THE QUEEN v. WONG CHOR SIK

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BETWEEN

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JUDGMENT

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Sears J.:

1. This is the judgment of the Court.

2. In September 1988, the Applicant was tried in the District Court before Deputy Judge Toh on 4 charges of theft contrary to Section 9 of the Theft Ordinance Cap. 210.

3. The basic facts were as follows:-

4. The Applicant was employed by Shell Electric Manufacturing (Holdings) Co. Ltd. as an Export Manager. Since April 1986, he had so acted and his duties were to negotiate with buyers, issue proforma invoices to the buyers, issue acceptance of orders to the shipping department, issue invoices to the buyers of the goods to be manufactured and delivered, and to recover outstanding payments as his accounts department so instructed him. He was not permitted, as one would expect, to receive any money or payment in the forms of cheques, drafts, letters of credit, etc. into his own account. Any monies he did receive from buyers should be handed over to the accounts department of his company.

5. It was discovered, after the Defendant had resigned from the company, that a number of payments which had been made by a West African company called Premier Standard in respect of goods supplied by Shell Electric, had not been recorded in the company's accounts.

6. What had happened was this. On June 3, 1987, Shell Electric issued a proforma invoice to Premier Standard in Nigeria in respect of a quantity of ceiling fans, at a cost of US$39,000 odd. It was an F.O.B. sale and payment was to be made by Letter of Credit.

7. The shipment of those fans occurred on August 12th, 1987. However, in the month before, that is on July 9th, there was paid by means of telegraphic transfer a sum of US$30,300.00 into the bank account of the Applicant. It is difficult from the papers to discover from whom this payment came. It was an agreed fact that Mr. Idown Adenuga of the Premier Standard Co. had so transferred this sum of money into the Applicant's bank account. A sum of US$4,000.00 was similarly paid into his bank account on July 15th.

8. By virtue of the stringent exchange control provisions then prevailing in Nigeria, the payment of cash was apparently to ensure that the goods would be shipped. Mr. Daley on behalf of the Crown has helpfully taken the court through a number of extracts from the evidence, which demonstrates that the proforma invoice exhibited in the case may not necessarily have been the totality of the agreement entered into between the parties and that there may well have been an arrangement whereby the cash payment was made to ensure that the goods would ultimately be received.

9. The Applicant made certain repayments to his employer of US$20,000.00.

10. It was on these facts that the Applicant was charged in the first charge with theft, but the charge as formulated was

"Wong Chor-sik, on or about the 9th day of July 1987, in Hong Kong, stole a thing in action, namely a debt of $30,300.00 United States currency, owed by Premier Standard Industrial Ltd. to Shell Electric Manufacturing (Holdings) Co. Ltd."

11. The second charge was similarly framed except that the date was the 15th July and the thing in action was a debt of $4,000.00 which was said to have been stolen.

12. The trial proceeded before the Deputy Judge on really one issue, namely whether or not, the Applicant when he received those sums of money into his account was acting dishonestly and was intending permanently to deprive the owner of the money.

13. The Deputy Judge in her reasons for verdict came to the conclusion that she did not believe the Applicant's account and she was of the view that as the money had been paid into his account and he had mixed the money with his own moneys, he was appropriating that money intending to permanently deprive the owner of it and he was acting dishonestly. She therefore convicted him of those two offences.

14. Originally, a large number of points were taken in the grounds of appeal with regard to the conduct of the trial before the Deputy Judge and the sufficiency of the reasons for verdict. Mr. Edward Chan, Q.C., who now appears for the Applicant, abandons all those points and takes one short point. He submits that the charge here is not the theft of the money from the employer, but a theft of a chose in action, namely a debt. He submits that at the material dates, set out in the charges, there was no debt due and owing from the Nigerian Company to Shell Electric which was capable of being stolen.

