HKSAR v. Kuo Yung Sen

DCCC 341/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 341 OF 2013

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REASONS FOR VERDICT

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1.The defendant pleads not guilty to one charge of conspiracy to deal with property knowing or believing the property represented the proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Chapter 455 and sections 159A and 159C of the Crimes Ordinance, Chapter 200.

2.The particulars of charge read as follows:

“KUO Yung-sen, on the 17th day of January, 2013, in Hong Kong, conspired with other persons unknown, to deal with property, namely an unspecified sum of money, knowing or having reasonable grounds to believe that the said property, in whole or in part directly or indirectly represented the proceeds of an indictable offence.”

Introduction

3.The charge relates to a telephone deception case when Madam Tam Shuk Kin was telephoned at home by someone impersonating her son pretending he had been captured and beaten up.  A second male demanded Madam Tam to pay $100,000, which sum was reduced to $20,000.  Madam Tam then went to the bank where she asked the bank staff to call the police.

4.The second male told Madam Tam to go to China Hong Kong City to hand over the money.  On arrival at China Hong Kong City the second male instructed Madam Tam to place the money under a tree.  Instead of money the police gave Madam Tam an envelope filled with scrap paper.  When the defendant picked up the envelope he was intercepted and arrested by the police.  

5.The prosecution case in summary is that the defendant agreeing to collect what was supposed to be the money was party to a conspiracy to deal with that money, knowing or having reasonable grounds to believe the money, in whole or in part, directly or indirectly represented the proceeds of an indictable offence.

6.The defence case in summary is that the defendant collected the envelope on behalf of a friend without knowing money was supposed to be inside the envelope and was therefore not a party to any conspiracy to deal in that money.

Conspiracy

7.Conspiracy is an agreement between two or more persons to do an unlawful act or to do a lawful act by unlawful means with the intention of carrying it out.  A party may join a conspiracy at any stage provided the conspiracy is a single, ongoing one.  The agreement may be proved by direct evidence, or by proving circumstances from which the court may presume it.  Proof of the existence of a conspiracy is generally a matter of inference, deduced from certain criminal acts of the parties accused.

8.The unlawful act alleged is to deal with the money obtained from Madam Tam, knowing or having reasonable grounds to believe the money, in whole or in part, directly or indirectly represented the proceeds of an indictable offence.  Monies are clearly property (see the definition of property in section 2 of the Ordinance as read with the definition of property in section 3 of the Interpretation and General Clauses Ordinance, Chapter 1).

9.Dealing in relation to property is defined in section 2(1) of the Ordinance and includes, (a) receiving or acquiring the property; and (c) disposing of or converting the property.  I am satisfied collecting money is dealing with that money.

10.This is a convenient place to consider Mr Wong’s submission that the police having placed paper in the envelope there was nothing which represented the proceeds of an indictable offence and therefore if I understand Mr Wong correctly the defendant cannot be guilty of the offence charged.  I have no hesitation in rejecting this submission.  Conspiracy having been charged the prosecution need only prove an agreement to do an unlawful act.  The fact the substantive offence could not have been committed provides no defence to the charge (see section 159A(1)(b) of the Crimes Ordinance).  I also note inHKSAR v Lung Ming Chu [2009] 3 HKC 137 the Court of Appeal said that if two people agree to deal with property, and if each of them knows or has reasonable grounds to believe that it represents, or will represent, the proceeds of an indictable offence, that is sufficient to make each of them guilty of conspiracy to contravene s.25(1).

11.The mens rea of dealing has two parts “know” or “having reasonable grounds to believe”.  The prosecution submit the defendant had actual knowledge and in the alternative that there existed reasonable grounds to believe the monies in whole or in part, directly or indirectly represented any person’s proceeds of an indictable offence.  

12.In HKSAR v Shing Siu Ming & Others [1999] 2 HKC 818, a case under the former Drug Trafficking (Recovery of Proceeds) Ordinance, Chapter 405, the Court of Appeal considered the expression “having reasonable grounds to believe”.  The court said, “This phrase, we are satisfied, contains subjective and objective elements.  In our view it requires proof that there were grounds that a commonsense, right-thinking member of the community would consider were sufficient to lead a person to believe that the person being assisted was a drug trafficker or had benefited there from.  This is the objective element. It must also be proved that those grounds were known to the defendant.  That is the subjective element.”

13.On appeal to the Court of Final Appeal in Seng Yuet Fong v HKSAR [1999] 2 HKC 833 Mr Justice Litton giving the judgment of the court said, “To convict, the jury had to find that the accused had grounds for believing; and there was the additional requirement that the grounds must be reasonable: That is, that anyone looking at those grounds objectively would so believe.”

