HKSAR v. TAM CHUN FUNG

HCMA 47 of 2012 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE (Appellate Jurisdiction) MAGISTRACY APPEAL NO. 47 OF 2012 (ON APPEAL FROM KCCC 3028 OF 2011) _______________________ BETWEEN HKSAR and Tam Chun Fung _______________________ Before : Deputy High Court Judge Yau in Court Date of Hearing : 25 July 2012 Date of Judgment : 27 August 2012 _____________________ JUDGMENT ______________________ The appellant was the first defendant in the present case. He was convicted after trial of 4 counts of agent using document with intent to deceive his principal, contrary to section 9(3) of the Prevention of Bribery Ordinance, Cap. 201, which were Charges 1 to 4 of the case. The particulars of the 4 charges are set out in the charge sheet and the court is not going to repeat them in full here, suffice to say that the allegations were that that the appellant, being the fitness manager of Fitness First (Hong Kong) Limited (“FF”), on 4 separate occasions as specified in the 4 charges, with intent to deceive his principal, used documents, namely, personal training agreements of Law Ying King numbered 006879 (Charge 1) and 006880 (Charges 2 to 4), in respect of which FF was interested and which contained a statement which was false or erroneous or defective in a material particular, namely that the said Law Ying King, without prior notice, failed to show up for pre-arranged training sessions, and which to his knowledge was intended to mislead FF. 3. He now appeals against his convictions. Evidence of the Prosecution Evidence of the prosecution consisted of the testimonies of 4 prosecution witnesses and a set of admitted facts. FF was a health and fitness group operating six fitness centres in Hong Kong, including a centre at 6/F, Tower 6, the Gateway, 9 Canton Road, TST, Kowloon (“the TST centre”). FF offered personal training packages (“packages”) to its customers for a fee, each package consisting of a different number of training sessions (“sessions”). The appellant was employed by FF as a fitness instructor from 24th September 2008 with a basic salary of HK$5,000 plus commission and was promoted to be a Fitness Manager (“FM”), which was also known as Personal Trainer (“PT”), on 1st March 2009 with a basic salary of HK$10,000 plus commission. The commission ranged from $220 to $420 per session, depending on the type of packages the customers bought. The appellant worked at the TST centre. A PT was also required to sell packages as part of his duties but successfully selling packages would not attract any commission. When a customer (“member”) purchased a package, he and the PT must sign a Personal Training Member Agreement (“the agreement”) with a unique serial number in triplicate which contained, among the personal particulars of the member and other details, an attendance table for recording the information of the attendance of the member at training sessions. When a member wished to have a session, he must make a telephone appointment with the PT in advance and the PT should enter the appointment details in an appointment record book. At the conclusion of the session, the PT would enter the date and time of the session in the attendance table in the member’s agreement. The member and the PT would sign against the entry. If a member was absent from a prearranged session without giving a 24-hour notice, the PT would enter the words “no show” in the attendance table and signed it. The member would be asked by the PT to sign as confirmation when he attended the next session. The PT would still be entitled to receive commission for that session. At the end of each month, a PT would submit a copy of the agreement of each member to claim for commission for conducted sessions as well as “no show” sessions. Law Ying King, PW4, gave evidence that sometime in May 2009, he joined FF as a member at the TST Centre and the appellant became his PT. On 9 May 2009 PW4 signed two agreements numbered 006879 (Charge 1) and 006880 (Charges 2 to 4) respectively for personal training with the appellant as the PT. The appellant told PW4 that if he had booked a session but failed to attend without prior notice, the session would be forfeited and make-up class would be given if prior notice had been given. Later on, the appellant told PW4 on one occasion that he had quotas imposed on him as a PT in FF and he had failed to meet those quotas. The appellant asked PW4 if he could put down one or two more signatures in the agreements. The appellant also said that after PW4 had pre-signed on the agreements made up classes would be given to him in the following month. PW4 thought that as the appellant had promised to give him made-up classes it would be alright to pre-sign. When PW4 pre-signed on his agreements, he noticed that nothing had been written down in the corresponding entries next to his signature, namely, date and time of the session that had been conducted. Thereafter the appellant asked PW4 occasionally to pre-sign on the