THE QUEEN v. PAUL KIN SEN, LIWANPO

Headnote

A direction as to knowledge, if inferred, providing corroboration need not concern itself with reference to the facts from which knowledge might be inferred as though those facts were the evidence which might be corroboration. Where knowledge can be inferred from proven facts and such knowledge, if inferred, would be capable of providing corroboration of the evidence of accomplices, the judge properly referred to the inferred knowledge and not to the facts when directing the jury as to the matters capable of providing corroboration.

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JUDGMENT

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Power, J.A.:

1. This is the judgment of the Court.

2. The applicant was charged with four counts of false accounting and one of publishing a false statement. After trial before Duffy J. and a jury he was found guilty on 3 counts of false accounting and on the count of publishing a false statement. He was found not guilty on one count of false accounting. He was sentenced to imprisonment for seven years on each of the counts of false accounting and to seven years on the count of publishing false statement. All sentences were ordered to be served concurrently. He now appeals against both convictions and sentences.

3. The verdict of not guilty on the second count was referred to during the appeal. The suggestion was that this might in some way indicate confusion in the minds of the jury as to some areas of summing up. It was not, however, suggested that it constituted an inconsistent verdict. We were, in the event, satisfied that nothing can properly be made of this matter.

4. The first count charged that he, together with Oen Yin Choy and Lee Yue Wing, on or about 27th July 1984 with a view to gain for himself or another, falsified a document, namely a credit proposition form by making a misleading, false or deceptive entry therein insofar as it purported to show that a bona fide loan facility of HK$60m had been granted to P.T. United Roxy Crown Corporation.

5. The second count alleged a similar falsification by the applicant and One on or about 14th August 1984 with regard to a loan facility of HK$50m to P.D. Ira Sari Utama.

6. The third count alleged a similar falsification by the applicant, Oen and Lee on or about 10th September 1984 with regard to a loan facility of HK$50m to F.A. Gaya Setia Baru.

7. The fourth count alleged a similar falsification by the applicant, Oen and Lee on or about 9th October 1984 with regard to a loan facility of HK$50m granted to P.T. Prima Kartika Unggul.

8. The fifth count against the applicant alone alleged that he, with intent to deceive members of a body corporate, the Union Bank, concurred in publishing the annual report thereof for the financial year ending 31st December 1984 with knowledge that it was misleading, false or deceptive insofar as it stated that the figure of HK$1,486,411.512 was attributable to advances to customers and other accounts.

9. The tortuous route which led to these counts commenced in 1974 when the Union Bank headed by Oen Yin Choy set up an Asian Currency Unit Deposit System - shortly called the ACU System. This purported to be an offshore deposit system interest from which would not be subject to Hong Kong tax. Each depositor was presented with a Certificate of Deposit which set out the amount of the deposit and stated that it would be placed with a correspondent overseas bank. This was, however, not in fact done. From 1974 to 1978 the deposits were credited to the account in the Union Bank in Hong Kong of Nasa, an Indonesian company. Remittances were from time to time made therefrom to that company in Djarkarta. In 1978 an account, also in the Union Bank in Hong Kong, of a second Indonesian company, PTUCC, was brought into the scheme. Both companies did, at times, remit money back to their Hong Kong accounts but overall the remittances to Djarkarta were in excess of the amounts remitted back.

10. It was the Crown's case, and this does not seem to have been contested, that the two companies operated from the same address, that they had no assets and that they were for all practical purposes the same company.

11. The applicant was the No.2 officer in the bank being junior only to Mr. Oen Yin Choy. He was aware at all times of the nature and operation of the ACU system. He was the one directed to deal with the bank auditors and it was he who kept them in the dark in relation to the system. He frankly admitted that he had lied to them over the years.

12. Each ACU depositor on maturity was entitled to the return of his money plus interest at 12.8%. These payments were, in fact, made from monies which flowed into the accounts from new depositors. The scheme, as it was being operated, was, therefore, dependent upon a continuing volume of deposits.

