The Queen v. Leung Hing

IN THE HIGH COURT OF HONG KONG

APPELLANT JURISDICTION

MAGISTRACY APPEAL NO. 209 OF 1993

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BETWEEN

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Coram : Hon. Woo J. In Court

Date of hearing : 8th June 1993

Date of delivery of judgment : 23rd June 1993

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J U D G M E N T

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1. This is an appeal against a conviction of operating an unlawful gambling establishment contrary to s.5(a) of the Gambling Ordinance, Cap.148.

2. There are the following common grounds both on the evidence and in the submissions made by counsel before me :-

(a) In the evening of 15/10/92, when a team of police officers executed an authorization issued under s.23 of the Ordinance, they found the appellant and 25 other persons inside a VIP room in a restaurant. Two of them were waiters employed by the restaurant and the rest were all friends.

(b) The appellant together with 14 friends were around a large table with a set of tin kau tiles, dice and money on the table, and a game of pai kau was being played thereat. The appellant was not a fixed banker.

(c) Of the other 9 friends, 4 were playing mahjong at another table and the other 5 were watching the game of mahjong.

(d) The appellant was the one who booked the room with the restaurant and brought the tin kau tiles used for the game of pai kau there.

(e) The room was correctly treated as “private premises” by the magistrate.

(f) It was conceded by Mr Cheung for the Crown that the magistrate was wrong to hold that the appellant had acquiesced in or accepted that the money on the large table belonged to other players to the exclusion of himself and that he was wrong in failing to take into account the appellant’s right to remain silent when the police inquired to whom various sums of money on the table belonged.

(g) A sum of $100 was charged of each of the 24 friends including the appellant. It is to be noted that the magistrate rejected that these admission fees were used for the purpose of buying the dinner at the restaurant.

(h) It is not disputed that gambling took place regarding the game of pai kau, and the presumption of the room being an illegal gambling establishment under s.19 of the Ordinance arose.

(i)  It is also common ground that the burden of proving that the gambling was lawful under s.3 of the Ordinance was on the appellant, as is provided in s.18, and that the standard of proof was one on the balance of probabilities.

3. The magistrate held that the appellant had failed to prove three constituents of the defence provided in s.3, namely, that the pai kau game was played on a social occasion, that no admission fee was charged, and that the game was promoted or conducted for no private gain.

4. Under s.3 of the Ordinance, all gambling is unlawful save as provided in subsections (2), (3), (4), (5), (6), (7) and (8) thereof. Only subsections (2), (3) and (4) are relevant for the consideration of this appeal. The relevant parts of the subsections provide as follows :-

“(2) Gaming is lawful if the game is played on a social occasion in private premises and is not promoted or conducted by way of trade or business or for the private gain of any person otherwise than to the extent of a person’s winnings as a player of or at the game.

(3) Gaming is lawful if the game is one in which dice, dominoes, mahjong or tin kau tiles, or playing cards are used and--

(a) the game is played on a social occasion in--

(i) premises licensed as a restaurant under the Public Health and Municipal Services Ordinance;

(ii) …; or

(iii)…;

(b) a fee is not charged for admission to such premises;

(c) the game does not involve playing against a bank kept by one or

more of the players exclusively of the others; and

(d) the game is not promoted or conducted by way of trade or business, or for the private gain of any person otherwise than to the extent of a person’s winnings as a player of or at the game.

(4) Gaming is lawful if the game is one in which mahjong or tin kau tiles are used and--

(a) it is played in premises--

(i) licensed as a restaurant under the Public Health and Municipal Services Ordinance;

(ii) …;

(b) a fee is not charged for admission to the premises;

(c) the game does not involve playing against a bank kept by one or more of the players exclusively of the others; and

(d) the game is not promoted or conducted by way of trade or business in the premises, otherwise than to the extent of the charging of a fee not exceeding the prescribed amount of the hire of any set of tiles, or for the private gain of any person otherwise than to the extent of a person’s winnings as a player of or at the game.”

(emphasis added)

5. It is to be noted, as Mr Cheung for the Crown pointed out, that absence of “admission charges” is not required to be proved under subsection (2), that “social occasion” is not required to be proved under subsection (4), and that “private gain” is required to be negated under all the three subsections.

6. The perfected grounds of appeal are as follows :-

1.  The learned magistrate erred in law or misdirecting himself,

alternatively, failing sufficiently or at all to direct himself on the following issues :-

(a)      that “social occasion” is to be determined from the point of view of “detached and objective bystander”, whereas in truth and in fact, the nature of the occasion should have been decided from the point of view of the participants and organisers.

(b)     when he purported to conclude from the entirety of the evidence that “the essential character of this gathering was gambling, not dining or drinking, as far as the Pai Kau participants were concerned ...” and that the Defence had failed to establish that the meeting was a social occasion; whereas, apart from the mere activity of Pai Kau game, there was no other evidence for him so to conclude and the weight of evidence relating to the circumstances of such Pai Kau game is against such finding.

