ANASTASIUS CHIU v. R.

1993, No. 730
(Criminal)

Headnote

Repeal of statutory provisions effected by s.3(2) of the Bill of Rights Ordinance. Better provision for certainty, publicity and facility for proof required.

IN THE COURT OF APPEAL

1993, No. 730
(Criminal)

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J U D G M E N T

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Nazareth, V-P (giving the judgment of the Court):

1. On 21st December 1993 the appellant was convicted by Deputy Judge Morley in the District Court on 15 counts of obtaining property by deception contrary to s.17(1) of the Theft Ordinance, Cap. 210 and 1 count of evasion of liability by deception contrary to s.18B(1) of the same Ordinance. He now seeks leave to appeal against conviction.

2. The facts, which were not disputed save as to the nature of the defendant's involvement and knowledge, can be quite shortly stated by reference to the judge's findings. They relate to a long firm fraud. A company called World Wide was set up for the purpose. It was in business for less than 4 months. The man who set it up made himself scarce on 24th August 1992, and was never seen again. He did, however, leave blank cheques signed by him for use by the company after that date. Thereafter, substantial quantities of goods of a disparate nature were ordered against post-dated cheques. Throughout October 1992 the credit balance at the company's bank never exceeded $5,200. The company closed down suddenly on 17th October 1992, just as the various cheques in excess of $1m issued were beginning to fall due for payment. Many documents were shredded. World Wide was set up for fraudulent purposes from the outset. Its rented premises were a front designed to give the appearance of a genuine prosperous company to deceive suppliers to give it credit so that the fraud could be perpetrated.

3. The company came to the notice of the police who managed to carry out some surveillance. The judge accepted the prosecution evidence of identification of the appellant and found he was the man who orchestrated the handing out of the several cheques and rejected his evidence that he was an innocent employee of World Wide, who was himself a victim and dupe and concluded that it was an irresistible inference that he was fully aware of what was happening, including the fraudulent nature of the company's business.

4. The applicant relies upon two of his amended perfected grounds of appeal:

(1) The Learned Trial Judge erred in law in applying the presumption under Section 29(6)(a)(i) of the Theft Ordinance Cap. 210 whereas the said presumption was inconsistent with the Hong Kong Bill of Rights Ordinance and is and was thereby repealed.

(2)(a)The Learned Trial Judge erred in law in that he wrongly took intoaccount lies (that he considered the Appellant had told) as "evidence of guilty knowledge on (Appellant's) part." In law the lies of an accused person cannot be used as direct evidence of guilt (even if the Lucas criteria are fulfilled) and only go towards strengthening the inference of guilt.

(b) Alternatively, by reason of the matters set out in paragraph 2(a) above, there is a real danger that the Learned Trial Judge erred in law in that he wrongly used the lies he considered the Appellant had told as direct evidence of the Appellant's guilt.

5. Beginning then with the first ground, the presumption in s.29(6)(a)(i) is provided in the following terms:

"29. Evidence and procedure on charge of theft, handling stolen goods, and obtaining by deception

(1)-(5) ...

(6) In any proceedings for an offence under section 17,...-

(a) any person who -

(I) obtains property, pecuniary advantage or services by means of a cheque or other bill of exchange which is refused payment upon presentation on or after becoming due shall, until the contrary is proved, be deemed to have obtained the property, pecuniary advantage or services with knowledge that such cheque or other bill of exchange would not be honoured;"

6. The respondent does not seek to rely upon the presumption, and Mr Saw who appears for the respondent, contends that the judge did not rely upon the presumption but upon the evidence and the inferences he drew from the evidence. However, for the applicant, Mr Buchanan submits not only that the presumption is inconsistent with the Bill of Rights Ordinance, but that the judge did rely upon it. In respect of the first limb of his submission, he relies upon the carefully reasoned judgment of Judge Whaley in R. v. Lau Shiu-wah (1991) 1 HKPLR 202 that the presumption did not permit of a construction that was consistent with Article 11(1) of the Bill of Rights and was therefore deemed repealed from 8th June 1991. The Crown did not appeal from that decision, and Mr Saw informs us that it is considered to be correct by the Attorney General.