agreements and on each occasion he pre-signed 3 to 4 signatures. This lasted for about 3 to 4 months. The appellant then became busy and could not attend session with PW4. Eventually another PT was assigned to PW4 by the appellant. According to Lam Wing See, PW1, the human resources executive of FF, FF required that sessions be conducted according to the time as stated in the agreements and did not allow customers to pre-sign in the agreement for sessions that he had not attended. FF also did not accept members to have private arrangement with the trainers to have the sessions to be conducted later. The reason given by PW1 for such prohibition was that when trainers left the company, FF would owe members any unattended sessions in the package and FF would need to find trainers to give make-up sessions to the members, and commissions would have to be paid to the substitute trainers. PW1 confirmed that in June, July, August and September 2009, PW4 signed for 6, 3, 2 and 2 “no show” sessions respectively in the agreements and the appellant was paid commissions for them. PW1 confirmed that if “no show” was false FF would not pay commission to the appellant. PW4 agreed that all the signatures in the agreements belonged to him. In so far as “no show” in the checkbox in the agreements was concerned, he confirmed in court that he had never failed to attend any booked sessions in FF without giving FF or the appellant prior notice. Tam Hoi Leung, PW2, was a Front of House Manager of FF. He said that the company did not accept members “pre-signing” the agreement for training sessions and entered “no show” at a later stage. Mok Wai, PW3, was the senior club manager of FF. He said that FF prohibited members or PT to “pre-sign” on the agreements and for PT to provide make-up classes to members subsequently for the ‘pre-signed’ sessions. PW3 denied that in or about August 2009, he had a conversation with the appellant. He denied that he had told the appellant that he did not care whether members had attended sessions so long as they “signed” for the classes. PW3 said that he recalled that a PT in the Olympic Plaza Centre had told him in Jan 2011 about an oppressive SMS that the PT had received from his senior. PW3 said that he recalled that the details of the SMS were “something which was not allowed”. PW3 agreed that he had a meeting with a PT called Max Wong on 25th August 2011 in which Max complained to him that he did not have enough members to conduct more classes. PW3 disagreed that the he had told Max it was all right for him to “sign” classes so long as members did not complain. PW3 said that a new system has now been implemented in FF, in which FF would send emails/SMS to members to confirm their attendance and the old system of requesting members to sign on the agreements to confirm their attendance was no longer in place. Defence case The appellant gave evidence that when he joined FF in 2008 there was already a system that targets were set in relation to selling packages and conducting sessions by FF for PTs to achieve. In March 2009, the appellant was promoted as FM and was transferred to Gateway Club in Harbour City. He came to know a practice in which members would sign blank in the agreements for sessions which would subsequently be marked “no show” and make-up classes would be provided to the members later. The appellant was told that members were afraid that their agreements would expire and they would lose all the sessions and by such practice they would not suffer any loss or file any complaint. The appellant said that a club general manager, Wilson Chan, and a national fitness manager, Michael Kwok, had put tremendous pressure on him to fulfil the monthly targets in selling packages and conducting classes. In the first 2 months as a FM he could not meet the targets. The appellant discussed the problems with his seniors and Wilson Chan said that as long as members did not complain the appellant could ask the PT to have more “pre-signed” sessions. Michael Kwok reassured him that it would be alright as long as targets were reached and the members were willing to “pre-sign”. Chan and Kwok later resigned and in August 2009, Mok Wai (PW3) took over as senior club manager and the appellant directly reported to him. When the appellant told PW3 about asking clients to “pre-sign” because that was the case before, PW3 told the appellant that he should not “sign” so many on one day but did it “bit by bit”, and space those “pre-signs” out every month. The appellant told PW3 he would do his best. The appellant was unable to meet PW4’s demand for training sessions after his promotion and he assigned “Ar man” as PW4’s PT. At that time, there were outstanding make-up lessons owed to PW4 due to “pre-signing” and, as far as he knew, “Ar Man” had conducted the lessons and he had private arrangement with “Ar Man” to pay the commission to “Ar Man” to make sure that FF did not have to pay the commission twice. The appellant said that after he had been