Fin App No 9-2010 (Crim)

IpsofactoJ.com: International Cases [2011] Part 9 Case 8 (CFA)


COURT OF FINAL APPEAL, HKSAR

Coram

Van Weerdenburg

- vs -

Hong Kong SAR

JUSTICE PATRICK CHAN Acting CJ

JUSTICE KEMAL BOKHARY PJ

JUSTICE R.A.V. RIBEIRO PJ

JUSTICE MORTIMER NPJ

SIR THOMAS GAULT NPJ

27 JULY 2011


Judgment

Justice Chan Acting CJ

  1. I agree with the judgment of Sir Thomas Gault NPJ and for the reasons given by him, I would dismiss the appeal against the convictions on charges 1, 2, 9 and 10. Since the Court is not unanimous on charges 9 and 10, I would like to add a few words in relation to these two charges.

  2. As I understand it, the appellant’s (D4’s) main contention is as follows. The trial judge had given himself repeated warnings on the dangers of relying on the evidence of Raymond Leung (PW1) in convicting D4 without “very strong supporting evidence”. It was conceded by the prosecution before the Court of Appeal that the convictions on charges 9 and 10 could not be supported without PW1’s evidence. The judge had failed to give any reason as to why he accepted PW1’s evidence and the majority of the Court of Appeal was wrong to have upheld his conclusion.

  3. It is amply clear that throughout his Reasons for Verdict, the judge was quite critical of PW1’s evidence and had repeatedly reminded himself to exercise caution in approaching such evidence. This appears in paras 492 to 496, 510 to 514, 535 to 539, 552 to 559, 560 to 565, and 915.

  4. It is implicit in the judge’s conviction on these two charges that he must have convinced himself that he could safely rely on PW1’s evidence, notwithstanding these dangers and deficiencies. The real issue in the present appeal is whether the judge was entitled to do so and whether it is clear from his Reasons for Verdict why he had done so.

  5. It is not disputed that D4 had signed the agreements with local promoters and approved payment requisitions for these companies. The question is whether he did all this in furtherance of the conspiracy as described by PW1; this turns on whether D4 knew that the new arrangements were a scheme which continued the payment of illegal commissions. PW1 said D4 was aware of this because D4 was part of the core team and took part in the discussions regarding such new arrangements, although, as the judge repeatedly pointed out, PW1’s evidence was admittedly not satisfactory in many aspects.

  6. In my view, when considering PW1’s evidence on this part of the case, it is highly relevant to take into account the following matters.

  7. First, D4 was required by the Board to conduct a full review of the commission B system (some parts of which, as he knew, consisted of payment of illegal commissions) and to recommend a new system which among other things “must be open and transparent, comply in all respects with accounting standards and other regulatory requirements and be appropriate to a public company”. It was thus his duty to ensure that this was implemented. He simply could not delegate this task to PW1 and the others especially when he already knew (as found by the judge) that the old arrangements involved the payment of bribes by these persons to travel agents.

  8. Secondly, there must have been discussions among senior management staff before arriving at the new arrangements. D4 was the CEO. Even if (contrary to what PW1 said) he did not directly take part in these discussions, those who discussed the new arrangements would no doubt have either consulted him or reported to him what they had discussed and what they would propose before a decision was made to implement these new arrangements.

  9. Thirdly, the new arrangements also involved the payment of commissions. As the CEO who was brought in at this time of crisis to monitor the finances of TSL, D4 must have been concerned about such payments and it was his duty to examine any new arrangements carefully: how much commission would be paid under the new arrangements, to whom were the commissions to be paid and for what purpose. In particular, the new arrangements involved paying different local companies different percentages as commission. It must be his duty to consider why the rates were different. He was authorized to sign these agreements and should have raised queries on how these figures were arrived at. This also applies to the variation agreements regarding the reduction of commissions. He should have been concerned about these reductions before signing these agreements.

  10. Fourthly, he was aware of the payment of illegal commissions under the old arrangements (from the flow chart and the contents of the KPMG Report). When the new arrangements were proposed for implementation, it must be his duty to see whether the previous illegal payments were to be stopped or to be continued. He must have noticed that most of the persons involved in the payment of illegal commissions were to be involved in the new arrangements. If he did not know whether the new arrangements would continue the payment of illegal commissions, he should find out; and if he knew but did not stop this, he must have been willing to participate in continuing such illegal payments. It must also be noted that during April and May 2003 when these discussions were allegedly taking place, D4 continued to approve the payment requisitions which constituted the subject matter of charges 1 and 2.

  11. These matters are clearly relevant when considering PW1’s evidence regarding D4’s involvement in the new arrangements. They were matters which tended to show that there was truth in what PW1 said about D4. The new arrangements simply could not have happened without D4 knowing what they involved (including the payment of illegal commissions) and he must have come to have such knowledge through either discussing with PW1 and the others or having been so informed by them. The judge, taking these matters into consideration, was thus entitled to rely on PW1’s evidence to the effect that D4 as the CEO had taken part in the discussions of the core team and had actively participated in the conspiracy giving rise to charges 9 and 10.

  12. In his Reasons for Verdict, when dealing with PW1’s evidence, the judge did make reference to and discuss some of these relevant matters (see paras 917 and 934 to 935) before concluding “on the totality of the evidence” (which must have included the matters to which he had referred) that D4 was very much involved and was an active participant in the second conspiracy: see para.941. As the Court of Appeal said at para.111 of their judgment,

    It cannot be said therefore that the judge paid mere lip service to the direction given to himself that he must approach Raymond Leung’s evidence with caution and that it was important, when considering his evidence, to identify supporting evidence. In this latter respect, it is to be said that there was supporting evidence, albeit of varying kinds and varying cogency, to support much of Raymond Leung’s evidence, certain of this evidence being mentioned elsewhere in this judgment.

  13. Although the judge could have made it more explicit in his Reasons for Verdict, it could not be said that he had ignored his own warnings and had failed to give any reason as to why he accepted PW1’s evidence. It is not disputed that if the judge accepted PW1’s evidence, he could convict D4 of charges 9 and 10. The majority of the Court of Appeal was right to have upheld the convictions on these charges. D4’s contention must be rejected.

