HKSAR v. WONG KAY DIN

CACC 322/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 322 OF 1998

(ON APPEAL FROM DCCC 11/98, 81/98 AND 1216/97 (CONSOLIDATED))

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J U D G M E N T

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Mayo J.A. (giving the judgment of the Court):

1. At the conclusion of the hearing on 3rd June 1999 we indicated that the application would be dismissed.

2. Our reasons for this are as follows:

3. The applicant was convicted of 9 counts of theft after a trial in the District Court before H.H. Judge Line. He seeks leave to appeal against his convictions.

4. The applicant is the son of a former Pastor of the Tin Lok Baptist Church. He was closely involved in the management of the church's property and finance. In 1983 a limited liability company was incorporated Tin Lok Baptist Church Limited. (TLBC Ltd.) The applicant was a director of this company. He also had his own business Steering Travel Services Limited.

5. The prosecution accepted that when the affairs of Steering Travel Services Limited prospered the applicant did make payments to the church. However when the business came under pressure he withdrew moneys from TLBC Ltd. This appears to have been done principally by obtaining funds from various financial institutions by mortgaging property owned by TLBC Ltd.

6. Put in a nutshell the main issue which had to be determined by the Judge was whether the applicant had withdrawn more money than he had paid to TLBC Ltd. and whether if more moneys had been taken out he had had a genuine intention of repaying the money in due course. In other words whether he had had a dishonest intent.

7. Originally the applicant had been charged with 17 offences. The Judge ruled that there was no case to answer on five forgery charges and returned verdicts of not guilty on two theft charges.

8. Details of the charges upon which the applicant was convicted were as follows:

"Charge 1 - $400,000.00 on 23 June 1993

Charge 2 - $500,000.00 on 23 June 1993

Charge 3 - $500,000.00 on 23 June 1993

Charges 1, 2 and 3 were the proceeds of a mortgage by TLBC Ltd. to Yu Tai Hing Limited of Flats A, B and C on the 2/F of the Sun Tao Building premises, each charge alleging a theft of a debt appropriated from the bank account of the Company.

Charge 6 - $320,250.00 on 17 December 1994

This was the balance of proceeds of a mortgage in the amount of $350,000 on the Kai Tin property mortgaged by TLBC Ltd. to Preamble Finance Limited, this charge alleging a theft of a debt appropriated from the bank account of Hui Yu Shing, a Director of Preamble Finance Limited.

Charge 8 - $191,161.02 on 29 March 1995

This was the balance of proceeds of a mortgage in the amount of $1,200,000 on the Kai Tin property mortgaged by the Company to WOC Finance Company Limited, this charge alleging a theft of a debt appropriated from the bank account of WOC Finance Company Limited.

Charge 11 - $228,750.00 on 27 March 1995

This was the balance of proceeds of a mortgage in the amount of $250,000 on the Flat D on the 2/F of the Sun Tao Building premises mortgaged by TLBC Ltd. to Preamble Finance Limited, this charge alleging a theft of a debt appropriated from the bank account of Preamble Finance Limited.

Charge 13 - $136,500.00 on 29 November 1995

This was the balance of proceeds of a mortgage in the amount of $1,800,000.00 on the Flats A, B and C on the 2/F of the Sun Tao Building mortgaged by TLBC Ltd. to Liu Chong Hing Bank Limited, this charge alleging a theft of a debt appropriated from the bank account of the Company.

Charge 15 - $400,000.00 on 1 December 1995

This was the proceeds of a mortgage Flats E, F and G on the 2/F of the Sun Tao Building, mortgaged by TLBC Ltd. to Preamble Finance Limited, this charge alleging a theft of a debt appropriated from the bank account of Preamble Finance Limited.

Charge 17 - $300,000 00 on 29 January 1996

This was the proceeds of a mortgage of the Flats A, B and C on the 2/F of the Sun Tao Building mortgaged by TLBC Ltd. to Preamble Finance Limited; this charge alleging a theft of a debt appropriated from the bank account of Preamble Finance Limited."

9. It was the respondent's case that the Applicant, who had signed the Memorandum of Association of the Company dated 15 September 1983, knew that the Company was incorporated for charitable purposes and that its Memorandum contained an express prohibition on use of the income and property of the Company other than for the promotion of the Objects of the Company.