2.  There was no or insufficient evidence to conclude that the Appellant has made any private gain from his activities. In particular,

(a) the Appellant was not a fixed banker;

(b) it is inconsistent to accept that the Appellant was responsible for payment of the dinner bill (for or about 20 people), and yet to reject his assertion that he paid it out of the admission charge of $100;

(c) there is no evidence to suggest the contents of the glass on the table were used other than for the purpose of alcohol or the meal; and

(d) the conclusion in R. v. Lim Hong-liang [1977] HKLR 542 that common fund set aside for food and refreshments constitutes private gain be reviewed and rejected.

3.  In convicting the Appellant of operating a gambling establishment under s.5(a) of the Gambling Ordinance, Cap.148, the learned magistrate erred in law because his said finding is against the weight of the evidence. Alternatively, there is no or insufficient evidence to support his findings that the Appellant was either running or in overall control of the gambling establishment in question.

7. The other grounds are for challenging the magistrate’s various findings of facts, either as contrary to the weight of the evidence or not supported by evidence.

8. I shall start with the common law position. Halsbury’s Laws of England, 4th Ed., Vol.4(1), para.8 states :-

“At common law, all games, except perhaps cockfighting, are lawful. Betting is also not an offence per se, either at common law or by statute, nor is it illegal. A contract by way of wagering was enforceable at common law, unless it was an incitement to a breach of peace or to immorality or was otherwise contrary to public policy. A gaming contract, however, appears always to have been unenforceable.”

9. Gambling was made illegal by the Gambling Ordinance. In R. v. Kwong Yiu-hung & Ors. [1988] 2 HKLR 304, at 306E, Silke, V-P, delivering the judgment of the Court of Appeal, said :-

“The Ordinance, which came into effect on 17th February 1977, gave as its purpose ‘to amend the law relating to gambling’. Its scheme is succinctly set out in s.3(1). Save as provided in sub-ss.(2), (3), (4), (5), (6), (7) and (8) of s.3 gambling is unlawful.”

Social occasion

10. On the question of “social occasion”, the magistrate said:-

“…I accept the following pieces of evidence which support the Defence position: that all the persons in that room were friends of each other; that they met regularly; that one of their purposes in meeting was to dine and drink; that food and drink were to be served during the evening; that the sign outside the room was in terms that described a ‘Banquet’; that some of the group played Mah Jong, and others watched.

I accept from DW1 that the normal charge for food was between $1,000 - 2,000 for each of the two dining tables depending on what was ordered by the 12 persons at each. ...

So is ‘social occasion’ to be regarded from the point of view of the participants, the organiser, the suppliers of food/drink, etc, or from the point of view of the detached and objective bystander? I take it to be the latter. ...

I resolve the matter by approaching the situation on the basis of what was the essential character of the gathering, an approach approved by the Court of Appeal in R. v. Kwong Yiu Lung (sic.), to which I was helpfully referred. The essential character of this gathering was gambling, not dining or drinking, as far as the Pai Kau participants were concerned, I find proved beyond all reasonable doubt that the money on the table was $50,500 when the police entered, as detailed in exhibit P8. I find that the game had continued from at least 8.00 p.m. to 9.20 p.m., with at least 10 rounds having taken place. Even if the meal ordered was to last for the same length of time, it could hardly have compared with the chance to win several thousands of dollars. And at between $80 - $170 per head, it was perhaps an exaggeration to describe it as a banquet. The defence have failed to establish that this was a social occasion, and this is enough to dispose of the matter.”

11. In R. v. Kwong Yiu-hung & Ors., ibid., at 309C, Silke, V-P, said :

“In my judgment, the true position is that the exception in s.3(2) provides a defence to a charge under s.6 the prima facie proof of which emerges from the presumptions contained in sub-ss.(1) and (2) of s.19. If the defendants can, or if the evidence of the prosecution itself is such to, rebut the presumptions then the gambling becomes lawful and the premises cease to be a gambling establishment. Once the presumptions come in to play then the burden on the more likely than not basis, is placed upon the person charged.”

At 309E-J, the learned judge said:

‘“social occasion’ is nowhere defined in the Ordinance--an unfortunate omission. We have been referred to Seddon v. Binions [1978] 1 Lloyd’s LR 381, a motor policy insurance case, where the meaning of the expression ‘social, domestic and pleasure purposes’ in such a policy lay for consideration. Roskill, L.J. at p. 385, having said at p. 384 that where such a phrase was to be considered:

‘... there will be cases which fall on one side of the line and cases which fall on the other side.’

depending on the facts, went on:

‘It seems to me that the solution of the problem can best be reached in this case by asking the question: What was the essential character of the journey in the course of which the particular accident occurred? A journey may have one essential or predominant character, or, as the judge thought, it may have two perhaps equally balanced, perhaps slightly disparate, elements in its make up.’

Roskill, L.J. took the view that the essential character was that the car was being used for business purposes, the motive for such use being in no way conclusive but simply a factor to be taken into consideration.

Here, in my judgment, there was a dual use: the hope of winning money at Pai Kau and lunch time recreation. Which of them was, if either, predominant?

….

Here there was no evidence of any banker’s bias, commission charged, charge for equipment or a planning of the gaming. There was no evidence of any promoting by way of trade or business. Had one or other of these elements been present, my decision might well have been different.”

