R. v. Mak Shing Chee

CACC000799/1995

IN THE COURT OF APPEAL

1995, No.799
(Criminal)

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Coram: Hon. Power, V.-P., Liu and Mayo, JJ.A.

Date of Hearing: 16 April 1996

Date of Judgment: 16 April 1996

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J U D G M E N T

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Power, V.-P.(giving the judgment of the Court):

1. The applicant faced 33 charges of offering an advantage to an agent contrary to s.9(2)(a) of the Prevention of Bribery Ordinance Cap.201. All of the persons involved were employees of H. Smal Ltd. He was convicted on each count after trial before Gould D.J. in the District Court. He now seeks leave to appeal against those convictions.

2. I set out below the recipients and intended recipient of the advances.

3. As regards Charge 1, the intended recipient was Miss Susanna Lau Wing-ching, a senior merchandizer employed by H. Smal Ltd. As regards Charges 2 to 20, the recipient was a Mr. Cheung Hak-man, a quality control supervisor with that company. As regards to Charges 21 to 27 the recipient was Madam Ho Yin-man, the wife of Mr. Ng Kwong-chung, the general manager of the company. Charges 28 to 33 involved one payment to Mr. Ng Ming-wing, a merchandizing manager, two to J. & K. Developments and three to Infast Investment Ltd. The latter two entities were, however, investments companies who invested the money for Mr. Ng Ming-wing.

4. It was an admitted fact that none of the persons involved had permission from the managing director of H. Smal Ltd. to accept the payments. I will read only one of the charges in order to give the flavour of the overall charges being levelled against the applicant. Charge 1 particularized that the applicant on or about the 11th of October 1993, without lawful authority or reasonable excuse, offered an advantage, namely a gift, fee, reward or commission, being a cheque number 0012852 dated 11th October 1993 in the sum of $40,560.50 drawn on the Sin Hua Bank Limited, to Susanna Lau, an employee of H. Smal Limited ("H. Smal") as an inducement to, reward for, or otherwise on account of the said Susanna Lau doing or having done an act in relation to her principal's affairs or business namely the purchase of belts from the Permanent Trading Company ("Permanent").

5. The applicant is the proprietor of the Permanent which is a supplier of belts to the garment trade. H. Smal are the manufacturers and exporters of jeans. It was the Crown case that the applicant gave cheques to the employees of H. Smal named in the charges, which were ostensibly to cover "handling charges" but which were in fact bribes paid to the employees to ensure a continuance of orders to Permanent.

6. It was the applicant's defence that, as United States buyers pressed for very low prices, many trading firms told his company that when calculating the price of a belt which formed a substantial part of the cost of the garment he was to add an amount above his real price to the quote and that this was to be regarded as "handling charges", which amount was to be then paid back to the trading firm. He said that as regards H. Smal the procedure was set in place by a Mr. K.M. Lau, the Production Manager, at the end of 1990. Much reliance was placed upon this evidence which was as follows:

"On arrival at her office, Joan introduced Mr. K.M. Lau, the Production Manager, to me. Eventually after I had met K.M. Lau he told me there were two prices of belts with his company - two prices for the same belt. The prices were, K.M. Lau explained, for: one, the price we quoted to him; other, the one they had with manufacturers (of garments). I knew by then they were dealing with jeans. K.M. Lau explained the difference between the two prices was for the handling charge of their company, i.e. H. Small. He explained that the handling charge was the commission for their company. He explained to me that when the business deal was completed, he would fax some documents re the price difference to us for checking. He asked us to issue a cheque to their company. During course of discussing about filling of the cheque, I asked him whether it was necessary to fill in the payee's name. K.M. Lau said according to policy of his company, there was no need to fill in. K.M. Lau told me that their company would not issue a receipt. The cheques would be delivered to their company. He told me to hand the cheque to the one in his company who was following up our order. He said, because this person represented his company."

7. The trial judge rightly stated that the "major issue raised by the case was whether the (applicant) was handing cheques to those persons named in their personal capacities for their own use or in their capacities as employees of H. Smal Ltd. for the company's use". The trial judge went on to say:

"The cheque represent payment for what the Defendant calls 'Handling Charges'. These charges, or 'commission' or 'sales discounts' as the Defendant sometimes calls them, arose from a scheme designed to extract an excessive payment from a common customer of HSL and the Defendant. In dealing with the common customer, the Defendant would fix an inflated price for his produce and when he received payment from the common customer he would pass the inflated portion of the price back to HSL. If this scheme were indeed made with HSL and the 'kickbacks' (as they might equally well be called) were paid to HSL itself, there is no infringement of s.9 Cap.201. On the other hand, if the scheme was operated by the Defendant on the one hand and one or more successive employees of HSL on the other hand without HSL's knowledge, then it was a scheme for obtaining secret commissions and is an offence under section 9."

The judge, rightly in our view, regarded as very significant the fact that the payments were made by bearer cheques with the name of the payee left blank, that the cheques was delivered into the hands of the particular staff member by the applicant himself and that no receipts were given or sought. These matters in themselves are highly irregular and highly suspicious. They were clearly, when it came to an assessment of the evidence overall, very significant matters to bear in mind. This is particularly so as the overall sum involved was $2.68m. We had then the applicant saying that he was passing $2.68m to the company by giving bearer cheques, blank as to the payee, to an employee without any requirement for acknowledgement of the receipt therefor. The trial judge found:

"The defendant was not an impressive witness. At times he was left gasping for an answer, whether credible or not. When pressed in cross-examination to give his reason for handing over cheques with the payee blank, and for not requiring receipts, he came up with reasons which were not logically-related or credible. At another point, the Defendant was unable to explain to me why he had spent time explaining to PW1 something which he says he thought at the time she already knew. In evading direct answers to awkward questions, the Defendant fell back time and again on his literal interpretation of 'company'."