arrested by ICAC, he had ceased the practice of asking members to “pre-sign”, but he was aware that a PT, Alan Liang, was still doing it. The appellant told PW1 he was worried this might lead to some crimes and suggested to Lam that FF could simply terminate Liang. Lam replied that there was not enough evidence, and “these things” happened all the time and by ‘these things’ Lam meant asking members to “pre-sign”. The appellant said he had no intention to deceive FF nor had he any intention to misled FF and he regarded those documents submitted to FF not erroneous nor defective. He, however, admitted that he did ask PW4 to “pre-sign” on the two agreements as stated in the charges. The appellant added that he had received an SMS forwarded to him by the second defence witness, Max Wong Tsz Fai (“DW2”), a PT at Olympic Plaza Centre and the SMS showed that it had been originated from the telephone number of a FM, Enoch Leung, which was provided by FF for his use. DW2 confirmed he received the SMS and forwarded it the appellant. The appellant talked to PW3 about the SMS and PW3 told him to ignore it and reassured him that as long as members did not complain it was alright. The appellant took the reassurance as a direction from the senior management. DW2 said he worked under Enoch Leung in Jan 2011 in Olympic Plaza Centre. When monthly targets were not met, Enoch Leung and other FM would ask PTs to “sign” more classes, meaning by way of “pre-signing”. The company regarded this as important because it would bolster sales. There were occasions that FM compelled PTs to do it. Members who “pre-sign” classes would be given make-up classes the next month. DW2 said, as far as he knew, the practice of “pre-signing” existed before he joined FF and was in place even up to the date he testified in court. On 25th January 2011, he attended a meeting with the FMs and he used his mobile telephone, which was in good working condition, to record some of the conservations to protect himself because of the ICAC investigations. He said that the recording accurately reflected what had been said in the meeting and he had not tampered or interfered with the phone or the recordings (Exhibit P6 and P6A). During the meeting, Jacky Wong, an assistant FM in the North Point Club, said as far as classes were concerned, it was “still a little bit short”. Wong asked the PTs to do their best to “do more classes”, but reiterated at the end that “if it is not enough, classes had to be signed, there is no alternative.” DW2 understood ‘classes to be signed’ meant “pre-signed” sessions. 5 days later DW2 received an SMS from Enoch. He took a photo of the SMS from his phone (Exhibit D2). On 30th January 2011, DW2 received another SMS from Jacky Wong saying that DW2 did not have enough classes and DW2 was asked to ask client to sign for classes. On 15th February 2011, DW2 had another meeting with Enoch and he again recorded part of the conversations (Exhibit P7 and P7A) which he had not tampered or interfered with. Enoch said he knew that many classes had been “signed” in the previous month. PTs were told that Enoch did not want “signing” of classes again in the subsequent months, and Alex Shieh, the Club General Manager, who was present, nodded his head. Both recordings were played in court. Transcripts of both recordings were produced. Both recordings only recorded part of the conversations in the respective meetings and the conversations stopped abruptly. DW2 claimed that the recordings of the 2 meetings stopped as there was an incoming call on both occasion. On 25th August 2011, DW2 had a meeting with PW3. DW2 complained that he did not have enough clients but he was asked to “sign” more sessions. PW3 told him that in fact “signing” classes was a “grey area” and members would usually agree to “pre-sign” two or three classes DW2 said that after the meeting he was transferred to the TST Club. Grounds of Appeal In the amended grounds of appeal the appellant sets out 5 major grounds of appeal, namely: There was a material irregularity in the trial in that the magistrate after having convicted a co-defendant, the third defendant (“D3”), on his own plea and admission of the facts and having heard the mitigation and made some adverse comments on the facts, still proceeded to try the appellant despite application by the appellant to pass the trial to another magistrate; The conviction was against the weight of evidence; The magistrate did not treat the evidence of the prosecution with caution as the prosecution witnesses had a motive to deny knowing about the practice in view of a report having made to the ICAC; The magistrate improperly rejected the evidence of PW2 and erred in giving no weight to the SMS and recordings In all the circumstances the conviction of the appellant should be overturned. Material Irregularity At the hearing of this appeal counsel for the appellant, Mr Polson, submits that the charges the appellant stands convicted and the charges D1 faced all had the same