DCCC149/2019 HKSAR v. XU ZHUO AND OTHERS - LawHero
DCCC149/2019
區域法院（刑事）HH Judge E Yip14/6/2021[2021] HKDC 720
DCCC149/2019
A A
B B
DCCC 149/2019
C [2021] HKDC 720 C
D D
IN THE DISTRICT COURT OF THE
E HONG KONG SPECIAL ADMINISTRATIVE REGION E
CRIMINAL CASE NO 149 OF 2019
F F
G ----------------------------------------- G
HKSAR
H H
v
I XU ZHUO (D1) I
LEUNG YUK WING (D2)
J J
TAM SHING YAN DOMINIC (D3)
K ----------------------------------------- K
L L
Before: HH Judge E Yip
M Date: 15 June 2021 M
Present: Mr Phil Chau, SC, Counsel on Fiat, for HKSAR
N N
Ms Charlotte Draycott, SC, leading Mr Benson Tsoi Y M &
O Ms Leticia Tang Hon Ling, instructed by Haldanes, for the O
1st defendant
P P
Ms Cindy Kong, instructed by Au Yeung, Cheng, Ho & Tin,
Q for the 2nd defendant Q
Offence: [1] - [2] Conspiracy for agent to accept advantages (串謀使代
R R
理人接受利益)
S S
[3] - [7] Agent accepting an advantage (代理人接受利益)
T T
U U
V V
-2-
A A
B B
-----------------------------------------
C REASONS FOR VERDICT C
-----------------------------------------
D D
A. CHARGES 4
E E
B. INTRODUCTION 4
F F
G C. PROSECUTION’S CASE 6 G
C.1. Documentary Exhibits 6
H H
C.2. PW1 Weber Tsang’s Evidence 6
I I
C.3. 19 Payments Constituting Subject-matter of All Charges 10
J J
C.3.1. Charge 1 (against D1 and D2 only) 10
K C.3.2. Charge 2 (against D1 – D3) 17 K
C.3.3. Charges 3- 6 (against D2 only, alternative to Charge 1) 20
L L
C.3.4. Charge 7 (against D3 only, alternative to Charge 2) 24
M C.3.5. 4 Categories of 19 Payments Outlined by Prosecution 26 M
C.3.6. Video-recorded interviews of D2 and D3 27
N N
D. DEFENCE CASE 28
O O
D.1. D1’s case 28
P P
D.2. D2’s case 32
Q Q
E. LEGAL POSITION 34
R R
E.1. Ingredients of Agent Accepting Advantage 34
S S
E.2. “Consent by Principal” as Lawful Authority to Exonerate 36
T T
E.3. Ingredients of Conspiracy 37
U U
V V
-3-
A A
B B
E.4. Ingredients of Conspiracy for Agent to Accept Advantage 37
C F. THIS COURT’S FINDINGS 38 C
F.1. Closing Submissions 38
D D
F.2. PW1’s Evidence 38
E E
F.3. 3 Categories in 19 Payments received by D2 and D3 38
F F.4. Illegality of Part 91 Flights 39 F
F.5. D2’s Credibility 41
G G
F.6. D1’s Credibility 45
H F.7. D1’s Understanding of Not Accepting Advantage 46 H
F.8. D1’s Understanding of Not Offering Advantage 48
I I
F.9. Conduct of D1 and D2 in Relation to LV 49
J F.10. Ingredients of Substantive Charges of Agent Accepting 49 J
Advantage (Charges 3 – 7)
K K
F.11. “Without Consent of the Principal” as Lawful Authority as 50
L Defence in Conspiracy Charge L
M M
G. PROSECUTION’S PROOF OF CHARGES 52
N N
G.1. Substantive Charges of Agent Accepting Advantage (Charges 52
O
3 – 6) against D2 O
G.2. Conspiracy Charge (Charge 1) against D1 and D2 53
P P
G.3. Substantive Charge (Charge 7) against D3 54
Q G.4. Conspiracy Charge (Charge 2) against D1 – D3 54 Q
R R
H. VERDICT 55
S S
T T
U U
V V
-4-
A A
B B
C A. CHARGES C
D D
1. D1 and D2 are charged with conspiracy for agent to accept
E advantage (Charge 1). D1 – D3 are charged with conspiracy for agents to E
accept advantage (Charge 2). D2 is charged with agent accepting
F F
advantage on four occasions (Charges 3 – 6). D3 is charged with agent
G accepting advantage on one occasion (Charge 7). G
H H
2. Charge 3 – 6 as against D2 are alternative to Charge 1.
I Charge 7 as against D3 is alternative to Charge 2. I
J J
3. D1 and D2 plead not guilty to the charges. D3 is tried in
K absentia due to his plea of not guilty tendered in his last appearance in K
court.
L L
M B. INTRODUCTION M
N N
4. D1 owned a company Joy Fly Jet (“JFJ”) in the business of
O charter brokerage and selling of private jets. She earned commissions from O
both affairs. She was also a senior sales member in Bellawings, an air
P P
operator serving private clients. She made use of both her personal bank
Q account and JFJ bank account interchangeably for banking transactions. Q
R R
5. D2 and D3 were employed by L’Voyage (“LV”), a subsidiary
S company of DGA. LV was likewise a charter broker. Diana Chou S
(“Diana”) was the boss of DGA and LV. LV would give D2 and D3
T T
commissions for successful transactions. The amount would be a fixed
U U
V V
-5-
A A
B B
percentage (D2 at 2.5% and D3 at a rate slightly higher) of LV’s profit
C margin, i.e. the difference between the Sell price to be paid by LV’s client C
and the Buy price to be paid by LV to the air operator.
D D
E 6. The Prosecution says D1/ JFJ had 15 made payments into E
D2’s bank account as secret commissions affecting LV’s business interest
F F
without LV’s consent, hence the conspiracy charges against D1 – D2
G (Charge 1). In parallel, D1/ JFJ had made 4 payments into D3’s bank G
account with the aid of D2 as secret commissions affecting LV’s business
H H
interest without LV’s consent, hence the conspiracy charge against D1 –
I D3 (Charge 2). I
J J
7. The Prosecution specifically makes 4 of such 15 payments to
K D2 the subject-matter of an alternative charge against D2 (Charges 3 – 6). K
In parallel, the Prosecution specifically makes 1 of such 4 payments to D3
L L
the subject-matter of an alternative charge against D3 (Charge 7).
M M
8. D1 and D2 elect to give evidence. D1’s husband gives
N N
evidence on how he helped D1 do the banking transactions when D1 was
O too busy or not around. D1 – D3 knew each other mutually. D1 and D2 O
do not dispute that the payments the subject-matter of the substantive
P P
charges (Charges 3 – 6) and part of the subject-matter of the conspiracy
Q charges (Charges 1 and 2) were commissions paid by D1/ JFJ to D2 or D1/ Q
JFJ to D3, as the case may be.
R R
S 9. D2’s case is that in a contingency, Diana had become aware S
that D2 and D3 had to place an illegal charter flight with JFJ to serve a big
T T
client of LV as no legal charter flight was available. D2 and D3 asked her
U U
V V
-6-
A A
B B
for extra commissions as they were committing an offence for LV. She
C did not want LV’s records to show such an illegal flight and commissions C
for D2 and D3. She therefore consented to D2 and D3 asking D1 to pay
D D
them commissions from the marked-up Buy price to be paid by LV to JFJ.
E Based on D2’s request and Diana’s alleged consent, D1 and D2 came to an E
agreement (“JFJ Commissions Agreement”). D2 also asked D1 to pay
F F
commissions to a middleman, who was actually D3 but D1 never disclosed
G D3’s identity to D1. G
H H
10. D1’s case is that D2 had told her of the aforesaid reason and
I Diana’s consent to the JFJ Commissions Agreement. She and D2 entered I
into the JFJ Commissions Agreement.
J J
K 11. The Commissions Agreement resulted in the subsequent K
payments made to D2 and D3 the subject-matter of the substantive charges
L L
(Charges 3 – 7) as against D2 or D3, as the case may be.
M M
C. PROSECUTION’S CASE
N N
O C.1. Documentary Exhibits O
P P
12. Nearly all documents are admitted into evidence without
Q dispute. A few isolated documents are examined for different Q
interpretations, which turn out to be of little significance.
R R
S C.2. PW1 Weber Tsang’s Evidence S
T T
13. The Prosecution calls two witnesses to give evidence.
U U
V V
-7-
A A
B B
C 14. PW2 is ICAC Officer Oscar Lau, who arrested D3 and C
conducted video-recorded interview with D3 under caution. His evidence
D D
is not challenged by D1 or D2. D3’s video-recorded interview is admitted
E into evidence. E
F F
15. PW1 is employed by LV. LV was a charter broker established
G and held by DGA. PW1 joined DGA in 2013. He is and was its director G
of finance and operations. He had no previous experience in charter broker
H H
or flight operator business. Diana also asked him to manage LV’s financial
I and daily operations. PW1’s responsibility in LV included the setting up I
and approval of payment according to the requests made by sales staff like
J J
D2 and D3. LV would first get a quotation from flight operators, which
K provided jets for hire, together with pilots and cabin crew. LV would in K
turn quote a price for LV’s clients. LV’s profit margin was the difference
L L
between what LV agreed to pay the flight operator (“the buy price”) and
M what LV’s client agreed to pay LV (“the sell price”). M
N N
16. He was not involved in fixing the buy price or the sell price.
O O
17. Diana also held another company, Aerodrome, under DGA.
P P
Aerodrome was in the business of buying and selling jets. It was also a
Q very successful business. Q
R R
18. LV had a small staff. The clerical and assistants apart, the
S main staff consisted of Diana, her nephew William the executive director S
until 31/12/2017, PW1, D2 and D3.
T T
U U
V V
-8-
A A
B B
19. D2 was the account manager. He joined LV in 2/2017. His
C monthly salary was around HK$25,000 plus commissions for charter C
flights arranged for LV’s clients. He was responsible for following up all
D D
charter flights with both new and existing clients. He resigned in 2018.
E His last working day was 31 March 2018. He then joined JFJ to help D1. E
There is some disagreement between the Prosecution and the Defence as
F F
to the exact last day but this turns out to have no bearing on the case.
G G
20. D3 was the business development manager. He joined LV in
H H
May 2016. Before that, he worked for VistaJet, an air operator. His
I monthly salary in LV was around HK$32,000 plus commissions for charter I
flights provided to LV’s clients. His position was higher than D2. He was
J J
responsible for training new colleagues in chartering service and
K accompanying Diana to meet potential trading partners of LV. He resigned K
at the end of March 2018. His last working day was 3 April 2018.
L L
M 21. In the Employment Agreements for D2 and D3 alike (Ex’s P1 M
and P2), clause 8 states as follows:-
N N
O “You will be entitled to commissions on successful charter O
transactions. Details of which shall be provided by the
Company separately.”
P P
Q Q
22. D2 and D3 were both expected to look for potential clients.
R
In general, the expected profit margin for each transaction was 10%, which R
was a figure derived from the average profit margin of LV in the past
S S
2 years and both D2 and D3 were informed of such expectation. LV relied
T on the sales staff to negotiate the best possible deals with flight operators. T
In real contingencies, charter brokers would be engaged by LV. It was the
U U
V V
-9-
A A
B B
duty of the staff who was responsible for arranging the flights, that is D2
C and D3, in the transactions concerned in this case to ensure that the flights C
were legal.
D D
E 23. After D2 left the employ of LV and returned his mobile phone E
to LV, PW1 discovered some messages in it where D2 acknowledged to
F F
D1 for having received monies from D1 for certain charter flights. Upon
G checking LV’s charter flights and D2’s office emails, he discovered that G
D2 had on several occasions placed flights through JFJ, which was an air
H H
broker. He suspected that D2 had received secret commissions from JFJ.
I This would reduce LV’s profit. He told Diana of his discovery and I
suspicion. Diana instructed him to report the matter to ICAC. So he gave
J J
a witness statement dated 9 April 2018 accordingly.
K K
24. He agrees in cross-examination that sometimes a charter
L L
broker would be engaged by LV. He remembers to have some contracts
M in Bellawings’s name. The Defence put to him that there was none. He M
disagrees.
N N
O 25. To his knowledge and based on available record, D2 had not O
asked Diana or the management of LV for permission to receive any
P P
commissions from JFJ. Nor did D2 approach him for it.
Q Q
26. The email correspondences (Ex’s P3 - 14) were charter flights
R R
placed by D2 and D3 while working in LV. All those charter flights were
S placed with JFJ (sometimes referred to as “Bellawings” but LV’s payment S
was always made to JFJ). A complete set of charter flights including
T T
emails shows the buy price and the sell price.
U U
V V
- 10 -
A A
B B
C C.3. 19 Payments Constituting Subject-matter of All Charges C
D D
27. The Prosecution’s case in respect of each payment, as stated
E in the Prosecution’s closing (at paras 12 – 31), is replicated in italics E
hereinbelow:-
F F
G “C.3.1. Charge 1 (against D1 and D2 only) [Conspiracy of 4/7/2017 – G
19/3/2018]
H H
I 12. The Prosecution’s case against D1 and D2 in short is that I
they entered into an agreement for D2 to place LV’s orders with JFJ and
J J
in return, D2 would get money as commissions for placing those orders.
K As elicited under cross-examination, an agreement was reached around K
28/8/2017 or 29/8/2017 regarding payment of commissions between D1
L L
and D2 (the “JFJ Commissions Agreement”).
M M
13. Email evidence of the transactions placed are as follows:
N N
O Email Date Order No. Amount paid to JFJ Bundle Ref. O
16/10/2017 170112 USD 54,500 20 – 23 (P3)
P P
27/10/2017 170117 USD 78,000 24 – 27 (P4)
Q
1/11/2017 170121; USD 120,000; 28 – 32 (P5) Q
R
170122 USD 42,500 R
14/11/2017 170126 USD 55,000 33 – 42 (P6)
S S
Unknown date 170091 USD 52,500 43 – 47a (P7
T and P8) T
U U
V V
- 11 -
A A
B B
14/3/2018 180019 USD 64,000 48 – 63 (P9)
C C
14. Bank transaction records from JFJ’s a/c or D1’s a/c to D2’s
D D
HKD a/c or D2’s USD a/c during the offence period are summarised below
E (for easy reference, D1’s definition of Payment 1 to Payment 19 is also E
incorporated below:
F F
G Date Debit Credit Amount Bundle Ref. G
21/8/2017 JFJ’s a/c D2’s HKD 30,000 Bank Statements:
H H
HKD (Payment 1) 1180 (JFJ) and
I a/c 1282 (D2) I
1194 - 1195 and
J J
1284 - 1285
K 24/8/2017 JFJ’s a/c D2’s HKD Bank Statements: K
HKD 15,619.48 1180 (JFJ) and
L L
a/c (Payment 2) 1282 (D2)
M 1196 - 1197 and M
1286 - 1287
N N
30/8/2017 JFJ’s a/c D2’s HKD Bank Statements:
O O
HKD 62,477.22 1180 (JFJ) and
P
a/c (Payment 3) 1282 (D2) P
1198 - 1199 and
Q Q
1288 - 1289
R 11/9/2017 JFJ’s a/c D2’s HKD Bank Statements: R
HKD 109,182.05 1180 (JFJ) and
S S
a/c (Payment 4) 1282 (D2)
T T
U U
V V
- 12 -
A A
B B
1200 - 1201 and
C 1290 - 1291 C
9/10/2017 JFJ’s a/c D2’s USD 5,500 Bank Statements:
D D
USD (Payment 5) 1184 (JFJ) and
E a/c 1314 (D2) E
1202 - 1203 and
F F
1321 - 1322
G 9/10/2017 JFJ’s a/c D2’s USD 2,000 Bank Statements: G
USD (Payment 6) 1184 (JFJ) and
H H
a/c 1314 (D2)
I 1204 - 1205 and I
1323 - 1324
J J
16/10/2017 JFJ’s a/c D2’s USD 10,000 Bank Statements:
K USD (Payment 7) 1184 (JFJ) and K
a/c 1316 (D2)
L L
1206 - 1207 and
M 1325 - 1326 M
28/10/2017 JFJ’s a/c D2’s USD 7,000 Bank Statements:
N N
USD (Payment 9) 1186 (JFJ) and
O a/c 1316 (D2) O
P
1208 - 1209 and P
1327 - 1328
Q Q
2/11/2017 JFJ’s a/c D2’s USD 32,000 Bank Statements:
R
USD (Payment 10) 1186 (JFJ) and R
a/c 1316 (D2)
S S
1210 - 1211 and
T 1329 - 1330 T
U U
V V
- 13 -
A A
B B
9/11/2017 JFJ’s a/c D2’s USD 6,440 Bank Statements:
C USD (Payment 11) 1187 (JFJ) and C
a/c 1316 (D2)
D D
1212 - 1213 and
E 1331 - 1332 E
15/11/2017 JFJ’s a/c D2’s USD 10,000 Bank Statements:
F F
USD (Payment 12) 1187 (JFJ) and
G a/c 1316 (D2) G
1214 - 1215 and
H H
1333 - 1334
I 20/12/2017 JFJ’s a/c D2’s USD 14,000 Bank Statements: I
USD (Payment 13) 1192 (JFJ) and
J J
a/c 1320 (D2)
K 1218 - 1219 and K
1337 - 1338
L L
5/1/2018 JFJ’s a/c D2’s USD 8,546.18 Bank Statements:
M USD (Payment 15) 1192 (JFJ) and M
a/c 1320 (D2)
N N
1220 - 1221 and
O 1339 - 1340 O
P
24/1/2018 D1’s a/c D2’s HKD Bank Statements: P
HKD 38,793.78 1253 (D1) and
Q Q
a/c (Payment 16) 1283 (D2)
R
1255 - 1256 and R
1292 - 1293
S S
29/1/2018 D1’s a/c D2’s HKD Bank Statements:
T HKD 36,711.90 1253 (D1) and T
a/c (Payment 18) 1283 (D2)
U U
V V
- 14 -
A A
B B
1257 - 1258 and
C 1294 - 1295 C
4/7/2017 - 19/3/2018 Total: USD 95,486.18 and HKD
D D
292,784.43
E E
15. For the transaction dated 16/10/2017, the respective bank
F F
statements of JFJ and D2 showed the date of 17/10/2017 instead because
G the transaction was done on the evening of 16/10/2017 and could only be G
processed on the next working day (i.e. 17/10/2017). The same applies to
H H
the transaction on 28/10/2017, with the next working day being
I 30/10/2017. I
J J
16. Except for order no. 180019 on 14/3/2018, where the bank
K transaction records do not show any monies received by D2 after this date, K
the date of bank transactions do tally with the email correspondences of
L L
the flights ordered by D2 in that either D2 was paid the same day or the
M next day after placing those flight orders with JFJ: M
N N
Email Date Order Bank Transfer Amount Alternative
O No. Date Charge O
P
16/10/2017 170112 16/10/2017 USD 10,000 3 P
(Payment 7)
Q Q
27/10/2017 170117 28/10/2017 USD 7,000 4
R
(Payment 9) R
1/11/2017 170121; 2/11/2017 USD 32,000 5
S S
170122 (Payment 10)
T T
U U
V V
- 15 -
A A
B B
14/11/2017 170126 15/11/2017 USD 10,000 6
C (Payment 12) C
D D
17. There are 2 further flight orders which D1 said involved
E commissions paid to D2 by her. E
F F
Email Date Order Bank Transfer Amount Alternative
G No. Date Charge G
Unknown 170091 30/8/2017 HKD N/A
H H
62,477.22
I (USD 8,000) I
(Payment 3)
J J
Unknown 170095 11/9/2017 HKD N/A
K 109,182.05 K
(USD 14,000)
L L
(Payment 4)
M M
18. Key WeChat messages which suggested a conspiracy between
N N
D1 and D2 for D2 to accept secret commissions are:
O O
P
Date Time Gist Bundle Ref. P
D1 asked D2 to keep more for
Q Q
himself in order no. 170117 for
09:05 Vol.5/957d
R compensating his failure to make R
25/10/2017
money in order no. 170114
S S
D2 said he must engage JFJ for
11:29 Vol.5/957f
T order no. 170117 T
U U
V V
- 16 -
A A
B B
D1 said D2 was on her frequent
20:56 Vol.5/959c
C payee list C
27/10/2017 D2 asked D1 to give a better offer
D D
21:12 next time and undertook to leave Vol.5/959d
E more for D1 E
D1 wanted to come up with a
F F
consistent story with D2 so that if
19:40 Vol.5/975d
G 20/11/2017 she would see Diana it would be G
easier
H H
20:07 D2 told D1 he quit all their groups Vol.5/975f
I D2 was afraid of the timeline being I
too much of a coincidence when
J J
talking about the refund for the
21/11/2017 20:39 Vol.5/975j
K cancelled flights. D2 was also K
worried about being investigated
L L
for his monetary dealings with D1
M D2 undertook to work hard in the M
future and help D1 earn the money
N 27/11/2017 11:35 Vol.5/975q N
back (in view of the order
O O
cancellation incident)
P
D1 said she would share the extra P
Vol.5/975zg-
15:33 with D2 and D2 said the extra is a
Q
zh Q
gift for D1
R 29/11/2017 D2 said his money had to be hidden R
15:40
in Macao casino for the fear that his
S to Vol.5/975zh S
money would be frozen all of a
15:54
T sudden T
U U
V V
- 17 -
A A
B B
19. It is the Prosecution’s case that D2 did receive those
C payments as commissions or otherwise as a reward for placing LV’s jet C
orders with JFJ. Further, such placing of orders and payments were
D D
effected pursuant to the Commissions Agreement between D1 and D2
E which was never sanctioned by LV (that is … “Diana”) or the management E
of LV.
