HKSAR v. Chiu Hoi Po

HCMA 457/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO 457 OF 2012

(ON APPEAL FROM FLCC 1151/2011)

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REASONS FOR JUDGMENT

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1.The Appellant, Chiu Ho Po, was convicted of one charge of operating a gambling establishment contrary to section 5(a) of the Gambling Ordinance (Cap 148) by Deputy Magistrate Daniel Tang Esq. He appealed against both the conviction and sentence.

2.I have dismissed the appeal and now give my reasons.

Prosecution case

3.The charge averred that on divers days between 11 November 2010 and 9 February 2011 the Appellant operated a gambling establishment.  The Appellant was the 1^st Defendant at the trial with 9 other defendants.  The 2^nd Defendant pleaded guilty to managing a gambling establishment, and the 3^rd Defendant pleaded guilty to assisting in managing a gambling establishment. They were not called at the trial of the Appellant. 

4.Originally, the charge covered only 1 day, i.e. the date of raid on 9 February 2011.  At the pre-trial review Senior Counsel for the defence objected to the evidence covering other days.  The Magistrate amended the charge to the period mentioned and no further objection was taken.

5.The premises concerned were the Club Regent in Sheung Shui.  The Club was registered in 2006 under the Societies Ordinance (Cap 151), and the Appellant was registered as a member of the committee. 

6.Mr Kwong (PW2) was the head tenant and he sublet the premises to the Club in October 2006 at $3,500 per month.  The Appellant negotiated the lease in the name of the Club, and he paid 1 month’s rental deposit and 1 month’s rent in advance.  PW2 would look for the Appellant when rent was in arrears.  A rental receipt for December 2010 was found in the car of the Appellant’s wife which he had driven on the date of the raid.

7.PW2 had given the key to the premises to the Appellant, and  the Appellant was in possession of a key to the wooden door of the premises on the date of the raid.

8.Prior to the raid on 9 February 2011, a police officer (PW3) observed the Club from the outside for 4 days on 11 and 29 November 2010, 13 and 27 January 2011.  On each day, the Appellant was seen walking up the staircase leading to the Club, and sound of mahjong playing was heard from the outside. 

9.On 9 February 2011, police officers (including PW1) gained entry to the Club pursuant to a gambling authorisation (ie search warrant) issued under section 23 of the Gambling Ordinance.  The wooden door was closed but the iron gate was open.  The Appellant, 2^nd and 3^rd Defendants, and also 1 male and 7 female players were found inside the premises.  There were 4 electrical mahjong tables and 8 sets of mahjong tiles. 

10.Section 19 of the Gambling Ordinance provides that:

“(1) Where in any proceedings under this Ordinance there is evidence that-

(a) the entry of a police officer to any premises or place under section 23(2)(a) was prevented, obstructed or delayed;

(b) any premises or place entered under section 23(2)(a) were or was provided with any means for concealing, removing or destroying gambling equipment;

(c) gambling equipment was found in any premises or place entered under section 23(2)(a) or on any person found in any such premises or place,

it shall, unless there is evidence to the contrary, be presumed that the premises or place are or is a gambling establishment."

11.Senior Counsel for the defence conceded that the presumption did arise on the day in question.

12.There was a CCTV recording system inside the Club premises. Over 600 hours of footages were seized.  The entirety of the footages was produced as exhibit (Exh P31), but by agreement only 16 clips were played at the trial, with still images excerpted from them.  The selected footages covered 7 days, 3 on which the police had made observation. 

13.The footages depicted that at each mahjong table, there was a plastic basket containing some money.  The players would pay money to the winner of each game, and money would also be put into the basket.

14.The Appellant was seen doing the following acts :

(1)  playing the game;

(2)  handling (meaning touching) and counting the money in the  plastic baskets;

(3)  distributing the money amongst the players;

(4)  putting some money into his wallet or pocket; and

(5)  taking off the top of a mahjong table and doing some repair to the mechanism inside.

Defence case

15.The Appellant elected not to give evidence.  The defence called one witness, Mr Eric Lai (DW).  DW knew the Appellant in 1997 when they were both with the Police Force.  DW later resigned and now works as a security guard.  They are good friends. 

16.The Appellant and others set up the Club in 2004, and he was registered as a committee member and sometime Chairman.  DW became a member in 2007, and later the Vice-Chairman.  The 2^nd Defendant managed the Club, and the 3^rd Defendant assisted her.  DW had 2 keys to the Club, one to the wooden door, and one to the iron gate.