10. The trial commenced on the 23rd February 1998. On the eighth sitting day the defence served on the prosecution a bundle of documents which purported to assert a 'claim of right' to $7,300,000.00.

11. An adjournment inevitably followed. The prosecution then undertook a very extensive exercise of tracing and accounting for the movements of funds in and out of the two bank accounts held by the church and the seven accounts held by the limited company over the eleven year period. The box files of paper exhibits multiplied. The end result was a claim by the prosecution that the exercise revealed that the defendant had taken more than they had initially claimed.

12. Once the prosecution put themselves in a position of being able to prove the various mortgage transactions and the flow of funds, the defence either admitted such to have occurred or have not disputed the figures drawn from the admitted material.

13. Schedules were prepared. Schedule A diagramatically sets out the various mortgage transactions. Schedule B sets out the monies being paid in to the church funds and breaks down by category what it was spent on. Thus categories 1 to 7 in the right hand column are what the prosecution say the defendant spent for his own purposes. Schedule C usefully tabulates the relevant material and figures, giving totals on its last page.

14. The contents of the three schedules were proved by their makers without challenge. The only dispute the defendant had with the totals on the last page of schedule C was as regards the total payments of mortgage instalments. He contended for a higher figure of $4.5 million. Such dispute did not materially affect the merits of the case.

15. The applicant had been arrested on 16th March 1996 after one of the church members made a report to the police. He made a cautioned statement in which he admitted that out of the $6 million which had been raised on the mortgages which he had taken out which were secured on TLBC Ltd.'s property, $3.9 or $4 million had been applied towards his own personal business requirements. He also admitted that he had a responsibility to repay the church and TLBC Ltd.

16. The applicant was released on bail. Shortly after this he attended a meeting of church members on 31st March 1996.

17. Unbeknown to him one of the people present tape recorded the proceedings. It is evident from the transcript of this recording that the applicant made further admissions at the meeting which were clearly consistent with his having appropriated the mortgage moneys for his own purposes. He also indicated that he was unable to make good any promise to repay the money as he did not have the ability to do so.

18. The applicant went into the witness box and was cross-examined at some length.

19. He produced a document which was referred to as Schedule D which he had prepared himself. He claimed that it was apparent from the material contained in Schedule D and from other documents that when he had used TLBC Ltd.'s moneys he had been entitled to do so as the company had owed moneys to him.

20. So far as his statements were concerned he attempted to justify his admissions by saying he had never at any time admitted that what he had done was wrong to anybody; the reason for asking forgiveness was that "he did not do well morally or spiritually so I would like them to forgive me".

21. He also claimed that when he had taken the moneys his fellow Directors had approved his actions. As was pointed out by the Judge any such approval would have been entirely contrary to the Memorandum and Articles of Association of TLBC Ltd. which was a charity. Had the fellow Directors knowingly approved his actions, they would have been laying themselves open to criminal proceedings being taken against them. On the evidence which was before him, the Judge did not believe that they had with full knowledge agreed to any such thing.

22. The Judge dealt exhaustively with the question of the applicant's credibility from pages 34 to 38 of the appeal bundle. Suffice it to say that he almost entirely rejected the applicant's testimony. After summarising his conclusions and relating them to the relevant issues, he was satisfied at the appropriate level that the nine charges in question had been proved. He also stated that so far as the question of the applicant's dishonesty was concerned he had considered each of the appropriations in the context of R. v. Ghosh 75 Cr. App. R. 154.

23. At the beginning of the application before us Ms Lai for the applicant informed us that it was her intention to seek leave to argue eight additional grounds of appeal. She said that at a very late stage she had been reading the papers and it had occurred to her that it might be open to her to argue that the convictions were unsafe or unsatisfactory on the basis of the principles propounded inR. v. Preddy and Others [1996] 3 WLR 255. She also submitted a 21-page document which referred to the arguments she proposed advancing.