F F
G C.3.2. Charge 2 (against all Defendants) [Conspiracy of 4/7/2017 – G
2/2/2018]
H H
I 20. The Prosecution’s case against all D’s in short is that they I
were in a conspiracy for D2 and/ or D3 to place LV’s orders with JFJ and
J J
in return at least D3 would get money as commissions for placing those
K orders. K
L L
21. Email evidence of the transaction placed:
M M
Email Date Order No. Amount paid to JFJ Bundle Ref.
N N
22/10/2017; 170114 USD 89,500 64 – 74 (P10)
O 24/10/2017 O
12/9/2017 170095 USD 110,000 75 – 80 (P11)
P P
6/12/2017 – 180001; Total of USD 380,000 81 – 100 (P12)
Q Q
8/12/2017 170138 (by two separate 101 – 114
R
payments USD 115,000 (P13) R
and USD 265,000)
S S
26/1/2018 180013 USD 106,000 115 – 126
T (P14) T
U U
V V
- 18 -
A A
B B
22. Bank transaction records from JFJ’s a/c or D1’s a/c to D3’s
C a/c during the offence period are summarised below (for easy reference, C
D1’s definition of Payment 1 to Payment 19 is also incorporated below):
D D
E Date Debit Credit Amount Bundle Ref. E
25/10/2017 JFJ’s D3’s a/c HKD Bank Statements:
F F
a/c 38,936.73 1186 (JFJ) and 1361
G (Payment 8) (D3) G
1222 - 1223 and
H H
1367 - 1368
I 20/12/2017 JFJ’s D3’s a/c HKD 77,500 Bank Statements: I
a/c (Payment 14) 1192 (JFJ) and 1363
J J
(D3)
K 1224 - 1225 and K
1369 - 1370
L L
24/1/2018 D1’s D3’s a/c HKD Bank Statement:
M a/c 38,793.78 1253 (D1) and 1365 M
(Payment 17) (D3)
N N
1259 - 1260 and
O 1372 - 1373 O
P
29/1/2018 D1’s D3’s a/c HKD Bank Statements P
a/c 37,327.09 1253 (D1) and 1365
Q Q
(Payment 19) (D3)
R
1261 - 1262 and R
1374 - 1375
S S
4/7/2017 - 2/2/2018 Total: HKD 192,557.60
T T
U U
V V
- 19 -
A A
B B
23. On one occasion D3 was paid the next day after the email
C correspondences confirmed the flight ordered by D3 with JFJ. It was also C
agreed by D1 and D2 that Payment 8 was commission paid to the
D D
middleman whose account number (without name or reference to the
E identity of the middleman) was sent by D2 to D1. E
F F
Email Date Order Bank Transfer Amount Alternative
G No. Date Charge G
22/10/2017 170114 25/10/2017 HKD 38,936.73 7
H H
to (USD 5,000)
I 24/10/2017 (Payment 8) I
J J
24. As shown in the WeChat messages, D2 referred to the holder
K of account number 055-265219-292 (i.e. D3’s a/c) as the “middleman” K
who was to receive USD 5,000 (Ex. P34, Vol.5/957e and 977c) in relation
L L
to order no. 170114. Coincidentally, as seen from the above tables, HKD
M 38,936.73 (equivalent to USD 5,000) was received by D3 on 25/10/2017. M
Hence, the WeChat messages show that all Defendants were in conspiracy
N N
in offering/ accepting commissions to D3 for placing LV’s orders with JFJ,
O including but not limited to the 25/10/2017 transaction. O
P P
25. It is the Prosecution’s case that D3 did receive those
Q payments as commissions or otherwise as a reward for placing LV’s jet Q
R
orders with JFJ. Further, such placing of orders and payments were R
effected pursuant to prior agreement amongst the Defendants, which was
S S
never sanctioned by LV (being Diana or the management of LV).
T T
U U
V V
- 20 -
A A
B B
C.3.3. Charges 3 – 6 (against D2 only, alternative to Charge 1)
C C
26. Charges 3 – 6 are laid in the alternative to Charge 1. If the
D D
Prosecution cannot satisfy the Court that D1 and D2 were involved in a
E conspiracy, the Prosecution relies on individual bank transaction records E
as proof that D2 in fact accepted advantages from D1 or JFJ to place LV’s
F F
orders with JFJ.
G G
27. Particular WeChat messages that tally with each charge are
H H
as follows:
I I
Charge 3: Payment 7 [Agent accepting on 16/10/2017]
J J
K Date Time Gist Bundle Ref. K
D2 sent a picture showing that LV Vol.5/954a
L 17:54 L
had paid USD 54,500 to JFJ and 982
M D2 calculated that the cost (of JFJ) M
17:55 was USD 42,500, implying that
N Vol.5/954a N
there was USD 12,000 left
O 16/10/2017 17:58 D1 asked D2 how much D2 wanted O
P
D2 requested “10,000” and P
18:00 claimed that he had to give most of
Q Q
it to an “unspecified secretary” Vol.5/954b
R
D2 confirmed receipt of payment R
22:39
(of USD 10,000)
S S
T T
U U
V V
- 21 -
A A
B B
Charge 4: Payment 9 [Agent accepting on 28/10/2017]
C C
Bundle
D Date Time Gist D
Ref.
E 09:55 D2 confirmed engagement of JFJ E
to and said he would only choose Vol.5/977d
F F
15:20 JFJ.
25/10/2017
G 16:57 D1 and D2 calculated that the cost G
Vol.5/957h-
to (of JFJ) was around USD 67,000
H 957i H
17:01 to 68,000.
I D2 sent a picture showing that LV Vol.5/959b I
12:59
had paid USD 78,000 to JFJ. and 998a
J J
D1 asked D2 how much D2
15:27
K wanted for this. K
D2 asked if it would be fine to Vol.5/959b
L L
20:53 leave 3,000 for D1, to which D1
M agreed. M
D2 hence said that 7,000 should
N 27/10/2017 N
20:54
be paid to him.
O O
D2 calculated that LV had paid
P
(USD) 78,000 to JFJ and (the cost P
of JFJ) was 68,000. Hence, the Vol.5/959c
Q Q
20:55 difference (earned by JFJ) was
R (USD) 10,000. D2 reminded D1 to R
pay D2 this time, instead of “the
S S
middleman” before (i.e. D3).
T T
U U
V V
- 22 -
A A
B B
D1 asked whether (the money
C was) to be paid to D2’s USD Vol.5/959d- C
00:11
account, to which D2 replied in 959e
D D
the affirmative.
E D1 said (the money) had been E
28/10/2017 00:13
paid to (D2’s) USD account. Vol.5/959e
F F
00:16 D2 confirmed receipt of money.
G D1 sent a picture showing that G
Vol.5/959e
00:34 USD 7,000 had been paid to D2’s
H and 999a H
USD account
I I
Charge 5: Payment 10 [Agent accepting on 2/11/2017]
J J
K Bundle K
Date Time Gist
Ref.
L L
D2 sent a picture showing that LV
M had paid USD 162,500 to JFJ [for Vol.5/960a M
11:56
order no. 170121 (USD 120,000) and 1005a
N N
and 170122 (USD 42,500)]
O O
D2 asked D1 to keep USD 5,000
11:57
P
2/11/2017 and pay D2 USD 32,000 P
D2 calculated that (the cost of
Q Q
JFJ) for the two orders was USD Vol.5/960b
R 12:05 125,500 (USD 91,000 for order R
no. 170121 and USD 34,500 for
S S
order no. 170122)
T T
U U
V V
- 23 -
A A
B B
D1 and D2 mutually described the
12:42
C other as “goddess of wealth” C
D1 said money has been paid to
D 12:56 D
D2
Vol.5/960c
E D2 said payment had been E
13:01
received
F F
G Charge 6: Payment 12 [Agent accepting on 15/11/2017] G
H H
Bundle
Date Time Gist
I Ref. I
D1 calculated that (the cost of
J J
15:36 JFJ) was USD 40,900 and Vol.5/961a
K enquired whether (LV) had paid K
D2 said that it was happy to make
L L
money. D1 asked D2 to advise if
M there was any outstanding M
(amount) that D1 had to “return”
N N
15:40
to D2. D2 replied that all had
15/11/2017 to Vol.5/961b
O
been “returned” except the O
15:41
P
present one. When asked, D2 P
stated that it was up to D1 as to
Q Q
how much to be “returned” to D2
R for the present one R
15:50 D1 said that her boss (believably
S Vol.5/961b- S
to Bellawings) might moan about the
961c
T 15:51 low price received (from JFJ). D1 T
U U
V V
- 24 -
A A
B B
further said that she would give a
C bit (of the profit of JFJ) to Cheung C
Yick-ka (believably President of
D D
Bellawings) for his protection in
E case the boss queried. D1 further E
said that she would not make any
F F
money this time
G D1 said that the USD“10,000” G
21/11/2017 20:45 (received on 15/11/2017) was Vol.5/975k
H H
relating to 19/11/2017 order)
I I
28. The monies paid to D2 by D1 in these alternative charges
J J
have been admitted by both D1 and D2 to be commissions to D2 in relation
K the flights LV placed with JFJ. K
L L
C.3.4. Charge 7 (against D3 only, alternative to Charge 2) Payment 8
M [Agent accepting on 25/10/2017] M
N N
29. In the event that the Prosecution cannot satisfy the Court that
O O
all Defendants were in a conspiracy, the Prosecution relies on individual
P
bank transaction records as proof that D3 in fact accepted advantages P
from D1 or JFJ to place one order on behalf of LV with JFJ.
Q Q
R R
S S
T T
U U
V V
- 25 -
A A
B B
30. Particular WeChat messages that tally with Charge 7 are as
C follows: C
D D
Date Time Gist Bundle Ref.
E D1 said that her boss (CHEUNG E
Yick-ka of Bellawings) had Vol.5/977a-
F 19:39 F
moaned that the price (that JFJ 977b
G paid to Bellawings) was too low G
D1 wished LV could increase
H H
payment (to JFJ) by USD 20,000
24/10/2017
I and D1 was willing to sacrifice I
19:46 Vol.5/977b-
the “3,000” she could originally
J to 977c and J
earn. D2 was afraid that he
19:50 1078a
K could not help as LV only K
charged client 89,000 for the
L L
order
M D2 enquired whether it would be M
fine to increase payment (from
N N
07:55 JFJ to Bellawings) by “7,500” so
Vol.5/977c-
O to that it would become “84,500.” O
977d
08:06 Thereafter, “5,000” would be left
P P
for a “middleman” and D1 and
Q
25/10/2017 Q
D2 earned nothing
R
D1 informed that (Bellawings) R
09:02 would be alright if (JFJ) could
S
Vol.5/957c- S
to increase the payment (to
957d
T 09:23 Bellawings) to “84,500”. D1 T
furthered that she would thus
U U
V V
- 26 -
A A
B B
give Bellawings “84,500” and
C separately give “5,000” to D2. In C
reply, D2 asked D1 to give the
D D
“5,000” to a “middleman”
E directly, relevant bank account E
details to be provided later
F F
D2 provided the bank account of
G 10:11 the “middleman” as HSBC 055- Vol.5/957e G
265219-292 (i.e. D3’s a/c)
H H
D1 sent a picture showing that
I USD 5,000, being converted into I
Vol.5/957h
16:59 HKD 38,936.73, had been paid to
J and 989a J
the account of the “middleman”
K (i.e. D3) K
D2 noted and said that he would
L L
17:00 tell the “middleman” (in respect Vol.5/957h
M of the bank deposit) M
N N
31. The money paid to D3 by D1 in this alternative charge has
O been admitted by D1 to be commissions in relation the flight LV placed O
P
with JFJ, save and except, D1 alleged she did not know the middleman P
being referred to in the WeChat was in fact D3.”
Q Q
R
C.3.5. 4 Categories of 19 Payments Outlined by Prosecution R
S S
28. The Prosecution categorises the 19 payments made by D1 to
T D2 or D3, as the case may be, the subject-matter of the conspiracy charges T
(Charges 1 and 2) into 4 groups (at para 47 of Prosecution Closing):-
U U
V V
- 27 -
A A
B B
“Reimbursement to D2 and Payment 1 (partly for tour
C C
token of Appreciation for guide services in USA,)
D2’s doing a foreigner (“Do Payment 2, Payment 5 (USD
D a Foreigner Category”) 3,000 of the USD 5,500) and D
Payment 6
Commissions to D2 Payments 3, 4, 7, 9, 10 and
E E
(“Commissions 12
Category”)
F Money Exchange or Payment 1 (RMB 14,700,) F
Remittance for Apex Air Payment 5 (USD 2,500 of
under D1’s Instruction the USD 5,500,) Payment 11
G (“Remittance Category”) and Payment 15 G
Transactions not upon D1’s Payments 13, 16 (also related
H Instruction (“No to Apex) and 18” H
Knowledge Category”)
I I
C.3.6. Video-recorded interviews of D2 and D3
J J
29. D2 stated that he had received monies from D1 in
K K
reimbursement of things purchased for D1. There were no purchase
L receipts. No monies were for his placement of flights with JFJ. He had a L
mobile phone from LV for use at work. He denied that when his WeChat
M M
messages with D1 referred to a middleman, that middleman was D3.
N N
O
30. D3 stated that he was not too familiar with JFJ. D1/ JFJ had O
tried to pay him commissions but he did not accept and instead returned
P P
the money. He knew D1 since 2014 when he first joined the industry. He
Q had purchased expensive wine for D1, who reimbursed him accordingly. Q
The monies he received from D1 did not relate to his work in LV.
R R
S S
T T
U U
V V
- 28 -
A A
B B
D. DEFENCE CASE
C C
D.1. D1’s case
D D
E 31. D1 has a clear record. This calls for the court’s self-direction E
to regard that her evidence should be more credible and that she has less
F F
proclivity to commit the offences she faces.
G G
32. D1 was born and brought up in Beijing. Most of the time, she
H H
was in Beijing when not doing business abroad. She was graduated from
I China Civil Aviation University. She worked in Air China as a flight I
attendant between 2006 and 2012. In 2012 – 2014, she joined the sales
J J
force in a company which sold private jets. In 2014, the company closed
K down. She established JFJ in the business of charter brokerage and the K
selling of Dassault private jets. Dassault’s competitors included
L L
Gulfstream and Bombardier. In 2015, the stock market crashed and her
M investment took a dip. The CEO of Bellawings, Mr Zhang, asked her to M
join Bellawings, which she did, as the sales representative of China
N N
Region. Her main responsibility in Bellawings was to gather clients who
O owned jets for management by Bellawings. Bellawings did not own any O
jets. She had to help maintain clients’ jets, hire flight crews and plan flight
P P
routes (“manage the jets”). For each flight, the operations department had
Q to arrange the flight route and communicate with the ground handler for Q
parking, adding fuel, ground catering and landing permit. She received
R R
13 months’ salaries and commissions from Bellawings. Bellawings
S actually welcomed JFJ’s business of selling jets to go on as JFJ’s clients S
might afterwards become Bellawings’s clients for management of their
T T
jets.
U U
V V
- 29 -
A A
B B
C 33. In 2015 – 2018, JFJ sold 5 or 6 Dassault jets. For each jet, C
JFJ got commissions of between USD 250,000 and USD 900,000.
D D
E 34. She came to know of D2 as a co-member of her WeChat E
group in 2/2017. There were 500 people in the group. She sent a message
F F
to the group asking for someone to help with a charter flight she could not
G place. D2 on behalf of LV gave her a quotation which was rather G
expensive. She did not take it but maintained contact with D2 for future
H H
business.
I I
35. D2 knew Diana personally from some business functions in
J J
2014 or 2015. Diana was quite well-known in the field. She always told
K others that her family was the shareholder of Dragonair. She knew D1’s K
JFJ was the sales agent of Dasssault and D1 was also working for
L L
Bellawings. Diana was the sales agent of Bombardier private jets. She
M understood that Mr Dai also knew Diana as Mr Dai had purchased a jet M
from Diana 10 years ago.
N N
O 36. She and Diana were agreeable to refer clients between O
themselves. Diana also told D1 that if JFJ had clients looking for charter
P P
flights, LV could accommodate D1 with jets owned by her family at a very
Q competitive price. Q
R R
37. On 18 June 2017, D2 contacted D1 to borrow a jet owned by
S Bellawings’s big investor Mr Dai. Mr Dai owned 3 or 4 jets maintained S
by Bellawings. D2 said LV’s big client Mr Shen of Sequoia had to fly
T T
from Shenzhen to Shanghai all of a sudden. There was no Part 135 flight
U U
V V
- 30 -
A A
B B
available. She knew one of Mr Dai’s jets managed by Bellawings would
C be available but that would be a Part 91 flight, which would be illegal for C
charter. She discussed the matter with Bellawings’s CEO Mr Zhang. They
D D
agreed to let LV have it for flying Mr Shen as if Mr Dai were entertaining
E a personal friend or family member. There should be no contract in the E
name of Bellawings. Mr Dai was expressly happy to make some money
F F
to relieve the maintenance costs of his jets, which were idle at times.
