (1937) completed the sale and purchase of Jebsen Building and engaged Centaline as estate agent for that sale and purchase transaction.

35.The 2nd Applicant also argued that Charge 8 was defective, the reason being that the 2nd Applicant was an agent of Li & Fung at the material time and, although he had received advantages, he had only caused a third party company (not being the principal), namely Li & Fung (1937) to engage Centaline as the estate agent, and this did not constitute any offence under section 9(1)(a) of the Prevention of Bribery Ordinance.

Particulars of Charge 8

36.The particulars of Charge 8 were as follows:

Ho Wai-jon [the 2nd Applicant], being an agent, namely General Manager of Li & Fung (Trading) Limited, on or about 11 August 2006, in Hong Kong and without lawful authority or reasonable excuse, accepted an advantage, namely a gift, loan, fee, reward or commission consisting of a sum of HK$800,000.00, from CHAN Ngan-lau [the 1st Applicant], as an inducement to or reward for or otherwise on account of the said Ho Wai-jon doing or having done any act in relation to his principal’s affairs or business, namely causing Li & Fung (1937) Limited to engage Centaline Property Agency Limited as an agent in a property transaction (namely the purchase of the property at Nos. 924-926, Cheung Sha Wan Road, Kowloon, Hong Kong).

The relationship among the companies

37.We should start by elucidating the relationship among the companies mentioned in Charge 8, the 2nd Applicant’s scope of duties, and the background of Li & Fung (1937) which was the ultimate buyer of Jebsen Building.  According to Dr. William K. Fung (ninth prosecution witness, PW9), Group Managing Director of Li & Fung Group, Li & Fung Trading was a wholly owned subsidiary of Li & Fung Limited, and Li & Fung (1937) was a shareholder of Li & Fung Limited.  Li & Fung Trading carried on trading business and, adopting the same policy as that of Li & Fung Limited, did not own any real property.  Should Li & Fung Group need to purchase real property, this would be done through Li & Fung (1937).  The 2nd Applicant was employed by Li & Fung Trading and, as such, his duties were to liaise with various departments of the company to ascertain their needs in respect of land use, to look for suitable real properties and make recommendations to the company in this regard.

38.Mr. Robert Adam is the Chief Operating Officer of Li & Fung Limited and a director of Li & Fung Trading.  In 2004, he established a Global Property Committee within Li & Fung Group.  The Committee did not have legal status, nor was it a separate legal person.  The Committee’s duties covered the entire Group as it was responsible for looking for suitable office premises for the various companies within the Group.  Although the 2nd Applicant was not a member of the Committee, he was assigned to look for suitable real properties and make recommendations thereon to the Committee.  The 2nd Applicant was not employed by the Committee; he was merely employed by Li & Fung Trading to look for real properties in the sole capacity as an agent of Li & Fung Trading.

39.Ms. Belinda Fung was a person-in-charge of Li & Fung (1937).  According to her witness statement, as Li & Fung Group was in need of land in order to expand its business, the 2nd Applicant was assigned to look for real properties for lease or for sale in Cheung Sha Wan area on behalf of the Group.  After the 2nd Applicant recommended Jebsen Building to the Group, as the landlord indicated that the property was only available for sale, the transaction was, pursuant to the established policy of the Group, passed to Li & Fung (1937) for handling.  When Ms. Belinda Fung took over the matter, the 2nd Applicant told her that Centaline was the agent in the said property transaction.

Judge Wong’s ruling

40.In his judgment, Judge Wong had this to say:

72.       After 27 April 2006, the 2nd Defendant was no longer involved in the matter, which was handled solely by Belinda Fung on behalf of Li & Fung 1937.  However, without the initial participation of Li & Fung Trading, this transaction would never have come about, nor would Centaline have become the agent of the transaction and hence been able to earn a commission.  The 1st Defendant gave the 2nd Defendant this sum of money as a token of appreciation, and this was something which the 2nd Defendant would certainly have understood.

73.       In the present case, there was no direct and clear evidence on the circumstances in which Centaline continued to be the estate agent.  It would appear from Belinda Fung’s witness statement that Centaline was initially engaged by Li & Fung Trading and was then engaged by Li & Fung 1937.  In the circumstances, I am of the view that it was Li & Fung Trading which caused [the subsequent events] and it was on this basis that the 2nd Applicant received the sum of money, and this must have been his intention and understanding. 

