HKSAR v. HAR KWOK HUNG

HCMA 970/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 970 OF 2006

(ON APPEAL FROM TWCC 668/2006)

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J U D G M E N T

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1.  The Appellant was charged with one count of procuring an entry in the record of a bank by deception, contrary to section 18D(1) of the Theft Ordinance, Cap. 210.  The Appellant had pleaded not guilty and he was convicted after trial.  He now appeals against his conviction.

2.  The particulars of the charge was that he is alleged to have dishonestly with a view to gain for himself or another or with intent to cause loss to another, procure the making of an entry in a record of the Hong Kong and Shanghai Banking Corporation Limited, namely a cash transfer of $8,603 was credited to an account numbered 554-0-010492, in the name of YIP Yuen-ying, Hidy, on 8 November 1993, by deception, namely by falsely representing to CHAN Kar-wah that the said amount of $8,603 was for premium payment for the years 1993-1994 for four insurance policies made out in the name of the said CHAN Kar-wah, and this four insurance polices were subsequently produced at trial as P2, 3, 4 and 5.

3.  The prosecution evidence mainly came from PW1, and therefore his credibility and reliability was of crucial importance in this case.  These events happened a long time ago.  PW1 said that between 1989 and 2003, he bought a total of four policies from the insurance company in which the Appellant was working at that time.  These four policies had annual premiums which were due at the same time and they were normally paid in one lump sum by cheque, and for the year 1993 - 1994 the premiums were due in November 1993. 

4.  According to PW1, on 8 November 1993, he had met the Appellant.  The Appellant had told him to pay the premiums through a bank transfer to an account nominated by the Appellant.  This bank account belonged to a Ms Yip, who subsequently became the wife of the Appellant in 1997.  The $8,603 was transferred by PW1 to this nominated account.  PW1 said that he expected that this sum would be passed to the insurance company as a premium payment for all his four insurance policies.  But it was the evidence that the insurance company did not receive such sum, and PW1 said that this was the first time he had paid his premiums by this method.

5.  On 14 January 1994, PW1 received a notification from the insurance company that he had not paid his premiums on these four policies for the year 1993 - 1994.  PW1 said he phoned the Appellant and the Appellant assured him that it was a documentary mistake.  Then, on 3 February 1994, PW1 said that he received a receipt (Exhibit P11) which purportedly came from the insurance company, and P11 contained PW1’s name, four policy numbers, a cheque number for the payment and the amount paid was stated as $8,563.  PW1 remembered that he did not pay by cheque and the cheque number did not belong to him.  PW1 called the Appellant for enquiry about the receipt.

6.  On 18 February 1994, PW1 received notice of automatic premium loan (APL) on two policies and a letter saying the two policies P4 and P5 had expired because no premium had been paid.  PW1 called the Appellant again and the Appellant said it was a mistake and that he would follow up the matter.  On 14 March 1994, PW1 received an apology purportedly coming from the insurance company, and this was exhibited as (Exhibit P12), and again this P12 noted the four policy numbers and the amount paid as $8,563.  PW1’s evidence was that he considered that the $40 difference to merely be fluctuation in the exchange rate and he paid no more mind to it.

7.  Evidence was called to show that the Appellant had ceased working for the insurance company since April 1993, so at the time of the bank transfer, the Appellant was no longer an agent of the insurance company.  PW1 said he only knew this on 1 May 1994 when he received a letter from the insurance company notifying him of this matter.

8.  Prosecution also called PW2 and mainly she gave an account of the workings of the insurance company and most importantly she denied that P11 and P12 were issued by her company because there were no records in her company of any payment on the premiums, and she said that, under normal circumstances, a receipt would only be issued upon payment being received.  And since no payment was received, no receipt would have been issued, and therefore she said that P11 could not have originated from her company.

9.  The case for the defence was that the amount of $8,603 was in effect payment from PW1 to his company for expenditure and fees covering:

(1)     the renewal premium on PW1’s vehicle and insurance policy in September 1993 in the sum of $3,849.00;

(2)     the renewal of the annual licensing fees for PW1’s vehicle in September 1993 of $4,254.00; and

(3)     the company’s service charge of $500.00 which amounted to a total of $8,603.00.