G Mr Dai was very wealthy and also very influential over Bellawings to the G
extent, as for example, that he could have the CEO Mr Zhang removed if
H H
he was not pleased with Mr Zhang.
I I
38. She therefore acceded to D2’s request. The flight was to be
J J
provided in JFJ’s name. She understood D2 would represent LV as the
K contact point. Mr Zhang told D1 to engage JFJ’s name to receive payment K
from LV so that Bellawings would not be involved as it did not have a Part
L L
135 licence for the jet.
M M
39. D1 admits that Payments 3, 4, 7, 9, 10 and 12 were
N N
commissions paid to D2 and/ or a middleman mentioned by D2. The
O commissions were pursuant to an agreement between her and D2 on about O
28 August 2017 just before D2 confirmed order no 170091 (the flight to
P P
be completed on 1 September 2017). D2 had called to tell her that Diana
Q did not want LV’s records to show this illegal Part 91 flight and the Q
commissions for D2, so Diana consented to the JFJ Commissions
R R
Agreement and that D1 would be at liberty to mark up the Buy price to be
S paid by LV to enable D1 to make USD 1,000 or USD 2,000 each time. S
She believed D2. She did not call Diana to confirm the position.
T T
U U
V V
- 31 -
A A
B B
40. She was aware of VistaJet, an air operator of very substantial
C standing, was also paying commissions to a third party, including C
employees of another company. It supported her view that LV was having
D D
the same policy here.
E E
41. Pursuant to this agreement, D1/JFJ paid D2 (in Payments 3,
F 4, 7, 9, 10, and 12 the respective sums of HKD 62,477.22, HKD F
109,182.05, USD 10,000, USD 7,000, USD 32,000, and USD 10,000), i.e.,
G G
HKD 171,659.27 and USD 59,000 in total (or the equivalent of HKD
H 628,000 in all). H
I I
42. LV’s corresponding profit margins on record, in the Long
J Sheet used at trial by the Prosecution and the Defence, for the flights were, J
in Payment 3 (USD 8,500), Payment 4 (USD 7,000), Payment 7 (USD
K K
6,500), in Payment 9 (USD 5,000), in Payment 10 (USD 0) and in Payment
L 12 (USD 0) as the flights were cancelled. L
M M
43. D1 says JFJ made a profit of about USD 2,000 each time.
N D2’s commissions were met by D1 and D2 agreeing between themselves N
on an inflated buy price to be paid by LV.
O O
P 44. Her husband Xi Wei gives evidence as to how he helped to P
do her banking transactions online when she was abroad. His evidence has
Q Q
very little bearing on the case except that the Prosecution seeks to criticize
R the way he and D1 did the banking transactions. R
S S
T T
U U
V V
- 32 -
A A
B B
D.2. D2’s case
C C
45. D2 has a clear record. This calls for a self-direction to the
D D
court to consider his evidence to be more credible and that he has less
E proclivity to commit the offences he faces. E
F F
46. The aforesaid commissions paid to him by D1/ JFJ to him
G were not in dispute. G
H H
47. His case of the JFJ Commissions Agreement is similar to D1.
I He supplements that the first occasion when Diana became aware of the I
use of Part 91 flights was during a sales meeting involving D2, D3 and
J J
Diana in June 2017 whereby JFJ was engaged to pick up Mr Shen of
K Sequoia, a big client of LV’s, on 18 June 2017 on an urgent basis (in order K
no 170067).
L L
M 48. On or around 28 August 2017, there was a sales meeting M
attended by D2, D3 and Diana in which D2 sought Diana’s approval to
N N
engage a Part 91 flight to fly Mr Shen on an urgent basis (for order
O no 170091). D2 knew it was a criminal offence1 to engage a Part 91 flight O
for commercial chartering, which must engage a Part 135 flight. D2
P P
complained to Diana that it was not fair for him to earn a meagre 2.5%
Q commission whilst having to risk committing a criminal offence for Q
arranging the Part 91 flight. Diana emphasised the significance of Mr Shen
R R
as a client of LV since she wanted to sell a private jet to Mr Shen. Diana
S agreed that for Part 91 flights arranged for Mr Shen with D1/ JFJ, D2 S
T T
1
Contrary to Air Transport (Licensing of Air Services) Regulations, Cap 448A, liable to a fine of
$5,000,000 and imprisonment for 2 years on conviction on indictment
U U
V V
- 33 -
A A
B B
would still get his 2.5% official commissions from LV and some extra
C commissions. Diana consented to D2 and D3 asking D1 for the extra C
commissions in relation to the Part 91 flight. Diana also said that D2 and
D D
D3 were to liaise with D1 directly regarding the extra commissions and D1
E and D2 were at liberty to mark up the buy price accordingly. E
F F
49. Diana had never asked how much commissions D2 received
G from D1/ JFJ for the Part 91 flights. D2 believed that the same applied to G
the situation of D3 and D3 would reach an agreement for commissions
H H
with D1 as well.
I I
50. It was only in a contingency, where no other flights were
J J
available, that he would look to JFJ for the Part 91 flights. Diana’s consent
K was given on each of the occasions of Part 91 flight placed with JFJ and K
commissions to D2 were then paid by D1/ JFJ.
L L
M 51. After he left the employ of LV in March 2018, he went to M
work for D1 in JFJ.
N N
O 52. He admits to have lied to ICAC in the video-recorded O
interview about the reason for D1 to pay him the money. His motive was
P P
to protect Diana from being investigated for the illegal flights.
Q Q
53. Whilst he admits monies in the Commissions Category (as
R R
described by the Prosecution) as commissions from D1/ JFJ, he disputes
S the 3 other categories of monies (“Do a Foreigner Category”, “Remittance S
Category”, “No Knowledge Category”) from D1/ JFJ as relating to the
T T
affairs or business of LV.
U U
V V
- 34 -
A A
B B
C E. LEGAL POSITION C
D D
E.1. Ingredients of Agent Accepting Advantage
E E
54. The substantive charges (Charges 3 – 7) are based on section
F F
9(1)(a) of the Prevention of Bribery Ordinance Cap 201 (“POBO”). It is
G for the Prosecution to prove as follows (Archbold Hong Kong 2020 at §35 - G
67):-
H H
I “(a) That there exists a principal/ agent relationship; I
(b) That there be an acceptance by an agent that comes within
J the definition of those terms in S2(2)(c) of POBO; J
K
(c) Of an advantage within the definition of the word in S2(1) K
of POBO;
L (d) That the acceptance of the advantage be as an inducement L
to, reward for or otherwise on account of; and
M M
(e) That agent conducting himself in relation to his principal’s
affairs or business by doing or forbearing to do an act in
N relation to his principal’s affairs or business.” N
O 55. The definition of “accepting an advantage” is provided as O
follows in section 2(2)(c) of POBO:-
P P
Q “a person accepts an advantage if he, or any other person acting Q
on his behalf, directly or indirectly takes, receives or obtains, or
agrees to take, receive or obtain any advantage, whether for
R R
himself or for any other person.”
S S
56. In Chan Chi Wan Stephen v Secretary for Justice [2017] 20
T HKCFAR 98, Ribeiro PJ enunciated at §§19 - 22 that the offence of T
accepting of an advantage is committed upon the acceptance and it is no
U U
V V
- 35 -
A A
B B
defence that the contemplated act or forbearance was not or could not be
C performed by the agent. The Prosecution must prove that the agent knew C
or believed it to have been provided as an inducement or reward for or
D D
otherwise on account of his act or forbearance in relation to his principal’s
E affairs or business. E
F F
57. Ribeiro PJ further elaborated what “in relation to his
G principal’s affairs or business” meant at §§50 - 54. The Prosecution must G
prove that in accepting the advantage, the agent knew or believed that the
H H
advantage was provided for as an inducement or reward for the agent’s act
I or forbearance aimed at and intended to influence or affect the principal’s I
affairs or business. The rewarded conduct which was “aimed at the
J J
principal’s business” has to be conduct which subverts the integrity of the
K agency relationship to the detriment of the principal’s interests. Besides, K
the prejudice to the principal’s interest does not need to involve immediate
L L
or tangible economic loss to the principal or benefit to the agent at the
M principal’s expense. M
N N
58. Eventually at §§68 - 70, Ribeiro PJ summarised as follows:-
O O
“68. The reference in s.9 to the agent’s act or forbearance being
P “in relation to his principal’s affairs or business” is properly P
construed to mean that the agent’s act or forbearance must be
Q
aimed at and intended to influence or affect the principal’s Q
affairs or business in a manner that undermines the integrity of
the agency relationship by injuring the bond of trust and loyalty
R between principal and agent. R
…
70. In a soliciting or accepting case, the Prosecution must prove
S S
that the agent knew or believed that the advantage was provided
as an inducement to or reward or otherwise on account of his
T actual or contemplated act or forbearance as conduct aimed at T
or intended to influence or affect the principal’s affairs or
business.”
U U
V V
- 36 -
A A
B B
C E.2. “Consent by Principal” as Lawful Authority to Exonerate C
D D
59. It shall be a defence if the agent had lawful authority or
E reasonable excuse in accepting the advantage as an inducement to or E
reward for or otherwise on account of his conduct. According to section
F F
24 of POBO, the onus of proof of lawful authority or reasonable excuse
G shall lie upon the defendant. G
H H
60. On the subject of “consent by the principal”, according to
I Bribery and Corruption Law in Hong Kong by Ian McWalters SC and I
Andrew Bruce SC2:-
J J
K “[9-121] Principal’s consent would appear to be a specific K
example of lawful authority and presumably codifies that
common law defence. It does not qualify the defence of lawful
L authority or reasonable excuse. Rather it creates a specific L
defence to conduct which otherwise would be criminal in
M nature and only arises once the Prosecution has proven M
beyond reasonable doubt those elements which constitute the
corruption offence.”
N … N
“[9-124] Proof of the principal’s consent rests with the agent
and it remains a persuasive burden. In HKSAR v Chan Tat
O O
Chung Danny, Beeson J determined such after applying the tools
of the analysis provided by the Court of Final Appeal. The
P defence of permission of the principal in section 9(4) of POBO P
remained a persuasive burden because of the exigencies of
investigation. There was a contrast to be drawn between the
Q defence available to those under enquiry by way of section 14 of Q
the POBO and the offence provisions in section 9. Beeson J
R drew support from the reasoning of Wright J in HKSAR v Yan R
Pak Cheung.” (emphasis added)
S S
T T
2
Fourth Edition published on 3 December 2019
U U
V V
- 37 -
A A
B B
E.3. Ingredients of Conspiracy
C C
61. Section 159A(1) Crimes Ordinance, Cap 200 defines
D D
“conspiracy” as follows:-
E E
“(1) Subject to the following provisions of this Part, if a person
agrees with any other person or persons that a course of conduct shall
F F
be pursued which, if the agreement is carried out in accordance with
their intentions, either —
G G
(a) will necessarily amount to or involve the commission of
any offence or offences by one or more of the parties to
H the agreement; or H
(b) would do so but for the existence of facts which render the
I commission of the offence or any of the offences I
impossible,
J J
he is guilty of conspiracy to commit the offence or offences in
question.”
K K
E.4. Ingredients of Conspiracy for Agent to Accept Advantage
L L
M 62. On the subject of conspiracy for agent to accept advantage, M
Ribeiro PJ in Secretary for Justice v Chan Chi Wan Stephen (2017) 20
N N
HKCFAR 98 said as follows:-
O O
“88 … To prove conspiracy [for agent to accept advantage], the
Prosecution cannot rely on section 12A3 or section 244 [POBO] but
P must, in accordance with the usual common law rule and section P
159A(2), discharge the burden of proving that pursuit by the alleged
conspirators of their agreement would necessarily result in the
Q commission of a section 9 offence without any (lawful authority or) Q
reasonable excuse availing the accused.” (emphasis added)
R R
S S
T 3 T
Same rules of evidence applicable to proof of substantive offence shall apply in like manner to proof
of conspiracy to commit the offence
4
Burden of proving Defence of lawful authority or reasonable excuse shall lie upon the accused
U U
V V
- 38 -
A A
B B
F. THIS COURT’S FINDINGS
C C
F.1. Closing Submissions
D D
E 63. The parties have filed full submissions. I will refer to them E
under specific topics.
F F
G F.2. Credibility of PW1’s Evidence G
H H
64. PW1’s evidence is not subject to any challenge of much
I significance. I
J J
65. A challenge is made on his views of engaging charter broker.
K On the one hand, in his report to ICAC (where he stated his and Diana’s K
concern that JFJ was a charter broker instead of an air operator). On the
L L
other hand, his evidence in cross-examination is that sometimes a charter
M broker would be engaged by LV. The Defence suggests that his views are M
contradictory. I disagree with this suggestion. His report to ICAC and his
N N
evidence in court must be read in the proper context. His report to ICAC
O was to complain that JFJ was a charter broker plus paying commissions to O
D2, not that LV objected to placing flights through a charter broker per se.
P P
Q 66. I accept his evidence as fully credible and reliable. Q
R R
F.3. 3 Categories in 19 Payments received by D2 and D3
S S
67. I agree with D2’s submissions in closing that the Prosecution
T T
has not shown how the 3 other categories of monies to D2 and D3 from
U U
V V
- 39 -
A A
B B
D1/ JFJ (“Do a Foreigner Category”, “Remittance Category”, “No
C Knowledge Category”) were an inducement to, reward for or otherwise on C
account of D2 and D3 doing what in relation to LV’s affairs or business.
D D
The scope of the conspiracy charges (Charges 1 and 2) is now reduced to
E only the Commissions Category (Payments 3, 4, 7, 9, 10 and 12 to D2; E
Payment 8 to D3).
F F
G F.4. Illegality of Part 91 Flights G
H H
68. The Defence says the illegality of Part 91 flights was the
I reason for Diana to contrive to conceal from LV’s records the charter I
flights and the commissions to D2 and D3, thereby leading to the JFJ
J J
Commissions Agreement between D1 and D2.
K K
69. Reg 3 of the Air Transport (Licensing of Air Services)
L L
Regulations (Cap 448A) provides as follows:-
M M
“Restriction on use of aircraft on scheduled journeys
N N
(1) A person may use any aircraft for the carriage in Hong
Kong of passengers, mail or cargo for hire or reward on
O O
any scheduled journey between 2 places, one of which is
in Hong Kong, only if—
P P
(a) (where the aircraft is registered in a country or place
other than Hong Kong) the person uses the aircraft
Q in accordance with an operating permit granted to Q
the person in respect of the journey; or
R R
(b) (where the aircraft is registered in Hong Kong)
the person—
S (i) holds an air operator’s certificate and uses the S
aircraft in accordance with a licence,
T
provisional licence or temporary licence T
granted to the person in respect of the journey;
or
U U
V V
- 40 -
A A
B (ii) holds an equivalent document and uses the B
aircraft in accordance with an operating
C permit granted to the person in respect of the C
journey.
D (2) A person who uses any aircraft in contravention of D
paragraph (1) commits an offence and is liable—
E E
(a) on summary conviction to a fine at level 6 and to
imprisonment for 3 months; or
F F
(b) on conviction on indictment to a fine of $5,000,000
and to imprisonment for 2 years.”
G G
(emphasis added)
H H
70. Reg 1 provides that “air operator’s certificate” “means an air
I I
operator’s certificate granted under Article 6 of the Air Navigation (Hong
J Kong) Order 1995 (Cap 448 sub Leg C) (LN 158 of 2011). J
K K
71. Article 6 of the Air Navigation (Hong Kong) Order 1995
L (Cap 448 sub Leg C) is as follows:- L
M M
“PART II
N AIR OPERATORS’ CERTIFICATES N
O 6. Issue of air operators’ certificates O
(1) An aircraft registered in Hong Kong shall not fly on any
P flight for the purpose of public transport, otherwise than P
under and in accordance with the terms of an air
operator’s certificate granted to the operator of the
Q Q
aircraft under paragraph (2) of this Article, certifying that
the holder of the certificate is competent to secure that
R aircraft operated by him on such flights as that in R
question are operated safely.
S (2) The Chief Executive may grant to any person applying S
therefor an air operator’s certificate if he is satisfied that
T that person is competent, having regard in particular to T
his previous conduct and experience, his equipment,
organization, staffing, maintenance and other
U U
V V
- 41 -
A A
B arrangements, to secure the safe operation of aircraft of B
the types specified in the certificate on flights of the
C description and for the purposes so specified. The C
certificate may be granted subject to such conditions as the
Chief Executive thinks fit and shall, subject to the
D provisions of Article 62 of this Order, remain in force for D
the period specified in the certificate. (36 of 1999 s. 3)”
E
(emphasis added) E
F 72. I construe the offence as regulatory in nature. It governs how F
the air operator should ensure the safe operation of the aircraft. It can be
G G
applied to Bellawings. It cannot be applied to LV as a charter broker.
H H
73. Even if it can be applied to LV, the question remains whether
I I
Diana or the management of LV knew of and consented to his placing Part
J 91 flights with JFJ. J
K K
F.5. D2’s Credibility
L L
74. The Prosecution in closing (at para 70) submits why D2’s
M M
evidence is not credible as follows:-
N N
“(a) D2 admitted in open court that he deliberately lied in the
O VRI. He knew he had an option to remain silent but he O
decided to keep talking and misleading the ICAC officers.
P The 6 payments shown to D2 during the VRI involved Apex P
Commissions or commissions paid by D1 or JFJ to D2.
These payments were termed as repayments during VRI
Q though. He even rejected the term “commissions,” Q
although all along he said Diana knew of the JFJ
Commissions Agreement and approved that he could take
R R
commissions from D1 for the Part 91 flights…
S (b) D2 accepted that over a 9-month period (March 2017 to S
December 2017) he received roughly HKD 500,000 from
LV being his salary plus commissions. Whereas over a 5-
T month period (August 2017 to January 2018) he received T
slightly more than HKD 1 Million from D1 or JFJ as
U U
V V
- 42 -
A A
B commissions for the Part 91 flights. That means D2 was B
able to double his earnings in half the duration (5 months
C vs. 9 months 5 .) It is mind-boggling for Diana to have C
approved such commissions. A more sensible explanation
is that these were secret commissions paid by D1 or JFJ to
D D2. D
E
(c) It is non-sensical that Diana would not ask how much E
commissions D2 got from D1 or JFJ for the Part 91 flights.
This is especially the case when LV’s profit margin for the
F relevant flights were smaller than the amounts received by F
D2. The only reasonable explanation for Diana not asking
about how much commissions D2 received from D1 or JFJ
G G
is because Diana never knew D2 was receiving those
payments. Otherwise, one would expect any reasonable
H businessperson to protect the company’s interest and H
disapprove the commissions to D2 would be greater than
LV’s profit margin. Had Diana known that the lay clients
I were willing to pay that much, LV could have charged the I
lay clients more and left the usual 10% commissions for
J D2 instead of allowing them to make as much as or even J
more than LV’s profit margin.
K … K
(e) D2 says Mr. Shen needed to depart from Hong Kong and
L L
so they could not engage flights that depart from
Shenzhen. However, according to the WeChat (Ex. P34,
M Vol.5/957f- g), D1 and D2 did mention Mr. Shen could M
depart from Shenzhen and that several quotations from
other companies were obtained. These other quotations
N were legitimate flights but JFJ was engaged in the end. N
This contemporaneous dialogue is directly opposite to
O what D2 suggested in court that the Part 91 flights with O
JFJ were last resorts and were necessitated because Mr.