At p. 310, the learned judge went on:

“...I accept that for this Court to upset the finding of fact of the tribunal of first instance is something which it should be most hesitant to do. Unless those findings cannot, on the evidence, be sustained or are plainly wrong.

This was an evenly balanced situation where it was necessary to consider in detail and with care the provisions of the Ordinance. ...one can, in the circumstances here, and the way this case was run depends very much upon its own facts, come to the conclusion that what was going on at the company premises on 4th September fell within the expression ‘on a social occasion’.

With respect, I consider that the trial magistrate was wrong and that this Court is in as good a position as was he to make its own findings on the facts even though we are not the seeing or the hearing court. Therefore, applying the law as I see it to the facts of this case, I would allow the appeal.”

12. The Court Appeal seemed to have adopted Roskill, LJ’s judgment including the part that “the motive for such use being in no way conclusive but simply a factor to be taken into account”. The criterion is the essential character of the gathering, and there could be two perhaps equally balanced, perhaps slightly disparate, elements in the make up of the essential or predominant character.

13. The magistrate accepted and found as a fact that the persons of the gathering were friends. From the prosecution’s evidence, it can be seen that these persons were members of the same trade, being all fish hawkers. There was no outsider. They gathered about once a month. This time, the appellant made the arrangements for the meeting by booking a room with a restaurant and by bringing a set of tin kau tiles. Some people played mahjong; some people watched the game of mahjong; others participated in the pai kau game. The gathering was arranged to take place in a public restaurant although in a VIP room which the magistrate concluded to be private premises within the definition of s.3 of the Ordinance. There was nothing clandestine about it.

14. The magistrate appears to have made comparisons between the price for the meal allocated to each person and the amount that might be won and between the length of the time of playing the game, i.e., at least from 8.00 p.m. to 9.20 p.m. and the time for eating the meal, being at most the same length of time He also appears to have placed vital reliance on the amount of the stake, finding it to be $50,500 on the table, and therefore on the amount that could be won by a participant being several thousand dollars. I shall return to this $50,500 later. If he is right, then the hosts of almost all banquets thrown by Chinese people in Hong Kong (many of whom are the players of mahjong and pai kau games) in accordance with their custom, for weddings and birthdays, etc. at restaurants, would be committing the offence of operating an illegal gambling establishment. Such gathering usually starts at 5 p.m. and even as early as 4 p.m. when guests would come to play those and other games until about 9 p.m. when the dinner which lasts for about two hours starts. If the stake of a game there would be such as to enable a player to win several thousand dollars, then with the significance placed by the magistrate on the chance to win several thousand dollars and the length of the playing time as compared with the time needed for the dinner, the party would not be a social occasion. It appears to me that this just cannot be right. Ought the decision on “social occasion” depend on the stake of the game at one table, without regard to the stake of the games played at other tables? Would the stake of the game at one table, for example, in a wedding banquet, change the essential character of the banquet from that of a social occasion to a gambling event? I think not. I agree that an objective test should be applied but in my view all the circumstances of the gathering, not only limited to those relating to the participants of a game played thereat, must be looked at, and Mr Cheung fairly conceded that to be the true test.

15. Once the magistrate had accepted that “all the persons in that room were friends of each other; that they met regularly; that one of their purposes in meeting was to dine and drink; that food and drink were to be served during the evening; that the sign outside the room was in terms that described a ‘Banquet’; that some of the group played Mah Jong, and others watched”, it is difficult to perceive how he would have concluded on a balance of probabilities that the meeting was not a social occasion amongst these friends. His view is that the essential character of the gathering was gambling because the money on the table was $50,500, the price for the meal was only between $80 and $170 per head, and there was the chance of winning several thousand dollars. How about those 5 who were merely watching the mahjong game and those 4 who were playing mahjong? Would it be right to consider the friends in the room attending different functions, those 9 people were attending a social function whereas those participants in the pai kau game attending a gambling function? The nature of these 9 persons’ presence in the room must also be relevant for an objective bystander to assess what the essential character of the gathering was. In the circumstances, can any justifiable differentiation be made as to the nature of the gathering attended by these 9 persons from that attended by the 15 who were at the pai kau game? I do not think so. I think weight should be given to the fact that these 9 friends were also inside the room and 4 of them were playing mahjong and that they were not charged with unlawful gambling, but the magistrate had apparently failed to consider this aspect altogether when reaching his conclusion that the pai kau participants were not playing that game on a social occasion.

16. Further, there is no evidence on the stake of the mahjong game. The only evidence is that there were 5 other friends just watching, not gambling, and that these 5 and the 4 mahjong players were not charged with anything. If the occasion was not a social occasion for these fishmongers to meet and recreate themselves, why were these 9 not brought to court by the police? One does not know why the police did not lay charges against these 9 people, or at least the 4 who played mahjong. But the evidence is, they were not charged. Mr Cheung suggested it was pure luck that they were not charged. That, in my view, cannot be the true position because then the police would have acted unjustly or unfairly, or the police would be seen as acting not justly or fairly. The police must at least have doubt whether these 9 people were gambling, or at least have doubt whether the mahjong players were gambling. There must have been mahjong tiles and dice with which these persons played mahjong. The police did not charge them and let them prove on the balance of probabilities that it was a social occasion, that there was no admission charge, and that there was no private gain made by any person. The fact remains: they were not brought to court. The magistrate failed to take into consideration these matters. Even Mr Cheung conceded that this was a typical dual-purpose occasion. Had all these circumstances been looked at, which the magistrate had failed to do, would he have reached the same conclusion that the appellant had failed to prove that it was a social occasion? The burden on the appellant is not a heavy one, only one of more likely than not. When I have all these matters before me, fully taken into consideration, I think more probable than not that it was a social occasion. In the circumstances, although the magistrate did not believe the appellant, on the findings as made by him and the other relevant evidence in this case, I think he was wrong in concluding that the appellant had failed to discharge the burden of proof that the game was played on a social occasion.