victim/customer, PW4. When D3 pleaded guilty an “Amended Summary of Facts for D1 and D3” was used and admitted to by D3. The magistrate should have followed the normal procedure to adjourn the mitigation of D3 until after the trial of the appellant to avoid any possibility in the mind of D1 that the magistrate had already made up his mind on any matters which might arise in his trial. The magistrate, however, proceeded to hear the mitigation and made some adverse comments on the facts before proceeding to the trial of the appellant, against the application of the appellant for him to recuse himself. Mr Polson claims that as a result of this irregularity the appellant feels aggrieved that he did not receive a fair trial and that justice was not manifestly seen to be done. The respondent points out that the facts admitted to by D3 after his plea was not the “Amended Summary of Facts for D1 and D3” but a set of “Summary of Facts for D3”, a copy of which is attached to the Summary of Arguments for the Respondent. It is clear from it that nothing about the appellant was mentioned and the facts were confined to matters relating to D3. Nothing prejudicial to the appellant was therefore put to the court. The only thing in the facts which might concern the appellant was that PW4 who testified in his trial was also the member of FF involved in the charges against D3 and was described as such in the summary of facts. The court will come to this again later. Although the magistrate proceeded to hear the mitigation of D3 instead of adjourning it until the conclusion of the trial of the appellant, there was nothing in the mitigation which touched upon the appellant. There was, indeed, nothing prejudicial to the appellant. Mr Polson complains in particular that in the mitigation, the counsel for D3, Mr Fong, made specific reference to matters relating to the willingness of the customer of D3 to pre-sign and this customer was PW4 who had yet to testify in the trial of the appellant. The relevant part of the mitigation is as follows: “Regarding the circumstances of these offences, he committed this offence out of stupidity and greed. His customer in this offence was willing to pre-sign those agreements because the defendant promised him to provide him the training session retrospectively…..” Although PW4 was the customer involved in the charges against both the appellant and D3 the summary of facts and mitigation were confined to D3 only. The summary of facts was actually entitled “Summary of Facts for D3” and in mitigation Mr Fong made it clear that it was for D3 only by saying: “Your Worship, in this mitigation, or as far as D3 is concerned….” Mr Polson relies on the prosecution using the “Amended summary of Facts for D1 and D3” as its opening in the trial of the appellant as one of the grounds of material irregularity. The respondent, however, points out that the “Summary of Facts for D1 and D3” was never submitted to the court nor was it relied upon by the prosecution. According to the transcript of the proceedings the prosecution did not make any formal opening at all. There is, therefore, no question of such a summary being made known to the magistrate. The trial of the appellant was before a single professional magistrate who was both the judge of facts and law. The magistrate was of course able to distinguish what was admissible and what was inadmissible evidence. What was admitted to by D3 in the summary of facts and what was said in his mitigation were clearly not evidence in the trial of the appellant. The magistrate was no doubt well aware of this because he did not only in his statement of findings make no reference to any of them, but he also spelt it out clearly: “It is trite law that the admission by one of the Defendants is not evidence against another co-accused in the same case. Further, D1 and D3 were not jointly charged. No weight would be attached to any matters admitted by D3 in D1’s trial and that no prejudice, as contended by Mr Polson, would arise against D1.” Mr Polson seeks to support his contention by asserting that the magistrate made an adverse finding after hearing the mitigation. The relevant statement of the magistrate being questioned by Mr Polson is as follows: “Defendant, corruption offences are always regarded by the court as serious offences and your counsel accepted that in your case that involve an element of breach of trust.” With due respect, I do not consider such a statement amounting to an adverse finding. First of all it is only common sense that corruption offences are serious offences and the magistrate had no need to make a finding in coming to this view. As to the part of breach of trust, the magistrate, as rightly pointed out by the respondent, was no more than repeating what Mr Fong said in mitigation which was: “…..in this mitigation, or as far as D3 is concerned, D3 is going to accept that, first, this offence involves a breach of trust element; second this offence is a type of offence which