Shen had to depart from Hong Kong.
P P
(f) If the WeChat messages are perused thoroughly, D2 said
Q
he deleted messages and mentioned the possibility of Q
investigation by LV after the incident with Mr. Shen
leading to the 2 cancelled flights (Ex. P34, Vol.5/975b-
R f.) Even though D2 says he deleted messages about Part R
91 flights 6 , reference to Part 91 flights could still be
found (Ex. P34, Vol.5/975e.) D2 even elaborated in the
S S
WeChat that “(t)he part involving you and me was very
fragmented, because I had deleted some messages
T T
5
Day 15/AM/P’s XXN of D2
6
Day 14/AM/EIC of D2
U U
V V
- 43 -
A A
B involving prices” and “(m)y explanation was that, Part B
91 couldn’t be made black- and- white so we placed the
C order by phone. I said I used another phone number to C
call you” (Ex. P34 Vol.5/975e.) If LV or Diana were
well-aware of the usage of Part 91 flights, D2 would not
D have had to give an explanation about Part 91. It would D
have been understood and kept secret among Diana, D2
E
and D3. All along, D2 said other staff in LV knew E
nothing about Diana’s approval of using Part 91 flights
and Diana strictly prohibited him from leaking
F information about usage of Part 91 flights. There is no F
reason why D2 would have to explain to Diana that it
was due to Part 91 flights nor should D2 have brought
G G
up Part 91 flights if he was questioned by other staff. D2
even told D1 that he had “quit all our groups” (Ex. P34
H Vol.5/975f.) If “our groups” were similar to the 500- H
people WeChat group D1 and D2 first came across with
each other, D2 would not have to quit the groups. The
I 500- people group was already in place when D2 was I
given the Official Smartphone. As such, the Prosecution
J submits that D2 was not apprehending the risks J
associated with Part 91 flights when he deleted the
messages but the risk of being caught by LV’s internal
K investigation about the secret commissions he obtained K
from D1 or JFJ.
L L
(g) A general theme of D2’s defence was Diana’s fear of
being discovered that LV used Part 91 flights. If that
M were the case, there is no reason why Diana would have M
instructed PW1 to report the case to ICAC forgoing the
risk of Part 91 flights being discovered by the authorities.
N D1 and D2’s defence may allege hatred and vindictive N
intent on behalf of Diana to cause trouble to D1 and D2.
O However, it will be disproportionate for a reputable O
person to take revenge while running the obvious risk
that Part 91 flights allegedly approved by her would be
P discovered. Diana could be in trouble as well. The only P
reasonable inference as to why Diana would be at ease
Q
to instruct PW1 to report the case to ICAC is that Diana Q
never instructed or agreed to the use of Part 91 flights
so she never apprehended the risk of being exposed to
R potential criminal charges. R
(h) Part 91 flights were not the only option to serve Mr.
S S
Shen. D2 admitted that Mr. Shen could and would fly on
commercial flights 7. D2 or LV always had an option to
T explain to Mr. Shen why Part 135 flights could not be T
7
Day 15/AM/P’s XXN of D2
U U
V V
- 44 -
A A
B arranged due to his late requests and any reasonable B
man would understand. As long as D2 or LV could help
C Mr. Shen complete his itinerary smoothly, Mr. Shen C
would not hold any grudges towards LV or Diana and
Diana’s plan to sell jet to Mr. Shen would not be ruined.
D For example, Mr. Shen did fly commercial once from D
Hong Kong to Shanghai when at the last moment he
E
found LV had failed to secure a departure slot 8. Mr. Shen E
still used LV for chartering flights afterwards as seen
from the “long sheet” in D1’s Exhibits. According to
F PW1, Diana even successfully sold a jet to Mr. Shen even F
after the incident that led to Mr. Shen using commercial
flight.”
G G
H 75. I agree with these submissions. H
I I
76. I am not convinced that Diana or the management of LV was
J aware or made aware of the usage of Part 91 flights. Leaving aside the J
Part 91 flights for a moment, if ever there was a discussion between Diana
K K
and D2 of extra commissions, Diana would certainly have followed up and
L discussed it with PW1, who was in charge of all finance and accounting L
matters in DGA and LV. PW1’s evidence that he was not approached on
M M
this subject is not challenged by the Defence. It is inconceivable that Diana
N or the management hearing of D2’s request for more commissions would N
have concluded right away that LV could not have done it within its own
O O
accounting system without going to PW1 for advice. D2 must be aware of
P Clause 8 of his own Employment Agreement which stated that LV would P
provide details of commissions separately. It is inconceivable that Diana
Q Q
would think, and tell, him that LV could not give more commissions to
R him within its own accounting system. He is obviously telling a lie when R
he says that he had ever raised this subject with Diana, let alone obtaining
S S
her consent.
T T
8
Day 14/AM/EIC of D2
U U
V V
- 45 -
A A
B B
C 77. I do not find D2 a credible witness generally. I reject his C
evidence on all matters in issue.
D D
E F.6. D1’s Credibility E
F F
78. D1 says that after D2 so spoke of Diana’s concern and
G consent, she believed D2 had the authority to represent LV. She did not G
contact Diana for confirmation despite their close relationship because she
H H
thought it a trivial matter. She therefore entered into the JFJ Commissions
I Agreement. I do not believe her evidence that she ever heard anything like I
that from D2.
J J
K 79. As seen in the WeChat messages between D1 and D2, D1 was K
at liberty to cite any amount of commissions without reference to any
L L
formula or percentage. It is inconceivable that LV would have given such
M liberty to D2 and agreed to pay the inflated buy price. It is also M
inconceivable that being an employer herself, she would have consented
N N
to it if it was ever raised by D2 to be considered by her. She believed D2
O was authorized to have such unfettered commissions. I find this O
implausible.
P P
Q 80. As pointed out by the Prosecution in closing (at para 59), there Q
was an incident which supports the inference that the payments under the
R R
Commissions Category was not requested or consented by Diana or the
S management of LV. In the aftermath of the two cancelled flights (order S
nos 170122 and 170126 originally booked with JFJ), refund had to be made
T T
to LV by D1/JFJ. D1 had to chase after D2 for refund of his and/or the
U U
V V
- 46 -
A A
B B
middleman’s share before D1 could transfer the money back to LV. Had
C LV requested for or consented to the JFJ Commissions Agreement, the C
easiest way for refund to be made would have been for D1 to pay JFJ’s
D D
share and notify LV the remaining portion was given to D2 and/or the
E middleman pursuant to LV’s instructions so LV could chase D2 and/or the E
middleman itself. D1 claims that she had thought of this method but she
F F
deemed it better for her to gather all the fund before returning the same to
G LV. Such a claim does not make sense as she should have selected a G
method refunding her part to LV at the earliest opportunity in order to
H H
alleviate her own part in the situation. It is equally strange that she did not
I contact Diana to see how best to cope with the situation but relied on D2’s I
assurance that he could handle the situation. There is no reason why D1
J J
would have to let D2 deal with the situation. D1, as a reasonable
K businesswoman, would and should have protected her own interests K
instantly by refunding her own part to LV. I agree with the Prosecution
L L
that the only reason why D1 had to wait for D2’s and/or the middleman’s
M share before the refund to LV was that D1 knew very well that LV did not M
know the sum included secret illegal commissions to D2.
N N
O 81. I do not find D1 a credible witness generally. I reject her O
evidence on all matters in issue.
P P
Q F.7. D1’s Understanding of Not Accepting Advantage Q
R R
82. LV’s Employee Handbook (Ex P50), which D2
S acknowledged receipt on 6/2/2017 (Ex P48), provides as follows (at Clause S
5.1.):-
T T
U U
V V
- 47 -
A A
B “The Company believes in fairness and honesty in business B
dealings. Without the prior consent of the Company, no
C employee shall accept, from any person, firm, company or C
organization which has dealings with the Company, either
directly or indirectly, any commission, rebate, gratuity, gift or
D favour, monetary or otherwise, nor shall any employee, in any D
manner, ask for or solicit any such benefits from such person,
E
firm, company or organization. Acceptance of or solicitation for E
any such benefits is a criminal offence under the Prevention of
Bribery Ordinance. It will also result in disciplinary action by
F the Company. F
Only unsolicited seasonal gifts in kind of small value (not
G G
exceeding USD80) where genuine friendship exists with outside
business associates are receivable. If you are uncertain about
H any offer received or gift delivered and feel that the same may H
fall outside the approval given above, consult your Management
to obtain clarification of the Company’s position.”
I I
83. D2’s evidence is that he only kept LV’s Employee Handbook.
J J
It did not cross his mind to read it. D2 submits in closing as follows (at
K
paras 91 – 93):- K
L L
“91. PW1 testified that as far as the handbooks are concerned,
he had: (i) not passed the handbooks to D2 himself; …(iii)
M M
never explained the content of the handbooks to D2; and
(iv) never arranged anyone to explain the content to D2.
N N
92. Further, there is not a single word on the
Acknowledgement mentioning about the purpose of the
O O
handbooks and that it bound its employees. D2’s 4-page
employment agreement with LV has not mentioned about
P the handbooks either.9 P
93. While there is a line on the last page of the LV handbook
Q for employee’s signature to confirm his understanding of Q
it being his responsibility to read and comply with the
R handbook, it was left blank. 10” R
S S
T T
9
P 1-4
10
P 1391
U U
V V
- 48 -
A A
B B
84. I find his explanation incredible. The only purpose for giving
C him the Employee Handbook must have been for his understanding of its C
contents. He was graduated in a university in Australia and he
D D
communicated with everyone on LV’s record in English. In the same
E record of receipt (Ex P49) also dated 6 February 2017, he was given E
custody of LV’s mobile phone, which he had engaged at work, such as
F F
contacting D1. The acknowledgment equally did not have a single line
G mentioning the purpose of giving him the mobile phone. His evidence is G
that he had actually utilized it and returned it to LV after he left its employ.
H H
Equally so was the key to the entrance which he acknowledged receipt on
I 12 May 2017. There was not a single line mentioning the purpose of giving I
him the key. His evidence is implausible. I am satisfied that he had read
J J
and understood the contents of LV’s Employee Handbook as much as he
K would understand without being told the purpose of giving him the mobile K
phone or the key.
L L
M 85. Apart from the Employee Handbook, he also says that he M
understood POBO prohibits an employee from taking commissions
N N
without his employer’s consent. I am satisfied that D2 knew he should not
O accept any commissions from D1/JFJ without LV’s consent. O
P P
F.8. D1’s Understanding of Not Offering Advantage
Q Q
86. D1’s evidence is that she understood it to be an offence to
R R
offer advantages to an employee (such as D2) without the employer’s (such
S as LV’s) consent. S
T T
U U
V V
- 49 -
A A
B B
F.9. Conduct of D1 and D2 in Relation to LV
C C
87. I find Diana and the management of LV did not know of the
D D
Part 91 flights. I also find that D2 had never raised the issue of extra
E commissions for such flights with Diana or the management of LV. The E
JFJ Commissions Agreement was made by D1 and D2 without knowledge
F F
and consent of Diana and the management of LV in order that D1/JFJ could
G pay commissions to D2 and make profit for D1/JFJ at a marked-up buy G
price to be borne by LV.
H H
I 88. Pursuant to this agreement, D1 paid D2 (in Payments 7, 9, 10, I
and 12 the respective sums of USD 10,000, USD 7,000, USD 32,000, and
J J
USD 10,000).
K K
89. D1/JFJ made a profit (in Payments 7, 9, 10 the respective
L L
sums of USD 2,000, USD 3,000, and USD 5,000). On top of it, D1 won
M the favour of Mr Dai, thereby enhancing her prospect in Bellawings. M
N N
F.10. Ingredients of Substantive Charges of Agent Accepting Advantage
O (Charges 3 – 7) O
P P
90. It is for the Prosecution to prove as follows:-
Q Q
(a) That there exists a principal/ agent relationship;
R R
S (b) That there be an acceptance by an agent that comes S
within the definition of those terms in S2(2)(c) of
T T
POBO;
U U
V V
- 50 -
A A
B B
C (c) Of an advantage within the definition of the word in C
S2(1) of POBO;
D D
E (d) That the acceptance of the advantage be as an E
inducement to, reward for or otherwise on account of;
F F
and
G G
(e) That agent conducting himself in relation to his
H H
principal’s affairs or business by doing or forbearing
I to do an act in relation to his principal’s affairs or I
business.
J J
K F.11. “Without Consent of the Principal” as Lawful Authority as Defence K
in Conspiracy Charge
L L
M 91. Based on the authority of Chan Chi Wan Stephen (above), D1 M
submits in closing that is for the Prosecution to establish the absence of
N N
lawful authority or reasonable excuse beyond reasonable doubt in
O conspiracy charges of agent accepting advantage. I agree with this legal O
submission.
P P
Q 92. D1’s closing (at para. 83) submits that whilst D2’s evidence Q
is that he had told D1 that Diana Chou knew of the Commissions
R R
Agreement, the Prosecution has not put to him that he had not done so.
S Likewise, D1’s evidence is that she believed D2 when he said Diana knew S
of the Commissions. This is not challenged by the Prosecution. It is never
T T
suggested to D1 that she knew D2 was lying, or to either of D1 and D2 that
U U
V V
- 51 -
A A
B B
D2 had never told her. In a nutshell, the Defence submits that the
C Prosecution has never put to D1 that she knew D2 had no authority to take C
commissions.
D D
E 93. D2’s closing (at para 19) attacks the Prosecution by the E
absence of Diana or the management of LV in court to give evidence of no
F F
consent. I think there is no need to deal with this issue as it is my finding
G that Diana and the management of LV were not aware or made aware of G
the Part 91 flights. They had no need to pay extra commissions to D2.
H H
I 94. Even if the issue of extra commissions has to be dealt with I
independently, there is clear evidence from PW1 that, as the person in
J J
charge of all financial and accounting matters, he was never approached
K by Diana or the management of LV for advice on how to pay D2’s K
commissions for placing charter flights with JFJ. I find it inconceivable
L L
that, be Diana or the management of LV called as a witness or not, they
M will say that without consulting PW1, they did consent or would have M
given consent to D1/JFJ paying commissions to D2 by giving them the
N N
liberty to mark up the buy price to be paid by LV. LV had, and would
O have, no difficulty in paying D2 more commissions within its own O
accounting system11 instead of granting D1/JFJ and D2 the liberty to mark
P P
up the buy price to achieve this.
Q Q
95. In the substantive charges (Charges 3 – 6), it is for D2 to prove
R R
consent by Diana or the management of LV as lawful authority on the
S balance of probabilities. It is clear that he has failed to prove it. S
T T
11
Clause 8 of the Employment Agreement gives LV the flexibility to do so
U U
V V
- 52 -
A A
B B
96. As to whether the Prosecution has put its case in the specific
C way as suggested by the Defence, I find that to be of no consequence. The C
JFJ Commissions Agreement was obviously uncalled for and prejudicial
D D
to LV. D1 and D2’s evidence is that D2 had told D1 of Diana’s consent
E with the reason for the consent and D1’s belief in D2, resulting in the JFJ E
Commissions Agreement. I repeat my findings above that such evidence
F F
is implausible.
G G
G. PROSECUTION’S PROOF OF CHARGES
H H
I G.1. Proof of Substantive Charges (Charges 3 – 6) against D2 I
J J
97. It is for the Prosecution to prove as follows:-
K K
(a) That there exists a principal/ agent relationship;
L L
M (b) That there be an acceptance by an agent that comes M
within the definition of those terms in S2(2)(c) of
N N
POBO;
O O
(c) Of an advantage within the definition of the word in
P P
S2(1) of POBO;
Q Q
(d) That the acceptance of the advantage be as an
R R
inducement to, reward for or otherwise on account of;
S and S
T T
U U
V V
- 53 -
A A
B B
(e) That agent conducting himself in relation to his
C principal’s affairs or business by doing or forbearing C
to do an act in relation to his principal’s affairs or
D D
business.
E E
98. LV was the principal and D2 its agent. The commissions paid
F F
by D1/ JFJ were an advantage within the definition of section 2(1) of
G POBO. D2 accepted the commissions on account of his placing LV’s G
charter flights with JFJ. LV had no knowledge of, and gave no consent to,
H H
D2 accepting such commissions. D2’s conduct undermined the integrity
I of the agency relationship because this led to LV having to pay an inflated I
buy price. It reduced LV’s profit.
J J
K G.2. Proof of Conspiracy Charge (Charge 1) against D1 and D2 K
L L
99. Section 159A(1) Crimes Ordinance, Cap 200 defines
M “conspiracy” as follows:- M
N N
“(1) Subject to the following provisions of this Part, if a person
agrees with any other person or persons that a course of conduct
O shall be pursued which, if the agreement is carried out in O
accordance with their intentions, either —
P (a) will necessarily amount to or involve the commission of any P
offence or offences by one or more of the parties to the
agreement; or
Q Q
(b) would do so but for the existence of facts which render the
commission of the offence or any of the offences impossible,
R R
he is guilty of conspiracy to commit the offence or offences in
question.”
S S
T
100. D1 and D2 knew: that LV was the principal and D2 its agent, T
that the commissions paid by D1/ JFJ were an advantage within the
U U
V V
- 54 -
A A
B B
definition of section 2(1) of POBO, that D2 accepted the commissions on
C account of his placing LV’s charter flights with JFJ, that LV had no C
knowledge of, and gave no consent to, D2 accepting such commissions,
D D
that D2’s conduct would undermine the integrity of the agency relationship
E because this would lead to LV having to pay an inflated buy price, that it E
would reduce LV’s profit, and that they were committing the offence of an
F F
agent accepting advantage without lawful authority or reasonable excuse.
G G
G.3. Proof of Substantive Charge (Charge 7) against D3
H H
I 101. I reject D2’s evidence that Diana had ever consented to D2 I
and D3 being paid commissions by D1. D3’s video-recorded interview
J J
was exculpatory of the reason for the payments. He said they were
K reimbursements for things he purchased for D1. K
L L
102. There is no evidence of what D3 had done or not done relating
M to the affairs or business of LV to get paid by D1/ JFJ in Payment 8 M
(HKD 38,936) by D1/ JFJ, or that D3 was even aware of the payment made
N N
into his bank account. D3 is not guilty of the substantive charge of agent
O accepting advantage. O
P P
G.4. Proof of Conspiracy Charge (Charge 2) against D1 – D3
Q Q
103. D2 was the only person aware of the secret commissions
R R
being paid into D3’s bank account. There is no evidence that D1 was
S aware that D3, who was unnamed but referred to by D2 as a middleman, S
was the recipient of her secret commissions or that such middleman was
T T
an employee of LV.
U U
V V
- 55 -
A A
B B
C 104. There is some suspicion as to how D3’s bank account was C
known to D2. Yet there is no evidence that D3 had revealed it to D2, let
D D
alone revealed to D2 for the purpose of accepting secret commissions for
E placing charter flights with JFJ. E
F F
105. As the evidence indicates that only D2 knew of all the fact
G and circumstances of the alleged conspiracy, D2 alone cannot be found G
guilty of the conspiracy charge.
H H
I H. VERDICT I
J J
106. All ingredients of Charge 1 (in respect of the Commissions
K Category: Payments 3, 4, 7, 9, 10 and 12 to D2) are proved beyond K
reasonable doubt. D1 and D2 are convicted of Charge 1. I return no
L L
verdict for Charges 3 – 6, which are alternative to Charge 1 as against D2.