    Justice Bokhary PJ

  14. I entirely and respectfully agree with the judgment of Mr Justice Mortimer NPJ. While we must not set any standard that overburdens trial or intermediate appellate courts, there is a minimum below which the danger of wrongful conviction is not adequately guarded against. Coming into the company to rescue it, the appellant was confronted with the criminality in which it was involved. He should have put an immediate end to such criminality even though that would have brought about the company’s immediate collapse. In going along with that criminality until it could be phased out, he took a wrong turn. It has had tragic consequences for him. As far as his convictions on charges 1, 2 and 14 are concerned, I am convinced that the tragedy is ultimately of his own making. But that is not the view I take of his convictions on charges 9 and 10. Those two convictions should be quashed. And I fear that the failure to quash them may mean that the appellant will not only have to rebuild his life and his career with a criminal record to live down but will have to do so unable to accept the justice of two-fifths of that record.

    Justice Ribeiro PJ

  15. I agree with the judgment of Sir Thomas Gault NPJ.

    Justice Mortimer NPJ

  16. I have had the advantage of reading Sir Thomas Gault NPJ’s judgment in draft. I fully agree, for the reasons he gives, that the appellant’s appeal against his convictions on charges 1 and 2 must be dismissed.

  17. It is with regret that I find myself disagreeing with his conclusions on charges 9 and 10. On these two charges I would allow the appeal for reasons which I will endeavour to explain.

  18. I gratefully adopt, and do not repeat save where relevant to my reasons, his description of the charges, the background, and the facts up to 6 March 2003. This was when the Independent Committee of the Board of Directors instructed the appellant to conduct a review and devise a new system which brought the conspiracies in charges 1 and 2 to an end.

    General background

  19. It is of some relevance to note at the outset the circumstances in which the appellant became involved in the earlier conspiracies in charges 1 and 2. These had begun some 6 years before he was appointed CEO to save Tse Sui Luen Jewellery (International) Limited (“TSL”) from financial collapse. He was an accountant. He had impeccable credentials and had a considerable reputation as a successful corporate rescuer. He was appointed temporary CEO of TSL on 20 December after the board meeting of 18 December 2002. This appointment was confirmed on 18 March 2003 and on the same day he became a director. When appointed he was not familiar with either the company or any of its members nor had he any previous experience of the jewellery or the travel businesses.

  20. When appointed he was responsible for financial and general restructuring, as well as operational matters. In spite of the company’s financial difficulties it continued to have a turnover of about $1billion. This is some indication of his responsibilities and workload.

  21. Relevantly one has to ask how it was that he became involved in the earlier long-standing conspiracies? For my part I am inclined to agree with the respondent’s view to be found on para. 87 of its printed case. The suggested explanation for his involvement in charges 1 and 2 is that after everything had been disclosed to KPMG and their report received, the appellant “had a choice, albeit perhaps a difficult one, to make”. The respondent’s point is that because the income from the showrooms (25% or more of the company total) was so important to the company’s survival the appellant chose to continue the bribery until a new system had been put in place. That he would choose a continuation of bribery thereafter as alleged in charges 9 and 10,and perhaps indefinitely,is a far harder inference to draw.

  22. On 25 April 2008, after a trial which began on 14 August 2007, the appellant and 4 other employees or directors of TSL were convicted by His Honour Judge Browne of the charges before this Court. There were other charges with which we are not concerned.

  23. On 31 May 2010 the Court of Appeal dismissed the appellant’s appeal on charges 1, 2, 9 and 10 by a majority (Hartmann JA, and Lunn J; McMahon J dissenting). He now appeals with leave to this Court.

    Giving reasons

  24. The judge was careful to treat the evidence of the accomplice witnesses with caution. He warned himself of the danger of accepting this evidence without “very strong supporting evidence” (Reasons for Verdict para.490). Although he noted the abrogation of the old corroboration rule in s.60 of the Criminal Procedure Ordinance, Cap. 221 given the importance of accessory evidence here, this warning was particularly appropriate.

  25. Relevant to this is the duty of a judge sitting alone to give adequate reasons for his decision such as the context requires and to consider any defence advanced, however flimsy. Such reasons must explain the decision to the parties, particularly the losing party, as well as to the public. Additionally they must enable the losing party to be properly advised on appeal, and an appellate court must be able to fully grasp why the judge reached his decision.

  26. The giving of adequate reasons also demonstrates that the judge has followed a sound decision making process.

  27. All this is trite but in a long and burdensome case such as this with a number of accused and offences this is easily, and understandably, overlooked in respect of an individual count or an individual accused.

    The facts

  28. It is worth repeating some of the background facts. In 1996 TSL had 5 jewellery showrooms in Hong Kong. They were run by the Jewellery Showroom Division. The showrooms sold jewellery almost exclusively to foreign tourists brought there by travel agents. To encourage travel agents to bring the tourists to the showrooms TSL offered them commission based on the number of tourists brought and the amount of money they spent.

  29. In 1996, following allegations of illegal commission payments made to the employees of a travel agent, the ICAC searched the offices of TSL and interviewed employees.

  30. Following this senior TSL staff devised a scheme (charges 1 and 2) whereby money was paid to overseas companies purportedly for them to promote visits to the showrooms by foreign tourists in return for a headcount payment.

  31. However, this was a bogus arrangement as the overseas companies provided no services. They channelled the money back to Hong Kong to be distributed in cash by the showroom staff to employees of travel agencies. These payments to employees included bribes made without the consent of their employers.

  32. As part of the arrangement false invoices used for accounting purposes were supplied to TSL by the overseas companies.

  33. Three overseas companies were used. Between October 1996 and February 2000 (before the appellant joined) Worldwide Tour Marketing (Labuan) Berhad. From March 2000 to April 2003 Brighouse Consultancy Ltd and from June 2002 to April 2003 Cinedell Holdings S.A.

    Charges 9 and 10

  34. The conspiracies in charges 9 and 10 were similar to the earlier ones save that local business promotion companies were used between April 2003 and April 2005. The local companies were Golden Speed Travel Service Ltd; Best Joint International Ltd; and Well Zen (Hong Kong) Ltd.

  35. These offences arose after the earlier conspiracies in charges 1 and 2 and other serious offences involving the company funds had been disclosed to the board before the appellant was appointed. The appellant became aware of the earlier conspiracies after being provided with the Flow Chart and later the KPMG report referred to in Sir Thomas Gault NPJ’s judgment. As I have indicated it may well be that because ending the system of bribing the employees of travel agents would have been so devastating to the company finances he allowed it to continue and implicated himself until a new system was put into place.

  36. This new system came into being after on 6 March 2003 when the Independent Committee of the Board instructed the appellant to:

    .... conduct a full review of the commission B system and to recommend a new system that dispenses with the need for the BVI companies, reduces if not completely eliminates the need for cash payments and that all commission agreements with travel agents to be approved by the committee of executive directors.