13. By 1979 there was what was described as a "hole" in the ACU system of $96m. Such a "hole", given the transfers of money to Indonesia and the rate of interest paid out to the ACU depositors, which was higher than that paid on the money in the two accounts, was, clearly, inevitable. By 1982 the total amount of deposits was HK$938m but the amount that was actually in the Nasa and PTUCC accounts was only HK$520m - a shortfall of HK$418m. The applicant was aware of this.

14. Allan Aw who joined the bank in September 1981, gave evidence that he established a system whereby ACU system deposits were routed through an American bank named Trans- National. This method was, it appears, adopted to give the transactions a semblance of respectability. The applicant continued to be aware of and involved in the system during this period.

15. In 1982 the Hong Kong Government abolished interest tax on Hong Kong dollar deposits making the whole ACU system very much less attractive to investors. Indeed, this change was fatal to the scheme, as it was being administered, as the money being deposited from which it was intended that depositors would, in due course, be paid rapidly fell below the amount that would be needed to make such repayments.

16. By June of 1983 the Nasa and the PTUCC accounts were overdrawn in the sum of HK$129m and the amount of ACU deposits was HK$402m. There was, therefore, an overall deficit of HK$531m. The seriousness of the position by this time can be gauged from the fact that the Union Bank shareholders funds were only HK$530m. The applicant was aware that there was a major problem. The bank also by that time appears to have been in breach of s.23 of the Banking Ordinance which limits the exposure of banks to particular classes of customers.

17. In August 1983, three fictitious loans were made to Indonesian companies. The moneys were routed through Trans-National Bank into the Nasa and PTUCC accounts and were used to pay out the ACU system depositors.

18. In November 1983 a further two fictitious loans were made for the same purpose. These loans totalled $227m. The applicant denied having any knowledge of these loans and was, indeed, the evidence revealed, on holiday in August 1983.

19. By Mid-1984 the two accounts were in overdraft to the extent of $220m and the ACU depositors were owed $194m. This made a total deficit of $414m. The shareholders funds were, in that period, ranging between $530m and $570m. The bank, by then, appears to have been in breach of the Banking Ordinance which requires that a bank must hold a minimum of $100m clear of liabilities in shareholders funds.

20. It was in consequence of this state of affairs that the four false loans, the subjects of the first four counts, were made and the statement, the subject of the fifth count, was published. The false loans were made for the same purpose as were those in 1983 - to provide money to pay out the ACU depositors. The statement was made to conceal the parlous state into which the bank's affairs had fallen.

21. The evidence of direct involvement by the applicant in the offences charged came from two bank officers, Ken Tjoeng and Lee Yue-wing. Allan Aw gave evidence that the applicant was aware of the five false loans, similar to those the subject of the first four counts, which were made in 1983. The trial judge directed the jury that they could treat all three witnesses as accomplices.

22. The applicant gave evidence in which he denied any knowledge of the false loans of both 1983 and 1984 and of the falsity. of the statement in the Annual Report. One prosecution witness, a Miss Angelina Hioe, gave evidence. which was favourable to the applicant as it suggested that he may have been kept in the dark as to the real nature of the loans. The real issue at the trial was whether the applicant had knowledge of the four false loans made in 1984.

23. The applicant was represented on appeal by Mr. Scrivener Q.C., Mr. Corrigan Q.C. and Mr. Lunn. Ground 1 of the Perfected Grounds of Appeals attacks the propriety and adequacy of the direction as to corroboration. This was an issue of considerable importance as evidence of direct involvement in the 1984 loans came from accomplices Tjoeng and Lee and in the 1983 loans from accomplice Aw. Ground 2 alleges a misdirection in which the judge usurped the function of the jury as arbiters of fact. Ground 3 alleges a failure to direct as to the limited use that could properly be made of evidence which might, without such a direction, have worked to the prejudice of the applicant.