M D1 – D3 are acquitted of Charge 2. D3 is acquitted of Charge 7. M
N N
O O
P P
Q ( E Yip ) Q
District Judge
R R
S S
T T
U U
V V
A A
B B
DCCC 149/2019
C [2021] HKDC 720 C
D D
IN THE DISTRICT COURT OF THE
E HONG KONG SPECIAL ADMINISTRATIVE REGION E
CRIMINAL CASE NO 149 OF 2019
F F
G ----------------------------------------- G
HKSAR
H H
v
I XU ZHUO (D1) I
LEUNG YUK WING (D2)
J J
TAM SHING YAN DOMINIC (D3)
K ----------------------------------------- K
L L
Before: HH Judge E Yip
M Date: 15 June 2021 M
Present: Mr Phil Chau, SC, Counsel on Fiat, for HKSAR
N N
Ms Charlotte Draycott, SC, leading Mr Benson Tsoi Y M &
O Ms Leticia Tang Hon Ling, instructed by Haldanes, for the O
1st defendant
P P
Ms Cindy Kong, instructed by Au Yeung, Cheng, Ho & Tin,
Q for the 2nd defendant Q
Offence: [1] - [2] Conspiracy for agent to accept advantages (串謀使代
R R
理人接受利益)
S S
[3] - [7] Agent accepting an advantage (代理人接受利益)
T T
U U
V V
-2-
A A
B B
-----------------------------------------
C REASONS FOR VERDICT C
-----------------------------------------
D D
A. CHARGES 4
E E
B. INTRODUCTION 4
F F
G C. PROSECUTION’S CASE 6 G
C.1. Documentary Exhibits 6
H H
C.2. PW1 Weber Tsang’s Evidence 6
I I
C.3. 19 Payments Constituting Subject-matter of All Charges 10
J J
C.3.1. Charge 1 (against D1 and D2 only) 10
K C.3.2. Charge 2 (against D1 – D3) 17 K
C.3.3. Charges 3- 6 (against D2 only, alternative to Charge 1) 20
L L
C.3.4. Charge 7 (against D3 only, alternative to Charge 2) 24
M C.3.5. 4 Categories of 19 Payments Outlined by Prosecution 26 M
C.3.6. Video-recorded interviews of D2 and D3 27
N N
D. DEFENCE CASE 28
O O
D.1. D1’s case 28
P P
D.2. D2’s case 32
Q Q
E. LEGAL POSITION 34
R R
E.1. Ingredients of Agent Accepting Advantage 34
S S
E.2. “Consent by Principal” as Lawful Authority to Exonerate 36
T T
E.3. Ingredients of Conspiracy 37
U U
V V
-3-
A A
B B
E.4. Ingredients of Conspiracy for Agent to Accept Advantage 37
C F. THIS COURT’S FINDINGS 38 C
F.1. Closing Submissions 38
D D
F.2. PW1’s Evidence 38
E E
F.3. 3 Categories in 19 Payments received by D2 and D3 38
F F.4. Illegality of Part 91 Flights 39 F
F.5. D2’s Credibility 41
G G
F.6. D1’s Credibility 45
H F.7. D1’s Understanding of Not Accepting Advantage 46 H
F.8. D1’s Understanding of Not Offering Advantage 48
I I
F.9. Conduct of D1 and D2 in Relation to LV 49
J F.10. Ingredients of Substantive Charges of Agent Accepting 49 J
Advantage (Charges 3 – 7)
K K
F.11. “Without Consent of the Principal” as Lawful Authority as 50
L Defence in Conspiracy Charge L
M M
G. PROSECUTION’S PROOF OF CHARGES 52
N N
G.1. Substantive Charges of Agent Accepting Advantage (Charges 52
O
3 – 6) against D2 O
G.2. Conspiracy Charge (Charge 1) against D1 and D2 53
P P
G.3. Substantive Charge (Charge 7) against D3 54
Q G.4. Conspiracy Charge (Charge 2) against D1 – D3 54 Q
R R
H. VERDICT 55
S S
T T
U U
V V
-4-
A A
B B
C A. CHARGES C
D D
1. D1 and D2 are charged with conspiracy for agent to accept
E advantage (Charge 1). D1 – D3 are charged with conspiracy for agents to E
accept advantage (Charge 2). D2 is charged with agent accepting
F F
advantage on four occasions (Charges 3 – 6). D3 is charged with agent
G accepting advantage on one occasion (Charge 7). G
H H
2. Charge 3 – 6 as against D2 are alternative to Charge 1.
I Charge 7 as against D3 is alternative to Charge 2. I
J J
3. D1 and D2 plead not guilty to the charges. D3 is tried in
K absentia due to his plea of not guilty tendered in his last appearance in K
court.
L L
M B. INTRODUCTION M
N N
4. D1 owned a company Joy Fly Jet (“JFJ”) in the business of
O charter brokerage and selling of private jets. She earned commissions from O
both affairs. She was also a senior sales member in Bellawings, an air
P P
operator serving private clients. She made use of both her personal bank
Q account and JFJ bank account interchangeably for banking transactions. Q
R R
5. D2 and D3 were employed by L’Voyage (“LV”), a subsidiary
S company of DGA. LV was likewise a charter broker. Diana Chou S
(“Diana”) was the boss of DGA and LV. LV would give D2 and D3
T T
commissions for successful transactions. The amount would be a fixed
U U
V V
-5-
A A
B B
percentage (D2 at 2.5% and D3 at a rate slightly higher) of LV’s profit
C margin, i.e. the difference between the Sell price to be paid by LV’s client C
and the Buy price to be paid by LV to the air operator.
D D
E 6. The Prosecution says D1/ JFJ had 15 made payments into E
D2’s bank account as secret commissions affecting LV’s business interest
F F
without LV’s consent, hence the conspiracy charges against D1 – D2
G (Charge 1). In parallel, D1/ JFJ had made 4 payments into D3’s bank G
account with the aid of D2 as secret commissions affecting LV’s business
H H
interest without LV’s consent, hence the conspiracy charge against D1 –
I D3 (Charge 2). I
J J
7. The Prosecution specifically makes 4 of such 15 payments to
K D2 the subject-matter of an alternative charge against D2 (Charges 3 – 6). K
In parallel, the Prosecution specifically makes 1 of such 4 payments to D3
L L
the subject-matter of an alternative charge against D3 (Charge 7).
M M
8. D1 and D2 elect to give evidence. D1’s husband gives
N N
evidence on how he helped D1 do the banking transactions when D1 was
O too busy or not around. D1 – D3 knew each other mutually. D1 and D2 O
do not dispute that the payments the subject-matter of the substantive
P P
charges (Charges 3 – 6) and part of the subject-matter of the conspiracy
Q charges (Charges 1 and 2) were commissions paid by D1/ JFJ to D2 or D1/ Q
JFJ to D3, as the case may be.
R R
S 9. D2’s case is that in a contingency, Diana had become aware S
that D2 and D3 had to place an illegal charter flight with JFJ to serve a big
T T
client of LV as no legal charter flight was available. D2 and D3 asked her
U U
V V
-6-
A A
B B
for extra commissions as they were committing an offence for LV. She
C did not want LV’s records to show such an illegal flight and commissions C
for D2 and D3. She therefore consented to D2 and D3 asking D1 to pay
D D
them commissions from the marked-up Buy price to be paid by LV to JFJ.
E Based on D2’s request and Diana’s alleged consent, D1 and D2 came to an E
agreement (“JFJ Commissions Agreement”). D2 also asked D1 to pay
F F
commissions to a middleman, who was actually D3 but D1 never disclosed
G D3’s identity to D1. G
H H
10. D1’s case is that D2 had told her of the aforesaid reason and
I Diana’s consent to the JFJ Commissions Agreement. She and D2 entered I
into the JFJ Commissions Agreement.
J J
K 11. The Commissions Agreement resulted in the subsequent K
payments made to D2 and D3 the subject-matter of the substantive charges
L L
(Charges 3 – 7) as against D2 or D3, as the case may be.
M M
C. PROSECUTION’S CASE
N N
O C.1. Documentary Exhibits O
P P
12. Nearly all documents are admitted into evidence without
Q dispute. A few isolated documents are examined for different Q
interpretations, which turn out to be of little significance.
R R
S C.2. PW1 Weber Tsang’s Evidence S
T T
13. The Prosecution calls two witnesses to give evidence.
U U
V V
-7-
A A
B B
C 14. PW2 is ICAC Officer Oscar Lau, who arrested D3 and C
conducted video-recorded interview with D3 under caution. His evidence
D D
is not challenged by D1 or D2. D3’s video-recorded interview is admitted
E into evidence. E
F F
15. PW1 is employed by LV. LV was a charter broker established
G and held by DGA. PW1 joined DGA in 2013. He is and was its director G
of finance and operations. He had no previous experience in charter broker
H H
or flight operator business. Diana also asked him to manage LV’s financial
I and daily operations. PW1’s responsibility in LV included the setting up I
and approval of payment according to the requests made by sales staff like
J J
D2 and D3. LV would first get a quotation from flight operators, which
K provided jets for hire, together with pilots and cabin crew. LV would in K
turn quote a price for LV’s clients. LV’s profit margin was the difference
L L
between what LV agreed to pay the flight operator (“the buy price”) and
M what LV’s client agreed to pay LV (“the sell price”). M
N N
16. He was not involved in fixing the buy price or the sell price.
O O
17. Diana also held another company, Aerodrome, under DGA.
P P
Aerodrome was in the business of buying and selling jets. It was also a
Q very successful business. Q
R R
18. LV had a small staff. The clerical and assistants apart, the
S main staff consisted of Diana, her nephew William the executive director S
until 31/12/2017, PW1, D2 and D3.
T T
U U
V V
-8-
A A
B B
19. D2 was the account manager. He joined LV in 2/2017. His
C monthly salary was around HK$25,000 plus commissions for charter C
flights arranged for LV’s clients. He was responsible for following up all
D D
charter flights with both new and existing clients. He resigned in 2018.
E His last working day was 31 March 2018. He then joined JFJ to help D1. E
There is some disagreement between the Prosecution and the Defence as
F F
to the exact last day but this turns out to have no bearing on the case.
G G
20. D3 was the business development manager. He joined LV in
H H
May 2016. Before that, he worked for VistaJet, an air operator. His
I monthly salary in LV was around HK$32,000 plus commissions for charter I
flights provided to LV’s clients. His position was higher than D2. He was
J J
responsible for training new colleagues in chartering service and
K accompanying Diana to meet potential trading partners of LV. He resigned K
at the end of March 2018. His last working day was 3 April 2018.
L L
M 21. In the Employment Agreements for D2 and D3 alike (Ex’s P1 M
and P2), clause 8 states as follows:-
N N
O “You will be entitled to commissions on successful charter O
transactions. Details of which shall be provided by the
Company separately.”
P P
Q Q
22. D2 and D3 were both expected to look for potential clients.
R
In general, the expected profit margin for each transaction was 10%, which R
was a figure derived from the average profit margin of LV in the past
S S
2 years and both D2 and D3 were informed of such expectation. LV relied
T on the sales staff to negotiate the best possible deals with flight operators. T
In real contingencies, charter brokers would be engaged by LV. It was the
U U
V V
-9-
A A
B B
duty of the staff who was responsible for arranging the flights, that is D2
C and D3, in the transactions concerned in this case to ensure that the flights C
were legal.
D D
E 23. After D2 left the employ of LV and returned his mobile phone E
to LV, PW1 discovered some messages in it where D2 acknowledged to
F F
D1 for having received monies from D1 for certain charter flights. Upon
G checking LV’s charter flights and D2’s office emails, he discovered that G
D2 had on several occasions placed flights through JFJ, which was an air
H H
broker. He suspected that D2 had received secret commissions from JFJ.
I This would reduce LV’s profit. He told Diana of his discovery and I
suspicion. Diana instructed him to report the matter to ICAC. So he gave
J J
a witness statement dated 9 April 2018 accordingly.
K K
24. He agrees in cross-examination that sometimes a charter
L L
broker would be engaged by LV. He remembers to have some contracts
M in Bellawings’s name. The Defence put to him that there was none. He M
disagrees.
N N
O 25. To his knowledge and based on available record, D2 had not O
asked Diana or the management of LV for permission to receive any
P P
commissions from JFJ. Nor did D2 approach him for it.
Q Q
26. The email correspondences (Ex’s P3 - 14) were charter flights
R R
placed by D2 and D3 while working in LV. All those charter flights were
S placed with JFJ (sometimes referred to as “Bellawings” but LV’s payment S
was always made to JFJ). A complete set of charter flights including
T T
emails shows the buy price and the sell price.
U U
V V
- 10 -
A A
B B
C C.3. 19 Payments Constituting Subject-matter of All Charges C
D D
27. The Prosecution’s case in respect of each payment, as stated
E in the Prosecution’s closing (at paras 12 – 31), is replicated in italics E
hereinbelow:-
F F
G “C.3.1. Charge 1 (against D1 and D2 only) [Conspiracy of 4/7/2017 – G
19/3/2018]
H H
I 12. The Prosecution’s case against D1 and D2 in short is that I
they entered into an agreement for D2 to place LV’s orders with JFJ and
J J
in return, D2 would get money as commissions for placing those orders.
K As elicited under cross-examination, an agreement was reached around K
28/8/2017 or 29/8/2017 regarding payment of commissions between D1
L L
and D2 (the “JFJ Commissions Agreement”).
M M
13. Email evidence of the transactions placed are as follows:
N N
O Email Date Order No. Amount paid to JFJ Bundle Ref. O
16/10/2017 170112 USD 54,500 20 – 23 (P3)
P P
27/10/2017 170117 USD 78,000 24 – 27 (P4)
Q
1/11/2017 170121; USD 120,000; 28 – 32 (P5) Q
R
170122 USD 42,500 R
14/11/2017 170126 USD 55,000 33 – 42 (P6)
S S
Unknown date 170091 USD 52,500 43 – 47a (P7
T and P8) T
U U
V V
- 11 -
A A
B B
14/3/2018 180019 USD 64,000 48 – 63 (P9)
C C
14. Bank transaction records from JFJ’s a/c or D1’s a/c to D2’s
D D
HKD a/c or D2’s USD a/c during the offence period are summarised below
E (for easy reference, D1’s definition of Payment 1 to Payment 19 is also E
incorporated below:
F F
G Date Debit Credit Amount Bundle Ref. G
21/8/2017 JFJ’s a/c D2’s HKD 30,000 Bank Statements:
H H
HKD (Payment 1) 1180 (JFJ) and
I a/c 1282 (D2) I
1194 - 1195 and
J J
1284 - 1285
K 24/8/2017 JFJ’s a/c D2’s HKD Bank Statements: K
HKD 15,619.48 1180 (JFJ) and
L L
a/c (Payment 2) 1282 (D2)
M 1196 - 1197 and M
1286 - 1287
N N
30/8/2017 JFJ’s a/c D2’s HKD Bank Statements:
O O
HKD 62,477.22 1180 (JFJ) and
P
a/c (Payment 3) 1282 (D2) P
1198 - 1199 and
Q Q
1288 - 1289
R 11/9/2017 JFJ’s a/c D2’s HKD Bank Statements: R
HKD 109,182.05 1180 (JFJ) and
S S
a/c (Payment 4) 1282 (D2)
T T
U U
V V
- 12 -
A A
B B
1200 - 1201 and
C 1290 - 1291 C
9/10/2017 JFJ’s a/c D2’s USD 5,500 Bank Statements:
D D
USD (Payment 5) 1184 (JFJ) and
E a/c 1314 (D2) E
1202 - 1203 and
F F
1321 - 1322
G 9/10/2017 JFJ’s a/c D2’s USD 2,000 Bank Statements: G
USD (Payment 6) 1184 (JFJ) and
H H
a/c 1314 (D2)
I 1204 - 1205 and I
1323 - 1324
J J
16/10/2017 JFJ’s a/c D2’s USD 10,000 Bank Statements:
K USD (Payment 7) 1184 (JFJ) and K
a/c 1316 (D2)
L L
1206 - 1207 and
M 1325 - 1326 M
28/10/2017 JFJ’s a/c D2’s USD 7,000 Bank Statements:
N N
USD (Payment 9) 1186 (JFJ) and
O a/c 1316 (D2) O
P
1208 - 1209 and P
1327 - 1328
Q Q
2/11/2017 JFJ’s a/c D2’s USD 32,000 Bank Statements:
R
USD (Payment 10) 1186 (JFJ) and R
a/c 1316 (D2)
S S
1210 - 1211 and
T 1329 - 1330 T
U U
V V
- 13 -
A A
B B
9/11/2017 JFJ’s a/c D2’s USD 6,440 Bank Statements:
C USD (Payment 11) 1187 (JFJ) and C
a/c 1316 (D2)
D D
1212 - 1213 and
E 1331 - 1332 E
15/11/2017 JFJ’s a/c D2’s USD 10,000 Bank Statements:
F F
USD (Payment 12) 1187 (JFJ) and
G a/c 1316 (D2) G
1214 - 1215 and
H H
1333 - 1334
I 20/12/2017 JFJ’s a/c D2’s USD 14,000 Bank Statements: I
USD (Payment 13) 1192 (JFJ) and
J J
a/c 1320 (D2)
K 1218 - 1219 and K
1337 - 1338
L L
5/1/2018 JFJ’s a/c D2’s USD 8,546.18 Bank Statements:
M USD (Payment 15) 1192 (JFJ) and M
a/c 1320 (D2)
N N
1220 - 1221 and
O 1339 - 1340 O
P
24/1/2018 D1’s a/c D2’s HKD Bank Statements: P
HKD 38,793.78 1253 (D1) and
Q Q
a/c (Payment 16) 1283 (D2)
R
1255 - 1256 and R
1292 - 1293
S S
29/1/2018 D1’s a/c D2’s HKD Bank Statements:
T HKD 36,711.90 1253 (D1) and T
a/c (Payment 18) 1283 (D2)
U U
V V
- 14 -
A A
B B
1257 - 1258 and
C 1294 - 1295 C
4/7/2017 - 19/3/2018 Total: USD 95,486.18 and HKD
D D
292,784.43
E E
15. For the transaction dated 16/10/2017, the respective bank
F F
statements of JFJ and D2 showed the date of 17/10/2017 instead because
G the transaction was done on the evening of 16/10/2017 and could only be G
processed on the next working day (i.e. 17/10/2017). The same applies to
H H
the transaction on 28/10/2017, with the next working day being
I 30/10/2017. I
J J
16. Except for order no. 180019 on 14/3/2018, where the bank
K transaction records do not show any monies received by D2 after this date, K
the date of bank transactions do tally with the email correspondences of
L L
the flights ordered by D2 in that either D2 was paid the same day or the
M next day after placing those flight orders with JFJ: M
N N
Email Date Order Bank Transfer Amount Alternative
O No. Date Charge O
P
16/10/2017 170112 16/10/2017 USD 10,000 3 P
(Payment 7)
Q Q
27/10/2017 170117 28/10/2017 USD 7,000 4
R
(Payment 9) R
1/11/2017 170121; 2/11/2017 USD 32,000 5
S S
170122 (Payment 10)
T T
U U
V V
- 15 -
A A
B B
14/11/2017 170126 15/11/2017 USD 10,000 6
C (Payment 12) C
D D
17. There are 2 further flight orders which D1 said involved
E commissions paid to D2 by her. E
F F
Email Date Order Bank Transfer Amount Alternative
G No. Date Charge G
Unknown 170091 30/8/2017 HKD N/A
H H
62,477.22
I (USD 8,000) I
(Payment 3)
J J
Unknown 170095 11/9/2017 HKD N/A
K 109,182.05 K
(USD 14,000)
L L
(Payment 4)
M M
18. Key WeChat messages which suggested a conspiracy between
N N
D1 and D2 for D2 to accept secret commissions are:
O O
P
Date Time Gist Bundle Ref. P
D1 asked D2 to keep more for
Q Q
himself in order no. 170117 for
09:05 Vol.5/957d
R compensating his failure to make R
25/10/2017
money in order no. 170114
S S
D2 said he must engage JFJ for
11:29 Vol.5/957f
T order no. 170117 T
U U
V V
- 16 -
A A
B B
D1 said D2 was on her frequent
20:56 Vol.5/959c
C payee list C
27/10/2017 D2 asked D1 to give a better offer
D D
21:12 next time and undertook to leave Vol.5/959d
E more for D1 E
D1 wanted to come up with a
F F
consistent story with D2 so that if
19:40 Vol.5/975d
G 20/11/2017 she would see Diana it would be G
easier
H H
20:07 D2 told D1 he quit all their groups Vol.5/975f
I D2 was afraid of the timeline being I
too much of a coincidence when
J J
talking about the refund for the
21/11/2017 20:39 Vol.5/975j
K cancelled flights. D2 was also K
worried about being investigated
L L
for his monetary dealings with D1
M D2 undertook to work hard in the M
future and help D1 earn the money
N 27/11/2017 11:35 Vol.5/975q N
back (in view of the order
O O
cancellation incident)
P
D1 said she would share the extra P
Vol.5/975zg-
15:33 with D2 and D2 said the extra is a
Q
zh Q
gift for D1
R 29/11/2017 D2 said his money had to be hidden R
15:40
in Macao casino for the fear that his
S to Vol.5/975zh S
money would be frozen all of a
15:54
T sudden T
U U
V V
- 17 -
A A
B B
19. It is the Prosecution’s case that D2 did receive those
C payments as commissions or otherwise as a reward for placing LV’s jet C
orders with JFJ. Further, such placing of orders and payments were
D D
effected pursuant to the Commissions Agreement between D1 and D2
E which was never sanctioned by LV (that is … “Diana”) or the management E
of LV.