Admission Fees

17. The magistrate said:

“the only evidence about an admission fee came from the defendant. I accept his evidence that there was an admission charge of $100 per person. I disbelieve his evidence that the $100 was used to pay for food. That is different from what he told the police in Exhibit P11, where his story was that he used the money in the beer glass to pay for dinner. The defence have not proved the absence of any admission fee, and the defence fails at this hurdle too.”

18. Regarding the admission fee of $100 per person, I do not understand while the magistrate accepted the evidence of DW1 that the normal charge for food was between $1,000 and $2,000 for each of the two dining tables depending on what was ordered by the 12 persons at each and the appellant’s evidence that he was responsible to pay the bill for the dinner, how he could have rejected the appellant’s evidence that the $100 admission fee from each of the friends was for payment of the meal. The admission fees came to $2,400 from 24 persons including the appellant, which would be consistent with the amount used for two tables of dinner. The magistrate said that he believed the appellant was responsible for payment of the dinner bill, but not out of the admission charges or out of the contents of the beer glass. But out of what? Out of his own pocket? Was the magistrate of the view, because it must be speculation, that the appellant would treat all his 23 friends out of his own generosity? Who would then become the owner of the admission fees and the money in the glass? There was, however, no finding on that. Mr Cheung argued that since it was a matter for the appellant to prove, the magistrate should fairly not be expected to make a finding save to rule that the presumption was not rebutted whereby the conviction followed.

19. Mr Cheung further suggested that the proper inference to be drawn from the evidence was that these monies would be pocketed by the appellant because the magistrate rejected the appellant’s evidence that the admission fees and the money in the glass were used for the dinner. If the admission fees were not for payment of the meal, did the players of the pai kau game and the mahjong game pay $100 for participation in these games there? Did the 5 on-looking friends pay $100 as admission fee purely for the purpose of having the privilege of watching the mahjong game or, if they preferred, watching the pai kau game? One has to take into consideration that these were friends in the same trade. They were getting together regularly, about once a month. Did they really pay an admission fee of $100 for the purpose of being there, and especially in respect of the 5 on-lookers, just for watching? This sounds absurd to me. The magistrate omitted to take into consideration this point altogether in his evaluation of the evidence regarding whether an admission fee was charged. His conclusion flew in the face of the evidence concerning these 9 people and looks exceedingly artificial. On the evidence and on his own findings, and in view of my conclusion that the gathering was more likely than not a social occasion, I think it is not just to find as the magistrate did that the appellant had failed to prove on the balance of probabilities that no fee was charged for admission to the room.

Private gain

20. After concluding that the restaurant was not conducting or promoting the game, the magistrate said:

“The evidence is, and I find proved beyond all reasonable doubt, that it was the defendant who promoted and conducted the game. He arranged it, as he had done previously. He provided the tiles. I find that he admitted to the police that he acted as croupier, and I find that he was at the table, by the light, with no money in front of him at the time of the police’s arrival. The irresistible inference is that he did in fact act as croupier. I do not believe his evidence that he was playing. He has not proved on the balance of probability that he was arranging, promoting, and conducting the game in this way for no private gain.

I do not believe the defendant’s evidence, or that of his second witness, that the beer glass on the table contained only $260. Nor do I believe that the contents of the glass were to be used solely for the purchase of alcohol. I believe the defendant’s admission that he is responsible for payment of the dinner bill, but I do not believe his assertion in court that he paid it out of the admission charge of $100, or his assertion to the police that he paid it out of the contents of the glass.

I find the defendant has lied persistently about the use to which the contents of the glass was to be put. He has not proved, on the balance of probabilities, that he has not made any personal gain from his activities.

As I reject the defendant’s evidence about the use to which the contents of the glass was put, I need not decide whether the use of its contents to buy refreshments nevertheless constitutes a private gain in the way that Lin (sic.) Hong-liang’s case decided. However, I regard that case as binding on me, and if I had accepted the defendant’s account of this aspect of the case, his own evidence on this point would have led to his conviction.”

21. The magistrate also wrote in his assessment of witnesses that :-

“The amount of money in the glass was also produced but had never been totalled either. The Appellant later gave evidence that the amount in the glass at the end totalled $6,000 approximately, and I accepted that.”