10.  According to the Appellant’s evidence, he said that the vehicle license fee was $4,254.00 as it was over 1.9 tonnes, but according to PW1’s evidence, he said that his lorry was actually below 1.9 tonnes and so the renewal licence fee would be much lower.

11.  The Appellant denied he had any knowledge of P11 and P12, and PW1 had also given evidence that on 19 December 1993, he had met with the Appellant, where the Appellant told him to convert his existing policies into one.  The Appellant had denied that there was such a meeting. 

12.  At the time of PW2’s testimony, counsel for the defence had produced a document which was subsequently exhibited as (Exhibit D5).  This was a document, dated 19 December 1994, which was the same day that PW1 alleged that he had met the Appellant where the Appellant had persuaded him to convert his policies into one.  I note the fact also that 19 December 1994 was well after the time when PW1 had received notice that the Appellant was no longer working for National Mutual Insurance Company.  But nevertheless, this document was produced and it was said to have come from the unused material provided by the prosecution.  Now the relevance of this document is not only the date, the relevance is also that there is a signature on the document of someone called Simon.  The evidence was that Mr Simon Luk had taken over from the Appellant as the agent in charge of PW1’s policies.  Mr Luk was not called to give evidence.  This document was not shown to PW1 and I accept that counsel only discovered this after the close of PW1’s evidence, but nothing further was done by the prosecution admittedly the prosecutor may have been taken by surprise by this document, but he never sought for PW1 to be recalled to clarify this matter.  And this was before the close of the prosecution’s case.

13.  In fact, it would have been more desirable had the police actually considered this document and questioned PW1 about it, so that he could deal with it in his evidence.  But apparently this document was not considered to be relevant until the defence produced it.

14.  As I have said at the beginning, the credibility of PW1 is a crucial important in this matter because, as Mr Chan pointed out, the matter was not reported to the police till much much later in 2004.  The learned Magistrate, at the end of the day, had to consider whether the Appellant had done what PW1 said.

15.  Mr Chan, representing the Appellant, had complained that the learned Magistrate had drawn conclusions based on inferences which were not supported by the evidence.  First of all, the evidence of the meeting of 19 December 1994.  The learned Magistrate had said that although the Appellant was no longer an employee of the insurance company, nevertheless, he did go there because he obviously knew he could collect or share the commission with Mr Simon Luk as mentioned in D5.  There is no evidence of that from Mr Luk or from PW1, and there was evidence from PW2 of the National Mutual Insurance Company that an agent employed by the insurance company would get a commission for introduction of a policy holder to the company, but she never mentioned that a commission would be paid to someone who was not employed by the company, so there was no basis for the learned Magistrate to infer that the Appellant had participated on 19 December 1994 because he expected to share the commission.

16.  The learned Magistrate also concluded that P11 and P12 were “caused” by the Appellant.  It is suspicious, according to the evidence of PW1 after he had complained to the Appellant subsequently these two letters were received by him.  But, the other matter that could throw light on this, as Mr Chan pointed out, the amounts on these two documents did not tally with the amounts that PW1 alleged that he had paid into the Appellant’s nominated account.  Mr Chan had submitted that if the Appellant had caused P11 and P12 to be fabricated, would he not make the amount the same as the amount that was paid into his nominated account because he would be worried that PW1 would go to the company and ask about why the amounts in P11 and P12 was not the same amount that he had paid into the nominated account.  It does not appear that the learned Magistrate had considered this. 

17.  Furthermore, Exhibit D5, an important document, but its accuracy and veracity was not explored by the prosecution when it had an opportunity to do so.  Therefore at the end of the day, there is a lurking doubt as to whether the conviction is safe and satisfactory.  The appeal is allowed, the conviction is quashed and the sentence is set aside. 

18.  If the Appellant has paid the fine it shall be returned to the Appellant.