F F
G C.3.2. Charge 2 (against all Defendants) [Conspiracy of 4/7/2017 – G
2/2/2018]
H H
I 20. The Prosecution’s case against all D’s in short is that they I
were in a conspiracy for D2 and/ or D3 to place LV’s orders with JFJ and
J J
in return at least D3 would get money as commissions for placing those
K orders. K
L L
21. Email evidence of the transaction placed:
M M
Email Date Order No. Amount paid to JFJ Bundle Ref.
N N
22/10/2017; 170114 USD 89,500 64 – 74 (P10)
O 24/10/2017 O
12/9/2017 170095 USD 110,000 75 – 80 (P11)
P P
6/12/2017 – 180001; Total of USD 380,000 81 – 100 (P12)
Q Q
8/12/2017 170138 (by two separate 101 – 114
R
payments USD 115,000 (P13) R
and USD 265,000)
S S
26/1/2018 180013 USD 106,000 115 – 126
T (P14) T
U U
V V
- 18 -
A A
B B
22. Bank transaction records from JFJ’s a/c or D1’s a/c to D3’s
C a/c during the offence period are summarised below (for easy reference, C
D1’s definition of Payment 1 to Payment 19 is also incorporated below):
D D
E Date Debit Credit Amount Bundle Ref. E
25/10/2017 JFJ’s D3’s a/c HKD Bank Statements:
F F
a/c 38,936.73 1186 (JFJ) and 1361
G (Payment 8) (D3) G
1222 - 1223 and
H H
1367 - 1368
I 20/12/2017 JFJ’s D3’s a/c HKD 77,500 Bank Statements: I
a/c (Payment 14) 1192 (JFJ) and 1363
J J
(D3)
K 1224 - 1225 and K
1369 - 1370
L L
24/1/2018 D1’s D3’s a/c HKD Bank Statement:
M a/c 38,793.78 1253 (D1) and 1365 M
(Payment 17) (D3)
N N
1259 - 1260 and
O 1372 - 1373 O
P
29/1/2018 D1’s D3’s a/c HKD Bank Statements P
a/c 37,327.09 1253 (D1) and 1365
Q Q
(Payment 19) (D3)
R
1261 - 1262 and R
1374 - 1375
S S
4/7/2017 - 2/2/2018 Total: HKD 192,557.60
T T
U U
V V
- 19 -
A A
B B
23. On one occasion D3 was paid the next day after the email
C correspondences confirmed the flight ordered by D3 with JFJ. It was also C
agreed by D1 and D2 that Payment 8 was commission paid to the
D D
middleman whose account number (without name or reference to the
E identity of the middleman) was sent by D2 to D1. E
F F
Email Date Order Bank Transfer Amount Alternative
G No. Date Charge G
22/10/2017 170114 25/10/2017 HKD 38,936.73 7
H H
to (USD 5,000)
I 24/10/2017 (Payment 8) I
J J
24. As shown in the WeChat messages, D2 referred to the holder
K of account number 055-265219-292 (i.e. D3’s a/c) as the “middleman” K
who was to receive USD 5,000 (Ex. P34, Vol.5/957e and 977c) in relation
L L
to order no. 170114. Coincidentally, as seen from the above tables, HKD
M 38,936.73 (equivalent to USD 5,000) was received by D3 on 25/10/2017. M
Hence, the WeChat messages show that all Defendants were in conspiracy
N N
in offering/ accepting commissions to D3 for placing LV’s orders with JFJ,
O including but not limited to the 25/10/2017 transaction. O
P P
25. It is the Prosecution’s case that D3 did receive those
Q payments as commissions or otherwise as a reward for placing LV’s jet Q
R
orders with JFJ. Further, such placing of orders and payments were R
effected pursuant to prior agreement amongst the Defendants, which was
S S
never sanctioned by LV (being Diana or the management of LV).
T T
U U
V V
- 20 -
A A
B B
C.3.3. Charges 3 – 6 (against D2 only, alternative to Charge 1)
C C
26. Charges 3 – 6 are laid in the alternative to Charge 1. If the
D D
Prosecution cannot satisfy the Court that D1 and D2 were involved in a
E conspiracy, the Prosecution relies on individual bank transaction records E
as proof that D2 in fact accepted advantages from D1 or JFJ to place LV’s
F F
orders with JFJ.
G G
27. Particular WeChat messages that tally with each charge are
H H
as follows:
I I
Charge 3: Payment 7 [Agent accepting on 16/10/2017]
J J
K Date Time Gist Bundle Ref. K
D2 sent a picture showing that LV Vol.5/954a
L 17:54 L
had paid USD 54,500 to JFJ and 982
M D2 calculated that the cost (of JFJ) M
17:55 was USD 42,500, implying that
N Vol.5/954a N
there was USD 12,000 left
O 16/10/2017 17:58 D1 asked D2 how much D2 wanted O
P
D2 requested “10,000” and P
18:00 claimed that he had to give most of
Q Q
it to an “unspecified secretary” Vol.5/954b
R
D2 confirmed receipt of payment R
22:39
(of USD 10,000)
S S
T T
U U
V V
- 21 -
A A
B B
Charge 4: Payment 9 [Agent accepting on 28/10/2017]
C C
Bundle
D Date Time Gist D
Ref.
E 09:55 D2 confirmed engagement of JFJ E
to and said he would only choose Vol.5/977d
F F
15:20 JFJ.
25/10/2017
G 16:57 D1 and D2 calculated that the cost G
Vol.5/957h-
to (of JFJ) was around USD 67,000
H 957i H
17:01 to 68,000.
I D2 sent a picture showing that LV Vol.5/959b I
12:59
had paid USD 78,000 to JFJ. and 998a
J J
D1 asked D2 how much D2
15:27
K wanted for this. K
D2 asked if it would be fine to Vol.5/959b
L L
20:53 leave 3,000 for D1, to which D1
M agreed. M
D2 hence said that 7,000 should
N 27/10/2017 N
20:54
be paid to him.
O O
D2 calculated that LV had paid
P
(USD) 78,000 to JFJ and (the cost P
of JFJ) was 68,000. Hence, the Vol.5/959c
Q Q
20:55 difference (earned by JFJ) was
R (USD) 10,000. D2 reminded D1 to R
pay D2 this time, instead of “the
S S
middleman” before (i.e. D3).
T T
U U
V V
- 22 -
A A
B B
D1 asked whether (the money
C was) to be paid to D2’s USD Vol.5/959d- C
00:11
account, to which D2 replied in 959e
D D
the affirmative.
E D1 said (the money) had been E
28/10/2017 00:13
paid to (D2’s) USD account. Vol.5/959e
F F
00:16 D2 confirmed receipt of money.
G D1 sent a picture showing that G
Vol.5/959e
00:34 USD 7,000 had been paid to D2’s
H and 999a H
USD account
I I
Charge 5: Payment 10 [Agent accepting on 2/11/2017]
J J
K Bundle K
Date Time Gist
Ref.
L L
D2 sent a picture showing that LV
M had paid USD 162,500 to JFJ [for Vol.5/960a M
11:56
order no. 170121 (USD 120,000) and 1005a
N N
and 170122 (USD 42,500)]
O O
D2 asked D1 to keep USD 5,000
11:57
P
2/11/2017 and pay D2 USD 32,000 P
D2 calculated that (the cost of
Q Q
JFJ) for the two orders was USD Vol.5/960b
R 12:05 125,500 (USD 91,000 for order R
no. 170121 and USD 34,500 for
S S
order no. 170122)
T T
U U
V V
- 23 -
A A
B B
D1 and D2 mutually described the
12:42
C other as “goddess of wealth” C
D1 said money has been paid to
D 12:56 D
D2
Vol.5/960c
E D2 said payment had been E
13:01
received
F F
G Charge 6: Payment 12 [Agent accepting on 15/11/2017] G
H H
Bundle
Date Time Gist
I Ref. I
D1 calculated that (the cost of
J J
15:36 JFJ) was USD 40,900 and Vol.5/961a
K enquired whether (LV) had paid K
D2 said that it was happy to make
L L
money. D1 asked D2 to advise if
M there was any outstanding M
(amount) that D1 had to “return”
N N
15:40
to D2. D2 replied that all had
15/11/2017 to Vol.5/961b
O
been “returned” except the O
15:41
P
present one. When asked, D2 P
stated that it was up to D1 as to
Q Q
how much to be “returned” to D2
R for the present one R
15:50 D1 said that her boss (believably
S Vol.5/961b- S
to Bellawings) might moan about the
961c
T 15:51 low price received (from JFJ). D1 T
U U
V V
- 24 -
A A
B B
further said that she would give a
C bit (of the profit of JFJ) to Cheung C
Yick-ka (believably President of
D D
Bellawings) for his protection in
E case the boss queried. D1 further E
said that she would not make any
F F
money this time
G D1 said that the USD“10,000” G
21/11/2017 20:45 (received on 15/11/2017) was Vol.5/975k
H H
relating to 19/11/2017 order)
I I
28. The monies paid to D2 by D1 in these alternative charges
J J
have been admitted by both D1 and D2 to be commissions to D2 in relation
K the flights LV placed with JFJ. K
L L
C.3.4. Charge 7 (against D3 only, alternative to Charge 2) Payment 8
M [Agent accepting on 25/10/2017] M
N N
29. In the event that the Prosecution cannot satisfy the Court that
O O
all Defendants were in a conspiracy, the Prosecution relies on individual
P
bank transaction records as proof that D3 in fact accepted advantages P
from D1 or JFJ to place one order on behalf of LV with JFJ.
Q Q
R R
S S
T T
U U
V V
- 25 -
A A
B B
30. Particular WeChat messages that tally with Charge 7 are as
C follows: C
D D
Date Time Gist Bundle Ref.
E D1 said that her boss (CHEUNG E
Yick-ka of Bellawings) had Vol.5/977a-
F 19:39 F
moaned that the price (that JFJ 977b
G paid to Bellawings) was too low G
D1 wished LV could increase
H H
payment (to JFJ) by USD 20,000
24/10/2017
I and D1 was willing to sacrifice I
19:46 Vol.5/977b-
the “3,000” she could originally
J to 977c and J
earn. D2 was afraid that he
19:50 1078a
K could not help as LV only K
charged client 89,000 for the
L L
order
M D2 enquired whether it would be M
fine to increase payment (from
N N
07:55 JFJ to Bellawings) by “7,500” so
Vol.5/977c-
O to that it would become “84,500.” O
977d
08:06 Thereafter, “5,000” would be left
P P
for a “middleman” and D1 and
Q
25/10/2017 Q
D2 earned nothing
R
D1 informed that (Bellawings) R
09:02 would be alright if (JFJ) could
S
Vol.5/957c- S
to increase the payment (to
957d
T 09:23 Bellawings) to “84,500”. D1 T
furthered that she would thus
U U
V V
- 26 -
A A
B B
give Bellawings “84,500” and
C separately give “5,000” to D2. In C
reply, D2 asked D1 to give the
D D
“5,000” to a “middleman”
E directly, relevant bank account E
details to be provided later
F F
D2 provided the bank account of
G 10:11 the “middleman” as HSBC 055- Vol.5/957e G
265219-292 (i.e. D3’s a/c)
H H
D1 sent a picture showing that
I USD 5,000, being converted into I
Vol.5/957h
16:59 HKD 38,936.73, had been paid to
J and 989a J
the account of the “middleman”
K (i.e. D3) K
D2 noted and said that he would
L L
17:00 tell the “middleman” (in respect Vol.5/957h
M of the bank deposit) M
N N
31. The money paid to D3 by D1 in this alternative charge has
O been admitted by D1 to be commissions in relation the flight LV placed O
P
with JFJ, save and except, D1 alleged she did not know the middleman P
being referred to in the WeChat was in fact D3.”
Q Q
R
C.3.5. 4 Categories of 19 Payments Outlined by Prosecution R
S S
28. The Prosecution categorises the 19 payments made by D1 to
T D2 or D3, as the case may be, the subject-matter of the conspiracy charges T
(Charges 1 and 2) into 4 groups (at para 47 of Prosecution Closing):-
U U
V V
- 27 -
A A
B B
“Reimbursement to D2 and Payment 1 (partly for tour
C C
token of Appreciation for guide services in USA,)
D2’s doing a foreigner (“Do Payment 2, Payment 5 (USD
D a Foreigner Category”) 3,000 of the USD 5,500) and D
Payment 6
Commissions to D2 Payments 3, 4, 7, 9, 10 and
E E
(“Commissions 12
Category”)
F Money Exchange or Payment 1 (RMB 14,700,) F
Remittance for Apex Air Payment 5 (USD 2,500 of
under D1’s Instruction the USD 5,500,) Payment 11
G (“Remittance Category”) and Payment 15 G
Transactions not upon D1’s Payments 13, 16 (also related
H Instruction (“No to Apex) and 18” H
Knowledge Category”)
I I
C.3.6. Video-recorded interviews of D2 and D3
J J
29. D2 stated that he had received monies from D1 in
K K
reimbursement of things purchased for D1. There were no purchase
L receipts. No monies were for his placement of flights with JFJ. He had a L
mobile phone from LV for use at work. He denied that when his WeChat
M M
messages with D1 referred to a middleman, that middleman was D3.
N N
O
30. D3 stated that he was not too familiar with JFJ. D1/ JFJ had O
tried to pay him commissions but he did not accept and instead returned
P P
the money. He knew D1 since 2014 when he first joined the industry. He
Q had purchased expensive wine for D1, who reimbursed him accordingly. Q
The monies he received from D1 did not relate to his work in LV.
R R
S S
T T
U U
V V
- 28 -
A A
B B
D. DEFENCE CASE
C C
D.1. D1’s case
D D
E 31. D1 has a clear record. This calls for the court’s self-direction E
to regard that her evidence should be more credible and that she has less
F F
proclivity to commit the offences she faces.
G G
32. D1 was born and brought up in Beijing. Most of the time, she
H H
was in Beijing when not doing business abroad. She was graduated from
I China Civil Aviation University. She worked in Air China as a flight I
attendant between 2006 and 2012. In 2012 – 2014, she joined the sales
J J
force in a company which sold private jets. In 2014, the company closed
K down. She established JFJ in the business of charter brokerage and the K
selling of Dassault private jets. Dassault’s competitors included
L L
Gulfstream and Bombardier. In 2015, the stock market crashed and her
M investment took a dip. The CEO of Bellawings, Mr Zhang, asked her to M
join Bellawings, which she did, as the sales representative of China
N N
Region. Her main responsibility in Bellawings was to gather clients who
O owned jets for management by Bellawings. Bellawings did not own any O
jets. She had to help maintain clients’ jets, hire flight crews and plan flight
P P
routes (“manage the jets”). For each flight, the operations department had
Q to arrange the flight route and communicate with the ground handler for Q
parking, adding fuel, ground catering and landing permit. She received
R R
13 months’ salaries and commissions from Bellawings. Bellawings
S actually welcomed JFJ’s business of selling jets to go on as JFJ’s clients S
might afterwards become Bellawings’s clients for management of their
T T
jets.
U U
V V
- 29 -
A A
B B
C 33. In 2015 – 2018, JFJ sold 5 or 6 Dassault jets. For each jet, C
JFJ got commissions of between USD 250,000 and USD 900,000.
D D
E 34. She came to know of D2 as a co-member of her WeChat E
group in 2/2017. There were 500 people in the group. She sent a message
F F
to the group asking for someone to help with a charter flight she could not
G place. D2 on behalf of LV gave her a quotation which was rather G
expensive. She did not take it but maintained contact with D2 for future
H H
business.
I I
35. D2 knew Diana personally from some business functions in
J J
2014 or 2015. Diana was quite well-known in the field. She always told
K others that her family was the shareholder of Dragonair. She knew D1’s K
JFJ was the sales agent of Dasssault and D1 was also working for
L L
Bellawings. Diana was the sales agent of Bombardier private jets. She
M understood that Mr Dai also knew Diana as Mr Dai had purchased a jet M
from Diana 10 years ago.
N N
O 36. She and Diana were agreeable to refer clients between O
themselves. Diana also told D1 that if JFJ had clients looking for charter
P P
flights, LV could accommodate D1 with jets owned by her family at a very
Q competitive price. Q
R R
37. On 18 June 2017, D2 contacted D1 to borrow a jet owned by
S Bellawings’s big investor Mr Dai. Mr Dai owned 3 or 4 jets maintained S
by Bellawings. D2 said LV’s big client Mr Shen of Sequoia had to fly
T T
from Shenzhen to Shanghai all of a sudden. There was no Part 135 flight
U U
V V
- 30 -
A A
B B
available. She knew one of Mr Dai’s jets managed by Bellawings would
C be available but that would be a Part 91 flight, which would be illegal for C
charter. She discussed the matter with Bellawings’s CEO Mr Zhang. They
D D
agreed to let LV have it for flying Mr Shen as if Mr Dai were entertaining
E a personal friend or family member. There should be no contract in the E
name of Bellawings. Mr Dai was expressly happy to make some money
F F
to relieve the maintenance costs of his jets, which were idle at times.