22. It has to be noted that the appellant’s evidence to which the magistrate referred was in the context that the amount in the glass came to about $6,000 after the police had induced the pai kau players to put money in their own pockets onto the table. I think it is dangerous to accept a part of the evidence without accepting the appellant’s version that the money contributed by the players was used by the police to inflate stakes on the table as well as the amount in the glass. In this connection, although none of the police witnesses was able to tell the exact amount of the money on the table, the magistrate accepted that it came to $50,500 as shown on Exhibit P8, a sketch drawn by PW3 who took part in the raid. However, this sketch showed 14 people claimed the money, whereas the photographs taken by the same officer showed that there were 16 piles of money on the table. Even Mr Cheung accepted the existence of this inconsistency, which raised doubts as to what amount was claimed by each player and as to the number of actual players at the game. The magistrate did not deal with this inconsistency. Mr Cheung, however, argued that this inconsistency was not serious enough to affect the magistrate’s finding of the amount on the table. I take a different view. The amount of money on the table was a fact for the police to prove, and on a beyond reasonable doubt basis. There was this blatant and serious inconsistency, and no police witnesses gave any explanation about it, nor did the magistrate attempt to resolve it. The officers also admitted that the money on the table was re-arranged in a tidying up exercise. This exercise was totally meaningless and indeed harmful to the presentation of true evidence before the court. The magistrate found that it was due not to dishonesty but to stupidity. Even accepting that, the inconsistency was unexplained, and Mr Cheung was compelled to accept that by reason of the 16 piles of money on the table, it could be that the appellant was himself a player at the game and not only acting as croupier, contrary to the magistrate’s findings. But that still does not resolve the difficulty. There were only 15 persons around the table including the appellant. If the police were just tidying up the piles of money and not mixing them up or splitting them, there would not have been one pile more than the number of all possible players. PW3 took the tedious exercise of ascertaining the amount that each player had on the table, by asking each to claim his own amount. It must be obvious to him that only 14 players who each claimed a pile of the money and two piles on the table were unclaimed. But he did not say so in evidence. No police witness told the magistrate the sum total of the piles of money on the table. On the content of the glass, which was another matter for the prosecution to prove, again no police witness was able to tell how much it was. As the magistrate had failed to deal with the inconsistency when making his fmdings, I think the appellate court is entitled to consider the matter and come to a conclusion of its own. My view is that the piles of money having been interfered with, there is a grave doubt in the police evidence as to how many people were playing at the game, and their evidence of the total amount of money on the table as well as that in the glass is tainted with unreliability. The only evidence then left is that from the appellant himself and from DW2, the waiter. The appellant said that the stake money on the table totalled about $8,100 and the amount of in the glass was $260. The waiter also said that the money in the glass was $260. But the magistrate rejected their evidence. The result will be that there is no acceptable evidence on the amount on the table and the amount in the glass.

23. Implicitly, although the magistrate did not say in so many words, he must have formed the view that the appellant was the one who would collect the admission fees and the money in the beer glass and pocket them, although there was no evidence to that effect. I have already dealt with the admission fees. If the magistrate found that these persons in the room were friends as he did and they were having a game of pai kau, would it be reasonable to conclude that these friends had agreed to have commissions deducted from their winnings each round making a large sum of over $6,000 in slightly over an hour’s time and also to pay an admission charge of $100 for the sole benefit of the appellant? The appellant’s services to his friends at the pai kau game were only his provision of the tin kau tiles which could be bought for a very modest sum as compared with the $6,000 and his acting as croupier at the game. Were his services really worth that much of money among friends? The answer must be a definite no to each of the questions posed by me. Once, as I have ruled, the magistrate had erred in his conclusions about “social function” and “admission charges”, his conclusion regarding “private gain” cannot stand. I see the magistrate’s believing the appellant being responsible for paying for the dinner and yet not with any of the admission fees or the commission in the glass as being artificial purely for the purpose of satisfying himself of the illegality of the transaction. It is against sound reasoning and unrealistic that the appellant was responsible to pay for the meal, but not out of the admission fees from all the friends, and not even out of the commission contributed by the winners. There was no evidence at all with what else the appellant would pay the cost of the meal.

24. The magistrate referred to R. v. Lim Hong-liang and said even on the appellant’s own evidence, he would be convicted under the ruling in that case in that the contents of the glass used to buy refreshments constituted a private gain. As I have ruled that the magistrate was wrong in concluding that the amount in the glass was $6,000, I shall proceed to examine the position that whatever the amount in the glass was commission from winnings for the purpose of buying refreshments for the players of the pai kau game.

25. The interpretation of the term “private gain” was dealt with by Cons, J. (as he then was) in R. v. Lim Hong-liang [1977] HKLR 542, where a husband and a wife played mahjong with other players in a room at their home, and the winner of each round was required to pay a commission into a common fund which was managed by the couple and used completely for purchasing food and refreshments for all the participants. On appeal by the couple against their conviction of operating a gambling establishment contrary to section 5(a) of the Ordinance, Cons, J. at p. 543 said:-

“Counsel for the appellants attacks the magistrate’s conclusion on two grounds. First he says that the payment of the commission money was an established system of the appellants and should therefore be treated as a ‘house rule’ that part of the winnings should be shared amongst the losers; in this sense the losers were really getting ‘winnings’, which is allowed by the Ordinance. I do not think this argument can succeed. It is a misuse of language to say that the losers were ‘winning’ anything. They had lost and paid. What the winner did with the money afterwards did not affect that position.

