Li Siu-ha and Another v. The Queen

CACC000872/1982

BETWEEN

Coram: Hon. McMullin, V.-P., Li and Silke, JJ.A.

Date: 20th January, 1983

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JUDGMENT

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McMullin, V.-P.:

1. The defendants, Li Siu-ha and Lam Wai-man, were convicted of conspiracy in the High Court. They received sentences, respectively of 2½ and 2 years' imprisonment. On the 19th January 1983 we refused their applications for heave to appeal against conviction and sentence. We now give our reasons for doing so.

2. The Mei Kong Travel Service vas registered in March 1981. It began to operate in late November or early December in premises rented at No. 582, Nathan Road. Between then and the 8th January 1982 it did a brisk business purporting to arrange tours for persons wishing to visit China around the period of the Lunar New Year which fell upon the 24th January.

3. Some 2,000 customers attracted by advertisements offerring very competitive prices in various newspapers and beguiled by descriptive details in printed brochures, paid substantial sums to secure places in tours of various lengths to a variety of destinations in the mainland. Payments were to cover the cost of transport to and from and accommodation at the various destinations covered by the particular tour selected by the customer.

4. A total of approximately $1.5m was paid by cash and cheques to the Mei Kong Travel Service in the brief five or six weeks of its flourishing prior to its closure by police intervention on the 8th January 1982

5. No aeroplane tickets were ever purchased or supplied and no accommodation was ever secured for any customer during that period.

6. The registered proprietor has absconded. Her true identity has not been ascertained but it is not in dispute that her registered identity, Wong Fung-ha, was false, that being the name of a woman who had host her identity card in March of 1981 and who had nothing whatsoever to do with the Mei Kong Travel Service. It is not seriously in dispute that the operation from beginning to end eras a gross and fraudulent imposture. It is conceded by the Crown that its true begetter was the woman who is not before the court and who may for present purposes be referred to as "Wong".

7. The only question with which we are concerned is whether the evidence before the District Court justified the Judge's finding that the Defendants, Li Siu-ha and Lam wai-man, conspired with Wong to perpetrate this fraud.

8. Both of the Defendants were arrested at the Nathan Road premises on the 8th January when the police carried out their raid there. Five young woman employees were found on the premises. These, and another girl who had quit her employment a short time before the 8th January, were interrogated and subsequently gave evidence for the' Crown. It was the Crown's case that these girls were, equally with 11 of the cheated customers who also gave evidence, dupes of the scheme inspired by Wong. This is not denied by the Defendants who have, however, throughout maintained that they too were mere employees of the travel agency and thus were in no different position than the prosecution witnesses.

9. Mr. Bernacchi who appeared for the 1st Defendant and Mr. Whitehead for the 2nd, have pressed this view upon the hearing of the appeal. The several grounds which they urged in common on behalf of their respective clients are founded upon the single contention that, there being - as is conceded - no direct evidence of conspiracy, the circumstances disclosed by the evidence, and upon which the trial Judge relied in convicting the defendants, amount to nothing more than suspicion and they admit therefore of reasonable inferences capable of being drawn other than that of guilt. To put the matter positively, in the language used by Hewart, L.C.J., in Rex v. Wallace, 23 Cr. App. Rep. 32 at p.35: we are not "concerned here with suspicion, however grave, or with theories, however ingenious".

10. We cannot agree, however, that such is the position here. On the contrary, we think that the evidence, read as fairly and liberally in the defendants' favour as it is possible to read it, points unmistakably in the direction of guilty complicity.

11. The 2nd defendant, Lam Wai-man, had previous experience in the travel business and must therefore be presumed to have been familiar with the usual practices in relation to such matters as ticketing, booking, accounting and banking as would be observed in any legitimate business of this kind. One would also expect him to be alert to detect untoward or irregular procedures if only to safeguard his own position in the company of which he professed himself to be an employee. Yet at the very outset his relationship with his alleged employer, Wong, was clouded by his adoption of her suggestion that he should present himself to the public and to the sub-ordinate employees under a false name. He says that he did this at her suggestion on his revealing that he was in debt to various people in the printing and advertising trades as a result of the failure of his own travel business shortly prior to his joining the Mei Kong agency.