7. In Lau Shiu-wah it was, surprisingly, conceded by the Crown that the presumption was inconsistent with the Bill of Rights in that it could not pass the tests of rationality and proportionality set out in R. v. Sin Yau-ming 1 HKPLR 88 but endeavoured to save it by arguing that the presumption only cast an evidential rather than a legal burden on the defendant. That argument failed and Judge Whaley, accepting the Crown's concession, held that the presumption had been repealed by the Bill of Rights.

8. We feel bound to say that this stance of the authorities is less than satisfactory. However well reasoned and convincing the judgment of a subordinate court, there must remain the risk of it being reversed by a superior court. The implications and consequences of such a reversal can hardly be acceptable. Of course, it may be possible to discount such a risk, and it seems that it is not Lau Shiu-wah that is relied upon but rather the view taken by the Attorney General and his staff. That hardly provides a better basis upon which to rest the repeal of a statutory provision and provide for its publication and proof. Until Mr Saw's statement in Court, neither the Court nor the appellant's legal advisers were in a position to know that the presumption was to be regarded in practical terms as having been repealed. It must surely be within the competence of the authorities to accord the repeal of statutory provisions effected by the operation of the Bill of Rights, certainty, publicity and facility for proof of the sort required in respect of repeal effected directly by legislation. We observe in that regard that there are in just the 1991 Volume of the Hong Kong Public Law Reports numerous decisions of judges of the District Court and of magistrates on Bill of Rights challenges to particular statutory provisions. Doubtless there are also provisions which the Attorney General is satisfied do not permit of a construction consistent with the Bill of Rights Ordinance and are therefore repealed by s.3(2).

9. However that may be, returning to the applicant's first ground of appeal, Mr Buchanan submits that it is apparent that the judge did rely upon the presumption from the following passages at pages 2 and 3 of his reasons for verdict:

"The prosecution are aided by only one presumption, about which I shall say more in a moment, and apart from that the prosecution remain under an obligation throughout the trial to prove each element of each charge beyond all reasonable doubt."

The reasons then list the several ingredients of the offence which the prosecution would have to prove, and go on:

"The one presumption of law which may assist the prosecution is to be found in Cap. 210 s.29(6)(a)(i), which states that in relation to obtaining by deception charges under s.17, where the property is obtained by means of a cheque which is subsequently dishonoured, the person obtaining the property shall be deemed to have obtained it with the knowledge that such cheque would not be honoured, until the contrary is proved.

I say at once that I find the contrary has not been proved. So Defendant is fixed with the knowledge that the cheques would be dishonoured by virtue of this section. As will appear, however, in the context of this case that will not affect the outcome of any charge. Nor does this presumption have any relevance in the instances where no cheques were obtained, the charges for 4,8,12,17 and 19."

Then at p.13 under the heading of "Defendant's knowledge and intentions" the judge says this:

"I have already commented on s.29 of Cap.210 on charges involving cheques."

10. While, it must be said, that there do appear to be suggestions in the foregoing passages that the judge relied upon the presumption, he proceeded immediately after the sentence quoted from p.13 of his reasons, in the following way:

"In respect of Defendant's knowledge and intentions, I have to consider next the type of operation being run by World Wide. It was in business for less than four months. The man who set it up made himself scarce on 24th August 1992, and was never seen again...."

11. He then outlined the facts pointing to a manifest long firm fraud, to which we have already adverted. He asked if there was any evidence that the defendant knew what the reality of the situation was. He answered that question in the following way:

"(a) I have dealt already with Defendant's capacity at World Wide. It is an irresistible inference that a person in the position he was would have full knowledge of the true situation.

(b) Defendant's use of false names to PW2 and PW3 is indicative of this knowledge. He would have no need to use false names unless he had something to hide and knew it.

(c) Defendant's delaying of the deliveries until 26th October 1992 as spoken to by PW2, (charge 14) and to 20th October 1992 as spoken to by Wu Hok Biu (charge 19; Agreed facts - P154 page 7) is indicative of this knowledge.

(d) I accept entirely the account given by Senior Inspector Hazelwood ("PW5") as to his contact with Defendant. I do not believe Defendant's account of this incident. I find that Defendant did disclaim knowledge of World Wide, and that when PW5 challenged him about that by showing him photo 114, XP127, he denied that it was a photo of him, the Defendant."