Secondly counsel says that the food and refreshment is not a ‘gain’ in  its proper meaning but merely an integral element of the ‘social occasion’. This argument is more attractive. The legislature has sanctioned social gaming in private. It is curious that it should differentiate between those cases in which the winner treats the others out of his own generosity and those where he is bound to do so by prior agreement. Counsel for the Crown suggests that in general it does not, that a distinction only arises when the refreshment money is kept in a separate ‘capital account’. Be that as it may, I am bound by the express words of the Ordinance. Food and refreshment is a benefit in kind. It has value. In the circumstances supposed it was something gained by the players. It was something deliberately organized as part of the gaming. I am therefore forced to the conclusion that the learned magistrate was correct. The appeal must be dismissed.”

26. It is to be noted that the learned judge did not seem to have taken any or much time for consideration as the judgment was delivered on the same day as the hearing of the appeal. In fact, he heard and decided another appeal on gambling on the same day (see R. v. Leung Shui & Ors. [1977] HKLR 544.)

27. I accept the learned judge’s ruling that the Ordinance sanctions social gaming in private and that “gain” includes any benefit in kind in the form of food and refreshment because it has value.

28. However, I cannot accept as a matter of principle that the learned judge was right in his statement that “winning” could not be made by losers. He said: “It is a misuse of language to say that the losers were ‘winning’ anything. They had lost and paid.” It may be a misuse of language, but the circumstances of the game and its rules must be examined carefully to find out the true intention of the players and the true nature of the rules. I do not know whether counsel in that case had drawn the attention of the learned judge to various situations where losers can “win”, at least the benefit of food and refreshment. I venture to set out just a few examples in what must be multifarious permutations for the purpose of testing the reasoning, assuming that all other conditions of legality under s.3(2) of the Ordinance are present.

(a)      The stake of a game is very small and the rules of the game are that out of a number of players, the largest winner is to buy an expensive meal for all the participants, in which circumstances, the winner at the game is the loser in respect of the meal, and the losers at the game are the winners in respect of the meal, and as far as money is concerned, the winner at the game is the loser. If one treats the eating of the meal not as winning, then the losers are making gains otherwise than to the extent of their winnings as players, and the game is illegal. This would be turning a blind eye to the true facts of the case that the losers at the game are actual winners overall because the meal costs more than the stake of the game. The meal is the substantial winning although the losers at the game have contributed to its cost by way of losing small sums of money.

(b)     The rules of a game are that the winner of each round has to pay a commission into a common fund up till the moment when the amount reached is sufficient to cover a meal for all the participants and that the winnings thereafter will not be liable for any payment of commission. The eventual winners at the game may not be the same winners at the time when the payment of commission stops. If a player wins all the way up till that time and loses all the way thereafter and eventually ends up as the only loser, but he gains his share of the meal, would he be considered as not having won his meal and then lose at the game? Would the fact that he eventually loses justify calling him not having won the meal, the full contribution for which was made by him? Would it be logical and reasonable to say that the game is illegal because he as a loser can share the meal? Clearly not.

(c)     The stake of a game or wager is a meal for the two participants where the loser will, like the winner, be entitled to eat the meal although he will have to pay for the meal whereas the winner does not. If the learned judge is right, then the winner will be winning a meal, and the loser by participating in the meal is obtaining a gain, whereby the game is rendered illegal. Would it not be more realistic and logical to view the situation thus: the winning of the winner is the share of the meal that he eats, and the loser loses only that share, and he is paying for his own share of the meal? If this interpretation is adopted, then the game is lawful since the loser is not making any gain (which is his contribution) and no one else is making any gain otherwise than to the extent of a player’s winnings.

(d)     The rules of a game are that all the winnings have to be used for a meal for all the participants, where the winners win a free meal, and the losers pay more than their fair share for the meal but nonetheless both are entitled to eat the meal. The effect will be the same as (c) above.

(e)      The rules of a game are that a commission is payable by the winner of each round into a common fund which will at the end of the day be shared amongst the players proportional to their number. Can one realistically describe the shares paid to the losers as an actual gain made by them otherwise than to the extent of their winnings as players, and therefore the game illegal? Can this situation not be interpreted realistically and logically as that both the winnings and the losses are by the rules of the game reduced? There can be no difference between sharing the commission levied at each round immediately and sharing the total of the commissions at the end of the whole game.

(f)      The rules of a game are that the commission payable by the winner of each round into a common fund will be first used to defray the expenses of a meal for the participants and the balance is to be shared amongst the players proportional to their number. Can this situation be interpreted differently from (e) above because of the intervention of the meal? Would it not be more logical and realistic to rationalise the situation as one where the stake is reduced and the participants share a meal bought with their contributions?

29. In all these and other similar situations, I am of the opinion that viewed realistically and logically, either the loser wins the meal or a share of the commissions levied; or the meal or share of the commission is an agreed method of reducing the stake so that the winner makes less by way of winnings and the loser loses less, rather than a gain is made by the loser. The chances are equal for all the players of or at the game, and nobody can say that the game is unfair or giving an unfair opportunity to any particular player. It is important to note that there is no one else involved except the players. The cost of the meal should realistically and logically be considered as comprising the money lost by the loser and also his own contribution towards the cost, and he who contributes his own meal cannot be reasonably said to be making a gain from the meal.

