HKSAR v. LAM CHUNG YAN

HCMA 549/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

APPELLATE JURISDICTION

MAGISTRACY APPEAL NO. 549 OF 1998

(On appeal from Kwun Tong Magistracy Case No. KTCC 915 of 1998)

-------------------

----------------------

J U D G M E N T

-----------------------

1. The Appellant was convicted after trial at Kwun Tong Magistracy of an offence of Evasion of Liability by Deception contrary to s. 18B(1)(b) of the Theft Ordinance, Cap. 210.

2. The facts of the case as found by the learned magistrate were that the Appellant in the course of Trading with his company Topclass Garment Limited (Topclass) had incurred debts to PW2, the proprietor of a firm Yat Wah Trading Company (Yat Wah) who had supplied zippers for use by "Topclass" at the Appellant's request in the course of "Topclass" conducting its garment business.

3. After repeated unsuccessful requests for payment of the outstanding balance PW2 had visited the premises of the Appellant on 15 November 1997 and personally obtained from him 6 cheques totalling $115,000 drawn on the account of "Topclass" with the Hang Seng Bank, all of which cheques being signed on behalf of "Topclass" by the Appellant. The cheques were drawn by the Appellant on that day, the 15 November 1997 and post-dated to the 30 November 1997.

4. Those cheques when presented on their due date were dishonoured for the simple reason that the account on which they had been drawn had been closed by the Hang Seng Bank on the 10 November some 5 days before they had been drawn.

5. Additionally the history of the account even before closure had been that cheques drawn on it for a period of some months, since apparently mid-1997, had been dishonoured and no significant deposits had been made into the account over that period. In other words, the account was dormant at the time these earlier cheques were drawn.

6. The Appellant appeals his conviction on the fundamental ground that the evidence was insufficient to allow the magistrate to safely find that the Appellant induced PW2 to wait for payment by the provision of the 6 cheques and further that the conviction was unsafe as it was against the weight of evidence.

7. The Appellant had given evidence at trial. His case was that "Topclass" was expecting a payment of a debt owed to it at the time he drew the 6 cheques and he thought that they would be honoured.

8. The magistrate gave no credit to this evidence because, as she said, the income of "Topclass" had historically always been paid into an account it had held at Wing Hang Bank. No deposits of this sort were made into its Hang Seng Bank account upon which the 6 cheques were drawn. It appears that the trading account of "Topclass" being held at Wing Hang Bank was not disputed by the Appellant when he gave evidence at the trial.

9. The Appellant's case further was that he had not received notice of the closure of the Hang Seng account before he had drawn the 6 cheques.

10. The learned magistrate found from the history of the Hang Seng account itself, in any event, that the Appellant must have been aware that any cheque drawn on that account would be dishonoured. The magistrate made further findings of fact to the effect that the Appellant had closed the premises of "Topclass" prior to the 6 cheques being dishonoured and had left no forwarding address so as to allow him to be contacted and had made no effort to communicate with PW2 after the 30 November 1997, or to settle the debt.

11. The final substantial aspect of the Appellant's case was that he said he had informed PW2 that the 6 cheques would be dishonoured at the time he gave them to him and that PW2 had simply said he wanted the cheques to prove the debt.

12. The magistrate found this version of events to have made no sense. PW2 had other evidence, she said, to prove the debt and further PW2 had said in his evidence, and this she accepted at the end of the day, that he wanted 6 smaller cheques rather than one single cheque because if there were insufficient funds to honour the whole of the outstanding amount then at least some or most of the 6 smaller cheques would be met. Accordingly, the magistrate rejected the Appellant's evidence. She was entitled to do so. Her reasons for so doing were concise and analytic.

13. That left the evidence in the prosecution case. That evidence consisted primarily of PW1, a bank officer of Hang Seng Bank, who produced various documents relating to the "Topclass" account, and PW2. The magistrate accepted both witnesses as credible and reliable. They had not, she said, been substantially challenged in cross-examination.

14. Mr MA argues that the magistrate's acceptance of PW2 as having been induced to wait for payment by the Appellant falsely representing that the 6 cheques would be met upon presentation was against the weight of evidence.

15. He says in fact there was evidence that PW2 must have known that the 6 cheques would be dishonoured and so PW2 could not have been induced to wait for payment.

16. It's true PW2 did agree in evidence that the Appellant had said "there was no money at the company". But this part of the evidence must be placed in context. It was apparently said by the Appellant during the course of a conversation which according to PW2 proceeded on the basis that he was told by the Appellant that the cheques would have to be post-dated, as it was inconvenient otherwise, and that the Appellant would have a letter of credit line opened with the bank in due course as the result of a debt owing to "Topclass" being paid.

17. In considering that aspect of the case, the magistrate said in her Statement of Findings:

"PW2 was x-examined at length. It was suggested to him that he was told that the said company had no money. He denied that. He stated that he understood that the bank was to give the said company an LC, and that debts were being pursued. In PW2's statement it says '.....LAM said he had no money at the Company .....' so he, PW2, asked for cheques or he would not leave. He explained why he requested 6 cheques rather than one cheques, namely because it is easier to collect smaller cheques. No money at the company is different from saying the company has no money. No money at the company means normally no cash money at its premises."

18. The learned magistrate subsequently considered also that the drawing of these 6 cheques on a closed account, or at least one known to the Appellant to be dormant, effectively meant that the Appellant had no intention of the cheques being met. She had indeed considered all the evidence in the case in arriving at this conclusion. She said in her Statement of Findings:

"The Appellant had dated them (that is the cheques) all the same date to be deposited on the 30th November 1997 10 days after they were issued, and the day that his company was moving its premises. PW2 would only discover that the cheques were dishonoured after the said Company had moved out of its then premises. The Appellant sent no forwarding address to PW2 and made no effort to contact him to satisfy the debt. PW2 had sufficient other evidence to prove the debt."

19. Further, PW2 had consistently denied in evidence that he knew the cheques could not be met and that he had simply wanted them as a record of debt. The magistrate accepted his evidence in this regard. She said:

"I was satisfied beyond reasonable doubt that PW2 accepted these cheques on the basis they would be honoured."

20. The magistrate considered all of the evidence making up the prosecution case carefully and thoroughly. She was entitled to arrive at the conclusions that she did and she did so on the basis of the evidence and a proper appreciation on it.

21. It is perhaps worthy of note that PW2 apparently did try to cash the cheques and it was only after they were dishonoured that he went to the police.

22. One final matter is that Mr MA sought to rely on the case of R. v. Andrews & Hedges (1981) CLR 106 where it was held that the payment of a debt by cheque subsequently dishonoured had not amounted to an inducement to the alleged victim to wait for payment. But that case depended on its own facts, crucially the existence of a contract allowing time to pay, so that, regardless of the payment by cheque, the alleged victim would have had to wait for payment in any event under the contract. That case does not take this present matter any further.

23. For the reasons I have given in my view there is no merit in this appeal and it is dismissed.