12. He concluded at p.16 of the reasons:

"In all the circumstances of this case, it is an irresistible inference that Defendant was fully aware of what was happening, including the fraudulent nature of the company's business."

It is plain from this and indeed the tenor of the whole judgment, that the judge did not rely upon the presumption, but upon the evidence to arrive at his conclusion that the applicant had full knowledge of the fraud. That was an inevitable conclusion of the individual findings of fact the judge made, a fortiori, in the context of the nature of the fraud. It is unfortunate that the judge made references to the prosecution being aided by the presumption in the way he did, But, as we have said, he did not rely upon it and we have no hesitation in rejecting the applicant's first perfected ground.

13. We turn then to his second perfected ground. It is not in dispute that it was not open to the judge to use any lies told by the accused as evidence of his guilt. What is in issue between counsel is whether the judge did rely on lies as evidence of guilt. Mr Buchanan's submissions that the judge did rely upon lies is founded upon the following passages in his reasons for verdict, first at p.7:

"The issue between PW2 and the Defendant is as to what was actually said on 16 September 1992. PW2 described how she asked for "Simon Lee' at reception, then was taken into a conference room. A man came in. She asked him if he was Simon Lee, and he nodded. He gave her a name card bearing Simon Lee's name (Exhibit P106). She agreed that she had not told the police in her statement about asking his name, nor about his nodding. She agreed that in her statement to police she had used the expression 'I believe' that he was Simon Lee.

By contrast, Defendant's account is that he had simply said that Simon Lee was not there, and that he introduced himself by his correct name as Mr. Chiu.

PW2 impressed me as an intelligent, alert and truthful witness. I find that Defendant did indeed nod to indicate to her that he was Simon Lee, and that he did not introduce himself to her as Chiu. I find PW2's account of this incident accurate and correct. I find that Defendant is telling deliberate lies about it for the same reasons that had earlier led him to tell lies to Senior Inspector Hazelwood."

And later at p.15:

"I find that these were deliberate lies, relevant to the case, and motivated by a realization of guilt and a fear of the truth. I find that they are evidence of guilty knowledge on Defendant's part.

I warn myself however in relation to these and other lies told by Defendant, that lies are not of themselves necessarily evidence of guilt. An innocent person may tell lies, for example, to bolster up what he perceives to be a weak case.

In all the circumstance of this case, it is an irresistible inference that Defendant was fully aware of what was happening, including the fraudulent nature of the company's business. I find that Defendant was acting dishonestly in soliciting the orders for delivery which he did solicit.

That does not mean, however, that he is necessarily guilty of the charges which he faces, which I shall shortly turn to consider individually."

Mr Buchanan stresses in particular the sentence "I find that they are evidence of guilty knowledge on the Defendant's part", which he submits, are an express statement by the judge of his use of lies as evidence of guilty knowledge.

14. He seeks also to derive some support for that submission from the following passage in the judge's reasons for sentence :

"But for your mistakes (1) In dealing with PW2 and revealing yourself as Simon Lee to her and (2) In reacting the way you did to Senior Inspector Hazelwood, it may well be that Crown would have had difficulty in securing your conviction."

It does not seem to us that any significant support can be so derived. Reverting to the earlier passages, it seems to us that the words "I find that they are evidence of guilty knowledge on the Defendant's part" are an unfortunate lapse in expression on the part of the judge. By that stage in his process of reasoning, he had already established guilty knowledge on the defendant's part. We reject Mr Buchanan's submission and the first limb of the appellant's second amended perfected ground. If we were in any doubt upon that point, we would certainly have no hesitation whatever in concluding that the judge would inevitably have come to the same conclusion having already established by reference only to the evidence, in the manner already indicated in relation to the first perfected ground, that the applicant had guilty knowledge.

15. For those reasons, we are also satisfied that the second limb of the applicant's second perfected ground, i.e. that there is a real danger that the judge erred in law, in that he wrongly used the lies he considered the appellant had told as direct evidence of the appellant's guilty, must also fail and with it the appellant's appeal.

16. We would therefore grant the applicant's application for leave, treat the hearing of the application as that of the appeal, and dismiss his appeal against conviction.