G Mr Dai was very wealthy and also very influential over Bellawings to the G
extent, as for example, that he could have the CEO Mr Zhang removed if
H H
he was not pleased with Mr Zhang.
I I
38. She therefore acceded to D2’s request. The flight was to be
J J
provided in JFJ’s name. She understood D2 would represent LV as the
K contact point. Mr Zhang told D1 to engage JFJ’s name to receive payment K
from LV so that Bellawings would not be involved as it did not have a Part
L L
135 licence for the jet.
M M
39. D1 admits that Payments 3, 4, 7, 9, 10 and 12 were
N N
commissions paid to D2 and/ or a middleman mentioned by D2. The
O commissions were pursuant to an agreement between her and D2 on about O
28 August 2017 just before D2 confirmed order no 170091 (the flight to
P P
be completed on 1 September 2017). D2 had called to tell her that Diana
Q did not want LV’s records to show this illegal Part 91 flight and the Q
commissions for D2, so Diana consented to the JFJ Commissions
R R
Agreement and that D1 would be at liberty to mark up the Buy price to be
S paid by LV to enable D1 to make USD 1,000 or USD 2,000 each time. S
She believed D2. She did not call Diana to confirm the position.
T T
U U
V V
- 31 -
A A
B B
40. She was aware of VistaJet, an air operator of very substantial
C standing, was also paying commissions to a third party, including C
employees of another company. It supported her view that LV was having
D D
the same policy here.
E E
41. Pursuant to this agreement, D1/JFJ paid D2 (in Payments 3,
F 4, 7, 9, 10, and 12 the respective sums of HKD 62,477.22, HKD F
109,182.05, USD 10,000, USD 7,000, USD 32,000, and USD 10,000), i.e.,
G G
HKD 171,659.27 and USD 59,000 in total (or the equivalent of HKD
H 628,000 in all). H
I I
42. LV’s corresponding profit margins on record, in the Long
J Sheet used at trial by the Prosecution and the Defence, for the flights were, J
in Payment 3 (USD 8,500), Payment 4 (USD 7,000), Payment 7 (USD
K K
6,500), in Payment 9 (USD 5,000), in Payment 10 (USD 0) and in Payment
L 12 (USD 0) as the flights were cancelled. L
M M
43. D1 says JFJ made a profit of about USD 2,000 each time.
N D2’s commissions were met by D1 and D2 agreeing between themselves N
on an inflated buy price to be paid by LV.
O O
P 44. Her husband Xi Wei gives evidence as to how he helped to P
do her banking transactions online when she was abroad. His evidence has
Q Q
very little bearing on the case except that the Prosecution seeks to criticize
R the way he and D1 did the banking transactions. R
S S
T T
U U
V V
- 32 -
A A
B B
D.2. D2’s case
C C
45. D2 has a clear record. This calls for a self-direction to the
D D
court to consider his evidence to be more credible and that he has less
E proclivity to commit the offences he faces. E
F F
46. The aforesaid commissions paid to him by D1/ JFJ to him
G were not in dispute. G
H H
47. His case of the JFJ Commissions Agreement is similar to D1.
I He supplements that the first occasion when Diana became aware of the I
use of Part 91 flights was during a sales meeting involving D2, D3 and
J J
Diana in June 2017 whereby JFJ was engaged to pick up Mr Shen of
K Sequoia, a big client of LV’s, on 18 June 2017 on an urgent basis (in order K
no 170067).
L L
M 48. On or around 28 August 2017, there was a sales meeting M
attended by D2, D3 and Diana in which D2 sought Diana’s approval to
N N
engage a Part 91 flight to fly Mr Shen on an urgent basis (for order
O no 170091). D2 knew it was a criminal offence1 to engage a Part 91 flight O
for commercial chartering, which must engage a Part 135 flight. D2
P P
complained to Diana that it was not fair for him to earn a meagre 2.5%
Q commission whilst having to risk committing a criminal offence for Q
arranging the Part 91 flight. Diana emphasised the significance of Mr Shen
R R
as a client of LV since she wanted to sell a private jet to Mr Shen. Diana
S agreed that for Part 91 flights arranged for Mr Shen with D1/ JFJ, D2 S
T T
1
Contrary to Air Transport (Licensing of Air Services) Regulations, Cap 448A, liable to a fine of
$5,000,000 and imprisonment for 2 years on conviction on indictment
U U
V V
- 33 -
A A
B B
would still get his 2.5% official commissions from LV and some extra
C commissions. Diana consented to D2 and D3 asking D1 for the extra C
commissions in relation to the Part 91 flight. Diana also said that D2 and
D D
D3 were to liaise with D1 directly regarding the extra commissions and D1
E and D2 were at liberty to mark up the buy price accordingly. E
F F
49. Diana had never asked how much commissions D2 received
G from D1/ JFJ for the Part 91 flights. D2 believed that the same applied to G
the situation of D3 and D3 would reach an agreement for commissions
H H
with D1 as well.
I I
50. It was only in a contingency, where no other flights were
J J
available, that he would look to JFJ for the Part 91 flights. Diana’s consent
K was given on each of the occasions of Part 91 flight placed with JFJ and K
commissions to D2 were then paid by D1/ JFJ.
L L
M 51. After he left the employ of LV in March 2018, he went to M
work for D1 in JFJ.
N N
O 52. He admits to have lied to ICAC in the video-recorded O
interview about the reason for D1 to pay him the money. His motive was
P P
to protect Diana from being investigated for the illegal flights.
Q Q
53. Whilst he admits monies in the Commissions Category (as
R R
described by the Prosecution) as commissions from D1/ JFJ, he disputes
S the 3 other categories of monies (“Do a Foreigner Category”, “Remittance S
Category”, “No Knowledge Category”) from D1/ JFJ as relating to the
T T
affairs or business of LV.
U U
V V
- 34 -
A A
B B
C E. LEGAL POSITION C
D D
E.1. Ingredients of Agent Accepting Advantage
E E
54. The substantive charges (Charges 3 – 7) are based on section
F F
9(1)(a) of the Prevention of Bribery Ordinance Cap 201 (“POBO”). It is
G for the Prosecution to prove as follows (Archbold Hong Kong 2020 at §35 - G
67):-
H H
I “(a) That there exists a principal/ agent relationship; I
(b) That there be an acceptance by an agent that comes within
J the definition of those terms in S2(2)(c) of POBO; J
K
(c) Of an advantage within the definition of the word in S2(1) K
of POBO;
L (d) That the acceptance of the advantage be as an inducement L
to, reward for or otherwise on account of; and
M M
(e) That agent conducting himself in relation to his principal’s
affairs or business by doing or forbearing to do an act in
N relation to his principal’s affairs or business.” N
O 55. The definition of “accepting an advantage” is provided as O
follows in section 2(2)(c) of POBO:-
P P
Q “a person accepts an advantage if he, or any other person acting Q
on his behalf, directly or indirectly takes, receives or obtains, or
agrees to take, receive or obtain any advantage, whether for
R R
himself or for any other person.”
S S
56. In Chan Chi Wan Stephen v Secretary for Justice [2017] 20
T HKCFAR 98, Ribeiro PJ enunciated at §§19 - 22 that the offence of T
accepting of an advantage is committed upon the acceptance and it is no
U U
V V
- 35 -
A A
B B
defence that the contemplated act or forbearance was not or could not be
C performed by the agent. The Prosecution must prove that the agent knew C
or believed it to have been provided as an inducement or reward for or
D D
otherwise on account of his act or forbearance in relation to his principal’s
E affairs or business. E
F F
57. Ribeiro PJ further elaborated what “in relation to his
G principal’s affairs or business” meant at §§50 - 54. The Prosecution must G
prove that in accepting the advantage, the agent knew or believed that the
H H
advantage was provided for as an inducement or reward for the agent’s act
I or forbearance aimed at and intended to influence or affect the principal’s I
affairs or business. The rewarded conduct which was “aimed at the
J J
principal’s business” has to be conduct which subverts the integrity of the
K agency relationship to the detriment of the principal’s interests. Besides, K
the prejudice to the principal’s interest does not need to involve immediate
L L
or tangible economic loss to the principal or benefit to the agent at the
M principal’s expense. M
N N
58. Eventually at §§68 - 70, Ribeiro PJ summarised as follows:-
O O
“68. The reference in s.9 to the agent’s act or forbearance being
P “in relation to his principal’s affairs or business” is properly P
construed to mean that the agent’s act or forbearance must be
Q
aimed at and intended to influence or affect the principal’s Q
affairs or business in a manner that undermines the integrity of
the agency relationship by injuring the bond of trust and loyalty
R between principal and agent. R
…
70. In a soliciting or accepting case, the Prosecution must prove
S S
that the agent knew or believed that the advantage was provided
as an inducement to or reward or otherwise on account of his
T actual or contemplated act or forbearance as conduct aimed at T
or intended to influence or affect the principal’s affairs or
business.”
U U
V V
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A A
B B
C E.2. “Consent by Principal” as Lawful Authority to Exonerate C
D D
59. It shall be a defence if the agent had lawful authority or
E reasonable excuse in accepting the advantage as an inducement to or E
reward for or otherwise on account of his conduct. According to section
F F
24 of POBO, the onus of proof of lawful authority or reasonable excuse
G shall lie upon the defendant. G
H H
60. On the subject of “consent by the principal”, according to
I Bribery and Corruption Law in Hong Kong by Ian McWalters SC and I
Andrew Bruce SC2:-
J J
K “[9-121] Principal’s consent would appear to be a specific K
example of lawful authority and presumably codifies that
common law defence. It does not qualify the defence of lawful
L authority or reasonable excuse. Rather it creates a specific L
defence to conduct which otherwise would be criminal in
M nature and only arises once the Prosecution has proven M
beyond reasonable doubt those elements which constitute the
corruption offence.”
N … N
“[9-124] Proof of the principal’s consent rests with the agent
and it remains a persuasive burden. In HKSAR v Chan Tat
O O
Chung Danny, Beeson J determined such after applying the tools
of the analysis provided by the Court of Final Appeal. The
P defence of permission of the principal in section 9(4) of POBO P
remained a persuasive burden because of the exigencies of
investigation. There was a contrast to be drawn between the
Q defence available to those under enquiry by way of section 14 of Q
the POBO and the offence provisions in section 9. Beeson J
R drew support from the reasoning of Wright J in HKSAR v Yan R
Pak Cheung.” (emphasis added)
S S
T T
2
Fourth Edition published on 3 December 2019
U U
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A A
B B
E.3. Ingredients of Conspiracy
C C
61. Section 159A(1) Crimes Ordinance, Cap 200 defines
D D
“conspiracy” as follows:-
E E
“(1) Subject to the following provisions of this Part, if a person
agrees with any other person or persons that a course of conduct shall
F F
be pursued which, if the agreement is carried out in accordance with
their intentions, either —
G G
(a) will necessarily amount to or involve the commission of
any offence or offences by one or more of the parties to
H the agreement; or H
(b) would do so but for the existence of facts which render the
I commission of the offence or any of the offences I
impossible,
J J
he is guilty of conspiracy to commit the offence or offences in
question.”
K K
E.4. Ingredients of Conspiracy for Agent to Accept Advantage
L L
M 62. On the subject of conspiracy for agent to accept advantage, M
Ribeiro PJ in Secretary for Justice v Chan Chi Wan Stephen (2017) 20
N N
HKCFAR 98 said as follows:-
O O
“88 … To prove conspiracy [for agent to accept advantage], the
Prosecution cannot rely on section 12A3 or section 244 [POBO] but
P must, in accordance with the usual common law rule and section P
159A(2), discharge the burden of proving that pursuit by the alleged
conspirators of their agreement would necessarily result in the
Q commission of a section 9 offence without any (lawful authority or) Q
reasonable excuse availing the accused.” (emphasis added)
R R
S S
T 3 T
Same rules of evidence applicable to proof of substantive offence shall apply in like manner to proof
of conspiracy to commit the offence
4
Burden of proving Defence of lawful authority or reasonable excuse shall lie upon the accused
U U
V V
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A A
B B
F. THIS COURT’S FINDINGS
C C
F.1. Closing Submissions
D D
E 63. The parties have filed full submissions. I will refer to them E
under specific topics.
F F
G F.2. Credibility of PW1’s Evidence G
H H
64. PW1’s evidence is not subject to any challenge of much
I significance. I
J J
65. A challenge is made on his views of engaging charter broker.
K On the one hand, in his report to ICAC (where he stated his and Diana’s K
concern that JFJ was a charter broker instead of an air operator). On the
L L
other hand, his evidence in cross-examination is that sometimes a charter
M broker would be engaged by LV. The Defence suggests that his views are M
contradictory. I disagree with this suggestion. His report to ICAC and his
N N
evidence in court must be read in the proper context. His report to ICAC
O was to complain that JFJ was a charter broker plus paying commissions to O
D2, not that LV objected to placing flights through a charter broker per se.
P P
Q 66. I accept his evidence as fully credible and reliable. Q
R R
F.3. 3 Categories in 19 Payments received by D2 and D3
S S
67. I agree with D2’s submissions in closing that the Prosecution
T T
has not shown how the 3 other categories of monies to D2 and D3 from
U U
V V
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A A
B B
D1/ JFJ (“Do a Foreigner Category”, “Remittance Category”, “No
C Knowledge Category”) were an inducement to, reward for or otherwise on C
account of D2 and D3 doing what in relation to LV’s affairs or business.
D D
The scope of the conspiracy charges (Charges 1 and 2) is now reduced to
E only the Commissions Category (Payments 3, 4, 7, 9, 10 and 12 to D2; E
Payment 8 to D3).
F F
G F.4. Illegality of Part 91 Flights G
H H
68. The Defence says the illegality of Part 91 flights was the
I reason for Diana to contrive to conceal from LV’s records the charter I
flights and the commissions to D2 and D3, thereby leading to the JFJ
J J
Commissions Agreement between D1 and D2.
K K
69. Reg 3 of the Air Transport (Licensing of Air Services)
L L
Regulations (Cap 448A) provides as follows:-
M M
“Restriction on use of aircraft on scheduled journeys
N N
(1) A person may use any aircraft for the carriage in Hong
Kong of passengers, mail or cargo for hire or reward on
O O
any scheduled journey between 2 places, one of which is
in Hong Kong, only if—
P P
(a) (where the aircraft is registered in a country or place
other than Hong Kong) the person uses the aircraft
Q in accordance with an operating permit granted to Q
the person in respect of the journey; or
R R
(b) (where the aircraft is registered in Hong Kong)
the person—
S (i) holds an air operator’s certificate and uses the S
aircraft in accordance with a licence,
T
provisional licence or temporary licence T
granted to the person in respect of the journey;
or
U U
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A A
B (ii) holds an equivalent document and uses the B
aircraft in accordance with an operating
C permit granted to the person in respect of the C
journey.
D (2) A person who uses any aircraft in contravention of D
paragraph (1) commits an offence and is liable—
E E
(a) on summary conviction to a fine at level 6 and to
imprisonment for 3 months; or
F F
(b) on conviction on indictment to a fine of $5,000,000
and to imprisonment for 2 years.”
G G
(emphasis added)
H H
70. Reg 1 provides that “air operator’s certificate” “means an air
I I
operator’s certificate granted under Article 6 of the Air Navigation (Hong
J Kong) Order 1995 (Cap 448 sub Leg C) (LN 158 of 2011). J
K K
71. Article 6 of the Air Navigation (Hong Kong) Order 1995
L (Cap 448 sub Leg C) is as follows:- L
M M
“PART II
N AIR OPERATORS’ CERTIFICATES N
O 6. Issue of air operators’ certificates O
(1) An aircraft registered in Hong Kong shall not fly on any
P flight for the purpose of public transport, otherwise than P
under and in accordance with the terms of an air
operator’s certificate granted to the operator of the
Q Q
aircraft under paragraph (2) of this Article, certifying that
the holder of the certificate is competent to secure that
R aircraft operated by him on such flights as that in R
question are operated safely.
S (2) The Chief Executive may grant to any person applying S
therefor an air operator’s certificate if he is satisfied that
T that person is competent, having regard in particular to T
his previous conduct and experience, his equipment,
organization, staffing, maintenance and other
U U
V V
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A A
B arrangements, to secure the safe operation of aircraft of B
the types specified in the certificate on flights of the
C description and for the purposes so specified. The C
certificate may be granted subject to such conditions as the
Chief Executive thinks fit and shall, subject to the
D provisions of Article 62 of this Order, remain in force for D
the period specified in the certificate. (36 of 1999 s. 3)”
E
(emphasis added) E
F 72. I construe the offence as regulatory in nature. It governs how F
the air operator should ensure the safe operation of the aircraft. It can be
G G
applied to Bellawings. It cannot be applied to LV as a charter broker.
H H
73. Even if it can be applied to LV, the question remains whether
I I
Diana or the management of LV knew of and consented to his placing Part
J 91 flights with JFJ. J
K K
F.5. D2’s Credibility
L L
74. The Prosecution in closing (at para 70) submits why D2’s
M M
evidence is not credible as follows:-
N N
“(a) D2 admitted in open court that he deliberately lied in the
O VRI. He knew he had an option to remain silent but he O
decided to keep talking and misleading the ICAC officers.
P The 6 payments shown to D2 during the VRI involved Apex P
Commissions or commissions paid by D1 or JFJ to D2.
These payments were termed as repayments during VRI
Q though. He even rejected the term “commissions,” Q
although all along he said Diana knew of the JFJ
Commissions Agreement and approved that he could take
R R
commissions from D1 for the Part 91 flights…
S (b) D2 accepted that over a 9-month period (March 2017 to S
December 2017) he received roughly HKD 500,000 from
LV being his salary plus commissions. Whereas over a 5-
T month period (August 2017 to January 2018) he received T
slightly more than HKD 1 Million from D1 or JFJ as
U U
V V
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A A
B commissions for the Part 91 flights. That means D2 was B
able to double his earnings in half the duration (5 months
C vs. 9 months 5 .) It is mind-boggling for Diana to have C
approved such commissions. A more sensible explanation
is that these were secret commissions paid by D1 or JFJ to
D D2. D
E
(c) It is non-sensical that Diana would not ask how much E
commissions D2 got from D1 or JFJ for the Part 91 flights.
This is especially the case when LV’s profit margin for the
F relevant flights were smaller than the amounts received by F
D2. The only reasonable explanation for Diana not asking
about how much commissions D2 received from D1 or JFJ
G G
is because Diana never knew D2 was receiving those
payments. Otherwise, one would expect any reasonable
H businessperson to protect the company’s interest and H
disapprove the commissions to D2 would be greater than
LV’s profit margin. Had Diana known that the lay clients
I were willing to pay that much, LV could have charged the I
lay clients more and left the usual 10% commissions for
J D2 instead of allowing them to make as much as or even J
more than LV’s profit margin.
K … K
(e) D2 says Mr. Shen needed to depart from Hong Kong and
L L
so they could not engage flights that depart from
Shenzhen. However, according to the WeChat (Ex. P34,
M Vol.5/957f- g), D1 and D2 did mention Mr. Shen could M
depart from Shenzhen and that several quotations from
other companies were obtained. These other quotations
N were legitimate flights but JFJ was engaged in the end. N
This contemporaneous dialogue is directly opposite to
O what D2 suggested in court that the Part 91 flights with O
JFJ were last resorts and were necessitated because Mr.
Shen had to depart from Hong Kong.