24. Mr. Scrivener referred us to D.P.P. v. Kilbourne (1973) 57 C.A.R. 381, D.P.P. v. Hester (1973) 57 C.A.R. 212 and The King v. Baskerville [1916] 2 K.B. 658. there was no issue taken with the general statements to which he made reference in those reports. de relied particularly upon a citation from Lord Reading C.J. in The King v. Baskerville at 665 where he said:

"What is required is some additional evidence rendering it probable that the story of the accomplice is true and that it is reasonably safe to act upon it."

He submitted that this indicated that there must be evidence which gives support to the evidence of an accomplice and submitted that it was the duty of the judge to indicate to the jury what this evidence was and the way in which it supported the evidence of that accomplice.

25. He referred also to Barry Alexander Beck (1982) 74 C.A.R. 221 and to the words of Ackner L.J. at 229 where he said:

"The submission may be summarised in this way: that evidence is only capable of amounting to corroboration if and in so far as it directly corroborates a piece of evidence given by the accomplice. Thus, if on a particular aspect of the case the accomplice says nothing incriminating the accused, other evidence on that aspect of the case, particularly if it is inconsistent with what the accomplice has said, is incapable of amounting to corroboration, however clearly and strongly it may point the finger of guilt at the accused.

 

We are quite unable to accept this submission which in our judgment is wholly unsupported by authority. The leading case on the subject of corroboration remains Baskerville (1916) 12 Cr.App.R. 81, 91; [1916] 2 K.B. 658, in which Lord Reading C.J. said that it must be: 'independent testimony which affects the accused by connecting or tending to connect him with the crime. In other words, it must be evidence which implicates him, that is which confirms in some material particular not only the evidence that the crime has been committed but also that the defendant committed it.' The other case to which reference must be made is Mullins (1848) 3 Cox C.C. 526 in which it was said [by Maule J. in summing-up to the jury at p.531], in our judgment correctly, that corroboration does not mean that there should be independent evidence of that which the accomplice relates, otherwise his testimony would be unnecessary, as it would merely be confirmatory of other independent testimony."

26. Mr. Scrivener submitted that this passage makes it clear that the evidence capable of being corroboration must be evidence which implicates the accused in the crime. It was his submission under Ground 1(b) that matters which the judge had told the jury could be corroboration could not possibly be so as they did not tend to connect the applicant to the crime.

27. Mr. Scrivener also referred to R. v. Hills (1988) 86 C.A.R. 26. He laid particular stress upon this report as he submitted that it dealt with a very similar error on the part of the trial judge there. The judge had there listed 13 circumstances which he identified as possible corroboration. The Appeal Court was satisfied that some of the circumstances could not be properly regarded as possible corroboration because they were either dependent upon the evidence of the accomplice or did not, without regard to the evidence of the accomplice, sufficiently go towards proving guilt. As it was not clear upon which of them the jury had relied whether upon those that could properly be said to be possible corroboration or upon the tainted circumstances the court was satisfied that there had been a material misdirection. The Lord Chief Justice went on to say at p.31.

"No doubt many of the 13 items listed by the judge were evidence of circumstances which served to cast grave doubt upon. the case being put forward on behalf of the appellant. If the judge had made use of that evidence in that way rather than erecting it into potentially corroborative material, no complaint could legitimately have been made."

28. It was the submission of Mr. Scrivener that the judge in the present case had fallen into the same error by referring to, what Mr. Scrivener identified as, 23 circumstances which, although admissible and perhaps capable of casting grave doubt upon the case of the applicant, were not such as would constitute corroboration. We shall deal further with this aspect of the matter when we come to Grounds 1(a) and (b).

29. We turn now to the summing up.

30. The trial judge, at p.6., said to the jury:

"However, you may draw inferences from the facts you find to be proved beyond reasonable doubt, but you must be careful to ensure that the inferences are reasonable ones. And when drawing inferences of guilt from facts, you must be satisfied that the inference you draw is the only reasonable inference or that the facts you find to be proved lead to one conclusion only."

