Cheung Wah Tim and Others v. The Queen
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CACC000951/1975
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----------------- Coram: Briggs, C.J., Huggins & Pickering, JJ.A. Date of Judgment: 13th May 1976. ----------------- JUDGMENT ----------------- Huggins, J.A.: 1. These Appellants were the third and fourth Defendants at the trial, each being charged with conspiracy, but not the same conspiracy. Both appeal against conviction and sentence. 2. The charge against the third Defendant, as amended, was in these terms:
Briefly the case was alleged to have arisen in this manner. The Paul Lee Engineering Co., Ltd. (which we shall refer to as "P.L.E.") had contracts with the Government for construction works. Some Public Works Department inspectors overseeing the works caused, or threatened to cause, delays unless they received corrupt payments. The company made such payments over a period of at least ten months. The officers of the company then sought means whereby those payments could be entered in the company's books without the revelation of their true nature. The method adopted was to persuade the officers of a subsidiary company, Chung Lee Machinery Co., Ltd. (which we shall call "the Machinery Co."), to issue invoices for the hire of plant which had never been supplied to P.L.E. Those invoices purported to show that the Machinery Co. had in turn hired the plant from Cheung Hing Motor Co. (which we shall call "the Motor Co."), a business owned by the third Defendant. It was the Crown's case that the bribes were in the first instance paid by the second Defendant out of accounts in his own name or that of the Machinery Co. and that the Motor Co., immediately it received payment on its allegedly false invoices, then paid back the money to the second Defendant. The third Defendant admitted that moneys equal to those paid on the Motor Co.'s invoices were paid to the second Defendant immediately after payment to the company, but he contended that they were paid as loans and he further maintained that the Motor Co.'s invoices were genuine invoices for plant actually hired to P.L.E. 3. Although the case involved the examination of a large number of documentary exhibits and a consideration of the evidence of thirty-six witnesses, it was not a difficult case of its kind and we cannot but think that the judgment of 144 typed pages (excluding the annexures) was unnecessarily prolix and could have stated the issues and made decisions thereon with greater clarity. In the event several criticisms of it have been made which were not entirely without basis, although in our view they are not of such substance as to undermine the verdicts. 4. The first main contention which calls for consideration is that the judge's finding that the Motor Co.'s invoices were not genuine was unsupported by the evidence. In this connection objection is taken to the admission of the evidence of a Mr. Fowler, an accountant employed by the Independent Commission against Corruption: it is said that he himself purported to decide whether the invoices were genuine, which was an issue which fell to be decided by the judge. We think that he did go further than he should have done, but we are satisfied that in so far as he exceeded the proper limits of admissible evidence he merely drew an inference which any judge would inevitably have drawn unaided from the rest of his evidence. That being so, no injustice resulted. What Mr. Fowler spoke to was the coincidence between the amounts set out in the invoices of the Machinery Co., the amounts set out in the invoices of the Motor Co. and the amounts of the bribes proved to have been paid to P.W.D. officials in the preceding months. For two months the coincidence was immediately apparent. Thereafter it became apparent that the Motor Co.'s invoices equalled not the amount of the bribes paid in the immediately preceding month but that amount plus the amount of the bribes paid in an earlier month. Thus the invoice dated 30th November 1973 equalled the bribes paid in October and the bribes paid in August, that dated 2nd January 1974 equalled the bribes paid in November and the bribes paid in July, that dated 12th February 1974 equalled the bribes paid in December and the bribes paid in June and that dated 31st March 1974 equalled the bribes paid in January 1974 and the bribes paid in May 1973. It is true that there was no evidence that the plant specified in the invoices had not been hired. Mr. Jackson-Lipkin makes much of the absence of such evidence and he contends that such absence must tell against the prosecution. However, we are not persuaded that such evidence was available. On the other hand we think that the coincidences just detailed are such as to leave no reasonable doubt that the invoices were fabricated for the purpose of advancing the fraud. That conclusion is to some extent reinforced by the fact that the six invoices in question are all alike in lacking particulars which would have enabled the recipient to check the accuracy of the account, whereas most of the company's genuine invoices contained full particulars and all contained more particulars than the six. It has been argued that this was not the basis of the trial judge's decision and that we should not uphold the verdict upon the strength of it. It is true that the emphasis in the judgment was on the payments made by the Motor Co. to the second Defendant, but we are satisfied that the coincidence of the figures formed a major part of the Crown's case and an important factor in the judge's reasoning. 