  37. The new system continued the earlier conspiracies in a new guise. Fees were paid to the local companies to provide promotional services. Some promotional services were provided but payments to employees continued on a reduced scale. The question remained. Was it proved that the appellant was aware of the payments and became criminally implicated in them?

    The issues

  38. The Appeal Committee granted the appellant leave to appeal on the substantial and grave injustice ground (s.32(2) of the CFA Ordinance).

  39. The issues raised for this Court’s determination are first, whether the trial judge properly evaluated material evidence given by the accomplice witness Raymond Leung implicating the appellant on charges 9 and 10. Second, whether the judge gave adequate reasons for accepting the evidence of this witness. Finally, whether in these respects the judge and the Court of Appeal followed the norms.

    Accomplice evidence - the background

  40. Raymond Leung was a key witness. He was an accomplice seriously involved in the offences with which the appellant was charged with others. His close family were also involved. He and his family were given full immunity from prosecution. They took considerable sums of money from TSL. This fraud depended upon the availability of cash paid to the employees of travel agents. Full immunity has (so far) enabled him and his family to keep much of their substantial ill gotten gains.

  41. At the outset it is to be noted that the appellant’s conviction on charges 9 and 10 depended upon Raymond Leung’s evidence. He had pressing reasons for not disclosing to the appellant that the corrupt schedule B payments would continue after the Independent Committee of the Board had instructed the appellant to conduct a review of the system.

    The Judge’s approach to Raymond Leung’s Evidence

  42. The judge formed an adverse view of Raymond Leung as a witness not only because he was an accomplice. In paras 490 to 497of his reasons the judge considered several witnesses named as co-conspirators who gave evidence under immunity. As I have said, the judge explained his general approach in these words:

    .... I treated their evidence with caution and warned myself of the danger of accepting their evidence without very strong supporting evidence.

  43. He then reviewed how Raymond Leung figured prominently in the offences involving members of his family who had also been given immunity. He had in mind that Leung had much to gain from cooperating with the prosecution as there was overwhelming evidence of his and his family's involvement. Even in these circumstances the judge found that he had lied about the extent of his gains and other matters. He was keen to show his value as a witness not only for his own benefit but for others whom he had brought in to the criminal enterprises.

  44. Raymond Leung had also participated in extensive memory refreshing exercises with ICAC officers which, in the judge’s view, had

    overstepped the mark of what is permissible.

  45. Additionally the judge took into account that this witness was recalling events and conversations which occurred several years before the trial and before he had given any statements to the ICAC; that there were many inconsistencies between his and other witness’s recollections of the events and conversations; and that he had not fully disclosed his dishonest activities to the court either.

  46. Finally in this passage, and important to this appeal because Leung’s evidence implicated the appellant, the judge said that he was particularly cautious to look for support for this witness’s evidence where it implicated others.

  47. In paras 510 to 514 the judge returned to this theme reminding himself again that there were inconsistencies and contradictions in the prosecution case; that many of the witnesses gave evidence under immunity and that their evidence had to be approached with caution; that in particular the evidence of Raymond Leung and Allan Cheung had to be examined very carefully as they were involved in criminal activity beyond the scope of the scheme devised by the TSL management; that they clearly saw the scheme as an opportunity to make money for themselves and took advantage of the situation; and Raymond Leung had concealed the role of his family in the scheme.

  48. At para.535 once more the judge returned to this theme saying,

    As I have already stated, the evidence of (Raymond Leung), in particular, had to be treated with the utmost caution.

  49. Combined with other deficiencies mentioned the extensive memory refreshing exercises with the ICAC officers which the judge found ‘overstepped the mark of what was permissable’ amounted to a serious flaw in his value as a reliable witness.

  50. The judge indicated in the plainest terms the dangers of placing reliance upon this witness’s evidence. If his initial intention was to rely upon Raymond Leung’s evidence it was necessary for him to undertake a careful evaluation of the evidence, to consider whether the evidence was supported, and to give clear reasons for accepting or rejecting it.

    The Evidence against the Appellant on Charges 9 and 10

  51. Oral evidence implicating the appellant in charges 9 and 10 was given by Raymond Leung. After the appellant had been given instructions to stop payments through the overseas companies and to introduce a transparent and properly accountable system the witness said he had meetings with the appellant and two others. The first was Tommy Tse (Tse Tat Fung) the company chairman and former CEO who stood down before the appellant's appointment. The second person was Stephen Wong, the General Manager of the Showroom Division. He was not a director.

  52. Raymond Leung said there were 5 or 6 meetings on the topic but could not say who was present at any one time. Some of these meetings he said were held alone with each of the 3 involved. He was unclear as to who was at individual meetings and what was said. His evidence was uncertain and lacked detail but he described the appellant as part of the “core team” which devised the new system. If accepted, this evidence implicated the appellant as one of the architects of the new scheme from the beginning after he had received the 6 March 2003 instruction.

  53. In contrast the witness described with some clarity and detail the new system of using local companies through which payments were to continue as before. The system he described was that the 3 local companies (the promoters) would replace the overseas companies and would be provided with a fixed fee enough to pay illegal commission on a reduced scale.

  54. Having then considered the high percentages paid to the local promoters, the arrangements for distribution of the money, the invoices and payment requisitions and the total of over $44,000,000 paid between May 2003 and February 2005 the judge decided:

    927.

    Taking into account the totality of the evidence I have no doubt whatsoever the local promoters were being used in precisely the same way as the overseas companies, namely as money transfer vehicles to facilitate payments to employees of agencies without the consent of their employers and which were unrecorded. I accepted the evidence of (Raymond Leung) in relation to this offence.

  55. When the judge turned to the evidence against the appellant on these counts (paras 934 - 941) he noted that the appellant was well aware that for many years TSL had been making illegal payments from the commission B Flow Chart and the KPMG forensic report. He took into account that in the new system of using local promoters most of the personnel engaged in the previous illegal distribution of commission were involved.

  56. In particular Kenny Cheung, who had been previously involved and referred to in the KPMG report, had been appointed as a local promoter on generous terms. The judge considered that these were

    matters which would cause any honest CEO very grave concerns.

  57. He then referred to the business promotion agreements which the appellant signed with the local companies for commission, the variation of those agreements which he signed later to reduce the commission and his initials on numerous payment requisitions authorising payment to the promoters.

  58. The judge then repeated his earlier finding about the continuance of the system of illegal payments as follows:

    941.

    As I have stated above, I have no doubt on the totality of the evidence that the switch from the use of overseas companies to using local promoters was merely a change in the modus operandi of the conspiracy to offer advantages to employees of agencies. It was also accompanied by the creation of further false documentation which could be used in the same ways as [those] under the previous arrangement, namely to conceal the payments being made to travel agency staff.