17.The Club had about 300 members. It provided internet service, food, newspaper and magazines, and mahjong tables at the Club premises, and ran a shuttle bus service.  DW had no idea the internet was stopped.

18.There was a minimum charge of $40 per visit to the Club.  A lunch box would cost $30, and it would be covered by the $40.  Members had to pay top-up if they consumed food for more than $40.  In chief, DW said there was no need to pay for playing mahjong, but the member would need to pay if he consumed food.  Under cross-examination, DW said $40 was the minimum charge per visit.  If someone simply visited the Club and hanged around without consuming any food or using any facilities, there would not be any payment.  If one just used the internet or read the newspaper without any food, one would still have to pay.  If one played mahjong for an hour without consuming any food, $40 would be charged.  If he played for 12 hours without any food, again $40.

19.On 3 August 2009, the Appellant signed a notice resigning from all positions in the club and withdrew his membership (Exhibit D1).  DW said the Appellant withdrew his membership because he was facing a disciplinary action in the Police Force.  The 2^nd Defendant was told to amend the list of committee members with the Licensing Bureau, but DW did not know that had in fact not been done. 

20.On 6 February 2011, DW was told by the 2^nd Defendant that a mahjong table was out of order, and he asked her to get someone to fix it.  DW recognised from a photo exhibit that the Appellant appeared to be fixing a mah-jong table. 

21.Under caution, the Appellant said that he had nothing to do with the Club’s tenancy, and he was only given the key to the premises by the 2^nd Defendant for making duplicate(s).

Magistrate’s Reasons

22.The Magistrate referred to Halsbury’s Laws of Hong Kong, Vol 3 (2010 reissue) at para 50.031 on “operating” a gambling establishment:

“To operate does not necessitate the actual exercising of control over an establishment but encompasses a situation where a person bring influence to bear on the running of an establishment or the carrying on of business, whether or not one leaves the management and control to another and whether one operates it alone or with others. The operator is in a category by himself, distinct from the person who manages or otherwise has control. He is 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 removed 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. A gambling establishment can have more than one operator”.

23.The Magistrate disbelieved DW, and he placed no weight on the Appellant’s explanation under caution because it was not tested. 

24.The Magistrate could not be satisfied beyond reasonable doubt that the money placed in the baskets was commission.  But the fact that the Appellant could handle money in the baskets even not from his table was a strong inference that he was the operator of the establishment.

25.The Magistrate stated the following facts on the inference:

“106. In a gist, there is no direct evidence from the Prosecution that D1 had committed the offence.

107.  However, after I considered that:

a.   D1 was very popular among the mah-jong players inside the Premises; sometimes, he just stood by to watch people playing mah-jong, sometimes, he joined the games;

b.   It is clear from the video footages that mah-jong players put money into the basket at the end of each game, and D1 could handle the money even he was not a player of that table;

c.   He could even take money from the basket and put it into his own wallet;

d.   According to the Admitted Facts (Exhibit P50), a bunch of keys was found from the right trousers pocket of the jeans worn by D1 on 9^th February 2011, and one of the keys was found fit to open the lock of the wooden main door of the premises;

e.   The overall circumstantial evidence;

I found the only, reasonable and irresistible inference to be drawn is D1 was a person who operated the Premises at the material time.

108.  Further, the Premises can take up difference functions at difference time.  At one time, the Premises can function as a gambling establishment; at another time, it can be used as a gathering place of the Club members.  One operates a gambling establishment at the Premises does not mean that he has to be a committee member of the Club; or vice versa, one manages the Club does not necessarily means that he also manages the gambling establishment at the Premises.

…

112.  I found the only, reasonable and irresistible inference to be drawn is D1 operated the Premises as a gambling establishment at the material time.”

26.The Magistrate found that the prosecution had independently proved that the Appellant had committed the offence.

Grounds of Appeal

27.The Amended Perfected Grounds of Appeal are as follows:

(1)     The Magistrate failed to properly direct himself on the burden and standard of proof on “gambling establishment”.

(2)     Parts of the CCTV footage were taken out of context and the Magistrate was misled and his findings were erroneous.

(3)     Further or in alternative to (2), the Magistrate erred to draw inference from the fact that the Appellant was seen taken money from the plastic bucket notwithstanding that there was no finding of the nature of the money in that plastic bucket.

(4)     The Magistrate erred to infer that the Appellant was the operator of the gambling establishment.