14.The objective and subjective elements were considered in the recent case of HKSAR v Pang Hung Fai CACC 34/2012 where the court held that the meaning of having reasonable grounds to believe as set out in Shing Siu Ming was correct.  The court went on to say that the order in which the two stage test has come to be applied did not unfairly prejudice a defendant however the more logical approach was first to ask the question: what were the facts known to the defendant and the objective factual circumstances in which he found himself and of which he was aware at the time at which he dealt with the property which is the subject of the charge?  The second question to ask then is: do those facts and circumstances provide reasonable grounds to believe that that property in whole or in part represented the proceeds of an indictable offence? (see paragraphs 105-108 of the judgment).

15.Mr Wong refers to the decision in HKSAR v Yam Ho Keung  CACC 555/2001 and draws to the attention of the court the distinction between reasonable grounds to suspect and reasonable grounds to believe.  This distinction is referred to in Pang Hung Fai where the court said that “…belief is something more than suspicion and…something less than knowledge.  It is not even proof on a balance of probabilities” (see paragraphs 129-135 of the judgment).

16.In HKSAR v Ma Zhujiang [2007] 4 HKLRD 285 the Court of Appeal was asked to depart from earlier decisions and hold that the prosecution must prove both that there were reasonable grounds to believe and that the defendant did in fact believe.  The court rejected the submissions and affirmed the earlier decisions holding that the plain and literal meaning of the phrase required proof only that the defendant knew of reasonable grounds for holding the requisite belief regardless of whether any such belief was in fact held. 

17.In Pang Hung Fai the court rejected the argument that a conviction may only be sustained if all reasonable persons furnished with the defendant’s knowledge and understanding of the facts would believe that the property was the proceeds of an indictable offence.  The court in rejecting the argument said: “Just as the test is not concerned with whether the defendant has the requisite belief in respect of the property, it is likewise not concerned with whether the reasonable man has it or would have it.  Rather it is concerned with whether he would regard the facts as sufficient to ground the section 25(1) belief” (see paragraphs 123-128 of the judgment).

Evidence

18.The facts relating to the telephone deception have been admitted pursuant to section 65C of the Criminal Procedure Ordinance, Chapter 221 (see paragraphs 1-5, exhibit P7).  Also admitted is the arrest of the defendant; photographs of the scene of arrest (exhibit P5) and immigration records showing that the defendant entered and departed Hong Kong on the 10, 14, 15 and 16 January 2013 and entered at 9:33 a.m. on the 17 January 2013.

19.Only one live witness has been called DSPC 53850 (PW5 on the list attached to the prosecution opening), who observed the defendant picking up the envelope.   

20.The defendant elected to remain silent and called no witnesses.  No adverse inference is drawn against the defendant for remaining silent.   That is his right.  This proves nothing one way or the other.  The prosecution must prove the charge beyond reasonable doubt.

21.The defendant relies on the explanation given to the police in two video interviews (exhibits P1 & P2) the voluntariness and accuracy of which have been admitted (see paragraph 7 of the admitted facts, exhibit P7).  In reaching my verdict I have considered the interviews, both the inculpatory and exculpatory parts, in accordance with the principles in    R v Sharp (1988) 1 WLR 7.

22.Admitted in evidence is that the defendant has a clear record (see paragraph 11 of the admitted facts, exhibit P7).  I direct myself in accordance with the decision in HKSAR v Tang Siu Man[1997-98] 1 HKCFAR 107.

23.The issue to be determined is whether the defendant was a party to a conspiracy to deal with the monies knowing or having reasonable grounds to believe the money, in whole or in part directly or indirectly represented the proceeds of an indictable offence.   

Summary of evidence

Admitted evidence (exhibit P7)

24.In summary the admitted facts are that at around 10.00 on the morning of the 17 January this year Madam Tam Shuk Kin was at home when she received a phone call from someone (referred to as WP1) who impersonated her son pretending to have been captured and beaten up.  A second male (referred to as WP2) took over the phone call and demanded Madam Tam to pay $100,000.  Madam Tam said she could only withdraw $20,000 from the bank which sum was accepted by WP2.

25.Madam Tam gave her mobile phone number to WP2 and stayed in contact with him when she went to the bank to withdraw the money.  Whilst at the bank Madam Tam wrote a note to the bank staff asking them to call the police.  The police arrived and asked Madam Tam to enquire of the place for the handover of the money.  WP2 told Madam Tam to go to China Hong Kong City.