30. If the learned judge is right, it appears only the following games can be legal under s.3(2) of the Ordinance if the players share a meal together before, at, during or after the game:-

(a)      Each player buys his own meal, because then the buying of the meal has no connection with the game.

(b)     The players share the bill for the meal out of their own monies, whether they win or lose at the game. But here, if the sharing of the bill is proportional to their number, there can be quarrels that the big eater or drinker will obtain a gain over the small consumer. If the winner happens to have no money on himself apart from the winnings, and if he is a small consumer, then there is a risk that the losers will be treated as obtaining a gain from the winner’s contribution out of his winnings to the cost of the meal, and so the game may be illegal for “private gain” being made by the other players otherwise than to the extent of their winnings as players.

(c)     The loser is obliged by the rules of the game to bear the cost of the meal for all the players including himself. Then he only contributes his own share of the meal and the others who are winners are not making any gain otherwise than to the extent of their winnings as players because their sharing of the meal will also be part of their winnings. There will, however, still be a doubt as to whether the game is legal, the reason being that it is a rarity in chances that all the winnings of the winners are equal and all the winners have the identical capacity for food and drink and there will therefore be unequal winnings by the winners otherwise than to the extent of their monetary winnings as players.

31. What is more astounding is that if a promoter of a game other than the players, like a party host who asks his guests to play games before dinner being served, has agreed to pay for a meal for the players, then the game will be illegal because the players are making gains otherwise than to the extent of their winnings as players.

32. It also appears to me that counsel in that case had not directed the learned judge’s attention to the word “private” in the term “private gain”. “Private” is always used as an opposite to “public”. For “private” to be understood properly, it is necessary to consider who the “public” is. Does “public” in the context of the Ordinance mean the whole community of Hong Kong or does “public” has the sense of an organisation or a certain or an uncertain group of people? Where a gain is derived from a particular form of legal gaming, like a lottery licensed under the Ordinance, it can hardly be said that the gain made therefrom will be a gain to the community of Hong Kong as a whole, for although such a gain may be used for a particular purpose, it may not necessarily be for the benefit of the community as a whole. For example, if the gain from a particular lottery is used for building a public hospital, it cannot be said that it must be for the benefit of the whole of the population of Hong Kong, because some people do not use this hospital or any public hospital at all. The sense of “public” must therefore be limited. But the extent of this limit is impossible to define. Should “public” be persons other than the players? What is the number and the category of the people involved to justify the gain for being not “private”? Mr Cheung ventured to suggest that “private” must be viewed in contradistinction with public matters like charity. But he could not answer my question whether a private school raising funds for, say, renovation of the school premises by running a lottery ticket sale would be considered as making a private or public gain. In the context of the provisions of the Ordinance, especially bearing in mind that “private gain of any person” is used in the section side by side with “a person’s winnings as a player of or at the game”, I am of the opinion that “private” should mean any one or more persons who is or are not a player, and any one or more of the players as opposed to all of the players collectively. If the gain is made by all the players themselves on equal and fair chances, it cannot be treated as private gain because it enures to the benefit of all and is therefore not private at all. If a fixed-rate commission is levied each round on the winning of the winner, and the total commission is at the end of the game shared equally amongst all participants, the shares of the commission received by the losers cannot logically and reasonably be treated as the losers’ private gain because those shares together with the winners’ shares are gains shared by the players as a whole equally. It is not a case where the organiser or operator of the game collects and pockets all the commissions for himself, which must be a private gain to the exclusion of the players, or to the exclusion of other players if he also participates in the game. What the Ordinance prohibits as illegal is that any person, be he a player or not a player, derives benefit or gain from the gambling, then it is a game operated by way of trade or business, or a game from which that person obtains a private gain.

33. A fortiori, if the commission levied on the winning of each round is used for buying a meal and refreshments for all the players, accepting that gain includes that form of benefit, it cannot be said that the losers are making a private gain by obtaining the benefit of the meal and refreshments, because it is a benefit for all the players collectively, and there is nothing private about it.

34. Moreover, my above construction of the word “private” in the context of the legislation is supported by Mr Lam’s suggestion of the purpose of the legislation. The provision of “private gain of a person” is to cover loopholes that may be left in the term “trade or business” in s.3 for fear that the operator of the game may argue that he does not operate the gambling as a trade or business although he derives some gains from it. The purpose of the Ordinance is not to catch the gamblers who play a fair game on a social occasion. It is to prohibit people operating gambling establishments, and people gambling, for the purpose of gain not won by the players fairly and on equal chances.

35. I have hesitated long and given the reasons above before I decide not to follow the judgment of so eminent a judge as Sir Derek Cons. I hold that the following will not be within the net of “private gain of any person otherwise than to the extent of a person’s winnings as a player of or at the game” in section 3 of the Ordinance, namely, where the gain or benefit is derived by all of the players from the game collectively and equally, whether by way of dividing equally in proportion of their number a commission charged in a fair and equal way from the winnings, or whether by way of sharing a meal which is paid for by such commission. Further, there is no reason why a loser at a game cannot win such a meal or win part of such commission divided in the manner I mention in this paragraph.