Having, at p.12, explained the nature of the charges the trial judge said:

"To summarize, there is no dispute that these credit proposition forms were materially falsified in that they created fictitious loans. There is no dispute that they were both made for and required for accounting purposes. The defendant had told us that he was a party to making the entries on the credit proposition forms. I have defined the term 'dishonestly' for you and also the expression 'with a view to gain for himself'. Your task, therefore, is to determine whether he knew, the defendant knew, the credit proposition forms were creating fictitious loans, and if you accept that he did and was acting dishonestly in so doing and with a view to gain for himself, and if you are satisfied of these matters beyond a reasonable doubt, then you would convict him of each of the first four charges and indeed of the 5th charge. Remember, you must treat each charge separately and each one represents a separate verdict. If you have any reasonable doubt about these matters in relation to all or any of the charges, then you must acquit the defendant of the charges." (Our emphasis)

31. The judge went on to give an accomplice warning telling the jury that it would be dangerous to act upon the evidence of an accomplice witness unless that evidence was corroborated in some material way. He then, at p.16, told the jury:

"Nevertheless, although I have given you a warning about the danger of acting upon the evidence of an accomplice without corroboration as that is what the law in its wisdom requires me to do, that does not mean that you cannot believe these accomplices and act upon their evidence in the absence of corroboration, so long as you keep my warning in mind. If after looking at the evidence of these accomplices in the context of the whole case, that is all the other evidence, including the defence evidence, if having looked at it in that context you are satisfied that, despite the warning that is given to you, you find these witnesses, or one or other of them, reliable and credible, or at least partly reliable and credible, then you can act upon that evidence which you find to be reliable and credible without corroboration, so long as the warning is still in the forefront of your minds."

Objection is taken to this direction in Ground 1(d). It is suggested that the judge wrongly told the jury that they could act upon the evidence of a witness whom they considered was partly reliable. It was conceded that the judge may well have meant to direct the jury that they were entitled to act upon a part of the evidence of a witness the totality of whose evidence they did not accept. Having given consideration to the words used and bearing in mind the passage set out below which followed shortly thereafter we have no doubt that the jury must have understood the judge to be referring to such part of any witnesses' evidence which they considered to be reliable. The judge, almost immediately thereafter, at p.17, put the matter beyond any doubt by saying:

"At any rate you must look at each of them and decide, in the light of my warning, if you are going to believe what they say or part of what they say without corroboration, or that you require corroboration in each case or one or other case."

32. The judge, when he came, at p.19, to deal with the admissions from the applicant that he knew that the ACU system was a sham and the evidence from Allan Aw that he knew of the fictitious loans in 1983, which the applicant denied, said to the jury:

"But it is vital that you note that, if you do accept it (i.e. the evidence against him regarding the 1983 loans), you must not conclude therefore that the defendant must have been a knowing and willing party to the creation of the 1984 loans. That is not the purpose for which that evidence was put before you. It was put before you in the same way as the evidence of the development of the ACU system was put before you, to persuade you that the defendant had been involved in a sequence of events which culminated in 1984 in the Union Bank being in a perilous financial state which, if revealed, might lead to the bank's downfall. The prosecution say that that evidence is therefore relevant to what was the defendant's state of mind and knowledge when it came to 1984 and the creation of the four fictitious loans then created." (Our emphasis)

33. We will refer again to this passage when considering Grounds 3(a) and (b).

34. The judge went on, at p.21, to remind the jury again of the real issue before them saying:

"Indeed as I think I have already mentioned, all that is really left for you to determine is whether or not the defendant knew these loans were false, whether he did what he did to keep his job and benefits as I have directed you, and whether he acted dishonestly as I have defined that term. All the other matters in relation to the charges, all the other necessary ingredients of the charges are not in dispute." (our emphasis)

Again, at p.31, he said:

"And remember that the factual question you must ask yourselves is whether the defendant knew these loans were false and not whether the defendant was No.2 in the bank." (Our emphasis)

35. The direction, at p.37, dealing with the evidence capable of corroborating the evidence of the accomplice witnesses, upon which attack - the main thrust of the appeal - is launched in Ground 1, is as follows:

"What I say now relates to the evidence of all three accomplices, and I will tell you that there is no single piece of corroboration - no single piece of evidence which provides corroboration for any of these witnesses.