24. The proposed additional grounds were in this form:

"CHARGE 6. 8, 11, 15 AND 17

GROUND 6

The Learned Judge erred in law in convicting the Applicant of these charges. In that, he failed to consider the fact that each respective loan was fully paid and redeemed by the Applicant and this was materially relevant to the 'intention to permanently deprive' the lending institution of the 'property' involved.

GROUND 7

The Learned Judge erred in law in convicting the Applicant of these charges. In that, he failed in finding that 'the property of the Bill of Exchange' had passed on delivery to Wong Kay Din as payee with the consent of the original owner in each case. At a later stage, the chose in action was also similarly transferred. See: Lawrence v Metropolitan Police Commissioner [1972] AC 626

GROUND 8

The Learned Judge failed to consider:-

(a) 'Was the property (chose in action) belonging to the lending institution or the Applicant?'

(b) If the property still retained by and belonged to the lending institution (presumably, Ground 7 failed), the second question to ask was 'Did the passing of the property necessarily involve an element of adverse interference with or usurpation of the right of the owner in the circumstances ie appropriation?'

In the Reason for Verdict, the Learned Judge erred (in) law in convicting the Applicant that,

'Mr. Laskey suggested, albeit tentatively, that on the basis of what the defendant claimed, the specific intent of permanent deprivation would not be proved. I rejected that. In each theft charge the particular chose in action appropriated did not survive the appropriation. Intended later repayment to the holder of the chose went to dishonesty.' [P.15 of the Reason for Verdict] also [P. 763 & 778].

The Learned (Judge) was wrong in law and in fact in rejecting the Defence submission that there was no intention to permanent deprive the owner of the property (chose in action) in the circumstances.

GROUND 9

Under such loan agreement(s), the lending institution(s) agreed to lend moneys to Tin Lok Baptist Church Limited in consideration that Tin Lok Baptist Church Limited agreed to provide security to secure such loans. The Applicant could not have stolen the chose(s) in action belonging to the property owner(s) because the property owner(s) were given value for such loans by enjoying interests and the security. Lack of necessary authority in the execution of the loan agreements would only make the loan agreements voidable, but not void. Could the Applicant's act amount to theft? Probably not, because the contract of loan was an enforceable contract. Deller (1952) 36 Cr. App R 184.

Besides, when the property was passed to the Applicant, the Applicant owed no legal obligation to any lending institution to deal with the chose in action in any particular way.

GROUND 10

Appropriation was not a continuing act, but an instantaneous act. The appropriation, if any, could not have taken place at a subsequent time after the creation of the chose in action in the payee's bank. Williams [1978] Crim LR 69

ALL CHARGES

GROUND 11

The Learned Judge erred in law in his Reason of Verdict when he said,

'As regards the question of having authority to do what he did from his co-directors, this could provide no comfort for the defendant. His own evidence made clear that this authority was given on the basis that his actions were for the church. It was quite apparent that those co-directors were ignorant of the true position. Even if it was the case that the defendant did on occasion reveal to a co-director that he wished to use the company for his own purpose due to his financial problems, there was again no comfort for him.' [P. 27 of the Reason for Verdict]

In that, the Learned Judge failed to consider the Applicant's defence that the Applicant was before the instance clothed with expressed or implied authority to raise finance using the properties as the Applicant saw fit when this was fundamentally relevant to the subjective state of mind of the Applicant. Further or in the alternative, the Learned Judge failed in consider that the Applicant's honest disclosing his financial difficulties and the need of finance to different PWs as early as from 1990 onwards was relevant to the issue of 'Dishonesty'.

GROUND 12

The Learned Judge failed to deal with one of the important defence of Applicant:-

(a) The Applicant's intention to repay the loans reflected when the Applicant, at various time before the event, has repeatedly pronounced his clear determination to make repayment during his conversation with different PWs;. See evidence from PWs

(b) The Mens Rea of the Applicant:-

(i) Honest intention to repay;

(ii) Honest intention to repay but founded on unrealistic belief on his ability to repay;

GROUND 13

The Learned Judge erred in law in convicting the Applicant when he said in his Reason of Verdict that,

'his offers to repay the mortgage loans, was material from which dishonesty was to be inferred'. [P.26 Reason for Verdict]

The Learned Judge wrongly treated the intention to repay the mortgage loan as 'a material inference of dishonesty' instead of a valid defence on issue of dishonesty.