P P
(f) If the WeChat messages are perused thoroughly, D2 said
Q
he deleted messages and mentioned the possibility of Q
investigation by LV after the incident with Mr. Shen
leading to the 2 cancelled flights (Ex. P34, Vol.5/975b-
R f.) Even though D2 says he deleted messages about Part R
91 flights 6 , reference to Part 91 flights could still be
found (Ex. P34, Vol.5/975e.) D2 even elaborated in the
S S
WeChat that “(t)he part involving you and me was very
fragmented, because I had deleted some messages
T T
5
Day 15/AM/P’s XXN of D2
6
Day 14/AM/EIC of D2
U U
V V
- 43 -
A A
B involving prices” and “(m)y explanation was that, Part B
91 couldn’t be made black- and- white so we placed the
C order by phone. I said I used another phone number to C
call you” (Ex. P34 Vol.5/975e.) If LV or Diana were
well-aware of the usage of Part 91 flights, D2 would not
D have had to give an explanation about Part 91. It would D
have been understood and kept secret among Diana, D2
E
and D3. All along, D2 said other staff in LV knew E
nothing about Diana’s approval of using Part 91 flights
and Diana strictly prohibited him from leaking
F information about usage of Part 91 flights. There is no F
reason why D2 would have to explain to Diana that it
was due to Part 91 flights nor should D2 have brought
G G
up Part 91 flights if he was questioned by other staff. D2
even told D1 that he had “quit all our groups” (Ex. P34
H Vol.5/975f.) If “our groups” were similar to the 500- H
people WeChat group D1 and D2 first came across with
each other, D2 would not have to quit the groups. The
I 500- people group was already in place when D2 was I
given the Official Smartphone. As such, the Prosecution
J submits that D2 was not apprehending the risks J
associated with Part 91 flights when he deleted the
messages but the risk of being caught by LV’s internal
K investigation about the secret commissions he obtained K
from D1 or JFJ.
L L
(g) A general theme of D2’s defence was Diana’s fear of
being discovered that LV used Part 91 flights. If that
M were the case, there is no reason why Diana would have M
instructed PW1 to report the case to ICAC forgoing the
risk of Part 91 flights being discovered by the authorities.
N D1 and D2’s defence may allege hatred and vindictive N
intent on behalf of Diana to cause trouble to D1 and D2.
O However, it will be disproportionate for a reputable O
person to take revenge while running the obvious risk
that Part 91 flights allegedly approved by her would be
P discovered. Diana could be in trouble as well. The only P
reasonable inference as to why Diana would be at ease
Q
to instruct PW1 to report the case to ICAC is that Diana Q
never instructed or agreed to the use of Part 91 flights
so she never apprehended the risk of being exposed to
R potential criminal charges. R
(h) Part 91 flights were not the only option to serve Mr.
S S
Shen. D2 admitted that Mr. Shen could and would fly on
commercial flights 7. D2 or LV always had an option to
T explain to Mr. Shen why Part 135 flights could not be T
7
Day 15/AM/P’s XXN of D2
U U
V V
- 44 -
A A
B arranged due to his late requests and any reasonable B
man would understand. As long as D2 or LV could help
C Mr. Shen complete his itinerary smoothly, Mr. Shen C
would not hold any grudges towards LV or Diana and
Diana’s plan to sell jet to Mr. Shen would not be ruined.
D For example, Mr. Shen did fly commercial once from D
Hong Kong to Shanghai when at the last moment he
E
found LV had failed to secure a departure slot 8. Mr. Shen E
still used LV for chartering flights afterwards as seen
from the “long sheet” in D1’s Exhibits. According to
F PW1, Diana even successfully sold a jet to Mr. Shen even F
after the incident that led to Mr. Shen using commercial
flight.”
G G
H 75. I agree with these submissions. H
I I
76. I am not convinced that Diana or the management of LV was
J aware or made aware of the usage of Part 91 flights. Leaving aside the J
Part 91 flights for a moment, if ever there was a discussion between Diana
K K
and D2 of extra commissions, Diana would certainly have followed up and
L discussed it with PW1, who was in charge of all finance and accounting L
matters in DGA and LV. PW1’s evidence that he was not approached on
M M
this subject is not challenged by the Defence. It is inconceivable that Diana
N or the management hearing of D2’s request for more commissions would N
have concluded right away that LV could not have done it within its own
O O
accounting system without going to PW1 for advice. D2 must be aware of
P Clause 8 of his own Employment Agreement which stated that LV would P
provide details of commissions separately. It is inconceivable that Diana
Q Q
would think, and tell, him that LV could not give more commissions to
R him within its own accounting system. He is obviously telling a lie when R
he says that he had ever raised this subject with Diana, let alone obtaining
S S
her consent.
T T
8
Day 14/AM/EIC of D2
U U
V V
- 45 -
A A
B B
C 77. I do not find D2 a credible witness generally. I reject his C
evidence on all matters in issue.
D D
E F.6. D1’s Credibility E
F F
78. D1 says that after D2 so spoke of Diana’s concern and
G consent, she believed D2 had the authority to represent LV. She did not G
contact Diana for confirmation despite their close relationship because she
H H
thought it a trivial matter. She therefore entered into the JFJ Commissions
I Agreement. I do not believe her evidence that she ever heard anything like I
that from D2.
J J
K 79. As seen in the WeChat messages between D1 and D2, D1 was K
at liberty to cite any amount of commissions without reference to any
L L
formula or percentage. It is inconceivable that LV would have given such
M liberty to D2 and agreed to pay the inflated buy price. It is also M
inconceivable that being an employer herself, she would have consented
N N
to it if it was ever raised by D2 to be considered by her. She believed D2
O was authorized to have such unfettered commissions. I find this O
implausible.
P P
Q 80. As pointed out by the Prosecution in closing (at para 59), there Q
was an incident which supports the inference that the payments under the
R R
Commissions Category was not requested or consented by Diana or the
S management of LV. In the aftermath of the two cancelled flights (order S
nos 170122 and 170126 originally booked with JFJ), refund had to be made
T T
to LV by D1/JFJ. D1 had to chase after D2 for refund of his and/or the
U U
V V
- 46 -
A A
B B
middleman’s share before D1 could transfer the money back to LV. Had
C LV requested for or consented to the JFJ Commissions Agreement, the C
easiest way for refund to be made would have been for D1 to pay JFJ’s
D D
share and notify LV the remaining portion was given to D2 and/or the
E middleman pursuant to LV’s instructions so LV could chase D2 and/or the E
middleman itself. D1 claims that she had thought of this method but she
F F
deemed it better for her to gather all the fund before returning the same to
G LV. Such a claim does not make sense as she should have selected a G
method refunding her part to LV at the earliest opportunity in order to
H H
alleviate her own part in the situation. It is equally strange that she did not
I contact Diana to see how best to cope with the situation but relied on D2’s I
assurance that he could handle the situation. There is no reason why D1
J J
would have to let D2 deal with the situation. D1, as a reasonable
K businesswoman, would and should have protected her own interests K
instantly by refunding her own part to LV. I agree with the Prosecution
L L
that the only reason why D1 had to wait for D2’s and/or the middleman’s
M share before the refund to LV was that D1 knew very well that LV did not M
know the sum included secret illegal commissions to D2.
N N
O 81. I do not find D1 a credible witness generally. I reject her O
evidence on all matters in issue.
P P
Q F.7. D1’s Understanding of Not Accepting Advantage Q
R R
82. LV’s Employee Handbook (Ex P50), which D2
S acknowledged receipt on 6/2/2017 (Ex P48), provides as follows (at Clause S
5.1.):-
T T
U U
V V
- 47 -
A A
B “The Company believes in fairness and honesty in business B
dealings. Without the prior consent of the Company, no
C employee shall accept, from any person, firm, company or C
organization which has dealings with the Company, either
directly or indirectly, any commission, rebate, gratuity, gift or
D favour, monetary or otherwise, nor shall any employee, in any D
manner, ask for or solicit any such benefits from such person,
E
firm, company or organization. Acceptance of or solicitation for E
any such benefits is a criminal offence under the Prevention of
Bribery Ordinance. It will also result in disciplinary action by
F the Company. F
Only unsolicited seasonal gifts in kind of small value (not
G G
exceeding USD80) where genuine friendship exists with outside
business associates are receivable. If you are uncertain about
H any offer received or gift delivered and feel that the same may H
fall outside the approval given above, consult your Management
to obtain clarification of the Company’s position.”
I I
83. D2’s evidence is that he only kept LV’s Employee Handbook.
J J
It did not cross his mind to read it. D2 submits in closing as follows (at
K
paras 91 – 93):- K
L L
“91. PW1 testified that as far as the handbooks are concerned,
he had: (i) not passed the handbooks to D2 himself; …(iii)
M M
never explained the content of the handbooks to D2; and
(iv) never arranged anyone to explain the content to D2.
N N
92. Further, there is not a single word on the
Acknowledgement mentioning about the purpose of the
O O
handbooks and that it bound its employees. D2’s 4-page
employment agreement with LV has not mentioned about
P the handbooks either.9 P
93. While there is a line on the last page of the LV handbook
Q for employee’s signature to confirm his understanding of Q
it being his responsibility to read and comply with the
R handbook, it was left blank. 10” R
S S
T T
9
P 1-4
10
P 1391
U U
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- 48 -
A A
B B
84. I find his explanation incredible. The only purpose for giving
C him the Employee Handbook must have been for his understanding of its C
contents. He was graduated in a university in Australia and he
D D
communicated with everyone on LV’s record in English. In the same
E record of receipt (Ex P49) also dated 6 February 2017, he was given E
custody of LV’s mobile phone, which he had engaged at work, such as
F F
contacting D1. The acknowledgment equally did not have a single line
G mentioning the purpose of giving him the mobile phone. His evidence is G
that he had actually utilized it and returned it to LV after he left its employ.
H H
Equally so was the key to the entrance which he acknowledged receipt on
I 12 May 2017. There was not a single line mentioning the purpose of giving I
him the key. His evidence is implausible. I am satisfied that he had read
J J
and understood the contents of LV’s Employee Handbook as much as he
K would understand without being told the purpose of giving him the mobile K
phone or the key.
L L
M 85. Apart from the Employee Handbook, he also says that he M
understood POBO prohibits an employee from taking commissions
N N
without his employer’s consent. I am satisfied that D2 knew he should not
O accept any commissions from D1/JFJ without LV’s consent. O
P P
F.8. D1’s Understanding of Not Offering Advantage
Q Q
86. D1’s evidence is that she understood it to be an offence to
R R
offer advantages to an employee (such as D2) without the employer’s (such
S as LV’s) consent. S
T T
U U
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- 49 -
A A
B B
F.9. Conduct of D1 and D2 in Relation to LV
C C
87. I find Diana and the management of LV did not know of the
D D
Part 91 flights. I also find that D2 had never raised the issue of extra
E commissions for such flights with Diana or the management of LV. The E
JFJ Commissions Agreement was made by D1 and D2 without knowledge
F F
and consent of Diana and the management of LV in order that D1/JFJ could
G pay commissions to D2 and make profit for D1/JFJ at a marked-up buy G
price to be borne by LV.
H H
I 88. Pursuant to this agreement, D1 paid D2 (in Payments 7, 9, 10, I
and 12 the respective sums of USD 10,000, USD 7,000, USD 32,000, and
J J
USD 10,000).
K K
89. D1/JFJ made a profit (in Payments 7, 9, 10 the respective
L L
sums of USD 2,000, USD 3,000, and USD 5,000). On top of it, D1 won
M the favour of Mr Dai, thereby enhancing her prospect in Bellawings. M
N N
F.10. Ingredients of Substantive Charges of Agent Accepting Advantage
O (Charges 3 – 7) O
P P
90. It is for the Prosecution to prove as follows:-
Q Q
(a) That there exists a principal/ agent relationship;
R R
S (b) That there be an acceptance by an agent that comes S
within the definition of those terms in S2(2)(c) of
T T
POBO;
U U
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- 50 -
A A
B B
C (c) Of an advantage within the definition of the word in C
S2(1) of POBO;
D D
E (d) That the acceptance of the advantage be as an E
inducement to, reward for or otherwise on account of;
F F
and
G G
(e) That agent conducting himself in relation to his
H H
principal’s affairs or business by doing or forbearing
I to do an act in relation to his principal’s affairs or I
business.
J J
K F.11. “Without Consent of the Principal” as Lawful Authority as Defence K
in Conspiracy Charge
L L
M 91. Based on the authority of Chan Chi Wan Stephen (above), D1 M
submits in closing that is for the Prosecution to establish the absence of
N N
lawful authority or reasonable excuse beyond reasonable doubt in
O conspiracy charges of agent accepting advantage. I agree with this legal O
submission.
P P
Q 92. D1’s closing (at para. 83) submits that whilst D2’s evidence Q
is that he had told D1 that Diana Chou knew of the Commissions
R R
Agreement, the Prosecution has not put to him that he had not done so.
S Likewise, D1’s evidence is that she believed D2 when he said Diana knew S
of the Commissions. This is not challenged by the Prosecution. It is never
T T
suggested to D1 that she knew D2 was lying, or to either of D1 and D2 that
U U
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- 51 -
A A
B B
D2 had never told her. In a nutshell, the Defence submits that the
C Prosecution has never put to D1 that she knew D2 had no authority to take C
commissions.
D D
E 93. D2’s closing (at para 19) attacks the Prosecution by the E
absence of Diana or the management of LV in court to give evidence of no
F F
consent. I think there is no need to deal with this issue as it is my finding
G that Diana and the management of LV were not aware or made aware of G
the Part 91 flights. They had no need to pay extra commissions to D2.
H H
I 94. Even if the issue of extra commissions has to be dealt with I
independently, there is clear evidence from PW1 that, as the person in
J J
charge of all financial and accounting matters, he was never approached
K by Diana or the management of LV for advice on how to pay D2’s K
commissions for placing charter flights with JFJ. I find it inconceivable
L L
that, be Diana or the management of LV called as a witness or not, they
M will say that without consulting PW1, they did consent or would have M
given consent to D1/JFJ paying commissions to D2 by giving them the
N N
liberty to mark up the buy price to be paid by LV. LV had, and would
O have, no difficulty in paying D2 more commissions within its own O
accounting system11 instead of granting D1/JFJ and D2 the liberty to mark
P P
up the buy price to achieve this.
Q Q
95. In the substantive charges (Charges 3 – 6), it is for D2 to prove
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consent by Diana or the management of LV as lawful authority on the
S balance of probabilities. It is clear that he has failed to prove it. S
T T
11
Clause 8 of the Employment Agreement gives LV the flexibility to do so
U U
V V
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A A
B B
96. As to whether the Prosecution has put its case in the specific
C way as suggested by the Defence, I find that to be of no consequence. The C
JFJ Commissions Agreement was obviously uncalled for and prejudicial
D D
to LV. D1 and D2’s evidence is that D2 had told D1 of Diana’s consent
E with the reason for the consent and D1’s belief in D2, resulting in the JFJ E
Commissions Agreement. I repeat my findings above that such evidence
F F
is implausible.
G G
G. PROSECUTION’S PROOF OF CHARGES
H H
I G.1. Proof of Substantive Charges (Charges 3 – 6) against D2 I
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97. It is for the Prosecution to prove as follows:-
K K
(a) That there exists a principal/ agent relationship;
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M (b) That there be an acceptance by an agent that comes M
within the definition of those terms in S2(2)(c) of
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POBO;
O O
(c) Of an advantage within the definition of the word in
P P
S2(1) of POBO;
Q Q
(d) That the acceptance of the advantage be as an
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inducement to, reward for or otherwise on account of;
S and S
T T
U U
V V
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A A
B B
(e) That agent conducting himself in relation to his
C principal’s affairs or business by doing or forbearing C
to do an act in relation to his principal’s affairs or
D D
business.
E E
98. LV was the principal and D2 its agent. The commissions paid
F F
by D1/ JFJ were an advantage within the definition of section 2(1) of
G POBO. D2 accepted the commissions on account of his placing LV’s G
charter flights with JFJ. LV had no knowledge of, and gave no consent to,
H H
D2 accepting such commissions. D2’s conduct undermined the integrity
I of the agency relationship because this led to LV having to pay an inflated I
buy price. It reduced LV’s profit.
J J
K G.2. Proof of Conspiracy Charge (Charge 1) against D1 and D2 K
L L
99. Section 159A(1) Crimes Ordinance, Cap 200 defines
M “conspiracy” as follows:- M
N N
“(1) Subject to the following provisions of this Part, if a person
agrees with any other person or persons that a course of conduct
O shall be pursued which, if the agreement is carried out in O
accordance with their intentions, either —
P (a) will necessarily amount to or involve the commission of any P
offence or offences by one or more of the parties to the
agreement; or
Q Q
(b) would do so but for the existence of facts which render the
commission of the offence or any of the offences impossible,
R R
he is guilty of conspiracy to commit the offence or offences in
question.”
S S
T
100. D1 and D2 knew: that LV was the principal and D2 its agent, T
that the commissions paid by D1/ JFJ were an advantage within the
U U
V V
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A A
B B
definition of section 2(1) of POBO, that D2 accepted the commissions on
C account of his placing LV’s charter flights with JFJ, that LV had no C
knowledge of, and gave no consent to, D2 accepting such commissions,
D D
that D2’s conduct would undermine the integrity of the agency relationship
E because this would lead to LV having to pay an inflated buy price, that it E
would reduce LV’s profit, and that they were committing the offence of an
F F
agent accepting advantage without lawful authority or reasonable excuse.
G G
G.3. Proof of Substantive Charge (Charge 7) against D3
H H
I 101. I reject D2’s evidence that Diana had ever consented to D2 I
and D3 being paid commissions by D1. D3’s video-recorded interview
J J
was exculpatory of the reason for the payments. He said they were
K reimbursements for things he purchased for D1. K
L L
102. There is no evidence of what D3 had done or not done relating
M to the affairs or business of LV to get paid by D1/ JFJ in Payment 8 M
(HKD 38,936) by D1/ JFJ, or that D3 was even aware of the payment made
N N
into his bank account. D3 is not guilty of the substantive charge of agent
O accepting advantage. O
P P
G.4. Proof of Conspiracy Charge (Charge 2) against D1 – D3
Q Q
103. D2 was the only person aware of the secret commissions
R R
being paid into D3’s bank account. There is no evidence that D1 was
S aware that D3, who was unnamed but referred to by D2 as a middleman, S
was the recipient of her secret commissions or that such middleman was
T T
an employee of LV.
U U
V V
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A A
B B
C 104. There is some suspicion as to how D3’s bank account was C
known to D2. Yet there is no evidence that D3 had revealed it to D2, let
D D
alone revealed to D2 for the purpose of accepting secret commissions for
E placing charter flights with JFJ. E
F F
105. As the evidence indicates that only D2 knew of all the fact
G and circumstances of the alleged conspiracy, D2 alone cannot be found G
guilty of the conspiracy charge.
H H
I H. VERDICT I
J J
106. All ingredients of Charge 1 (in respect of the Commissions
K Category: Payments 3, 4, 7, 9, 10 and 12 to D2) are proved beyond K
reasonable doubt. D1 and D2 are convicted of Charge 1. I return no
L L
verdict for Charges 3 – 6, which are alternative to Charge 1 as against D2.
M D1 – D3 are acquitted of Charge 2. D3 is acquitted of Charge 7. M
N N
O O
P P
Q ( E Yip ) Q
District Judge
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S S
T T
U U
V V