26.On arrival at China Hong Kong City WP2 instructed Madam Tam to place the money under a tree opposite to China Hong Kong City.  Instead of money Madam Tam placed an envelope (exhibit P6) filled with scrap paper which had been given to her by the police.  

DSPC 53850 (PW5)

27.DSPC 53850 testified that together with colleagues he arrived at China Hong Kong City around 11:10 where he met another team of police officers who were together with Madam Tam.  Madam Tam was on the phone walking along the pavement outside China Hong Kong City.  After walking for about two minutes Madam Tam stopped and placed the envelope (exhibit P6) next to a tree nearest to the pavement as shown in photographs 12 & 13, exhibit P5.

28.DSPC 53850 and two colleagues pretending to be road workers observed the envelope from about 15-20 meters away near some road works shown in photographs 12 & 16.  About 10 minutes later the defendant was seen coming towards the police officers from the direction of Kowloon Park Path.  The defendant stopped by the tree where the envelope had been placed and glanced at the envelope for 1-2 seconds.  The defendant then walked on past where DSPC 53850 was.

29.After a short while the defendant returned walking past where DSPC 53850 was and again stopped by the tree and looked at the envelope.  The defendant stopped for only one second and then walked off in the direction of Kowloon Park Path. The defendant returned after a short while and again stopped by the tree. After glancing at the envelope the defendant looked to the left and right twice and “then in hurried pace he walked into the tree”, bent down and picked up the envelope.  The defendant turned round and walked hurriedly in the direction of Kowloon Park Path.

30.DSPC 53850 ran forward and intercepted the defendant.  Admitted in evidence is that at around 11:49 the police intercepted and arrested the defendant (see paragraph 6 of the admitted facts, exhibit P7).  DSPC 53850 seized the envelope from the defendant’s right jacket pocket.  DSPC 53850 also found two mobile phones, a SIM card; a key card for a guest house; the defendant’s Taiwanese passport and identity card together with HK$250, TW$400 and RMB 541.

31.In cross-examination DSPC 53850 agreed that at one stage he saw the defendant talking on one of the mobile phones but could not remember at which point in time.  DSPC 53850 disagreed that the defendant only approached the tree twice.

Video interviews (exhibits P1 & P2)

32.In the first video interview (certified translation P3B) the defendant explained the circumstances he came to collect the envelope.  In summary the defendant said he came to Hong Kong that morning with a friend called Xiaoli for fun (see entries 343-347; 454-462 & 524).

33.Xiaoli like the defendant was from Taiwan (see entries 135-138 & 291-294) and had been introduced to the defendant by a friend called    Mr Guo, who was also Taiwanese (see entries 221-238 & 741-764).  The defendant was able to show the police in his phone book the phone numbers of both Xiaoli and Mr Guo (see entries 250-278 & 962-973).

34.In the second interview (certified translation P4B) the defendant said the introduction by Mr Guo had taken place four days earlier in Zhuhai (see entries 290-307).  To be noted here is that in the second interview Xiaoli is spelt as “Siu Li”.  The prosecution and defence accept the names refer to the same person.

35.The defendant and Xiaoli arrived at the China Hong Kong City ferry pier by boat from Zhuhai at 9:30 a.m. (see entries 462-480, exhibit P3B).  They then went to Kowloon Park and the China Travel Service in Golden Era Plaza in Sai Yee Street before returning to China Hong Kong City (see entries 481-498 exhibit P3B and entries 435-506, exhibit P4B). 

36.Xiaoli was smoking beside China Hong Kong City when he said a friend had brought over a packet of “stuff” which he asked the defendant to collect from the friend. The place where the defendant went to collect the packet of “stuff” was on the opposite side to where Xiaoli was smoking and from where he was watching (see entries 505, 541-544, 602-606, 665-683 & 690-697, exhibit P3B).  The defendant did not know why he was asked to collect the envelope or why Xiaoli did not collect the envelope himself (see entries 652-659, exhibit P3B) and was not told whether he would be given some reward (see entries 737-740, exhibit P3B).

37.The friend would go past and ask the defendant to collect the stuff from him.  When the defendant went over nobody was there.  Xiaoli telephoned the defendant saying the stuff was under the tree (see entries 583-606, exhibit P3B).  Later the defendant says he telephoned Xiaoli (see entries 611-614, exhibit P3B). When the defendant noticed something under the tree he telephoned Xiaoli and asked whether the stuff was in white colour.  When Xiaoli said yes the defendant immediately rushed to collect the envelope at which time he was caught by the police (see entries 698-717, exhibit P3B).