74.       I find that the sum of money received by the 2nd Defendant from the 1st Defendant constitutes an advantage within the meaning of the Ordinance, and that he received the advantage as an agent of Li & Fung Trading.  When he received the money, he must have fully understood that it was a reward in relation to his having done an act concerning his principal’s affairs or business, namely causing Li & Fung 1937 to engage Centaline as the agent for the relevant property transaction, or that it was a benefit given to him for his having done the said act.  This, in my view, is the only reasonable inference that can be drawn from the evidence as a whole.

The Prevention of Bribery Ordinance

41.Section 9(1)(a) of the Prevention of Bribery Ordinance provides as follows:

Any agent who, without lawful authority or reasonable excuse, solicits or accepts any advantage as an inducement to or reward for or otherwise on account of his ―

(a)      doing or forbearing to do, or having done or forborne to do, any act in relation to his principal’s affairs or business;

The 2nd Applicant’s submissions

42.The 2nd Applicant’s arguments ran as follows:

(1) In the sale and purchase of Jebsen Building, he was merely responsible for looking for a suitable property and carrying out preliminary discussions with the vendor, and the decisions to purchase the said property and engage Centaline as agent were made by Li & Fung (1937).  There was no evidence to show that he had participated in the process or influenced Li & Fung (1937) in its decisions.  The reason was that he was merely an employee and an agent of Li & Fung Trading and did not have any employment or agency relationship with Li & Fung (1937).

(2) The engagement of Centaline as agent by Li & Fung Trading and the subsequent engagement of Centaline as agent by Li & Fung (1937) were two distinct matters and not necessarily related.  However, in the absence of any supporting evidence, Judge Wong inferred from the above matters that the 2nd Applicant had caused Li & Fung (1937) to complete the property transaction and engage Centaline as its estate agent.

(3) Under section 9(1)(a) of the Prevention of Bribery Ordinance, the prosecution bore the burden of proving that any act done by the 2nd Applicant to solicit or accept any advantage must have been in relation to his principal’s affairs or business.  As the prosecution failed to produce any evidence of the 2nd Applicant having caused Li & Fung (1937) to complete the property transaction and engage Centaline as estate agent, his conviction was unsafe.

(4) Besides, applying the legal principle set out in Commissioner of the Independent Commission Against Corruption v. Ch’ng Poh [1997] HKLRD 652, the prosecution bore the burden of proving that the 2nd Applicant’s “act” was in relation to his principal’s affairs or business.

43.The 2nd Applicant submitted that the evidence in the present case did prove the following facts:

(1) The 2nd Applicant was merely an agent and employee of Li & Fung Trading but not an agent of Li & Fung (1937).  He was instructed by a third party (i.e. the Global Property Committee of Li & Fung Group) to look for real properties, report his findings to the Committee and make recommendations accordingly.

(2) The general affairs and business of Li & Fung Trading did not involve investment projects such as sale and purchase of real properties.

(3) Li & Fung (1937) and Li & Fung Trading were separate entities and should not be regarded as one single entity.

(4) Strictly speaking, Li & Fung (1937) was merely a shareholder of Li & Fung Limited and was not under Li & Fung Group which was headed by Li & Fung Limited.  Hence, the business of Li & Fung (1937) (including the transaction over Jebsen Building and the engagement of Centaline as estate agent) was not the business of the 2nd Applicant’s principal.

(5) To sum up, the 2nd Applicant’s ‘act’ in respect of the transaction over Jebsen Building in fact related only to the business of Li & Fung (1937) which had never been the 2nd Applicant’s principal.  Accordingly, the charge against him pursuant to section 9(1)(a) was misconceived and his conviction was unsafe.