    (The Appellant) was well aware of the purposes of the overseas companies and I was sure that he was very much involved in the arrangements to have the local promoters take over from the overseas companies with the same ends in mind. I had no doubt that (the appellant) was an active participant in these two conspiracies. I was sure that the prosecution had established all the ingredients of each offence against (the appellant) beyond reasonable doubt.

    The Court of Appeal

  59. The majority of the Court of Appeal upheld these two convictions (paras 306 and 307 of the judgment) on the basis that there was overwhelming evidence for the judge to determine that the payments to local promoters was made to facilitate payments to employees of travel agencies without the consent of those employers. And from the circumstances in which the local promoters were instructed and the role played by the appellant thereafter entitled the judge to find that the appellant was an active participant in the conspiracies.

    Discussion

  60. There were two issues which fell for the judge’s determination. The first was whether under the new arrangement to use local companies as promoters illegal payments to employees of travel agents continued. This issue presented the judge with little difficulty. There was overwhelming evidence of this which he accepted.

  61. The second issue was more difficult. When the new arrangement was made, was there evidence, open to the judge to accept, of his knowledge, his participation in and his intention to pursue, a similar criminal enterprise using local promoters?

  62. The judge’s view was that the appellant’s involvement in these conspiracies followed on from his involvement in the earlier conspiracies. But this was not necessarily so. As I have indicated a realistic appreciation of the position concerning charges 1 and 2 is displayed in para.87 of the prosecution’s printed case that the appellant “had a choice, albeit perhaps a difficult one, to make” and chose to continue the bribery.

  63. It seems to me that if this is an appropriate conclusion, considerable care is necessary in evaluating the evidence and concluding that the only reasonable inference is the appellant chose to jointly instigate a new similarly corrupt system contrary to his instructions. This is especially so when there was overwhelming evidence that others, who were making substantial financial gains, continued the conspiracy and there is no suggestion that the appellant personally gained in any way.

  64. Mr Duncan SC, appearing for the respondent, conceded in the Court of Appeal and before this Court that these convictions cannot stand in the absence of Raymond Leung’s evidence. Although this Court is not bound by such a concession, even if made by such an able and respected counsel, in my judgment it is completely proper and justified.

  65. Raymond Leung’s evidence was the link without which it was not open to the judge to conclude that signing the agreements and initialling the requisitions were other than normal duties of a CEO. He had delegated to other directors and managers the responsibility of making the new arrangements.

  66. The judge accepted the evidence of Raymond Leung and on that basis the normal activities of the appellant as CEO were viewed as guilty participation. Without this evidence judge’s comment that “any honest CEO” would have been put on enquiry loses its force. As Mr Duncan SC conceded, the signing of the agreements and initialling the requisitions for payment were not in themselves sufficient to prove guilty participation as the only reasonable inference.

  67. In these circumstances was it open to the judge to rely upon Raymond Leung’s evidence without giving reasons for so doing?

  68. In my view it was not. Many times the judge warned himself of the dangers of accepting the evidence of Raymond Leung unless it was supported, particularly when that evidence implicated the appellant. When the witness said the appellant was part of the “core team” he was vague about the meetings and about the participants. There was no support for the evidence implicating the appellant and yet the judge did not evaluate the detail of the evidence, and did not give any reasons why he was able to accept the evidence in the absence of such support.

  69. Whether the judge heeded his own warnings when considering this part of the evidence or whether he overlooked them is immaterial. Neither this Court nor the appellant, nor anyone reading the judgment can know why the judge accepted the accomplice evidence. Whether he found the evidence to be supported or whether he accepted the evidence sufficiently reliable without support to prove guilt is unknown. Given the dangers he implicitly acknowledged his duty to give full reasons and he failed so to do.

  70. Further, it is not sufficient for a judge to give himself full and proper general warnings about relying upon accomplice evidence unless it is independently supported without (save in obvious cases) carefully evaluating the evidence, considering whether or not it was supported by other evidence and then giving careful reasons why he either accepts or rejects the evidence. This is a necessary part of a proper decision making process when considering accomplice evidence without which errors may occur.

  71. The judge’s omission also involved a failure to consider the appellant’s defence put forward on his behalf by Mr Blanchflower SC, who appeared here and below. However weak, or even nonsensical, he may think a defence a judge sitting alone must consider the defence advanced. In the same way as a judge summing up to a jury must leave the defence for its consideration. Here where the appellant chose not to give evidence and the defence was that the prosecution evidence ought not to be accepted as proof to the criminal standard it was particularly necessary for the judge to evaluate the evidence and give full reasons.

  72. I therefore find myself in agreement with McMahon J’s minority judgment in the Court of Appeal. He rightly pointed out that the issue was not whether Raymond Leung had been involved in the replacement of the overseas companies with local promotional companies but whether the appellant was made aware that these companies would continue to provide funds for the illegal commission payments. McMahon J was of the view that the reasons given by the judge were not sufficient, particularly as central to the judge’s reasoning was his earlier finding that the appellant was a participant in charge 1.

  73. McMahon J held that there was nothing in the documents signed or seen by the appellant which indicated that the illegal payments were to continue. The only incriminating evidence came from Raymond Leung the uncertainties and deficiencies of which he noted. In his judgment these were all matters which the judge should have analysed in coming to his verdict as being relevant to the appellant's defence and having come to the conclusion that the reasons were insufficient he thought the convictions unsafe.

  74. For these reasons the norms were not followed either at trial or in the Court of Appeal in the respects I have indicated. I would allow the appeal on charges 9 and 10.

  75. Finally, I would add that the judge had a massive task and he demonstrated an impressive grasp of the evidence and the issues. His oversight must be viewed in this context.

    Sir Thomas Gault NPJ

  76. The appellant was charged, with others, of dishonest conduct while employed by, and as an officer of a publicly listed company. He was convicted on 5 counts and his appeal to the Court of Appeal was dismissed. In the case of 4 charges the decision of the Court of Appeal was by a majority. It is against his convictions on those 4 charges that he was granted leave to appeal under the “substantial and grave injustice” limb of s.32(2) of the court’s statute.

    Particulars of the charges

  77. The 1st charge was of conspiracy to offer advantages to agents, contrary to ss 9(2)(b) and 12(1) of the Prevention of Bribery Ordinance, Cap. 201 and ss 159A and 159C of the Crimes Ordinance, Cap. 200. The particulars of offence specified that during the period from 2 August 1996 to 30 April 2003, the named conspirators, without lawful authority or reasonable excuse, offered advantages to employees of travel agencies who would arrange tour groups to patronise the showrooms of Tse Sui Luen Jewellery Company Limited (“TSL”) as an inducement for favoring TSL in their principals’ affairs or business.

