HKSAR v. CHEUNG TO AND ANOTHER

HCMA 1013/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 1013 OF 2001

(ON APPEAL FROM SPCC 1920 OF 2001)

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J U D G M E N T

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1. The 1st appellant was convicted after trial at San Po Kong Magistracy of three offences of theft of a chose in action contrary to section 9 of the Theft Ordinance Cap. 210 being the 1st to the 3rd charges, and his co-defendant wife, the 2nd appellant, was convicted of five separate offences of theft of a chose in action being the 4th to the 8th charges.

2. The facts of the case as found by the learned magistrate were that the 1st appellant was one of two partners in a company called Wai Wing Engineering ("Wai Wing"). His co-partner was PW1. PW1 was, if not a silent partner, a less active partner than the 1st appellant. The 2nd appellant was employed within Wai Wing as the accountant of the company.

3. The company was involved in maintenance work at Queen Elizabeth Hospital as a sub-contractor of another group of companies called Yiu Wing Group ("Yiu Wing"). The sole income of Wai Wing, as a sub-contractor, was from Yiu Wing.

4. Wai Wing had two pay days per month when it issued pay-cheques to its employees. On or just before those pay days, Yiu Wing would pay Wai Wing. Accordingly when Wai Wing paid its workers money had come into Wai Wing from Yiu Wing enabling Wai Wing to be in a position to draw its own pay cheques in favour of its workers. These worker pay-cheques issued by Wai Wing were signed by PW1 as a co-signatory together with the 1st appellant. When PW1 signed those cheques he was provided with two sorts of documents by either the 1st appellant or 2nd appellant.

5. Those two sorts of documents were, firstly, the Yiu Wing cheque in favour of Wai Wing which evidenced that funds were available to meet the Wai Wing worker pay-cheques and, secondly, the Wai Wing salary lists which set out the amount payable to each Wai Wing worker based on the days he had worked. The cheques signed by PW1 were supposed to be in amounts which matched the salary list.

6. In due course PW1 came to be suspicious of the state of Wai Wing's finances. He checked all the salary cheque records of Wai Wing and eventually the matter was reported to the police. In his evidence as accepted by the magistrate PW1 said that he noticed certain irregularities in the worker pay- cheques issued by Wai Wing.

7. One sort of irregularity related to cheques made out in amounts which differed, on their face, from the amount due to the worker to whom they were paid according to the salary list. In that regard the cheques the subject of charges 1, 4, 5, 6, 7, 8 were made out in amounts which increased the amounts actually due to the worker by several ten thousand dollars.

8. For example in charge 4 (against the 2nd appellant) the cheque Exhibit P6 was originally drawn in favour of a worker in the sum of $2,500, an amount corresponding to the amount set out against the name of that worker in the salary list. However in due course, when cashed by the 2nd appellant, it had been altered to the sum of $52,500.

9. The other sort of irregularity PW1 gave evidence of was the making out of cheques in favour of workers whose names were apparently taken from non-current salary lists in amounts much greater than a worker's salary cheque could reasonably comprise. That form of irregularity was reflected in charges 2 and 3. In respect of both categories of cheques PW1's evidence was to the effect that he had signed them before they had been altered or completed in the amounts that they subsequently bore.

10. The cheques which were the subject of the charges were paid, in their altered form, in respect of those the subject of charges 1, 2 and 3, i.e. those charges the 1st appellant faced, into the 1st appellant's bank account and in respect of those the subject of charges 4 to 8, i.e. the charges the 2nd appellant faced, were cashed by the 2nd appellant.

11. The principal grounds of appeal advanced on behalf of both appellants were the same and can be summarised fairly as follows:-

(i) the magistrate failed to properly take into account evidence to the effect that, in any event the appellants may have had a claim of right to the monies allegedly appropriated, as they may have had to pay, on behalf of Wai Wing a number of unlawful workers employed by the company.

(ii) The magistrate wrongly became an expert in his own trial by examining the hand-writing upon the cheques on the way to concluding some had been altered.

I will deal with those grounds of appeal in order.

Claim of Right

12. Section 3(1)(a) & (b) of the Theft Ordinance, so far as is relevant to this complaint of the appellants, is as follows:-

" A person's appropriation of property belonging to another is not to be regarded as dishonest:-

(a) if he appropriates the property in the belief that he has in law the right to deprive the other of it, on behalf of himself or of a third person; or

(b) if he appropriates the property in the belief that he would have the other's consent if the other knew of the appropriation and the circumstances of it;"

13. So far as any issue of a claim of right is concerned it should be said in the event the issue is raised it is the responsibility of the prosecution to prove beyond reasonable doubt that a defendant in a trial had no claim of right before that defendant can be found to have had the requisite dishonesty.