Ch'ng Poh

44.In the Privy Council case of Ch’ng Poh, Lord Lloyd of Berwick elucidated section 9(1)(a) of the Prevention of Bribery Ordinance, as follows:

… Section 9 is the only section in the [Prevention of Bribery Ordinance] dealing with persons other than public servants.  It is confined to agents.  It does not say, like with section 4, that the agent must have been acting in his capacity as an agent.  Instead the act done (or not done) by the agent must be an act done or not done in relation to his principal’s affairs … the alternative words serve the same purpose.  They are clearly intended to be restrictive.  It is not enough that the recipient of the bribe should be an agent in fact …

So what do the limiting words mean?  They mean that, for the section to apply, the person offering the bribe must have intended the act or forbearance of the agent to influence or affect his principal’s affairs … it is an essential ingredient of the offence under section 9 that the action or forbearance of the agent should be aimed at the principal …

Our views

45.On the authority of Ch’ng Poh, in seeking to establish a defendant’s guilt for an offence under section 9(1)(a) of the Prevention of Bribery Ordinance, the emphasis is that the act or forbearance of the agent must be aimed at his principal.  If the defendant received a bribe solely by reason of his being an agent but the receipt of the bribe had nothing to do with his principal, then the defendant is not proved guilty of the offence.  This principle leaves no room for doubt.  However, as the Court of Appeal clearly stated in A. G. v. Ling Kar Fai (No.1) [1997] HKLRD 671 and HKSAR v. Tham Chee Seng [1998] 3 HKC 654, in dealing with a charge under section 9(1)(a) or (b), the court has to take into account the intention of the recipient of the advantage.  In the present case, the 2nd Applicant’s intention in accepting the $800,000 was that the money served as an inducement to or reward for his doing an act, and the relevant act was to cause his principal to engage Centaline in the property transaction.  The 2nd Applicant was fully aware how Li & Fung Group’s property needs were to be addressed, and Belinda Fung deposed in her witness statement that when the 2nd Applicant briefed her on the details of the property transaction, she already came to know that Centaline was the agent in that transaction.  On the evidence, the 2nd Applicant demanded a rebate from the 1st Applicant concerning the transaction, and after the 2nd Applicant referred the Jebsen Building transaction to Li & Fung (1937) for handling, he still telephoned PW3 at the time of execution of the contract by the parties, with a view to persuading her to sign the proposal, and he had also telephoned Belinda Fung, informing her that Centaline was dunning her for the commission.  All these events lent support to Judge Wong’s finding that the 2nd Applicant’s intention and understanding in accepting the bribe were that it was a reward for his causing his principal Li & Fung (1937) to engage Centaline as agent in the relevant transaction.

46.Furthermore, pursuant to section 11(1) of the Prevention of Bribery Ordinance, even though the 2nd Applicant had not materially and directly participated in the course of the transaction or influenced the decisions of Li & Fung (1937), this would be irrelevant to the question of his guilt or otherwise under section 9(1)(a) as long as he did hold the aforesaid belief.  Section 11(1) of the Prevention of Bribery Ordinance provides as follows:

If, in any proceedings for an offence under any section in this Part, it is proved that the accused accepted any advantage, believing or suspecting or having grounds to believe or suspect that the advantage was given as an inducement to or reward for or otherwise on account of his doing or forbearing to do, or having done or forborne to do, any act referred to in that section, it shall be no defence that ―

(a) he did not actually have the power, right or opportunity so to do or forbear;

(b) he accepted the advantage without intending so to do or forbear; or

(c) he did not in fact so do or forbear.

47.In our view, the prosecution had proved that when the 2nd Applicant accepted the $800,000, he believed or had grounds to believe that the bribe was given as a reward for his causing Li & Fung (1937) to engage Centaline as its estate agent.  It was irrelevant to the offence whether he had actually done the act or whether he had the power to do so.  The bribe was given to him not purely because he was an agent but because, as stated in the charge against him, it was in relation to his principal’s business.  Therefore, the prosecution had established the element of causation as required by the offence.

48.We now turn to the issue of whether Li & Fung (1937) was the 2nd Applicant’s principal.  The 2nd Applicant’s submission that Li & Fung (1937) was not his principal was, in our view, a highly technical point.  On a narrow view of the matter, Li & Fung (1937) did not appear to be the 2nd Applicant’s principal because the 2nd Applicant was not an employee of Li & Fung (1937), he was no longer involved in the sale and purchase transaction after Li & Fung (1937) took over it, and Li & Fung (1937) eventually became the purchaser.  However, in Hong Kong, it is common in conveyancing transactions for purchasers to use other limited companies to execute sale and purchase agreements.  In the present case, Li & Fung (1937) was not an independent company which had nothing to do whatsoever with Li & Fung Trading or Li & Fung Limited.  Given the close connection among Li & Fung Trading, Li & Fung (1937) and Li & Fung Limited and the fact that Li & Fung (1937) eventually became the purchaser, we consider that, taking a broad view of the matter, Li & Fung (1937) was also the 2nd Applicant’s principal: by reason of the internal operation of Li & Fung Group, Li & Fung (1937) became the 2nd Applicant’s principal upon taking over the transaction from Li & Fung Trading.  Accordingly, Judge Wong’s ruling was in our judgment correct.  Nor was Charge 8 defective.