  78. The 2nd offence charged was of conspiracy to commit false accounting, contrary to s.19(1)(a) of the Theft Ordinance, Cap. 210 and ss 159A and 159C of the Crimes Ordinance, Cap. 200. The particulars specified that between the same dates the appellant, with others, conspired

    .... to, dishonestly and with a view to gain for themselves or another or with intent to cause loss to another falsify documents required for accounting purposes by making entries therein which were or may have been misleading, false or deceptive in a material particular in that they:

    (a)

    purported to show that commission payments were made to certain overseas companies by Tse Sui Luen Jewellery Company Limited (‘TSL’) for them to promote the business of TSL whereas the said overseas companies had not in fact provided any promotional service to TSL; and

    (b)

    falsely represented the actual amounts paid to travel agencies and employees of travel agencies which would arrange tour groups to patronise the showrooms of TSL.

  79. The two further charges (charges 9 and 10) related to a subsequent time period, between 1 April 2003 and 19 April 2005, and charged the same two offences of conspiracy to offer advantages and false accounting. The particulars of the charge of conspiracy to offer advantages were, in substance, as under the 1st charge. The particulars of the false accounting conspiracy charge specified that the appellant, with others,

    .... dishonestly and with a view to gain for themselves or another or with intent to cause loss to another falsify documents required for accounting purposes by making entries therein which were or may have been misleading, false or deceptive in a material particular in that they:

    (a)

    purported to show that commission payments were made to Golden Speed Travel Service Limited, Best Joint International Limited and Well Zen (Hong Kong) Limited by Tse Sui Luen Jewellery Company Limited (‘TSL’) for such companies to promote the business of TSL whereas part of such payments were to be paid to travel agencies and employees of travel agencies;

    (b)

    falsely represented the actual amounts paid to travel agencies and employees of travel agencies which would arrange tour groups to patronise the showrooms of TSL designated as ‘DY’, ‘HE’, ‘HO’ and ‘HC’; and

    (c)

    falsely represented the amount of entertainment expenses incurred by TSL.

    Background

  80. The evidence at the trial established that over a considerable period, those engaged in the management of the showroom division of TSL operated schemes under which secret commissions were paid and falsely accounted for. The appellant was employed long after the dishonest practices had become entrenched in the business of TSL. For present purposes, the details and magnitude of the schemes can be taken from the summaries in the judgment of the Court of Appeal. It is sufficient to go back to 1996 to describe the background to the charges. This can be done briefly because the appellant was employed by TSL only on 20 December 2002.

  81. Tour guides were paid commissions to encourage them to bring tour groups to TSL retail jewellery premises in Hong Kong. When paid to tour guides without the knowledge or consent of their employers these payments were unlawful. To avoid disclosure of these illegal payments, TSL established the scheme described by the Court of Appeal in the following terms:

    14.

    For that purpose a scheme was agreed upon whereby a company, Worldwide Tour Marketing (Labuan) Berhad (‘Worldwide’) incorporated in the British Virgin Islands, was set up in Malaysia and entered into a bogus agreement with a subsidiary of TSL, Bonaventure (International) Jewellery Limited (‘Bonaventure’), to the effect that Worldwide would procure tourists to go to TSL’s jewellery showrooms and in return would receive commission payments based on the number of tourists who went to those showrooms.

    15.

    In reality, matters continued as before, with Worldwide simply acting as an overseas vehicle to channel TSL funds intended to be used to pay advantages to tour guides in Hong Kong through its overseas bank account and then back to Hong Kong into the bank account of another BVI company from where it was withdrawn in cash by TSL staff and distributed as payments to the guides. This scheme, using the company Worldwide, commenced in October 1996 and was set up and administered by Allen Cheung who had been a business controller of TSL before the commencement of the scheme and who had left TSL for the purpose of running Worldwide. The overall scheme was managed by Raymond Leung who was the director of TSL responsible for the group’s operations. Between October 1996 and early 2000, some $60 million had passed through Worldwide’s bank account as purported payments for the provision of tourists.

    16.

    Around February 2000, there was a falling-out between Allen Cheung and his fellow conspirators, and it was decided by the latter to replace Worldwide with another BVI company called Brighouse Consultancy Limited (‘Brighouse’), and a further bogus agreement to the same effect was entered into between that company and Bonaventure.

    17.

    Brighouse operated a bank account in the Channel Islands and was run by Stephen Leung, who was the brother of Raymond Leung.

    18.

    The scheme then continued using Brighouse as the purported offshore provider of tourist groups to TSL showrooms. Other BVI companies were used to open bank accounts in Hong Kong, and money sent to Brighouse was immediately remitted to Hong Kong into the accounts of those companies from where the monies were withdrawn to provide corrupt payments to the tour group guides. Between March 2000 and about April 2003, some $40 million purporting to be commission payments for the provision of tour groups to TSL’s showrooms had passed through Brighouse’s offshore bank account.

    19.

    Some months previously concern had grown amongst the conspirators that the large sums of money being paid to Brighouse might attract attention, particularly that of KPMG, the auditors of the TSL group. Accordingly in late May 2002, the conspirators had purportedly engaged another BVI company, Cinedell Holdings SA (‘Cinedell’) to act in the same manner as Brighouse pursuant to a similar bogus agreement for the provision of tourists groups to TSL’s showrooms. It was thought in this way the large sums of money being sent overseas would be shared between Brighouse and Cinedell and be less likely to attract attention.

    20.

    Cinedell also operated a bank account in the Channel Islands and Stephen Leung operated that account. Between June 2002 and April 2003, a total of nearly $10 million was paid as purported commission to Cinedell under the terms of its agreement with Bonaventure.

    The findings in the District Court

  82. On 18 December 2002, the 2nd defendant, then Chairman and Managing Director (having superseded his father), disclosed the commission payments, and other matters to the Board of Directors of TSL. It was resolved to accept his resignation as Managing Director and to appoint the appellant, an independent company consultant, as Chief Executive Officer (“CEO”) of the company. The Board also resolved at the same time to engage KPMG to review the structure of the commission payments to Brighouse and Cinedell.

  83. The appellant commenced his employment on 20 December 2002 initially as a temporary CEO which appointment was confirmed on 18 March 2003 and he was appointed a director.