In all the circumstances of the case, the convictions were unsafe and unsatisfactory."

25. It was apparent from Ms Lai's submissions and from the material she supplied that to a large extent she intended revisiting the issues which were canvassed before the Judge and to a large extent would be inviting us to retry this case.

26. So far as the question of the applicability of Preddy was concerned, it was difficult to see how the case could assist the applicant. Preddy is concerned with obtaining property by deception.

27. After giving the application careful consideration we came to the conclusion that there was no realistic prospect that any of these additional grounds could succeed. This being the case we declined to grant the leave sought.

28. The 1st perfected ground of appeal reads:

"1. Throughout the trial, the learned judge constantly interrupted counsel, witnesses, the Appellant, and ultimately, himself, took over cross examination and so interfered in the conduct of the trial, that he apparently lost the appearance of neutrality, failed to stand above the conflict and denied the Appellant a fair and impartial hearing. Further as the sole tribunal of fact, the learned judge, clearly in the garb of advocate, allowed his judgement to be influenced by his conduct and came to adverse conclusions as to the case of the Appellant long before the close of the evidence. The Appellant relies upon the following passages in the transcript of evidence:-

a) Examples during the prosecution case are at 291-295, 301-303, 305, 307-309, 333-338, 347-349, 365, 368-379, 381-383, 385-386, 387-389, 392-393, 411-412, 414-415, 428-438, 442-443, 452-455 and 457.

b) Having set the pattern of the trial, examples of interference, particularly during cross-examination of the Appellant are at 522D, 524F-P, 525E-526I, 527S, 528J, 528R-529H, 530D.

c) Examples where the learned judge interfered with the cross-examination, cut across the Appellant's explanations, and answered questions for him are at 577-581 (note counsel for the prosecution had to rectify misconceptions from 582-591), 594-599, 603-604, 606M-609L, 612F-616, 631K-639L, 640-646, 651-652, 667-669, 671-672, 673-682, 689-690 and 694-697.

d) Notwithstanding that the defence depended upon an analysis of the figures, the learned judge gave up at 698:-

'The answer is, becoming apparent yesterday, it's impossible to decide this case on looking at the figures. You can't prove it one way or the other because when you get the slack that would account for the difference, he says expenses, you say own use, that's the issue, so the figures just go round and round.'

e) Thereafter, the learned judge became impatient at any further questioning: see 698-699, 700Q, 701R, 702K-703L, 704F-707G (note that the learned judge refused to listen to the explanation for the two numbers on the mortgage documents, although in his Reasons for Verdict he regarded this discrepancy as the two final bullets into the defence case). See also 707R and 710-711.

f) At 711 and 712 the question of the telephone number was raised, a matter the learned judge took up enthusiastically for his own cross-examination from 713A-714H. Interruptions continue from 715-718 and 719O-724K. Note his comment at 724E:-

'I've made it absolutely clear to you that if the figures don't decide the case, therefore continuing to cross-examine about them is just plain irritating and irrelevant.'

g) The learned judge continued on the following day to indicate his impatience: 729C-H and 745-747.

h) Long before the conclusion of the Appellant's evidence, the learned judge had made up his mind that the figures did not matter, and that he did not believe the Appellant. The conduct of the learned judge went far beyond seeking clarification of the evidence."

29. Before considering the passages complained of it is necessary to have regard to the relevant principles.

30. Purchas, L.J. had this to say at p. 32 of R. v. Matthews [1983] 78 Cr. App. R. 23.

"To summarise these authorities the following propositions appear to emerge: (1) Whilst a large number of interruptions must put this court on notice of the possibility of a denial of justice, mere statistics are not of themselves decisive; (2) The critical aspect of the investigation is the quality of the interventions as they relate to the attitude of the judge as might be observed by the jury and the effect that the interventions have either upon the orderly, proper and lucid deployment of the case for the defendant by his advocate or upon the efficacy of the attack to be made on the defendant's behalf upon vital prosecution witnesses by cross-examination administered by his advocate on his behalf; (3) In analysing the overall effect of the interventions, quantity and quality cannot be considered in isolation, but will react the one upon the other; but the question which is posed ultimately for this court is 'Might the case for the defendant as presented to the jury over the trial as a whole, including the adducing and testing of evidence, the submissions of counsel and the summing-up of the judge, be such that the jury's verdict might be unsafe?' In the presence of conditions in which this Court has been alerted in the manner to which we have referred, it appears to us that if there is a possibility of a denial of justice then this Court ought to intervene."