15. There is no doubt that a debt is a right of property capable of being stolen. There have been many instances before the courts where persons are charged with stealing a chose in action, e.g. a cheque belonging to someone else. In those instances, the debt is owed by the bank on whom the cheque is drawn to a customer who is in credit. In R. v. Kohn (1969) 69 Cr. App. R. 395 and, in particular, at page 404 there is found the court's view of the meaning of the words 'chose in action' More recently in R. v. Dool [1985] Crim. L. R. 450, it has been emphasised that for such a charge to be capable of success there must be at the date of the appropriation, an existing debt, Mr. Chan submits that on the dates charged, there was no existing debt because on that date, Shell Electric could not have called on Premier Standard to pay the moneys for the sale of those ceiling fans. He submits that the debt did not arise until the date of shipment at the earliest.

16. It appears to us that this case has been over complicated and no criticism can be levelled at the Deputy Judge who, of course, had to deal with the case as it was presented to her and the submissions as made to her.

17. The defence then being put forward was that this Applicant was not being dishonest when he received the moneys and he had no intention of permanently depriving his employer of those monies.

18. It appears to us, however, that the submissions made by Mr. Chan are correct. As at the dates set out in charges 1 and 2, there was in our judgment, no debt then capable of being stolen by this Applicant. The mere fact that there had been some prior arrangement to pay cash in order to faciliate the goods being delivered, does not in our judgment, create a debt.

19. We reach this conclusion with some reluctance, particularly because the trial below was conducted on a wholly different basis and it is clear from the findings of the Deputy judge that she did not believe the Applicant and was of the view that he was acting throughout dishonestly.

20. Nevertheless, we must apply the law as it relates to these particular charges. It would have been far simpler for the prosecution merely to have charged this Applicant with a theft of the money which was paid into his account as being money received by him for and on behalf of his employer.

21. We have come to the conclusion that there was no evidence before the Deputy Judge which proved that, at the material dates set out in the charges, there was a debt due and owing from Premier Standard to Shell Electric and therefore as a matter of law, these two charges are bad.

22. On the fourth charge, the Deputy Judge acquitted the Defendant.

23. The third charge was in similar terms to the first two charges, and read as follows:-

"Wong Chor-sik, sometime between August and November 1987 in Hong Kong, stole a thing in action namely a debt US$25,570.00 owed by Emmus Enterprises Co. Ltd. to Shell Electric Manufacturing Co. belonging to that company."

24. On October 27th 1987, Shell Electric issued an invoice to Emmus Enterprises in respect of 1005 sets of ceiling fans at a price of US$25,570.00. They were shipped to Nigeria on November 30th. Three Nigerians who visited Hong Kong paid, according to the Crown, the whole of that sum of money to the Applicant in cash. Although he stated that he only received two-thirds of the money, approximately US$20,000.00, the money was received by the Applicant in July and August 1987. The date when a debt arose at the earliest in respect of this transaction was, in our judgment, on October 27th 1987 when the invoice was made out. It was a standard F.O.B. sale, although it may well be that that debt did not really arise until November 30th when the shipment occurred. The charge as framed, that it was between August and November 1987 when the theft took place, would cover both of these eventualities.

25. The Judge found that the Defendant only obtained a balance of this sum of money; he had received some US$20,000.00 and had repaid Shell Electric US$10,000.00. The Judge found that the Defendant appropriated the sum charged by mixing it with his own money.

26. It is clear to us, however, that the Defendant was never in possession of US$25,570.00. Although this charge is not as clear as charges 1 and 2, we are in considerable doubt as to whether or not, there was evidence sufficient to amount to a prima facie case of theft of a chose in action. Again, there is no criticism of the Deputy Judge; the case was presented to her on a wholly different basis.

27. With similar reluctance, we consider that the conviction on charge 3 is, at the very least, unsafe and unsatisfactory and we would quash it.

28. It seems to us that this charge could have been similarly frames as being a straightforward theft of the money from the employer, as the Applicant clearly had received the money for and on behalf of his employer.

29. Nevertheless, despite some reservation over this charge, we are of the view that there was no sufficient evidence to justify a conviction. We therefore give leave and allow the appeal; the convictions are quashed.