  84. The trial judge accepted that the appellant had an impressive business record with experience in corporate rescues. Two or three days after his appointment, the appellant discussed with PW1, Raymond Leung (who was a member of the senior management) payment of commissions by the company. There were some differences in the evidence concerning this discussion but the judge in his reasons for verdict found, and the Court of Appeal did not differ on this point, that the system by which commissions were paid was explained in detail to the appellant. In his reasons the judge said

    278.

    PW1 said he explained the whole flow and the organisation of the commission system since the ICAC investigation in 1996. He said he told [the appellant] D4 about Worldwide, Brighouse and Cinedell and about illegal commission payments being made without the consent to the staff of travel agencies. PW1 said that D4 said this was a normal arrangement which appears in other trades. PW1 said the meeting lasted for two hours.

    279.

    PW1 said that D4 suggested that he should write down the whole work flow of commission so PW1 could present it in a fluent way when he met KPMG officers and that he should disclose everything.

  85. Subsequent to this meeting, at the suggestion of the appellant PW1 prepared a flow chart which was shown to the appellant. The judge said

    284.

    In the chart, PW1 describes Table B as ‘the amount payable to employees of the like (normally tour guides) of the travel Agent as negotiated between the business promotion manager of TSL and the employee directly to ensure that the travel tours contracted for come to TSL first or second to give TSL the opportunity to maximise the amount spent by each passenger (PAX) contracted to be brought by the Travel Agent to TSL. This is not evidenced in writing nor is it normally disclosed or normally known to the Travel Agent’.

  86. The flow chart subsequently was passed to KPMG and was attached to a full KPMG report dated 28 February 2003. The appellant acknowledged receipt of a copy of that report on the same day. As the Court of Appeal judgment records

    224.

    The flowchart was referred to and attached to the KPMG Forensic report dated 28 February 2003. In a receipt dated 28 February 2003, the 4th defendant acknowledged to KPMG his receipt of one copy of that report. In the report, KPMG noted that although the apparent agreements between Bonaventure, a subsidiary of TSL, and Brighouse and Cinedell provided for payments to the two companies in respect of the provision of services in arranging tourists to visit the company’s showrooms in Hong Kong on a per capita basis, the actual calculations were made in relation to the amount of money spent in the showrooms by the tourist. Further, it stated:

    The services as outlined in the agreements therefore appear not to be those actually performed by the BVI companies, the BVI companies appearing to actually be money transfer vehicles to facilitate payments from TSL to travel agents.

  87. A Committee of Independent Directors of the Board of TSL, was appointed to investigate the payment of commissions and other matters. The judgment of the District Court records that

    225.

    At a meeting dated 6 March 2003, the Independent Committee of the Board of Directors of TSL, comprised of its four independent non-executive directors, considered the KPMG Forensic report and, in respect of the commission system (referred to as the commission B system), stated:

    The committee requires Mr Peter Van Weerdenberg, CEO as a matter of utmost urgency to conduct a full review of the commission B system and to recommend a new system that dispenses with the need for the BVI companies, reduces if not completely eliminates the need for cash payments and that all commission agreements with travel agents to be approved by the committee of executive directors.

  88. This led to termination of the use of the overseas companies to process the commission payments. The last payment by TSL was made in May 2003. From January to May that year, a total of $6.6 million was paid to Brighouse and Cinedell.

  89. It was acknowledged for the appellant that from the beginning of January 2003 to May of that year, in accordance with his duties to control TSL’s cheque books, the appellant initialed payment requisitions authorizing payments to creditors including Brighouse and Cinedell.

  90. The judge noted that on 29 July 2003 the appellant (with D2) signed a letter to the company’s auditors confirming that they had reviewed and evaluated the findings in the KPMG report and concluded that there were no “irregularities involving any member of management or employees who have significant roles in the system of internal controls”. Although written after the period of the charged conspiracy, the statement relates to the time when the BVI companies were being used.

  91. In providing that certificate to the auditors the appellant may not have been deliberately misleading them. It may be that even as late as July 2003 it had not been recognized by the appellant that paying commission to employees of travel agents without approval of their employers was unlawful. KPMG, in their February 2003 report, did not spell out the illegality but rather emphasized issues of accountability. Of course ignorance of the law cannot excuse unlawful conduct, but it might provide the reason for the appellant having subscribed to that certificate. It could also explain the appellant’s acquiescence in the continuing commission payments even after July 2003.

  92. From 1 May 2003 TSL, through Bonaventure, pursued arrangements with three Hong Kong companies. Agreements were entered into that provided for payments of “promotion” fees in respect of which the trial judge concluded

    941.

    .... I had no doubt on the totality of the evidence that the switch from the use of overseas companies to using local promoters was merely a change in the modus operandi of the conspiracy to offer advantages to employees of agencies. It was also accompanied by the creation of further false documentation which could be used in the same ways as under the previous arrangement, namely to conceal the payments being made to travel agency staff.

    D4 was well aware of the purposes of the overseas companies and I was sure he was very much involved in the arrangements to have the local promoters take over from the overseas companies with the same ends in mind ....

    The appeal to the Court of Appeal

  93. In the Court of Appeal it was submitted for the appellant that, in the absence of direct evidence, the judge should not have drawn the inference that the appellant had read the KPMG report. It was also argued that the contents of the report were hearsay and parts were used impermissibly by the judge.

  94. It was submitted that in the circumstances in which the appellant was employed, the unlikelihood that he would have joined a long-standing criminal conspiracy was accorded insufficient weight by the judge. It was submitted also that it had not been shown that the appellant had the necessary mens rea to justify the verdicts. It was said that there was shown no more than poor professional judgment.

  95. The evidence of PW1 was challenged as unreliable on some aspects and unsafe where unsupported. It was also argued that undue weight had been given to facts relied on by the prosecution: in particular that the appellant had signed payment requisition authorisations and promotion agreements.

  96. These submissions were rejected by the majority of the Court of Appeal.

  97. The majority judges were satisfied that there was overwhelming evidence that the appellant had read the KPMG report and that he knew that the BVI companies were simply money transfer vehicles. They enabled payments to employees of travel agents without the knowledge or consent of their employers.

  98. The majority rejected the submission that the KPMG report, as hearsay, was relied on as establishing the truth of certain facts referred to in that report and found those facts were proved on the other evidence. They upheld the findings of the trial judge that, after being informed from the KPMG report, the appellant actively participated in the perpetuation of the scheme until an alternative was found “by authorizing payment on the TSL payment requisitions in favour of Brighouse and Cinedell”. The majority said he clearly was possessed of the necessary mens rea.