(5)     The Magistrate erred in rejecting the evidence of DW1 without a proper basis for doing so.

Discussion

28.Under section 2 of the Gambling Ordinance:

“ ‘gambling establishment’ (賭場) includes any premises or place, whether or not the public or a section of the public is entitled or permitted to have access thereto, opened, kept or used, whether on one occasion or more than one occasion, for the purposes of or in connection with unlawful gambling or an unlawful lottery;”

29.Section 3 of the Gambling Ordinance provides that gambling is unlawful unless it comes within an exception under sections 3 and 4.  Section 18 provides that burden of proving that any gambling is lawful shall be on the defendant.

30.The 2^nd and 3^rd Defendants pleaded guilty to the charges of managing and assisting in managing a gambling establishment.  They were not called to give evidence at the trial.  Their admissions were not evidence against the Appellant.  It is the defence evidence that the 2^nd Defendant was the manager of the Club, and the 3^rd Defendant assisted her.  They appeared in the CCTV footages and were referred to as the 2^nd and 3^rd Defendants for convenience of identification. 

31.Mr Lam, for the Appellant, submitted that the trial prosecutor erroneously submitted that the defence bore the burden of proof to rebut the presumption of gambling establishment, and the Magistrate failed to properly direct himself on the burden of proof.

32.The prosecutor submitted that the entry was pursuant to a gambling authorization under section 23(1) of the Gambling Ordinance, and the presumption of gambling establishment arose under section 19 (because gambling equipment was found therein).  Senior Counsel for the defence conceded that the presumption did arise on the day of the raid.

33.The prosecutor submitted that “it is for the defence to prove that the premises was not a gambling establishment”, and that “the place was a gambling establishment not only on 9 February 2011, but also on the date(s) within the time period named in the charge” because “similar activities or mahjong playing was observed in that period of time”, and “so that the premises were correctly identified as a gambling establishment on 9 February but it also covered a period.”

34.In HKSAR v Yip Koon Tai [2010] 2 HKLRD 993, 996, DHCJ Pang (as he then was) held that:

“13. This being the case, the presumption in section 19(1)(c) was engaged and the court was entitled to presume that the unit was a “gambling establishment” – unless there was “evidence to the contrary” to rebut the presumption.

14. The problem is that “evidence to the contrary” is not the same as “legal burden”. The “legal burden”, which is be borne by the prosecution, denotes the duty to adduce proof so that the court is sure that the defendant is guilty. On the other hand, “evidence to the contrary” can come from any party to the proceedings, but where the prosecution has established a prima facie case or is assisted by some legal presumptions, the defence will then bear the evidential burden.

15. In other words, the requirement as to “evidence to the contrary” is not only directed against the defendant and the defendant is not required to prove anything on a balance of probabilities. Instead, the “legal burden” to prove the defendant’s guilt is always borne by the prosecution, and once there is a reasonable doubt in the case, no matter what causes it or where it comes from, the defendant must be acquitted.

16.  This being the case, the magistrate’s finding that the Appellant failed, on a balance of probabilities, to rebut the presumptions under section 19 of the Gambling Ordinance is erroneous in that the magistrate wrongly shifted the legal burden to the Appellant.”

35.In HKSAR v Yeung Wai Ho Henry [2013] 1 HKLRD 560, 568, Stock VP held that the mere giving of evidence by the defendant does not discharge the evidential burden and it must be more than a bald denial.

36.Hence, the effect of the presumption is that the prima facie case will carry unless the defence can discharge the evidential burden and point to some credible evidence to the contrary, whether emanating from the defendant, a defence witness or from the prosecution case.

37.In the present case, the prosecutor submitted that it was for the defence to prove that the premises were not a gambling establishment, but not to the extent that they bore the legal burden of proof.  In any case, the Magistrate correctly directed himself that the prosecution had the burden of proof of the case beyond reasonable doubt, and the defence had no such burden but the benefit of the doubt.  Hence, the Magistrate was well aware that the legal burden never shifted to the Appellant and is so in his reasons.

38.The defence case is that no money was charged for playing majhong at the Club, and the Appellant had resigned from the Committee of the Club.

39.DW produced the resignation letter of the Appellant in 2009 tabled at the Committee meeting.  However, the Appellant is still a registered as a Committee member.  Further, the resignation was allegedly not only from the Committee, but also the Club membership.  It begs the question as to why the Appellant would still visit the Club often when mahjong was played in 2011?  This really gives the lie to the resignation.