 

            I say there is no single piece of evidence because you may in this case only find corroboration from a combination of facts and circumstances. Whether you are prepared to treat that as corroboration is for you to decide. But I tell you that corroboration can be obtained by looking at a number of pieces of evidence, each on its own certainly not conclusive of the defendant's involvement with the offences, but which taken together might tend to show the offences were committed and that the defendant committed them. I used the word 'might' because whether they do or not is for you to decide. Remember that corroboration needs to be evidence in this case independent of the suspect witnesses and tending to prove that the offences were committed and that the defendant committed them.

 

            So what you are looking for is evidence that the four loans were false, the defendant knew that, and that he falsified the various credit propositions knowing that and acted dishonestly with a view to gain for himself, all of that in relation to the false accounting charges, and in relation to the 5th charge that he knew the loans were false but despite that as a director published the annual report for the financial year 1984, a fact he has admitted.

 

            Keep all that in mind. That is what you are looking for when we talk about corroboration in this case. Keep that all in mind and look at the evidence. I will direct your mind to those areas of evidence which taken together are capable of providing corroboration." (Our emphasis)

36. The trial judge then set out matters, admitted by the applicant when he gave evidence, which indicated his knowledge of the workings of the bank and of the deceit practiced with regard to the ACU system. He set these matters against the background of facts relevant to the knowledge of the applicant which were either admitted or not contested. We shall for ease of reference refer to this as "the judge's outline". He then, at p.42, said:

"That evidence - the whole body of evidence which I have outlined for you, you may think, is capable of establishing that the defendant was aware of the crisis at the bank caused by the ACU system, that the defendant was involved with the false loans from 1983 and 1984, and as the bank's liaison with the auditors had to know what was the real situation in relation to these loans, and that what he did  was dishonest and he did it to keep his job.

 

            Whether in fact, that evidence does establish these matters is for you to decide. As I nave already told you, no one piece of evidence can lead you to that conclusion that the defendant knew the whole story. But you may, if you think it right, looking at the whole body of evidence, draw the inference that he knew, so long as you are satisfied that that is the only reasonable inference you can draw.

 

            If you come to the conclusion that there is another reasonable inference you can draw, or if you are in some doubt about that, then obviously you must not draw the inference of .guilt against the defendant from consideration of that body of evidence.

 

            Do not look for other corroboration in this case. You will not find it. And even if you think you have, you must accept my directions on this matter and regard as capable of being corroboration only what I have had mentioned." (Our emphasis)

37. The first attack upon this direction is that the judge failed to indicate the evidence which was capable of corroborating the evidence of each of the accomplice witnesses separately and by reference to the evidence of those witnesses. (Ground 1(a)) It was submitted that the judge was required to refer to the evidence capable of corroborating the accomplice evidence by making reference to the specific evidence of the accomplice witness which it was capable of corroborating and that, in taking the course he adopted, he failed to link the relevant independent evidence with the evidence which it was capable of corroborating and that this was fatal.

38. Mr. Scrivener, following the approach in R. v. Hills, broke the judge's outline into 23 circumstances and submitted that not only were these circumstances not related to the evidence of each of the accomplices in a way which indicated how they were capable of corroborating that evidence but also that, whether taken individually or collectively, they were incapable of corroborating that evidence as they were not capable of connecting or tending to connect the applicant with the offences. We are satisfied that this was not, in the circumstances of this case, a proper approach to the judge's outline.

39. This becomes apparent, in our view, when an examination is made of the words used by the judge when telling the jury of the nature of the corroboration for which they must look. Having told the jury at p.38, that corroboration must be independent evidence, he said:

"So what you are looking for is evidence that the four loans were false, that the defendant knew that, and that he falsified the various credit propositions knowing that ......"