38.In both interviews the defendant says he did not know what was in the envelope (see entries 578-582, 607-610, 660-663 & 685-689, exhibit P3B and entries, 591-599 & 627-634, exhibit P4B).

Verdict

39.I have carefully considered all the evidence and the submissions made.  In reaching my verdict I remind myself of the burden and standard of proof and that the burden is on the prosecution throughout.  I direct myself that I must be sure of the guilt of the defendant before I can convict.  If what the defendant says in his video interview that he did not know he was collecting money is true or may be true he is entitled to be acquitted.

40.I remind myself that when drawing inferences from the evidence the inference must be a compelling one and the only one that no reasonable man could fail to draw from the direct facts proved.  I now turn to consider the evidence.

41.I accept the evidence of DSPC 53850 as to the events he described and that he saw the defendant approach the tree three times and not twice as put in cross-examination.

42.I have no hesitation in rejecting the explanation given by the defendant in the video interviews as to the circumstances he was asked to collect the envelope and that he did not know what was inside the envelope. 

43.I do not find credible the defendant was asked to collect a packet of “stuff” by Xiaoli because Xiaoli was smoking.  I find inherently improbable considering the “stuff’ was supposed to be $20,000 that if Xiaoli was smoking opposite where the money was to be collected that he would not go and collect the money himself, in particular considering the defendant was someone he had known for only four days.  Nor do I find credible the defendant would be asked to collect the “stuff” from someone he did not know and that he was only told the packet was under a tree when he was unable to find that person. 

44.I find inherently improbable that the defendant would be entrusted to collect the “stuff’ not knowing what it was.  It makes no sense to entrust an innocent third party, let alone someone who had only been known for a few days, to collect the envelope and run the risk that he will discover what he is collecting is money and either keep some or all the money or take the money to the police. 

45.In addition the actions of the defendant approaching the tree three times and looking right and left twice before picking up the envelope in a hurried manner are not the actions of someone who is innocently collecting for a friend a parcel of which he does not know the contents.  The actions were clearly those of someone ensuring he was not being observed.

46.Having carefully considered all the evidence I am satisfied no weight is to be attached to the defendant’s explanation as to the circumstances he came to collect the envelope and that he did not know that money was supposed to be in the envelope, which explanations were not made on oath, have not been repeated on oath and have not been tested by cross-examination (see HKSAR v Wong Ka Wah CACC 260/2006).

47.Accepting Mr Wong’s submission there is no evidence that the defendant knew the money to be collected was obtained by telephone deception, I turn to consider whether there existed reasonable grounds to believe the money to be collected in whole or in part, directly or indirectly represented the proceeds of an indictable offence.

48.I am satisfied so I am sure the only inference to draw is that the defendant when asked to collect the envelope knew the envelope contained money.  As stated earlier I find inherently improbable that the defendant would be entrusted to collect the “stuff’ not knowing what it was.  The facts therefore known to the defendant are that he was asked to collect from under a tree a packet in which he believed was to be money.  Knowing this I am satisfied that a common sense, right-thinking member of the community would quickly conclude that there were reasonable grounds to believe that the money to be collected in whole or in part, directly or indirectly represented the proceeds of an indictable offence for money is not ordinarily left in an envelope under a tree for someone to collect.

49.Having carefully considered all the evidence I find that in being asked to collect what was believed to be money from the tree within 10 minutes of Madam Tam being instructed to place the envelope containing the money under the tree the only inference to draw is that the defendant was party to a conspiracy to deal with that money having reasonable grounds to believe that the money, in whole or in part directly or indirectly represented the proceeds of an indictable offence.

50.In reaching my findings I have carefully considered everything said by Mr Wong both individually and collectively, including that the evidence taken at its highest gives rise only to reasonable grounds to suspect and not reasonable grounds to believe.  Nothing said by Mr Wong causes me to doubt the only inference to draw is that the defendant was a party to the conspiracy particularised in the charge. 

51.I am satisfied so I am sure there are no material and significant discrepancies, improbabilities or omissions in the evidence, which cause me to doubt the findings I have made.  I am satisfied so I am sure the prosecution have proved all the elements of the charge beyond reasonable doubt.  The defendant is convicted as charged.

52.Finally I would add that I have considered the issue raised in Pang Hung Fai as to whether there should be read into the statutory scheme a halfway house defence, that notwithstanding the establishment of reasonable grounds, the defendant nonetheless honestly and reasonably did not suspect the property to represent the proceeds of an indictable offence.  Having rejected the defendant’s explanations to the police the consideration of such halfway house does not arise.  Further no submissions have been made by Mr Wong that such halfway house does arise.