40.DW said in chief that no fee was charged for playing mahjong.  However, upon reading the transcript of DW’s cross-examination, Mr Lam conceded that the Club did charge a fee for playing mahjong each time.  The $40 was a minimum charge, and the fact that the players could get a $30 lunch box if they so wished was neither here nor there. 

41.Only the key to the wooden door was found on the Appellant.  The prosecution evidence was that only the wooden door was locked and the iron grille was open, and the Magistrate was entitled accept that.

42.Under section 3(3) and (4) of the Gambling Ordinance, where mahjong is played in a licensed restaurant or clubhouse under the Clubs (Safety of Premises) Ordinance (Cap 376), there is still the condition that fee is not charged for admission to such premises for it to be lawful.

43.The case of R v Leung Hing [1993] 1 HKC 479 where the mahjong players in a restaurant chipped money in a beer glass for the payment of food and drinks does not assist as the Club is not a restaurant or club under section 3 of the Gambling Ordinance, and a fee is charged.

44.An important feature of the Club premises was its CCTV surveillance.  One might ask what for?  To monitor the internet surfing, reading the magazines, or having a lunch box?  Without a hint of doubt it related to the mahjong playing, and not just on a social occasion.

45.Hence, it is beyond doubt that mahjong playing at the Club was not lawful, and that the presumption of a gambling establishment is not rebutted.

46.Given the Club was a gambling establishment, the Magistrate drew the inference that the Appellant operated the premises as a gambling establishment.  He relied on the background evidence and the acts of the Appellant as seen in the CCTV footages.

47.Mr Lam submitted that the clips selected were misleading, as the Appellant had only pocketed money from the basket at the table he was playing, but not from other tables.  Mr Lam applied to play other clips in continuation or relating to the clips played.

48.Miss Lau, for the Respondent, objected to the new evidence.  She submitted that although the entirety of the clips seized were produced as real exhibits, they were not in evidence.  Only the clips selected and played were in evidence.  The selection was made by agreement between the parties, and the parties were bound by it.

49.I noted that the first footage played was on 29 November 2010, hence the prosecution had relied on entire footages to cover the period in the charge.  I ruled that the additional clips should be viewed de bene esse.  Upon viewing the clips, Miss Lau conceded that none of the original or additional clips showed the Appellant had pocketed money from the baskets at a table he was not playing. 

50.Mr Lam accepted that since it is common ground that the Appellant only pocketed money from the basket qua player, it is not necessary to formally adduce the additional clips. 

51.Miss Lau pointed out that the Magistrate never said the Appellant had pocketed money from baskets of other tables, but only that he handled money from baskets of other tables.

52.Be that as it may, Mr Lam submitted the Magistrate was wrong in including the fact the Appellant had pocketed money qua player in drawing the inference of guilt.

53.Leaving that aside for the moment, the viewing of the original clips apart from showing the Appellant had handled money in baskets other than from tables he had played, also showed that:

(1)    Footage 11 on 6 February 2011

The 2^nd Defendant took some money from a blue basket and gave the blue basket to the Appellant.  The 2^nd Defendant handed the money to the desk, and the Appellant distributed the rest of the money in the blue basket to the players.

(2)    Footage 12 on 7 February 2011

The 2^nd Defendant took some money from a basket and the Appellant distributed the rest of the money to the players.

(3)    Footage 14 on 8 February 2011

A player poured the money out from a basket and gave some money to the Appellant who passed it to a person at the desk.

54.Hence, the Appellant had also helped the 2^nd Defendant, the manager of the Club, in distributing the money in the basket to the players, and to pass money taken from the basket to a person at the desk or counter.  Such acts are in addition to the possession of the key and fixing a mahjong table.  Of course, these taken alone could be that of a mere functionary but not necessary the “operator”.

55.Then there was the background evidence: the Appellant was one of the promoters of the Club and still a registered committee member. He negotiated the tenancy agreement and sometimes paid the rent.  He is at a higher level than the manager of the Club, privy to the decisions of the activities to be organized at the Club.  The Appellant had knowledge of the mahjong playing because he also played the game and was seen there often. The irresistible inference is that he must a person able to have his influence brought to bear on the running of majhong game at the Club. 

56.Upon the rejection of the evidence of resignation and denial of negotiation of the tenancy agreement, the only irresistible inference on all the evidence is that the Appellant was an operator of the Club as a gambling establishment.  The conclusion is not abrogated by the fact that the Appellant had only pocketed money after playing the game himself.