He was clearly here telling the jury that the evidence capable of corroborating the evidence of the accomplices was evidence that established knowledge of falsity on the part of the applicant. He then told them that he would direct their minds: "to those areas of evidence which taken together are capable of providing corroboration" that is capable of establishing knowledge on the part of the applicant that the loans were false. The judge was not, we are satisfied, when, in the outline, tie-set out the evidence capable of providing corroboration, delineating 23 circumstances of corroboration. What he was doing was outlining evidence from which the jury could infer knowledge on the part of the applicant. Having outlined that evidence he said to the jury, at p.42, that the

"whole body of evidence which I have outlined for you, you may think, is capable of establishing that the defendant was aware of the crisis at the bank caused by the ACU system, the defendant was involved with the false loans of 1983 and 1984, and as the bank's liaison with the auditors had to know what was the real situation in relation to these loans,........"

40. Mr. Scrivener launches a very strong attack on these words suggesting the judge was here usurping the function of the jury and telling them that if they accepted the evidence outlined, that established guilt. We are satisfied that this is not a fair way to interpret the words used and the jury would not have understood them to have such meaning. What the judge was saying was that this evidence was capable of establishing that the defendant was "aware", that is "knew", of the crisis and was knowingly involved with the false loans of both 1983 and 1984. In the following paragraph he explicitly told the jury that they could arrive at the conclusion of awareness and involvement if they were prepared "to draw the inference that he knew.......". The paragraphs taken together contain a proper direction that the facts outlined were capable of supporting the inference of knowledge. We see nothing in the words used which would give any support to the submission that the judge was here somehow usurping the function of the jury. We are satisfied that what he was telling them, and what they must have understood him to be telling them, was that if, upon the basis of the facts outlined, they were satisfied that they could draw the inference of knowledge, then that inference was capable of corroborating the evidence of the accomplices.

41. We compare this situation to that in which a defendant has made an admission of guilty knowledge to a third party. In such a case the judge could properly direct the jury that such an admission of knowledge was capable of corroborating the evidence of any number of accomplices even though the evidence of each differed from that of the others and implicated the defendant in different aspects in the offence. The judge could not do more in such circumstances than simply state that the admission of knowledge was capable of corroborating the evidence of the accomplices. The evidence of such an admission would not be capable of being broken down and linked to the evidence of each accomplice. In the outcome all that could be said to the jury was that if they were satisfied that the defendant had made the admission then that was evidence capable of corroborating the evidence of each of the accomplices.

42. Mr. Scrivener also makes complaint of the passage, which followed shortly after the directions as to corroboration, where the trial judge said:

"However, if you reject the defendant's explanations and are prepared to draw the inference from the facts I have outlined for you that the defendant was involved in the creation of these loans knowing the loans were false and acted dishonestly to keep his job, then you could convict the defendant without the need to have regard to the evidence of the accomplice."

He suggests that the judge was again usurping the function of the jury by telling them that if they accepted the facts he outlined, they must find the defendant guilty as charged. This was not, we are satisfied, what the trial judge was saying. He was telling the jury that if they were prepared to draw the inference of knowledge from the facts outlined then that would be sufficient of itself to sustain a conviction. This was a perfectly proper observation which in no way usurped the function of the jury. The judge plainly left it to them to determine whether or not they were prepared to draw the inference.

43. It is the further submission of Mr. Scrivener that the facts in the judge's outline are not capable of supporting the inference of knowledge. We cannot agree. We are satisfied that the facts outlined were capable of sustaining such an inference.

44. Ground 1(b) lists six facts which it says were not capable of being corroboration. This ground falls away given the approach which, in our view, was taken by the trial judge. As we have already said he was not dealing with individual facts which were capable of being corroboration but was outlining facts, not in issue, from which a inference of knowledge could be drawn which inference was capable of corroborating the evidence of the accomplices.

45. Ground 1(c) complains that the trial judge did not direct the jury correctly on the facts as to the defendant's involvement in the valuations for the 1984 loans. We nave examined the portion of the transcript to which our attention has been directed and upon which that direction was based and we are satisfied that there was no misstatement of fact.