The third ground of appeal

49.At the investigative interview with ICAC officers, the 2nd Applicant, under caution, denied the charge against him.  Judge Wong made the following findings on the record of the interview:

56. In deciding where the truth lies, I have taken account of all the evidence.  If the exculpatory part of the 2nd Defendant’s statement is true, may be true or gives rise to a reasonable doubt, then I have to acquit the 2nd Defendant.  In my view, the 2nd Defendant’s denial is superficial and short of details.  Coupled with the fact that he has not testified in court, I do not accept the exculpatory part of his statement.

57. This notwithstanding, I will not convict the 2nd Defendant solely on this basis, because a defendant does not bear the burden of proof, which always rests with the prosecution.  In assessing whether the prosecution has proved beyond all reasonable doubt that the 2nd Defendant has committed the offence, I have all along borne in mind that he has no conviction record.

50.The 2nd Applicant submitted that Judge Wong should not have rejected the exculpatory statement that he had made at the interview on the basis that he had not testified in court, because he had the right to elect not to give evidence in court.  He cited the following guidelines given by the Court of Final Appeal in HKSAR v. Lee Fuk Hing [2005] 1 HKLRD 349:

There was a right to silence, in consequence of which suspected persons in Hong Kong should be and routinely were given a caution informing them in unqualified term that they need not speak.  In the whole of these circumstances, it was inappropriate in Hong Kong to use a person’s silence against him in any way.

51.In addition, the 2nd Applicant submitted that Judge Wong had unreasonably criticized the 2nd Applicant’s denial of the charges in the record of interview as superficial and lacking in details.

52.We do not think that Judge Wong had erred in any way on this.  He had made it clear to the Applicant that he had the right to elect not to give evidence in court and that the court would not draw any adverse inference against him if he exercised his right.  We do not consider that Judge Wong’s findings had encroached upon the right of silence which the law had conferred on the 2nd Applicant.  As a matter of law, the court is not bound to accord any weight to a defendant’s out-of-court exculpatory statement, such as his denial under caution of the charges against him, because the defendant may have made such a statement purely with a view to protecting his own interest or absolving himself from criminal liability.  Furthermore, the record of interview showed that, apart from a making bare denial of the charges against him, the 2nd Applicant had not provided any particulars to support his exculpatory statement.

53.For the above reasons, the 2nd Applicant’s application for leave to appeal against conviction is dismissed.

The 1st Applicant’s application for leave to appeal against sentence

54.We have hereinabove referred to the facts of Charge 1 against the 1st Applicant as summarised by Judge Wong.  We now refer to the Judge’s summary ofthe facts pertaining to the remaining three charges:

Charge 3

4. In July 2005, a member company of Li & Fung Group purchased certain premises in Hong Kong Textile Factory Industrial Building.  The 2nd Defendant suggested that the Group appoint [Centaline] as its agent, and [Centaline] was engaged accordingly.  In that connection, the 1st Defendant offered approximately $412,000 to the 2nd Defendant as an advantage.  In order to obtain the said sum, the 1st Defendant falsely represented to [Centaline] that a company named Classic Look had provided consultancy services to [Centaline], as a result of which he fraudulently obtained $518,645.

Charge 5

5. In February 2006, Li & Fung Trading rented certain properties.  The 2nd Defendant suggested that the company appoint [Centaline] as its agent, and [Centaline] was engaged accordingly.  In that connection, the 1st Defendant provided approximately $200,000 to the 2nd Defendant as an advantage.  In order to obtain the said sum, the 1st Defendant falsely represented to [Centaline] that [Wang Him] had provided consultancy services, as a result of which he fraudulently obtained $267,797.

[the rented property concerned was Ng Fat Building (吳發大廈)]

Charge 7

6. In April 2005, in order to raise money to pay commission, the 1st Defendant, conspiring with the 3rd Defendant and PW1, submitted documents which falsely represented that [Wang Him] was a referral agency, thereby causing [Centaline] to believe that the representation was true and hence pay Wang Him $275,000 as referral fee.