12. Thereafter, on his own showing, the business of the Mei Kong was conducted in a manner which must have seemed, to any honest and experienced travel agent, recklessly unsafe. He and the 1st Defendant were heft in charge of the day-to-day running of the business. The six minor employees, who were engaged either by himself or the hot defendant, were very young and, save for Miss Ho who was engaged to hook after the accounts, were wholly without business experience. Their duties were explained to them by either the 1st or the 2nd defendant. Their sole task appears to have been to record particulars of customers seeking to join tours and to receive from these customers payment either by cash or cheque which would then be given to Miss Ho, the accountant, who would in her turn pass these proceeds of tour sales over to either the 1st or 2nd defendant. None of these girls ever checked upon the availability of seats in aeroplanes, hotel rooms or upon ferry or train facilities in relation to the particular tours selected by the customers. They were never instructed to do so.

13. What is, however, of much greater significance is that no such enquiries were ever made by either of the defendants. Their case was that all such matters were left wholly in the hands of Wong who would attend at the premises solely, it seems, for the purpose of checking upon the payments made by customers. She would direct the banking of cheques and would take away with her all cash so received by the staff up to the date of each visit. No account was ever rendered by Wong and no explanation ever given by her to either defendant of what was done with the sums so appropriated which amounted in total to over $900,000.

14. The 2nd defendant's case was that Wong was in charge of all the bookings and although he never saw any tickets or took any part in procuring tickets for customers, he believed that Wong would have done this had the police not closed the business down on the 8th January.

15. The earliest of the projected tours was to commence on the 22nd January 1982 and, according to the Defendant, it was anticipated that the necessary tickets would be put in the customers' hands a few days only before that date at a tea party to be arranged by Wong for them. He confirmed the evidence of several, of the girls who said that they were instructed to continue taking bookings for any given tour until three of the relevant forms kept by the travel agency had been filled up. This would amount to 105 persons per tour. Thereafter the girls were to continue booking "extra tours" without any enquiry as to whether places were available in aeroplanes or in hotels.

16. Challenged as to one particular tour he agreed that 158 bookings had been taken for Chung Shan Hot Springs, although he was aware that accommodation there was very limited. He accepted that there were in fact only 157 beds available in the principal hotel in that resort and further that three other agencies had each taken 40 rooms in that hotel for that period so that the Mei Kong bookings could not have been accepted. He did not even suggest that alternative accommodation might have been available.

17. From what has been said already, it would seem unlikely that an experienced travel agent would not have been aware at the very least that the Mei Kong operation was being conducted in the most dubious manner. The sole explanation for his lending himself to such a manner of trading was that he expected his employer, Wong, to find the necessary places and tickets and indeed to make all other necessary arrangements to facilitate the smooth working of the tours. Yet despite the fact that all the bookings accepted by the Mei Kong travel service were for tours at the busiest time of the year when competition for accommodation and travel facilities could be expected to be at its most intense, the 2nd defendant appears to have remained quite unperturbed by Wong's appropriation of the customers' money and never pressed her to explain how she proposed to satisfy her customers' expectations.

18. That was the situation on the 8th January, two weeks before the first tour was due to start and five or six weeks after the earliest bookings had been made. The 2nd defendant's previous experience would have apprised him of the fact that tickets for China must be procured either from the China National Aviation Corporation direct or else from some Hong Kong agency to which CNAC had disposed of such tickets. The market, that is to say, was tight and if procured close to the new year from private agencies, the tickets could be expected to cost more. Yet there was evidence that the tour prices offerred by Mei Kong were on the low side. Further, there was evidence that although some customers had been booked for tours to Kunming on the 24th and 25th of January, there were no direct flights to Kunming on those days. Yet the money was taken from the customers by the girl who dealt with them - Chong So-kuen - on the assurance by the 1st Defendant that Wong had gone to the mainland to make bookings, this could only have been, as the evidence showed, on the off chance that she could secure places on the occasional extra flights put on by the regular carriers, or else upon a chartered plane of equally uncertain provision. Nobody ever saw fit to inform these customers of this fact. It is relevant at this point to mention the fact that one of the six employees, Ng lai-hing, became so exercised by what she regarded as the suspicious character of the business that she discussed this with the other girl employees and actually told some customers that the company was a fake. She was subsequently fired by Hiss Wong who she thought might have overheard her.