14. Mr Grounds for the appellants points to certain aspects of the evidence before the magistrate as giving rise to a possible claim of right by the appellant to the appropriated sums pursuant to section 3(1)(a) and (b) of the Ordinance. That evidence is again perhaps conveniently summarised so far as its important aspects are concerned as follows:-

(i) PW1 in his evidence agreed that the 1st appellant told him at some time that some of the workers employed by Wai Wing were two-way permit holders from the mainland and further agreed that he was also told by the appellants that they, on occasion, had to cash in some cheques to pay the illegal workers.

(ii) That a ledger book seized from Wai Wing by the police referred to the charged cheques and particularised their amounts in their final form. In other words the charged cheques were fully disclosed in the ledger of Wai Wing in the amounts to which the magistrate found they had been altered.

15. Mr Grounds argues that in his Statement of Findings the learned magistrate wrongly approached the issue as to whether there was a claim of right by dealing with it as a matter relating to the credibility of PW1 rather than as a matter which arose in regard to the issue of the appellants' dishonesty in the terms of section 3(1)(a) and (b).

16. In the Magistrate's Statement of Findings he said this:-

"Another submission of the Defence Counsel was that one cannot discount the possibility that the cheques were used to "launder" some cash so as to pay some illegal workers. Despite the fact that I have warned PW1 that he was not obliged to answer any questions that may incriminate him, he still chose to answer some of the questions. According to PW1, D1 did tell him that some of the workers were Two Ways Permit holders from the mainland and he was also told that D1 and D2 had to cash in some cheques in order to pay those illegal workers."

17. As a preliminary matter, it can be seen that the issue of a potential claim of right arose during the cross-examination of PW1, the primary prosecution witness, by the appellant's counsel. That, and the ledger which was produced and relied upon in the defence case as support on the issue of claim of right, was the only evidence available to the appellants as evidence supporting their cases in this regard. It should be emphasised that neither appellant gave evidence.

18. It does not appear, from the Statement of Findings or the portions of the transcript of the trial available at the hearing before me, on what basis the evidence of PW1 as to what was said to him by the appellants in this regard was allowed into evidence. It may well be that this evidence, as to some statement by the appellants at some unknown time to PW1 would give rise to some concern that it was hearsay. It does not appear to fall into any obvious category of exception to the hearsay rule.

19. Nevertheless it was apparently admitted into evidence on some basis and the magistrate did take it into account. His Statement of Findings went on to say this:-

"As a matter of fact, the bank records of D1(i.e. Exhibit P2) actually contradicts this suggestion. (that the cheques in question were made to pay illegal workers) From those records, one could see that after D1 had paid in Exhibits P4 and P5, subsequent entries revealed that D1 had not drawn much cash from his account. On a simple counting of the entries, one could see that D1 had drawn 16 cheques in the total sum of $179,365 after he had paid in those cheques. On the other hand, he had only withdrawn cash on 7 occasions in the total amount of $22,800. Therefore, I do not accept that these cheques were made for the payments of those illegal workers."

20. In dealing with this issue of a claim of right the magistrate also considered the evidence relating to the ledger book, he said:-

"According to Defence Counsel, another piece of evidence that was in the Appellants' favour is Exhibit D4. It was a Company Ledger Book seized from the Company by the Police. In the said ledger, all the 8 cheques in question were accounted for. This shows that the Defendants were not dishonest as they have not concealed these cheques from the Company accounts. Some of the cheques were recorded as a lump sum for the payment of workers or sub-contractors. This supports the Defence's claim in the cross-examination of PW1 that the cheques were needed to be cashed in order to pay the illegal workers."

21. The magistrate subsequently went on to place no weight on the contents of the ledger book so far as those contents related to the subject cheques because the book had been in the custody of the appellants all along and said in his findings that there was nothing to suggest that PW1 would have seen it. He noted inconsistencies between the contents of the ledger and the payees' named in the subject cheques.

22. In short it seems quite obvious from his findings the magistrate considered the issue of a possible claim of right generally and did not restrict his consideration of it only as to its bearing on PW1's credibility. As a general issue he dismissed it as a possibility. His findings were reasoned and explicit in this regard. He was entitled to conclude as he did that there was no weight to any suggestion that the cheques may have been made out in the manner in which they were so as to go to pay illegal workers. His rejection of this possibility was unqualified.

23. I do not see any reason why he should be required to expressly deal with the matter, in his findings, so far as the question of the appellants dishonesty was concerned in the precise terms of section 3(1)(a) and (b).

24. His general rejection of the possibility of facts existing raising any claims of right in the appellants to the sums reflected in the subject cheques was sufficient for all purposes, including that of the question of dishonesty effected by any claim of right specifically arising under section 3(1)(a) and (b).

25. I might add that the payment of even illegal workers by way of altering partnership cheques and laundering monies through a bank account of the employer or by cashing those cheques after alterations or additions seems to me to be a suggestion entirely worthy of dismissal. This ground of appeal has no merit.