[the property concerned was at 98 Fa Yuen Street]

55.Judge Wong adopted the following starting points for the various charges: imprisonment for 3 years in respect of Charge 1; imprisonment for 30 months in respect of Charge 3; imprisonment for 30 months in respect of Charge 5; and imprisonment for 2 years in respect of Charge 7.

56.As the 1st Applicant pleaded guilty to the charges, the various terms of imprisonment were reduced by one-third to the following: 24 months in respect of Charge 1; 20 months in respect of Charges 3 and 5; and 16 months in respect of Charge 7.  The sentences for the first three charges were ordered to run concurrently, but these terms were ordered to run consecutively to the sentence for Charge 7, making a total term of 40 months.

The 1st Applicant’s background

57.The 1st Applicant is 49 years of age and comes from the grass roots.  He studied diligently, worked part-time after school and obtained a degree from the university, following which he worked in the business sector.  He joined Centaline in 1996 and was promoted to the post of director a few years later.  The mitigation letters written for him by the senior officers of Centaline revealed that the 1st Applicant had assisted Centaline in boosting its business and had made a lot of contributions to the company.  Scores of staff members of Centaline had also written to the court, seeking to mitigate the 1st Applicant’s sentence.  Outside office hours, the 1st Applicant took part in a number of social services.

The submission on mitigation

58.Mr. Pang, Counsel for the 1st Applicant, submitted that the sentence was manifestly excessive.  He submitted that the 1st Applicant did not take the initiative to offer bribe to the 2nd Applicant; in fact, the 2nd Applicant sought a rebate from PW3, who then related the request to the 1st Applicant, and hence the 2nd Applicant was the culprit.  Mr. Pang also submitted that Centaline had in fact not suffered any loss ― the 1st Applicant’s act increased the business turnover of Centaline, and therefore Centaline would not possibly have suffered any loss; had the 1st Applicant not agreed to give rebate to the 2nd Applicant, Centaline would not have been engaged as the agent in the relevant property transaction.  Mr. Pang further pointed out that Judge Wong had not reduced the 1st Applicant’s sentence as appropriate in light of his previous good record.

Our views

59.In our view, in order to uphold Hong Kong’s reputation as an international commercial centre, Hong Kong courts must impose severe punishment on those who practise commercial corruption.  Although the 1st Applicant did not take the initiative to offer the bribe to the 2nd Applicant, he actively took part in the corruption, making false documents to deceive his employer and dishonestly obtaining money in order to pay the bribe to the 2nd Applicant.  The 1st Applicant had also bribed the 2nd Applicant in two other property transactions.  As a senior officer of Centaline, the 1st Applicant had not only failed to set an example by prohibiting his subordinates from doing corrupt acts and urging them to report such acts, but rather had directly participated in illegal activities.  This cannot be allowed by the law.

60.While it is true that the activities in which the 1st Applicant took part had increased the business turnover of Centaline, we do not agree with Mr. Pang’s submission that Centaline had not suffered any loss.  In our view, all estate agents must conduct property transactions in a legitimate manner.

61.As regards the 1st Applicant’s good record and contribution to the community, we consider that given the serious nature of this type of cases, it was correct for Judge Wong not to further reduce the 1st Applicant’s sentence.  What the 1st Applicant did as a senior officer of Centaline plainly constituted a serious breach of trust.

62.To support his contention that the 1st Applicant’s sentence was manifestly excessive, Mr. Pang cited the sentences in 10 other cases of the same nature (see the Appendix to this judgment for details).  We must reiterate that the sentence(s) for each case is/are considered on its own facts and, as different cases involve different facts, the sentences imposed may not necessarily be the same.  The paramount consideration is that on the facts of the present case, the sentence imposed on the 1st Applicant is not manifestly excessive.  In our judgment, whether individually or taken as a whole, the sentences imposed on the 1st Applicant by Judge Wong are appropriate.

Conclusion

63.The application in respect of sentence is dismissed.

Appendix

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

Mr. Robert Pang, instructed by Cheung & Choy, for the 1st Applicant.

Mr. Wong Man-kit SC, Mr. Edwin Choy and Mr. Joe Chan, instructed by Sit, Fung, Kwong & Shum, for the 2nd Applicant.

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