  99. With reference to the charges relating to the subsequent payments to the local Hong Kong promoters, the majority held that the evidence established that the appellant took a “hands on” overview of the replacement scheme. He signed all three business promotion agreements and variations of them and throughout initialed authorizations of payments under them. The majority determined that there was “overwhelming” evidence that those payments were for the same purpose as those made to the BVI companies. They concluded that the appellant was an active participant, also in these two subsequent conspiracies.

    The dissenting judgment of McMahon J

  100. McMahon J considered that the trial judge had given insufficient reasons for seemingly accepting as plausible that the appellant would have joined a conspiracy that already had been exposed by one of the conspirators and had been fully described in the KPMG report. McMahon J said

    371.

    That meant that the prosecution case must have been that almost immediately the 4th defendant had become aware of the conspiracy the subject of the 1st charge he had taken quite firm steps to have it revealed in documentary form to the forensic department of KPMG, and so been aware of the high probability that it would be uncovered, yet had in fact from almost the same time decided to join that conspiracy. That indeed is remarkable conduct.

    ....

    373.

     

    There was no further analysis as to why the judge concluded that the 4th defendant had acquiesced in the scheme. In particular there was no express analysis as to how the defendant’s actions in bringing the scheme to the attention of KMPG almost immediately he had become aware of it was reconcileable with the 4th defendants then joining into the conspiracy which he must have assumed would be exposed by TSL’s auditors. It is generally thought to be the primary characteristic of a criminal conspiracy that the members of it try to keep its existence a secret, particularly from those persons who may be under a duty to report such activities.

  101. Referring to the charges relating to the later period, McMahon J considered that the evidence was insufficient to establish that the appellant knew that the local promotional companies were, in addition to providing some genuine promotion services, also channeling funds for the purpose of continuing unlawful payments to travel agents. There was a reasonable argument, McMahon J considered, that the appellant had responded properly, if not promptly, to KPMG’s criticisms of the “commission B” illegal payments and, in his view, there was nothing in the documents signed or seen by the appellant indicating that the commission B payments were continuing. His judgment states

    380.

    Unsurprisingly, following the provision of the KPMG report, the 4th defendant had been instrumental in the replacement of the overseas companies with the local promotional companies, and had, as CEO of TSL, signed the agreements with those companies for the provision of their promotional services. That was common ground. But the issue remained as to whether he was aware the new companies were, in addition to their providing some genuine promotional services, also channelling funds for the purpose of the continuation of unlawful payments to employees of travel agents. There was nothing on the invoices sent by those companies to TSL which separately reflected the premium paid for the provision of these commission payments to the employees of agents.

    The submissions in this Court

  102. In his argument in this Court, Mr Blanchflower QC with whom Ms Alice Lee appeared, presented submissions essentially supporting the reasons of McMahon J in his dissenting judgment. He submitted that the majority of the Court of Appeal had provided no or insufficient reasons for upholding the convictions. In effect the appellant seeks a review of the findings of fact of the trial judge as upheld by the Court of Appeal. Central in his argument is the contention that the trial judge and the Court of Appeal did not evaluate or give adequate reasons for rejecting factors favorable to the appellant. At the forefront of these was the inherent improbability of the appellant having joined criminal conspiracies in the circumstances that prevailed when he began his employment with TSL. It was said that being informed of the practices within the company did not establish that he became a member of the conspiracies and that the evidence did not prove the necessary agreement and intention to constitute conspiracy. It was said that the judge made no mention of the evidence that the appellant was instructed to disclose everything to KPMG and to tell the truth. Further, there was no evidence that the appellant indicated his intention to join conspiracies to pay bribes or to falsify accounts nor when he is said to have done that.

  103. With reference to the authorizations for payment to the overseas companies, it was submitted that the appellant, when he initialed payment requisitions, was waiting for the Board to make decisions about the payments in light of the KPMG report. It was submitted that this is relevant to the assessment of his honesty.

  104. It was argued similarly that the charges directed to the system of payments after the change to local companies as agents rested on the evidence of PW1. It was submitted that there was weakness in his evidence that the judge omitted to evaluate. He had given evidence under immunity and that was not supported where it implicated the appellant in conversations with other conspirators.

  105. It was submitted that the evidence was capable to be construed as supporting the inference that the appellant had the interests of TSL in mind and acted with concern for accountability and transparency in relation to the commission payments and control over the company finances.

  106. For the respondent, Mr Duncan SC with whom Mr John Marray appeared, supported the judgments of the District Court Judge and the majority of the Court of Appeal. He submitted that the principal issues were the credibility of the key witness PW1 and whether the appellant had read the KPMG report and they were matters for the trial judge.

  107. It was submitted that the evidence on those principal issues, taken with the content of the KPMG report, the signing by the appellant of the payment requisitions, and his involvement with completion and implementation of the various business promotion agreements, along with the accepted evidence of PW1, fully supported the findings of the judge.

  108. Counsel addressed the concern of McMahon J that it would have been remarkable if, so soon after taking employment with the company, the appellant had joined the conspiracies that already had been disclosed. It was submitted that this was not as remarkable as it might be first seen. It was in the company’s interest that it continued to trade. It would have been for the Board to determine that it should not. It was for the appellant to determine in light of his knowledge whether to continue and become involved as he did.

  109. Counsel similarly submitted that McMahon J’s concerns were met in respect of the charges of the later conspiracy once the evidence of PW1 was accepted and that was a matter for the judge.

    Conclusion

  110. The charges with which we are concerned are of conspiracy. Others charged as participants in the conspiracies were convicted and do not require consideration at this stage except as they were witnesses. There is no question that the conspiracies were proved. What is in issue is whether the appellant was proved to be a party to those conspiracies. The burden on the prosecution was to prove that the appellant participated by agreeing actively to further the unlawful acts. More than just awareness of what was to be done must be established.

  111. The trial judge and the majority of the Court of Appeal held that the evidence established that the appellant knew from disclosures made to him and from the KPMG report that the unlawful conduct was occurring. That was no longer disputed before this Court. The focus became whether the appellant involved himself in furthering the unlawful conduct. Also no longer disputed was the fact that commissions were paid to overseas companies having the sole purpose of channeling the unlawful payments to unauthorized recipients.

  112. The District Court Judge heard the evidence. He was required to assess the credibility of the witnesses and, in particular, that of the immunized conspirator PW1 admittedly long involved in the scheme to pay commissions to the employees of travel agencies without the knowledge of the employers. The long-standing practice with the falsification of accounting was at the heart of the showroom business of the company.