may attract immediate custodial sentence,” In fact when the magistrate made the statement he framed it in very clear terms that it was what was accepted by D3’s counsel and was in the case of D3 only. No matter the statement amounted to an adverse finding or not it was only confined to D3. To conclude, the facts admitted to by D3 in his plea and the mitigation Mr Fong submitted on his behalf did not contain anything prejudicial to the appellant and the magistrate made it clear that such facts and mitigation did not constitute evidence in the trial of the appellant. Mr Polson argues that what the magistrate had done would give the appellant a perception that he would not get a fair trial and that throughout the trial it was apparent that the magistrate was against the appellant. No particulars are given by Mr Polson in respect of these allegations. Judging from the statement of findings and other materials in the appeal bundle I am of the view that such allegations are unfounded. It can be seen from the statement of findings that the magistrate conducted the trial in a fair and unbiased manner and all his findings were supported by evidence. There is still the contention raised by Mr Polson that the appellant felt aggrieved that he did not receive a fair trial and justice was not manifestly seen to be done. As pointed out above there was nothing prejudicial to the appellant in both the facts D3 admitted during his plea and his mitigation. The trial was conducted by a professional magistrate who knew what was evidence and what was not. Under such circumstances I am of the view that the refusal of the magistrate to recuse himself did not breach the maxim that justice must manifestly be seen to be done. There was also nothing for the appellant to be aggrieved about. The magistrate had in fact demonstrated that he had not taken inadmissible evidence into consideration in the trial of the appellant which was conducted in a fair and unbiased manner. This serves to strengthen the conclusion of the court. This ground of appeal has no merit. Conviction Against Weight of Evidence The appeal grounds (b) and (c) can be dealt with together. Mr Polson submits that the magistrate’s reasons for rejecting the evidence of the appellant and DW2 were illogical. The magistrate in fact carefully assessed the evidence of the appellant and DW2 (Max Wong Tsz Fai). He pointed out the unreasonable and illogical instances in their evidence before he rejected it. He said: “83. In so far as the appellant and Max evidence is concerned, the appellant claimed that he was only aware of the practice of “pre-signing” when he was transferred to the TST centre. If that was such a practice being widely adopted by PTs in FF, as claimed by the appellant and Max and suggested by the Defence, it would be surprised that the appellant did not notice the existence of such practice when he worked as a PT in Sheung Wan Branch for 6 months. Strange enough, after the appellant became aware of the existence of the ‘pre-signing’, and when his sub-ordinates informed him that they could not meet the targets, he then met Wilson Chan and Michael Kwok and suggested to them that he had to ask members to “pre-sign” as was the case before. If the appellant was not familiar with the practice, and he was just promoted to FM not long ago and being assigned to a new Centre, why he did not ask or discuss with his sub-ordinates to find other alternative solutions but instead blindly adopt the practice? Given the fact that the appellant was able to meet the targets as a PT, he should be able to share his experience with his sub-ordinates or other PTs under him as to how to meet the targets. Instead, he followed something that he was not only familiar with, but a practice that he was puzzled about. 84. As suggested by the appellant, there were two reasons given to him as to the practice of ‘pre-signing’: one being members did not want their sessions invalid when their agreements expired, the other one being to meet the targets. They were different reasons. Why he, as a FM, did not inquire with the PTs under him as to the real reason behind the practice of ‘pre-signing’? 85. The appellant claimed that he had a meeting with PW3. This meeting is important because it was the first time that the appellant claimed that he had got the acknowledgment and approval from PW3, being the new senior management, to “pre-sign” sessions. This meeting and conversation, however, was never put to PW3 in cross-examination by Defence Counsel. 86. Max said in his evidence in chief that the practice of “pre-signing” was still going on even at the day he testified in court. He said that he heard from other colleagues saying that it was possible of ‘pre-signing’ even under the new PIN system. But in re-examination, he admitted that it was not possible under the new system for members to enter the PIN twice in one day but only take one session/classes. This change of stance and evidence clearly indicated that he tried to exaggerate the matter and his evidence in this regard as to “pre-signing” is self-contradictory. 