19. So much for the general picture of the Mei Kong venture. In addition, there are the following particular matters which should be considered against that background.

20. Most of these observations apply also to the case of the 1st Defendant. In addition, police investigation revealed the following facts relating to her case only.

21. The 1st Defendant did not give evidence but after her arrest, she had made a statement to the police which was put in by the prosecution at the trial. In this statement she says that some of the jewelry is hers but some belongs to her mother. The $120,000 in the safe deposit box, she says, also belongs to her mother. She claims that $300,000 odd in the savings accounts as her own and said that this sum was given to her by her mother and that it derived in part from a legacy left by her grandfather and in part from a gratuity paid by the Whampoa Shipyard to her mother following upon the death of her father - an employee of that shipyard - in Typhoon Wonda in 1962. Her mother did not give evidence. Counsel for the Crown asked the trial Judge to infer that the money and jewelry were proceeds of the alleged fraud. There is little doubt that the Judge did come to that conclusion and we think that he was fully justified. As against both defendants it must be noted that the sums appropriated by Wong and the second defendant added to the total value of the discovered assets of the first defendant together with the cash seized in the office amount roughly to the sum of the moneys received from the customers.

22. In the end, having surveyed all the evidence which has been set out above, the Judge found that the only inference he could draw was that the Defendants had conspired with Wong to represent the Mei Kong travel service as a bona fide travel agency in order to defraud such persons as could be induced to part with their money by which amounts to an elaborate and all-too-successful confidence trick. This is, in effect, the burden of the 5th of the particulars stated in the charge and in a compendium of the earlier particulars there stated. There was abundant evidence to support the charge, evidence which went far beyond mere suspicion.

Sentence

23. The 1st Defendant received a sentence of 2½ years and the 2nd a sentence of 2 years. In imposing an extra six months upon the 1st Defendant, the Judge was evidently moved by the information derived from the probation officer's report to the effect that a certain Li Ching, a sister of the lst Defendant, was "strongly suspected of being a ring header of this conspiracy". The Judge had however already, in giving his reasons for conviction, rejected the evidence by which the Croon had sought to prove that the mysterious Miss Wong was in fact Li Ching, the 1st Defendant's sister. It was therefore not open to him to substitute the opinion of the probation officers for the evidence he had rejected in considering the appropriate sentence for the 1st Defendant.

24. Mr. Bernacchi and Mr. Whitehead also object to one other aspect of the reasons for sentence. At the outset of those reasons the Judge said: "The probation officer reports that Dl showed no remorse and D2 showed little remorse. This is a comment which, as Counsel rightly point out, appears not infrequently in such reports." There may be occasions when e such a comment is justified - as for example where the accused has pleaded guilty. This opinion of the probation officer may then reasonably be resorted to by the Judge in considering the sentence. Where innocence is maintained, however, such a comment by a probation officer is not helpful and should not be resorted to by the trial Judge in passing a sentence.

25. This emphasis given to the lack of remorse suggests that the Judge may have selected a level of sentence which he felt to be appropriate and then considered that the sentence so selected should be enhanced by reason of this lack of remorse. Although two years could not be said to be excessive, we considered that the Defendant should be given the benefit of that possible view of the Judge's reasons. We granted the application in respect of sentence and set aside the sentences imposed substituting therefor sentences of 18 months in respect of both accused.

Representation:

B. Bernacchi and R. Whitehead (Wong, Hui & Souza) for 1st Appellant.

R. Whitehead (D.L.A.) assigned for 2nd Appellant.

P.A. Nicholas for Respondent/Crown.