31. Assistance can also be derived from the judgment of Cons. V.-P. in R. v. Lau Hing-on [1987] 1 HKC 89 where he considered the relevant principles in the context of a trial in the District Court at p. 90E:

"Unfortunately, a complaint of this nature is not unique. We have been referred to several cases in which others have been made to this court or Courts of Appeal in other jurisdictions. For our part we are content to rely upon the judgment of this Court R v Tam Chi Ping & Ors (Crim App 119/85 unreported) where the Chief Justice, giving the judgment of the court, said:

'It must be made clear that there is nothing improper in interventions as such by a judge, even if they are frequent and lengthy, provided that the judge follows the principles set out in Jones v National Coal Board [1957] 2 QB 55 by Denning LJ in the following terms-

The judges' part in all this is to hearken to the evidence, only himself asking questions of witnesses when it is necessary to clear up any point that has been overlooked or left obscure: to see that advocates behave themselves seemly and keep to the rules laid down by the law; to exclude irrelevance and discourage repetition; to make sure by wise intervention that he follows the points that the advocates are making and can assess their worth and at the end to make up his mind where the truth lies. If he goes beyond this he drops the mantle of a judge and assumes the robe of an advocate and the change does not become him well. Lord Chancellor Bacon spoke right when he said that 'Patience and gravity of hearing is an essential part of justice; and an overspeaking judge is no well tuned cymbal.'

The case before that court related to a jury trial and the court went on to quote, and rely upon, three principles that had been formulated by Lord Parker in R v Hamilton [1969] Crim LR 486. The first two of those principles are not appropriate to trial by a single judge and no reliance has been placed upon the third in the present instance. We find assistance however in a later passage of the judgment:

'Nevertheless, we administer an adversarial and not an inquisitorial system. Until the law is changed, as we hope it will not be, we must seek to preserve it. One of its most important rules is that the judge must continue to preserve an appearance of neutrality throughout a trial. Whatever he may think, he must not seek to impose his views on the jury, during the course of a trial, by interventions of a volume or nature which put pressure on a jury to find as the judge has shown he wishes them to do.

It would, of course, be naive to expect that every convicted defendant would acknowledge that his trial had been fair. But the judge must strive to so conduct himself during a trial that a neutral observer would be left in no doubt that the trial was conducted fairly before a judge who stood above the conflict and retained his air of impartiality throughout.

Those remarks must apply even more strongly to trial by a single judge, for should the judge assume the robe of an advocate, as Lord Denning put it, not only is the appearance of neutrality lost, but the judge being a judge of fact as well as law, there is a very real possibility that his judgment will be influenced by his conduct and the defendant genuinely deprived of a fair and impartial trial."

32. We have anxiously considered all of the passages referred to and we have attempted to analyse the complaints made on the basis of the principles propounded by Purchas, L.J. and Cons. V.-P.

33. It has to be immediately accepted that there were a large number of interventions by the Judge. However this was a case which cried out for case management by the Judge. He was faced with a mass of material and it was imperative for him to 'rein' counsel in so as to ensure that only relevant matters were canvassed before him.

34. What is very clear is that the Judge with commendable diligence and ability succeeded in keeping the parties within the bounds of relevance. Had he not exercised the restraints that he did, there is no doubt that the hearing of the case would have been much protracted to the detriment of everyone concerned.

35. What also emerges from this analysis is that on numerous occasions it was necessary for the Judge to intervene so as to enable him to fully comprehend the significance of the evidence being given.

36. In this connection it has to be added that it was by no means true to state that the evidence emerged in a coherent and logical manner. In fact quite the reverse. The applicant in particular was a very difficult and evasive witness. He changed the thrust of his evidence on several occasions and it was necessary for the Judge to intervene in order that he could be accurately appraised of the true position.