57.During the viewing of the footages on appeal, the topic of the 2^nd Defendant retaining some money from the baskets before distribution of the rest amongst the players was discussed.  Be that as it may, they were only acts of the 2^nd Defendant and no the Appellant.

58.As analysed above, the finding of the nature of the money in the basket or its partial retention is not necessary for the issue of gambling establishment, nor the inference of the role of the Appellant in the gambling establishment.  Hence, there is no inconsistency between the conviction and the lack of finding of any commission.

59.The commission of the offence during the charge period can be inferred from set-up of the Club and similar activities during the period.

60.In the premises, the appeal against conviction is dismissed.

Appeal against sentence

61.The Magistrate referred to Cross & Cheung on Sentencing in Hong Kong and said that the sentence is normally immediate custodial.  The Magistrate said that as a serving police officer, the Appellant should have known the serious consequence such as losing his job and pension.  The Appellant was sentenced to 3 months’ imprisonment.

62.The Ground of Appeal against sentence is that 3 months imprisonment is manifestly excessive given the small size of the operation and that the Magistrate has found that the Club had served other purposes.

63.According to AG v Li Wai-ming & anr [1984] HKLR 324, the Court of Appeal held that immediate custodial sentences should be considered, possibly in addition to a fine, in all but minor cases for operating a gambling establishment.  Mr Lam agreed with this principle.

64.Miss Lau agreed there is no tariff for operating a gambling establishment.  She has very helpfully summarized the sentencing cases.  The spectrum starts with 3 weeks imprisonment upon plea with 3 electrical mahjong tables on an one-off occasion (HKSAR v 林禮娥 (Lam Lai Ngor) HCMA 151/2013), and 5 weeks on a plea with 8 players in a provisions store on an one-off occasion (HKSAR v 嚴愛林(Yam Oi Lam) HCMA 59/2013); to the more serious cases of 3 months upon plea for over a period of 6 months (HKSAR v Tsang Ling Yim & ors HCMA 1102/1999) and 3 months upon plea for over 7 months (HKSAR v Lam Wai Keung HCMA 149/2005).  The sentence of 3 months and $15,000 fine upon plea was confirmed on appeal for a quite substantial operation (HKSAR v Wong Hing Lam HCMA 69/2004), and 7 months imprisonment upon plea during trial for conspiracy to operate a gambling establishment for over 3 months with 10 to 20 players and the profit of $9,000 per day (HKSAR v Lai Pui Sang CACC 122/2003).

65.Hence, the normal range is from a few weeks on an one-off occasion to 3 months for over a longer period.

66.Mr Lam submitted that there only 3 tables in the present case as in Lam Lai Ngor.  But the present case was over a much longer period.

67.Mr Lam submitted that the present operation was lesser in scale than the cases of 3 months imprisonment, and the sentence should be “pro rata” or rateably reduced.

68.In the New South Wales case of Kardoulia v R (2005) 159 A Crim R 252, Johnson J stated that the parity principle applies to the sentencing of co-offenders, but not as a ground of appeal for inviting the comparison between sentences on offenders who are not co-offenders simply because they may have similar characteristics or have committed similar crimes.

69.The relevant principle is whether the sentence is manifestly excessive or manifestly inadequate.  Like cases should be treated alike, but sentencing is never on a purely mathematical approach.

70.Mr Lam submitted that the Appellant had long standing litigation with the Police Force.  He was not officially suspended from duty at the material time, but not required to do anything after clocking in.  Hence, he went to the Club to kill time.

71.Miss Lau pointed out that it is more serious for a serving police officer to have committed the offence.

72.The sentence of 3 months imprisonment is in line with similar cases even without taking into account that the Appellant is a police officer.

73.As to the Club’s other legitimate services, as mentioned before, there was no apparent reason for it to have installed the CCTV surveillance, and mahjong playing must have loomed large amongst its activities.

74.In the premises, the sentence of 3 months imprisonment is appropriate, and the appeal against sentence is dismissed.

75.Lastly I thank Mr Lam and Miss Lau for their submissions, especially their efforts in helpfully preparing an agreed summary of the CCTV footages.

Ms Virginia Lau, ADPP (Ag) of the Department of Justice, for the respondent

Mr Lam Shun Chiu, instructed by Au Yeung, Cheng, Ho & Tin, for the Appellant