The magistrate became a handwriting expert in his own trial

26. What is complained of in this regard is that the magistrate found some support for PW1's evidence that some of the cheques he signed were subsequently altered, by observing in the copies of the cheques characteristics which were consistent with PW1's assertion.

27. In his Statement of Findings the magistrate said:-

"First of all, on all the 8 cheques, one can see that the names of the Payees was not written right after the printed words on the left and thus leaving some space between the printed words and the names of the Payees. This suggests that it was the practice of the person who drew up the cheques in leaving large spaces in front of his handwriting. This would certainly lower the vigilance of the signing party even if similar space also exists in front of the writing of the amount.

More importantly, for Exhibit P7, one can see from the Chinese writing of the amount, the first 2 words denoting the sum of $40,000 (肆萬) was tilted to the right while the rest of the writing denoting the sum of $2,800 was tilted to the left. Another example is Exhibit P8. One can also see that the spacing of the first 2 words denoting the sum of $20,000 (貳萬) and the rest of the writing denoting $3,600 (叁仟陸佰元正) was markedly different."

28. It is apparent from his findings that the magistrate was observing the characteristics of the writing on the cheques. He was not comparing one set of writing with another to determine whether both sets were written by the same or different hands, nor was he purporting to determine the authorship of the writing. If he had embarked upon either of those tasks he may rightly have been criticised for doing so without the aid of expert evidence. But a tribunal of fact only requires the aid of an expert's evidence in respect of a specialised subject matter where the tribunal of facts own knowledge and experience is therefore insufficient and needs to be supplemented by that of the expert. That is the function of an expert witness.

29. But in the present case, in my judgment it can hardly be said that an expert witness was required to do that which the magistrate did. His two observations of the writing on the cheques were restricted to the gap which the drawer habitually left between the printed parts of the cheques and the payees' name, and the slanting nature of some parts of the writing compared to others.

30. Those matters plainly fall within the experience and knowledge of a layman. To call such evidence from an expert before a jury would be to succeed only in pointing out what they could plainly see for themselves. The same applies to a magistrate and the magistrate in the present case was not required to abandon his common sense simply because he was dealing with hand writing. The examination that he undertook did not go into areas requiring specialist knowledge. He was entitled to take into account his own observations as to what he saw on the face of the cheques in this regard.

31. Mr Grounds further criticises the magistrate for taking this evidence into account as being only "suspicious" but as, nevertheless, considering it as support for PW1's credibility. The magistrate said in this regard:-

"I must say I am not a handwriting expert and the above observation by me is not conclusive on whether the cheques have been altered or not. However, I find the circumstances of the drawing and signing of the cheques highly suspicious."

32. It is apparent from those comments of the magistrate that he was effectively saying that what appeared on the face of the cheques was of some weight, but was not conclusive or determinative though it was evidence he took into account together with the rest of the evidence in the case. He was entitled to take it into account as evidence, together with other evidence in the case, which supported PW1's credibility as a witness. That other evidence primarily consisted of the salary lists which strongly suggest that the cheques had been altered in the way which supported PW1's evidence. There is no merit in this ground of appeal.

Other matters

33. There were other complaints advanced by Mr Grounds during the course of this appeal. He complained of differences between the magistrate's reasons given at the time of conviction and those given by him in his Statement of Findings. The most significant of those differences advanced by Mr Grounds was to the effect that at the time of convicting the appellants, the magistrate, in his reasons, had said that there was no forensic evidence relating to the original cheques because the originals "could not be found" whereas in his Statement of Findings the magistrate had said in the same context that the originals "could not be produced", otherwise the magistrate's Statement of Findings was virtually identical with his original reasons.

34. With respect, so far as the issues in this case before the magistrate are concerned, I can find no meaningful difference in those complained of terms. Both phrases used by the magistrate have, in my judgment, effectively the same meaning. There is no merit in this complaint.

35. Finally Mr Grounds relied on a defence exhibit during the course of his arguments before me which apparently evidenced an acknowledgement by PW1 that he owed a substantial portion of the debt which, for some reason, Wai Wing owned. Mr Grounds' argument was that that document was evidence going to PW1 having a motive to incriminate particularly, the 1st appellant.

36. That document became Exhibit D1 at trial and was before the magistrate. The magistrate was aware that it was relevant to the defence case to the effect that PW1 had tried to falsely incriminate the 1st appellant and presumably also the 2nd appellant so as to avoid paying his share of the partnership deficit. The magistrate eventually concluded that there was no merit in that suggestion.

37. In other words he had considered the defence case in this regard and had rejected it as of any weight. In my view no criticism can be made of his findings as far as that is concerned.

38. For these reasons, the appellants' appeals against convictions are dismissed.