37. It was also necessary on occasion to put questions to the applicant so that he could sufficiently understand what was being said. A good example of this relates to the complaint made concerning the three questions asked by the Judge concerning a document which was produced. The Judge was not prepared to just 'let the matter go'. He repeated his questions so that he could satisfy himself that there was no possibility of an innocent explanation. This was not in the nature of cross-examination. It was very much in the applicant's interests that the Judge should explore the matter thoroughly before coming to a conclusion which was adverse to the applicant. All of this related to what the Judge described as 'the final bullet' which conclusively demonstrated the false nature of the document referred to as Schedule D.

38. The final matter to be considered is the overall impression which would have been gained by a neutral and informed observer. In as much as it is possible to form an accurate impression from the transcript, it is by no means the case that the Judge would have appeared to have become a participant in an adversarial process. On the contrary an overall impression is gained that he conducted the proceedings in a dignified and restrained way and that the applicant had a fair and impartial hearing.

39. There is no merit whatever in this ground and it is dismissed.

40. Ground 2 reads:

"2. The learned judge failed to give full and detailed consideration to Schedule D and to the documents tendered in support of the Appellant's contention that the payments which he and his company, Steering Travel Services Ltd., had made to or on behalf of the Church and/or Tin Lok Baptist Church Limited ('Ltd') prior to June 1993 exceeded the capital payments from loans which he received on behalf of the Church and/or Ltd."

41. What has to be borne in mind on this ground is that Schedule D was a self serving document which had been prepared by the applicant with virtually no supporting documentary evidence to verify the contents.

42. It is however manifest that the Judge did carefully weigh and consider the document. However he did so on the basis of the assessment he had made of the applicant's credibility. The Judge went to considerable lengths to give reasons why he was not prepared to accept the applicant as a witness of the truth. He was fully justified in reaching the conclusion he did.

43. This ground has no merit and fails.

44. Grounds 3 & 4 can conveniently be dealt with together. They read:

"3. The learned judge, in rejecting that the Church became obligated to pay the Appellant, failed to give any or any sufficient weight to the evidence from prosecution witnesses and from the prosecution's own exhibits:

a) that he and his company had supported the Church financially;

b) that there was a record of at least one such loan in the accounts;

c) that his co-directors were aware, at least from 1990, that the Appellant wished to obtain repayment of loan for his own and his company's purposes; and

d) that the Church's accountant acknowledged the existence of loans and vouchers during the time in question: see evidence of PW30 Li Shu Pui at 445 and ff.

4. The learned judge was consequently wrong in inferring:

a) that there were no such loans; and

b) that the Appellant was dishonest from the outset, namely, 1985.

The learned judge was equally wrong to conclude that the Appellant was 're-financing his own depredations of Ltd's property.' Further by basing these conclusions mainly on the reasons that there were no accounts, vouchers or other documentations extant at trial, relating to transactions between 6 to 13 years prior to the trial, the learned judge effectively reversed the burden of proof."

45. These grounds really amount to an attempt to retry this case.

46. The Judge did have regard to the background situation and the fact that the applicant had in earlier years made financial contributions to the church. He was also fully aware of the role which had been assumed by the applicant and his co-directors. The Judge was fully entitled to reach the conclusions he did on the basis of the evidence which was before him. His Reasons for Verdict were obviously well thought out and his conclusions were entirely convincing. There is no merit in these grounds.

47. Ground 5 reads:

5. The learned judge inferred dishonesty from conclusions of facts which were fundamentally flawed in the respects referred to in Grounds 2-4 above. Further, in the context of this case where the Appellant was in effect a trustee of the property, the learned judge ought to have considered in addition to R v. Ghosh, the guidance contained in Royal Brunei Airlines v. Tan [1995] 3 WLR 64, where the concept of dishonesty was considered in the context of a breach of trust."

48. The Judge was clearly right to consider the question of the applicant's dishonesty on the criteria laid down in Ghosh. Royal Brunei Airlines v. Tan [1995] 3 WLR 64 was not germane to the facts of this case.

49. This ground must also be dismissed.

50. For the reasons we have given these convictions were in no way unsafe or unsatisfactory and the application is dismissed.