  113. In this Court there was reliance on the absence from the District Court Judge’s reasons for verdict of any indication that he had weighed in his assessment of the evidence that the appellant had told PW1 to write down the whole work flow, to disclose everything, so that it could be presented to KPMG, and that there was no need to hide anything. Also absent from the reasons for verdict was any mention that the board had decided that the system of commission payments should not cease immediately, the evidence being that to simply stop the payments would bring the very existence of the company into jeopardy.

  114. Those matters are important by way of background and demonstrate the inherent unlikelihood that the appellant joined a conspiracy very soon after commencing his employment. They do not, however, detract from a conclusion that after becoming aware of the parlous state of the business and the importance of the unlawful commissions to its viability, the appellant involved himself in their continuance while a different system was developed.

  115. The judge set out his reasons for rejecting the claim on behalf of the appellant of ignorance of the content of the KPMG report. That was no longer in issue. The finding that with knowledge of the conduct from the report the appellant furthered the unlawful scheme by signing payment requisitions was clearly open to him.

  116. It was in respect of charges 9 and 10 directed to conspiracy to pay commissions using the local agents that the evidence of PW1 is critical. In the Court of Appeal (but not recorded in the judgment) the prosecution accepted that, without reliance on that evidence, the convictions on these two charges could not be upheld. PW1’s involvement in and profit from that over a considerable period, and the fact that he had given unreliable evidence in some aspects, were emphasized by the District Court Judge. In a section of his reasons for verdict, he set out full directions including careful warnings of the dangers of accepting the evidence of co-conspirators without very strong supporting evidence. He dealt at some length especially with the dangers of relying on the evidence of the PW1. I find no justification for the submission for the appellant that when he came to make his findings on charges 9 and 10, the judge disregarded his own warnings.

  117. Before the Court of Appeal, also there had been again a strong attack on the reliability and credibility of PW1. After reviewing that, the court said

    111.

    It cannot be said therefore that the judge paid mere lip service to the direction given to himself that he must approach Raymond Leung’s evidence with caution and that it was important, when considering his evidence, to identify supporting evidence. In this latter respect, it is to be said that there was supporting evidence, albeit of varying kinds and varying cogency, to support much of Raymond Leung’s evidence, certain of this evidence being mentioned elsewhere in this judgment.

    112.

    It is also to be remembered that the judge had the opportunity to consider the value of Raymond Leung’s evidence during an extensive cross-examination. It was for the judge, as the finder of primary fact, to determine what weight, if any, he would give to Raymond Leung’s evidence in respect of any particular issue. He was clearly of the view that, despite Raymond Leung’s shortcomings, both the truth and accuracy of his evidence could be relied upon in a broad range of matters. We have no reason to think that the judge may have been wrong in coming to this conclusion in respect of Raymond Leung or indeed of any other immunised witness. This general ground also fails.

  118. It was submitted further that the District Court Judge was wrong when directing himself in relation to charge 9 to have expressed himself as “taking into account the whole of the evidence” when the prosecution accepted that the charge depended solely on the evidence of PW1. On that point I consider that within the context, there was no inaccuracy in what the judge said. He was accepting the evidence of PW1 on the role of local promoters not on the narrow point of knowledge of the appellant of what was occurring with commissions.

  119. The contracted local agents were paid promotion fees from which travel agents were paid commission in substantially the same way as before. That part of PW1’s evidence was not contested.

  120. McMahon J’s view that the appellant should not be convicted on the charges directed to the payments made after the change to the local agents rested not on his acceptance that illegal commission payments did not continue as before, but on his view that the evidence did not prove the appellant was aware of that.

  121. In the absence of evidence from him, it is a matter of whether the knowledge of the appellant could be inferred from the evidence that was given. Accepting that could not be done without the evidence of PW1, it must be determined whether, in the context of the surrounding evidence, and taking account of all that has been said about the dangers in his evidence, there was sufficient to justify the conclusions of the District Court Judge and the majority of the Court of Appeal.

  122. First, it must be said that PW1’s own evidence was vague in its detail. He said there was a core team engaged in addressing the requirement to end the arrangement with the BVI companies and set up a system using local companies. He said the appellant was part of that team which discussed the problem in a series of meetings in April and May 2003. He did not identify in which meetings the appellant participated. He accepted the appellant was not involved in selecting the agents who were contracted to operate a new system. But when it was expressly put to him in the cross-examination that there were no such meetings with the appellant during which the continuation of the commission B was discussed, he disagreed. Further, it was also put to him directly that the appellant did not instruct him or anyone else to continue commission B payments. Again, he disagreed.

  123. PW1 referred to the agents appointed by Bonaventure under contracts dated back to May 2003. The appellant was not directly involved in selecting those agents. At least two of them had previous links with TSL and were said to have been involved in earlier arrangements in which questioned commissions were paid.

  124. The appellant signed the new contracts and subsequent variations of them. The contracts themselves did not provide for commissions payable to travel agents but the evidence of PW1 was that promotion fees that were provided for in fact comprised three components: a commission payment, a handling fee for the promoter and a subsidy for tax.

  125. PW1 said that the appellant was provided with the copy of an agreement terminating a prior arrangement with one of the agents and he signed the new promotion agreements along with subsequent variations of them. The different rates of commission specified in these agreements must have come to the attention of the Chief Executive and been justified to him. Plainly he was at least kept informed.

  126. I consider that it was open to the District Court Judge to conclude that, on the whole of the evidence, including of course the unsupported evidence of PW1 that the appellant must have known that the commission B payments were intended to continue. He participated in the arrangements to that effect. The evidence was that the appellant, who had been employed with the express responsibility for assuming control of the company which then was in financial stress, within the short period, had familiarized himself with the role. He was fully informed at an early stage of the issues surrounding agents’ commissions and he was charged with the task of changing the system. He knew the viability of the business had for years rested on the commissions and that they were unauthorized. That had not changed. He had been prepared to go on with the unlawful practice of using overseas companies even after that was exposed. He had specific responsibility to oversee the implementation of a new system. He must have been involved in discussions as the new scheme was formulated and implemented. He signed contracts and requisitions authorizing payments in accordance with the new scheme.

  127. Accordingly I would dismiss the appeal also in respect of charges 9 and 10.

    Justice Chan Acting CJ

  128. The Court unanimously dismisses the appeal against conviction on charges 1 and 2. The appeal against conviction on charges 9 and 10 is dismissed by majority (Mr Justice Bokhary PJ and Mr Justice Mortimer NPJ dissenting).


Representations

Mr Michael Blanchflower SC and Ms Alice Lee (instructed by Messrs Haldanes) for the Appellant.

Mr Peter Duncan SC and Mr John Marray (instructed by the Department of Justice) for the Respondent.


all rights reserved