5. Then it was submitted that even if the Motor Co.'s invoices were false there was no evidence that the third Defendant was aware of what was being done: on the contrary he was out of the Colony when some of the moneys were received by his company and then paid to the second Defendant. Mr. Jackson-Lipkin pointed out that the judge, having declined to find that the promissory notes given by the second Defendant to the Motor Co. were a sham, went on to say that he was "inclined to think they are evidence of sub-deals within this whole scheme of getting money to pay bribes, albeit probably unknown to the third Defendant". It is not entirely clear how much the third Defendant did know, but one thing is certain - one of the cheques by which money was transferred from the Motor Co. to the second Defendant was drawn by the third Defendant himself and he entered on the cheque stub the words "for return of machine hiring fee for December". It was common ground that the several payments were made to the second Defendant, but, the defence being that they were all loans, this endorsement was entirely inconsistent with it. On the other hand it was certainly not inconsistent with the existence of the scheme alleged by the prosecution, and if the third Defendant was lying about that payment it was legitimate to conclude that that was indicative of a guilty mind. Whether or not he knew of the other entries in the books of his company, which showed payments to the second Defendant as "revolving fund", therefore becomes a matter upon which it was unnecessary to decide. Unless he did know of them they were not evidence against him, for it was not proved that any of them was made by him. It was, perhaps, unfortunate that his son CHU Kwok-wai was stopped by the judge from giving an explanation of his use of the phrase "revolving fund", but in the event nothing turns upon this. 6. Two other matters were advanced in support of the application. First it was argued that there was no evidence that the conspiracy was one "dishonestly to make or concur in making entries in documents or accounts which were false in material particulars to enable the falsification of the accounts of the Paul Lee Engineering Co., Ltd. ......". The fact that the third Defendant did not have access to the books of that company was immaterial, because it was not alleged that he falsified the books: the question was whether he knew that the officers of the company were intended to falsify the books. No possible benefit could accrue to the Motor Co. from this scheme except such indirect benefit as might result from its having (as the third Defendant would see it) accommodated P.L.E. It was a proper inference that this was the purpose of the false invoices and that they were made at the instance of the first and second Defendants. The making of false invoices is inherently dishonest and they were clearly intended to support false entries to be made in P.L.E.'s books by the proper officers of that company. It matters not whether the bribes had already been paid or were to be paid subsequently. But it is then said that the charge alleged an intention to cause loss to P.L.E., whereas in truth the object was to cause a gain. We cannot agree. At best the intent was to cause a loss in order to prevent a greater loss, namely that which would result from delays in the completion of the construction work. The payment of bribes inevitably reduced the profit which ought to have accrued to the shareholders and was therefore a loss. Indeed, if there was to be a gain to the P.W.D. inspectors it is difficult to see how that could be achieved without an equal loss to somebody else. Nor had the loss been already incurred, as was suggested. The initial payments were made by the first and second Defendants and, even if one accepts that the account in the second Defendant's name was in fact P.L.E.'s account (which is questionable), the extraction of moneys from P.L.E. to recoup the first Defendant for bribes already paid was clearly a loss then incurred by the company and not the mere covering up of a loss it had already suffered. 7. As to the general ground of appeal that the verdict was unsafe and unsatisfactory we do not propose to review all the criticisms of the judgment in detail. We have already indicated that some of them were justified, but we do not think that they are sufficient to raise a doubt whether the third Defendant was guilty of the offence. 8. The fourth Defendant was charged with conspiracy to offer and bay bribes and the case against him was that money was handed to him for distribution. The second Defendant gave evidence of having handed him an envelope or envelopes and that evidence is consistent with documents showing that subsequently the second Defendant accounted to the first Defendant for moneys stated to have been handed to the fourth Defendant. Joseph Yu gave evidence that the fourth Defendant had told him about the practice of paying bribes to the P.W.D. staff and that there was once a dispute between the fourth Defendant and a man called Woo, who was demanding a larger bribe than had normally been paid. It is not denied that the fourth Defendant knew bribes were being paid or that on one occasion he signed a list, in part prepared by himself, showing the names of P.W.D. officials who were to receive bribes. The contention is that he was what the judge described as "an unwilling conspirator", which, it is said, is a contradiction in terms because a conspiracy involves an agreement - a voluntary meeting of minds: he was a mere conduit pipe and had no guilty mind. We cannot accept that. The phrase used by the judge was a convenient one even if open to misconstruction. A person may be subjected to such pressure as amounts to duress, in which event his apparent consent is nullified. He may, on the other hand, be subject to less pressure, which, whilst it makes him an "unwilling" party, does not prevent his becoming an accountable party. In the present case the trial judge accepted that the fourth Defendant had on three occasions taken active steps to have P.W.D. officials removed for demanding bribes. It does not necessarily follow that the fourth Defendant was not a fully consenting party in respect of the bribes proved. Even if he disapproved of the corrupt payments subsequently made, that would not prevent his becoming a conspirator in relation thereto: what had to be established was that he had agreed to the making of the payments with knowledge of their nature. As Mr. Reid said, the evidence of the fourth Defendant's previous opposition to the payment of bribes might be relevant to mitigation of sentence, but in relation to conviction it could do no more than possibly raise a doubt whether the fourth Defendant was the sort of man who would eventually succumb to the temptation to be corrupt. It may be that he was, to use Mr. Jackson-Lipkin's words, so "imbued with a sense of despair" that in the end he went along with the system rather than risk finding the construction business closed to him, but go along he did and his conduct amounted to conspiracy. The trial judge was in error when he referred to the fourth Defendant as a Director of P.L.E. Moreover, he was wrong when he said that the fourth Defendant admitted receiving "the money" and it is possible, if improbable, that the fourth Defendant did not know what was in the package which the second Defendant asked him to give to Joseph Yu. Nevertheless, we are satisfied that the judge was right to conclude that the fourth Defendant cannot have been unaware of the purpose of the list of names which he helped to prepare. At the meeting at Kai Tak Airport he threatened to have Mr. Woo removed if he created trouble and it may be said that that condition detracted from the force of the argument that the fourth Defendant was an honest man persuaded to go along with a corrupt system against his better judgment. The judge has been criticised as perverse for believing any part of the evidence of Joseph Yu, but nothing that has been said to us convinces us that Yu's evidence was so manifestly unreliable that the judge could not safely believe him on any matter. 9. The appeals of both Appellants against their convictions are dismissed. As to the appeals against sentence it is submitted that the third Defendant did not stand to gain anything from this conspiracy. While it is true that he did not initiate the scheme and did not stand to gain anything directly for his company, he did stand to avoid a possible loss of business if he refused to join the scheme. Without his aid the first and second Defendants could not have carried through their fraud. While there is some force in the submission that his culpability was less than that of the other two, we do not think that a sentence of 21 months' imprisonment is too severe for a conspiracy involving a very large sum of money belonging to a public company. What has caused us some concern is the order that was made against the third Defendant to pay $151,500 compensation to the Official Receiver as receiver of P.L.E. The record does not indicate the provision under which the order was made, but it seems to be agreed that it was s.73(1) of the Criminal Procedure Ordinance, which reads:
No doubt the company is an aggrieved person but it is contended that it has not suffered any loss within the meaning of the subsection or that, if it has, such loss was not one for which the third Defendant should be made to pay compensation. Mr. Jackson-Lipkin says that the Crown's own case was based on recoupment, that is that the Motor Co. was paying to the second Defendant what he himself had already paid out on behalf of the company, so that the loss did not result from the conspiracy but rather from the malfeasance of the first and second Defendants. Mr. Reid rightly says that there has been some loss because it can never have been intended that the moneys paid to the second Defendant should find their way back to the coffers of P.L.E. Equally the third Defendant did have the moneys under his control and chose to pay them to the second Defendant and not back to P.L.E., to whom they rightfully belonged. Nevertheless the third Defendant did pay out all that he had received and made no direct financial gain. It must be conceded that the judge's order at first sight appears to punish the third Defendant more severely than the Defendants who ultimately received the money. However, it must be borne in mind that the order is for payment of compensation and is not a fine. The shareholders of P.L.E. suffered a loss and the third Defendant was in part responsible for that loss. The judge thought it right that he should be ordered to make good half the loss and the fact that no order was made against the third and second Defendants (no doubt for good reason) is irrelevant. In the event we do not think there is any good ground upon which we can interfere. 10. The sentence of nine months' imprisonment imposed on the fourth Defendant was, we think, a proper sentence. 11. For these reasons the appeals are dismissed. 13th May 1976. Representation: |