That interpretation is not supported by the tenor and meaning of (P11), the recorded conversation, a detailed examination of (P11) supports the Prosecution's interpretation of it. The Defendant's interpretation of it is not reasonable. Nor are there any other reasonable inferences, or sets of inferences to be made.

The cheques were offered to the respective recipients' advantages within the meaning of the Ordinance. I am satisfied beyond reasonable doubt that the Prosecution case on all charges is proved. The defendant is guilty on all counts."

8. The applicant seeks leave to appeal against those convictions, being represented today by Mr. Ching Wong, and with him Mr. Raymond Yu, who argued four grounds. The first ground is that the trial judge failed sufficiently to consider the evidence given by the applicant about his conversation with Mr. K.M. Lau set out above. It is suggested that this was evidence of such particular significance that it called for specific reference by the trial judge in his decision who should have indicated, if he did not accept that it had occurred, why he was not prepared so to do.

9. When the reasons are looked at as a whole, it is clear that the judge rejected the evidence of the applicant and rejected, inter alia, the exculpatory parts of that evidence in which he sought to explain that he was acting honestly in the belief that he was really giving the money to the company.

10. The judge, at the outset, as I have indicated, identified the major issue. His resolution of that issue against the applicant was a clear rejection of the evidence from the applicant that the company had, through Mr. K.M. Lau, approved the approach which had been then set in place and thereafter followed. We find no merit in the submission that a failure to make specific mention of that the evidence in any way flaws the finding of guilt.

11. As to Ground 2, it was argued that the judge erred in his finding that when the appellant and Ms. Lau in the tape recorded conversation used the words 'the company' and 'you' they referred not to the company itself but to the individual concerned. Having read the reasons, and in particular having read the conversation as transcribed, we are satisfied that the trial judge was entitled to come to the conclusion he did in this regard. The transcript of the conversation is highly damaging to the applicant and we are satisfied that no issue can be taken with the approach of the judge to the statements that were made by the parties therein. He was entitled to rule as he did when he said:

"Hence the Defendant makes the reference to 'those colleagues who followed up the belts would have a little, you know' - which is a kind of 'nudge, nudge, wink, wink' kind of remark. In evidence to me, the Defendant says that he was meaning that he believed that HSL would distribute the money to the employees in the form of bonus payments or 'staff welfare' payments. If he did not care and did not ask, then he would have had no such knowledge and no grounds for such belief."

Throughout (P11) there is an overwhelming insistence on the fact that the Defendant did not care about what happened to the money, and that he would not ask about it. The theme is elaborated, dropped and then uplifted again, numerous times during the conversation.

12. A further criticism is made of the judge, it being suggested that he had formed a premature view of matter which influenced him when finding that the conversation referred to ilicit payments. Having read the reasons, we are satisfied that no such premature view was formed by the judge as to the meaning to be given to the words "the company". The judge very early in his reasons (at p.3) identified this central plank of the defence evidence, i.e. that it was the company that was really being referred and not the individuals, when he said:

"The Defendant says the payments were made to 'the company', meaning HSL itself. The defence is based on a very literal interpretation of the word 'company'. The Defendant points to his use of that term in the course of his conversation with PW1 on 11 October 1993. He also points to his references to payments, etc., being paid to 'you', where it is clear from the original Cantonese that he means 'you' in the plural. The Defendants says this shows that he was meaning HSL, not PW1 herself in person."

After carefully examining the evidence in the light of those defence contentions, he was finally satisfied (at p.8) that the literal meaning of the words "the company" argued for by the defence was not supported by "the tenor and meaning" of the taped conversation. This was a conclusion to which he was entitled to come and he cannot properly be criticized for so doing.

13. We turn now to Ground 3. In this ground it is submitted that the judge erred in failing to direct himself to take into consideration the applicant's clear record and good character when assessing the applicant's evidence before arriving at his verdict of guilty. This court has repeatedly said that it is not necessary for a judge when sitting alone to make specific reference to character. Evidence of good character was given by the applicant in this case and we have no doubt that the trial judge had it in mind when coming to his decision.

14. Finally it is argued that in all the circumstances the convictions were unsafe and unsatisfactory. We do not intend to canvass all of the arguments advanced under this head. Suffice it to say that there is nothing which occasions us any doubt as to the propriety of the conviction. We make reference only to the suggestion that the judge should not have inferred that the payments made to the persons named in the charges, other than that made to Miss Susanna Lau in the first charge, were illicit payments. We are satisfied that the judge was, given all of the circumstances, perfectly entitled to infer that the payments were illicit throughout. The evidence was, in our view, overwhelming. The conclusion of the judge cannot properly be called into question.

15. The application for leave to appeal against conviction must, therefore, be refused.

Representation:

Mr. D.G. Saw, S.A.C.P. (Crown Prosecutor) for the Respondent.

Mr. Ching Wong & Mr. Raymond Yu instructed by Messrs. Chow, Griffiths & Chan for the Applicant.