86. Both Max and the appellant claimed that FF had put tremendous pressures to them to “pre-sign”, but the fact is that they are still being employed by FF, even though they claimed at some stages that they had refused to allow his sub-ordinate to pre-sign (for the appellant) and pre-sign (for Max), as they failed to reach the “targets’ as set by FF. They even admitted that they could still manage to reach the targets as stipulated in their employment contracts. 87. “Pre-signing” did not reduce the work-loads of FMs and PTs; they would still need to provide made-up classes to members later, which meant that they would have less time to provide sessions to other members. From FF’s perspective, “pre-signing” meant that members could extend the validity of agreement/packages and that would affect the productivities of PTs and minimize the FF’s profits. On the contrary, “pre-signing” would allow FMs and PTs to earn commissions that they were not supposed to earn in that month which they had asked members to “pre-sign” classes. I agreed with the prosecution’s submission that the appellant and Max were tried to portray themselves a victim when in fact they were the ones who had received the benefit under the ‘pre-sign’ practice. 88. I find the appellant and Max incredible and unreliable witnesses. I rejected their evidence.” In the case of Chou Shih Bin v HKSAR FACC 11/2004 the Hong Kong Court of Final Appeal said that where facts were concerned the appellate tribunal would recognise that it did not enjoy the advantage of having received the evidence at first-hand which the trial tribunal enjoyed. This is in line with the well known principle that an appellate court should be slow to interfere with the finding of facts by a trial magistrate or judge. The magistrate in the present case had this advantage and, contrary to the submission of Mr Polson, I find the reasons given by the magistrate sound and valid and there is no reason to interfere with his finding of facts. Mr Polson complains that the magistrate did not treat the evidence of the prosecution witnesses with caution since they all had a motive to lie as their employer had reported the matter to ICAC. This again goes to the facts finding of the magistrate. He came to the conclusion that the prosecution witnesses were honest and reliable after considering their evidence and he gave his reasons. I do not consider that there is any ground to interfere with his finding of facts. I find the complaint of Mr Polson unfounded. On the strength of the facts found by the magistrate there was ample evidence to support the conviction of the appellant. This ground of appeal fails. SMS and Recordings Mr Polson submits that the magistrate erred in giving no weight to the SMS and the recordings. The magistrate gave full reasons for his ruling: “89. In so far as the two telephone recordings provided by Max, I noted that both recordings were only partial records of the alleged meetings; both recordings when (were) “cut-off” when details about ‘signing’ classes was mentioned. In fact, the speakers in the recordings mentioned ‘signing classes’, it was not sure whether he meant by ‘pre-signing’ classes or whether he meant that “members who had conducting sessions” as members would need to sign on the agreement after they had conducted sessions. None of the speakers in the recordings were called to testify. I attached no weight to this two telephone recordings. 90. In respect of the SMS messages, no telephone records were produced to show that the SMS messages were sent from the telephone number, ie, the telephone number of Enoch. The so called “picture” which tended to show the list of the telephone numbers and contacts at the office desk of North Point Club did not assist the Defence as that was hearsay to show that the telephone number was indeed the telephone number of Enoch Leung. Further, same in the case of the telephone recordings, ‘signing classes’ instead of ‘asking clients to pre-sign classes’ when (were) mentioned in the SMSs. I attached no weight to this SMS messages.” (italics added) It can be seen that the magistrate carefully analysed the evidence and correctly applied the legal principles in coming to his ruling. The decision of the magistrate cannot be faulted. This ground of appeal must fail. Conclusion The magistrate considered all the evidence thoroughly and gave reasons for his finding of facts which supported fully the conviction of the appellant of the 4 charges. There is nothing in the statement of findings or the appellant’s grounds of appeal and submissions that render the conviction of the appellant unsafe. The appeal against conviction is dismissed. (Joseph Yau) Deputy Judge of the Court of First Instance High Court Mr Dominic Ngai, Acting Senior Public Prosecutor of the Department of Justice, for the Respondent Mr I Polson, instructed by Messrs Keith Lam Lau & Chan, for the Appellant