40. Taking the money in the glass as commission for the purchase of refreshments for the players, I am of the opinion that where the refreshments would be shared amongst the players themselves collectively, there was no private gain made and the pai kau game in the circumstances was legal under s.3(2) of the Ordinance.

Operator

41. The appellant was charged with the offence of being an operator of a gambling establishment, contrary to s.5(a) of the Ordinance. The presumptions given rise by s.19 do not cover the word “operator”, and the Crown would have to prove that the appellant was an operator beyond a reasonable doubt. The magistrate dealt with this as follows:

“In the [cautioned] statement referred to, the Appellant admitted the gambling was going on inside the V.I.P. room, that it was a monthly gathering, that a commission was collected from each game, at the rate of $5 per $100, out of which the restaurant’s bill for dinner would be paid, and that the participants all knew each other. He said he had brought the Pai Kau tiles, and when asked who had suggested the dinner and gambling, he said ‘I held it this time’. ...

I believed his evidence that everyone paid an admission charge of $100, but I did not believe that that charge was to be used to pay for the dinner. I believed that he had arranged the meeting, brought the Pai Kau tiles, and was responsible for paying the dinner bill. ...

The evidence is, and I find proved beyond all reasonable doubt, that it was the defendant who both promoted and conducted the game. He arranged it, as he had done previously. He provided the tiles. I find that he admitted to the police that he acted as croupier, and I find that he was at the table, by the light, with no money in front of him at the time of the police’s arrival. The irresistible inference is that he did in fact act as croupier. I do not believe his evidence that he was playing. He has not proved on the balance of probability that he was arranging, promoting and conducting the game in this way for no private gain.”

42. However, despite all these findings, the magistrate appeared not to have touched upon the word “operator”. He seemed to be dealing with the element of “private gain” the burden of negating which was on the appellant. On the meaning of the word “operator” in s.5(a) of the Ordinance, Mr Lain directed my attention to R. v. Mak Tat-kue and Ors. (MA No. 162/83, unreported) where Barker, JA, sitting as an additional High Court Judge, quoted what McMullin, V-P, said at page 8 of Tang Hang-chung and Ors. v. R. (Cr. App. 565 of 1982) on this matter as being the law:

“In section 5 the ‘operator’ is put in a category by himself, distinct from the person who manages or otherwise has control. It seems reasonable to suppose that the legislature viewed the operator as the person in overall control, the person with the final say in how, where and when, and even whether the enterprise is to be carried on. He may be remote from the day to day running of the business which can be left in the hands of a manager or other lesser functionary below the manager. If that is the proper way to look at the section, it may be that a person who cannot be said to assist in the management of the business might nevertheless be said to assist in the operation thereof. That is a point we do not have to decide in this case.”

43. Barker, JA, added one qualification to that statement of the law by saying that “clearly there can be more than one operator.”

44. Mr Cheung argued that there was sufficient evidence for the magistrate to find the appellant guilty of being an operator, under s.5(a), although the magistrate did not use the word “operator” in his findings. Mr Lam submitted the magistrate did not have the benefit of that authority before him and it was apparent that he did not bear the law in his mind when he convicted the appellant as the operator. He further submitted that operator of an establishment must be someone whose acts amounted to more than promoting or conducting the game. For the gathering of friends in the same trade, the appellant was merely booking the room and the dinner and bringing a set of tin kau tiles to play there, and if the friends wished to gather and recreate themselves with a game of pai kau, somebody must do all these chores. There was no evidence that the appellant had control over that VIP room in the restaurant, that he employed anybody so as to retain or exert his control, or that he made rules as to who were to play which game and who should only be on-lookers. There was no evidence that the appellant had the final say as to the time when the pai kau or the mahjong game would start or end, although he was the one who booked the room and the dinner and would pay for the dinner. He was doubtless the person who convened the meeting, but there was no evidence that his position in that room was like that of a chairman at a meeting. I find Mr Lam’s argument attractive, and had I not found in favour of the appellant on all the three issues decided by the magistrate against him, I would have ruled against the magistrate on this point as well. But in the circumstances, I do not think I need do so.

Conclusion

45. I well appreciate that it is not usual for an appellate court to upset findings of fact. In this case, many of the findings of the magistrate are contradictory or inconsistent. If the magistrate had correctly and properly directed his mind to the pieces of evidence that he accepted of the defence case and those other relevant pieces that I have referred to above, and then viewed all the evidence in a proper light, I think he would and should have decided the case in favour of the appellant. The contradictions in the findings and the omission to take into account very relevant evidence entitle me to come to different conclusions which I do that the appellant ought to be treated as having discharged his burden of proof in establishing the defence afforded him by s.3 of the Ordinance. In the circumstances, I would allow the appeal.

46. The conviction is quashed and the sentence set aside.

Mr W.S.Cheung, Crown Counsel, for the Crown

Mr Osmond Lam (on the instructions of Messrs. Pang, Wan & Choi) for the appellant.