46. Ground 2 taxes issue with the direction of the judge, at p.44, when he said:

"If you don't want to accept the accomplices without corroboration, them I have told you what is capable of being corroboration from that whole body of evidence I outlined, in this case that body of evidence is a combination of facts and circumstances. If you think you can conclude from these, that body of facts and circumstances, that the defendant knew the loans were false when he helped to create them and was acting dishonestly to keep his job and find you could reach no other reasonable conclusion from these facts and circumstances, then that would not only be capable of corroborating the accomplices but would be enough on its own for you to convict the defendant on all charges."

Mr. Scrivener submits that what was sufficient evidence for conviction was a matter for the jury to determine. It was certainly a matter for the jury to determine what evidence they accepted but it was, in our view, quite proper for the judge to direct the jury that if they were satisfied to draw an inference of knowledge on the part of the applicant as to the false loans then, knowledge being the only issue, that would be on its own be enough for them to convict on all charges. We do not consider that there was any misdirection in this regard.

47. Ground 3 states that in view of the prejudicial evidence relating to the ACU system and the 1983 loans, the judge should have directed the jury that it did not follow from the applicant's admission of involvement in the ACU system, admitted lies and, if the jury so found it, dishonest involvement in the 1983 loans that he was guilty of the offences charged. We are satisfied that the trial judge did make this plain to the jury when he told the jury, in the passage at p.19 to which we have already made reference, that the admission of involvement in the ACU system and the evidence as to knowledge of the 1983 loans was not evidence before them to assist them to "conclude therefore that the defendant must have been a knowing and willing party to the creation of the 1984 loans."

48. We are satisfied that the judge dealt properly and fairly with this evidence. He referred, as he was entitled to, to the matters in the outline when directing the jury that it was open to them, hearing all of those matters in mind, to infer guilty knowledge. The jury was made fully aware that this potentially prejudicial evidence could not of itself establish guilt but could only be used as part of the evidence establishing the background from which knowledge might be inferred.

49. Nothing has been raised to establish that the trial judge was wrong in the directions which he gave to the jury and the application must therefore be dismissed.

Silke, V.-P:

Sentence:

50. Having  dismissed the application for leave to appeal against conviction, we are now concerned with the matter of sentence.

51. The sentence passed by the trial judge was one of 7 years' imprisonment concurrent on each of the four counts upon which the applicant was convicted. It is the main contention of the applicant that the judge fell into error in taking as a starting point a maximum of 10 years. This is conceded by the Crown because the Theft Ordinance was amended in 1986, in its section 19, to increase the maximum penalty which then existed of 7 years to one of 10 years. These offences were committed in 1984. There would seem to have been some misunderstanding in the Court below because the present maximum, and the alterations, were drawn to the judge's attention by counsel then appearing for the applicant and who appears before us today. That being so, clearly we are left at large in relation to sentence.

52. The trial judge said that he did not intend to impose the maximum sentence of 10 years and thus came to his basis of 7 years' imprisonment. In passing the sentence he did he bore in mind that the applicant was a bank director, that he was a professional accountant and that he was in a position of trust. He also took into account that the applicant was not the prime mover - that was Mr. Oen Yin Choy - and he said that he thought the maximum should be reserved for a person of Mr. Oen's status. He also took into consideration that the applicant had obtained no direct financial benefit, that is no money into his pocket. He had of course kept his job.

53. He clearly directed his mind to the issue of ordering the sentences to run concurrently. The trial judge took the view that they were all part and parcel of a "single cover up operation", as he termed it. We take the view that he was right in so finding, for the fifth count, which was separate from the other three counts upon which the applicant was convicted, was something which was bound up with the other three although strictly not coming under the one transaction rule. We are not prepared to depart from the concurrent nature of these sentences.

54. Bearing in mind all the matters that the trial judge took into consideration, we think that we should also pay attention to them and follow the approach which he adopted. The maximum sentence being in effect 7 years' imprisonment, we think sentences of 5 years' imprisonment on all counts would be appropriate.

55. The application for leave is therefore granted, we treat the hearing as the hearing of the appeal and allow the appeal, set aside the sentences imposed on counts 1, 3, 4 and 5 and impose on each of them concurrent sentences of 5 years' imprisonment.