R. v. YAU SIU MING

IN THE COURT OF APPEAL

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JUDGMENT

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Hon. Yang, C.J.:

1. This is the judgment of the Court.

2. Criminal Appeal No. 292 of 1991 is a case stated. Criminal Appeal No. 351 of 1991 is an application for leave to appeal against conviction and sentence.

3. On the 13th December we heard the two cases together. In the case stated, we answered the question posed for our opinion in the affirmative, i.e. the learned Deputy District Judge erred in law in holding that s. 18D of the Theft Ordinance had no application to the defendant's dishonest conduct as found by him and he erred by reason of that finding in dismissing the charges against him. Having done so we, under the provisions of s. 84(c)(ii) of the District Court Ordinance Cap. 336, found him guilty of all the charges, convicted him, and sentenced to one year's imprisonment on each charge, those sentences to run concurrently. In the second case, we refused leave to appeal against conviction and sentence.

4. We indicated that we would reduce our reasons in writing at a later stage, which we now do.

5. Section 18D of the Theft Ordinance is the governing provision. It reads:

"(1) Any person who dishonestly, with a view to gain for himself or another or with intent to cause loss to another, by any deception (whether or not such deception was the sole or main inducement) procures the making, omission, altering, abstracting, concealing or destruction of an entry in a record of a bank or deposit-taking company, or any subsidiary thereof the principal business of which is the provision of credit, shall be guilty of an offence and shall be liable on conviction upon indictment to imprisonment for 10 years."

6. The issues which call for our decision in both cases are the same, and the facts are broadly similar.

7. In both cases, the accused faced numerous charges of dishonestly procuring the making of an entry in the record of a bank by deception contrary to s. 18D, with a view to gain for himself or another or with intent to cause loss to another. The particulars of offence were that on different dates, the accused procured the making of an entry in a stated sum of money in the record of a bank, namely, a credit card statement of account bearing a particular number (- in the one case the Hongkong Bank Master Card statement and in the later case the Standard Chartered Bank Visa Card statement) and dated a specified date by deception, namely, by falsely representing that he was entitled and authorized to use that bank's credit card bearing the number in question.

8. In both cases, the accused were entitled, as holders of the relevant credit cards, to use them in various countries including Hong Kong, China and Macau. Each accused, being aware of his credit limit, exceeded it. All the transactions entered into by means of the credit cards were within the "floor limit" of the retailers who accepted payments by means of the cards. The phrase "floor limit" means the maximum amount the credit card accepting retailer may process without reference back to the bank issuing the card for approval.

   There is no dispute that both accused were dishonest in acting the way they did.

9. Deputy Judge Eccleton in the appeal had held that an offence under s. 18D had been committed. Deputy Judge Davies in the appeal by way of case stated had held a contrary view. In his opinion that section was enacted to cater for particular circumstances within the Banking Industry to ensure that no person, having access to banking records, could manipulate them to his own advantage.

10. Deputy Judge Davies then went on to observe that the entries in the bank records in this case were not in themselves false but correctly reflected the transactions in China, albeit that these transactions had been entered into by the respondent in breach of conditions under which the Master Card was issued. In this he seems to have been influenced by the side note to the section.

11. Noting that s. 18D does not appear in the Schedule of Alternative Verdicts in the Theft Ordinance the Judge stated that he was reinforced in his view that this section was intended for specific circumstances and not for dishonest use of credit cards. He therefore acquitted the respondent.

12. Mr. McCoy, while he does not support these particular findings, seeks to uphold Deputy Judge Davies' judgment by submitting that, on the facts, the proper charge should have been one of obtaining pecuniary advantage by deception contrary to s. 18(1) of the Theft Ordinance. Having initially argued that each of the acts specified in s. 18D(1) constitutes a misfeasance, he later conceded that whilst "concealing",and "destruction", are clearly misfeasance, the other matters set out, "making", "omission", "altering", "abstracting", may or may not be. But he did not accept that an offence could be committed if the "entry", was a valid one. The accused in each case, it is contended, did not "procure", the making of an entry. Though they started the chain of events, their acts stopped short of procuring an entry, for their acts came to an end with the retailers. Though the accused knew or must have known of the chain which was to follow, neither was guilty of acts or omissions which caused the bank records to give an inaccurate account of the debtor/creditor relationship between bank and customer.

13. The gist of the Crown's submissions is as follows.

14. Judge Davies was wrong in law in that he seemed to have held the "entry" in the record of the Bank had to be false. The marginal note to s. 18D is wrong in that it reads "Procuring false entry in certain records". Nowhere in the section itself is the word "false" used. All that the section says in this context is that "the making, omission, altering, abstracting, concealing or destruction" be dishonestly procured by deception.

15. Under the provisions of s. 18(3) of the Interpretation and General Clauses ordinance, a marginal note shall not have any legislative effect and shall not in any way vary, limit or extend the interpretation of any Ordinance.

16. The accused knew they had exceeded their credit limit. Given that the cardholder is required to use his card within the credit limit each accused knew that this use was dishonest and involved a deception, i.e. that he was entitled so to use the card. This dishonest and deceptive use was clearly with a view to gain the provision of goods or services. Each accused must have realized that this use would set in motion a chain of events which would involve the making of an entry of the use in the books of the bank.

17. We had no doubt that they had procured the making of an entry in each case and by deception within the terms of s. 18D, and that they were properly charged and properly convicted.

Sentence

18. The accused in the appeal by way of case stated, Chow Wai-ming, was a member of the Fire Services Department earning $7,700 per month. He has been declared a bankrupt because of this case and is now an odd job worker earning $4,000 per month. The dishonest advantage he gained came to a total of some $220,000. These offences, the subject matter of 20 charges, were committed in late 1989. He was acquitted on 14th March 1991.

19. He is married with two children, aged 14 and 11, and he supports his mother.

20. On 21st February 1990 the Commissioner of Police wrote to the Director of Fire Services saying that following legal advice the police would not prosecute him. He was however in fact charged with these offences in September of the same year.

21. The goods he had obtained by the dishonest transactions were given away as largesse to his friends and relatives in China in order to show off.

22. Having considered all the circumstances, and giving this accused the appropriate discount, we impose the sentences already indicated.

23. The accused in the appeal, Yau Siu-ming, was a security guard. He is divorced and has two children. The amount involved was about $122,000. Deputy Judge Eccleton called for a probation officer's report which we have also considered. In sentencing him to 15 months' imprisonment on each of the 13 charges on which he had been found guilty, sentences to run concurrently, the judge noted that the accused had obviously set out to deceive the bank with no real intention of making any repayment. He took the view that this was intentional calculated fraud and that such offences appeared to be on the increase. Adopting a starting point of _two years' imprisonment, the judge gave the accused credit for agreeing to the Crown's case in toto and he treated that as a plea of guilty.

24. In our view, the judge's sentence was entirely proper. We dismissed his application for leave to appeal against sentence.