HKSAR v. LAM WAI YIP HUGO

CACC64/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 64 OF 2005

(ON APPEAL FROM DCCC NO. 988 OF 2004)

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J U D G M E N T

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Hon Ma CJHC (giving the judgment of the Court) :

1. The Applicant seeks leave to appeal against conviction and sentence.  On 26 January 2005, following a trial in the District Court before Deputy District Judge Andrew Chan, the Applicant was convicted of a charge of having custody or control of counterfeit currency notes.  The relevant notes were 1,474 HK$20 notes.  The alleged date of the offence was 21 June 2004.  On 8 February 2005, the Applicant was sentenced by Deputy District Judge Chan to a term of 45 months’ imprisonment.  The Judge adopted a starting point of 30 months and then enhanced the sentence by 50% under section 27 of the Organized and Serious Crimes Ordinance, Cap.455 (“OSCO”) to arrive at the total figure of 45 months.

The application for leave to appeal against conviction

2. In the Judge’s Reasons for Verdict, he records the prosecution case as essentially being the following : -

(1)	On 18 June 2004, the Applicant telephoned one Fu Mei Yee (PW1) whom the Applicant had known since about November 2003 (according to his evidence she was an acquaintance whom he occasionally met together with other friends) and asked her whether she could look after some Canadian currency for him.  A meeting was set up for 21 June 2004.
(2)	That day, PW1 went to the Applicant’s office.  She gave him $6,000 in cash which had been deposited into her account by him a few days earlier.  There, he also took out a plastic bag from his desk and produced a brown envelope containing 15 wads of $20 banknotes.  When PW1 queried the genuineness of these notes, the Applicant simply smiled.
(3)	The Applicant asked PW1 to keep the notes for eight to ten days for which she was to be paid $100 a day.  PW1 evidently agreed to this as she did take away the brown envelope containing the banknotes and stored them at her home.  Before she left the Applicant’s office, he also gave her another five $20 notes for her use.  She put these notes into a cardholder.
(4)	The next day, at a boat party (it was the Applicant’s birthday) the Applicant asked PW1 to return one of the five $20 notes to him which she did.
(5)	It was an admitted fact at the trial that on 29 June 2004, the police executed a search warrant at PW1’s home.  There, PW1 was asked about three $20 notes which were in her handbag.  When she was asked whether there were more, she took out the bag containing the $20 notes she was storing for the Applicant.  The bag contained 1,470 $20 notes.  In a drawer in her bedroom, another $20 note was found.  All these notes (1,474 in total) were counterfeit.
(6)	A search warrant was also carried out at the Applicant’s office.  A palm print and a sole print of PW1 were found on envelopes there.
(7)	On 6 July 2004, at an identification parade, PW1 identified the Applicant.

3. The Applicant gave evidence at the trial and also called two witnesses.  The Judge stated the defence case to be as follows : -

(1)	There was no dispute that the Applicant knew PW1 nor that PW1 met him at his office on 21 June 2004.  However, it was the Applicant’s case that the counterfeit money came from PW1 and had nothing to do with him.
(2)	According to the Applicant, the circumstances in which he came into contact with the money was as follows.  On 14 June 2004, PW1 asked the Applicant for a loan of $3,000.  He agreed and transferred this sum into her bank account.  She agreed to repay him within a week.  Three days later, on 17 June 2004, PW1 asked for another loan, this time for $7,000.  She was desperate and although he did not at first agree to the loan, he eventually did.  He said this when giving evidence :

“In the end, yes, because it seems to me that she was in a desperate situation.  She was almost come to tears.  Her ex-husband did not pay her maintenance and she had no money for the school fees or the kids.”

She apparently agreed to repay the loan on or before 22 June 2004.

(3)	On 21 June 2004, PW1 met the Applicant at his office and offered to repay him by using counterfeit money.  He was requested to launder this counterfeit money through his business.  He flatly refused.
(4)	On 22 June 2004, at the boat trip we have referred to earlier, the Applicant demanded repayment of the $10,000 lent to PW1.  Here the evidence of the Applicant’s two witnesses was relevant.  According to one (Tsang Hoi Yan - DW2) apart from saying that at no stage did the Applicant ask PW1 to return any of the false $20 notes, she testified to the Applicant having mentioned a loan of $10,000 to $15,000.  According to her, she was with the Applicant throughout the boat trip, even when he went to the washroom.  The other defence witness (Tsang Ka Wai - DW3) said more or less the same as DW2.  She too was with the Applicant throughout the trip except when he briefly left the boat to pick up a friend and collect some ice cubes.
(5)	On 23 June 2004, PW1 told the Applicant she could not repay the loan and asked him to reconsider her request for him to launder counterfeit money.  He became quite angry with her.  This was the motive for her to fabricate evidence against him.  In other words, he was framed.

4. In his Reasons for Verdict, the Judge, after setting out the respective cases for the prosecution and defence, then assessed the evidence before him.  This he did after reminding himself of the burden and standard of proof, the fact that the Applicant had a clear record and also that PW1 was a tainted witness and an accomplice.  He reminded himself of the need to treat PW1’s evidence with extreme caution.  He also recorded the fact that PW1 also had a criminal record involving several offences.

5. After assessing the evidence, the Judge found PW1’s evidence to be credible and reliable, and that the imperfections in recollection could be satisfactorily explained.  He found the Applicant’s version of events wholly unconvincing and he similarly rejected the evidence of DW2 and DW3.

6. Before us this morning and in the Perfected Grounds of Appeal, Mr Keith Oderberg (for the Applicant) has essentially made the following submissions : -

(1)	The evidence was such that the prosecution could not prove its case against the Applicant beyond a reasonable doubt.  Its case was as compatible with the Applicant’s version as it was with PW1’s.  The Judge just could not decide the case on credibility alone.
(2)	There was an effective reversal of the burden of proof.  Even worse, the evidence of the defence witnesses (including the Applicant himself) was subjected to a more rigorous and, it was said, illogical examination than that of the prosecution witnesses.  Mr Oderberg highlighted here the Judge’s comment that the evidence of the defence witnesses was “too perfect to be true” whereas for PW1, the Judge accepted her evidence notwithstanding imperfections.  The Judge was more willing to give her the benefit of doubt rather than the Applicant.
(3)	The Judge was wrong in analyzing the evidence.  Here, criticism is made, for example, of the Judge not attaching significant weight to the fact that none of the Applicant’s fingerprints had been found on the counterfeit banknotes, there being no evidence that the Applicant did not touch the notes nor of the fact that he was, say, wearing gloves.  The Judge was said to be wrong in treating the absence of fingerprints as merely being a neutral factor.  The Judge also made a factual error as to when PW1 withdrew $6,000 from her account.

7. In our view, none of these submissions has substance : -

(1)	The critical issue confronting the Judge was that of the credibility of PW1, the Applicant and the defence witnesses.  The prosecution case rested largely on PW1’s evidence and, if believed and if the requisite standard of proof was achieved, a conviction was justified.  The prosecution case, while some of the facts were common and consistent with the defence case, was of course starkly different to that of the defence’s.
(2)	We are not satisfied that the Judge fell into error by reversing the burden of proof.  He did no such thing.  Quite apart from correctly stating the applicable principles, he critically assessed the testimony of the witnesses.  In disbelieving the testimony of the Applicant, the Judge carefully analyzed just what was being asserted and subjected the evidence to notions of commonsense and believability.  The Judge’s assessment of the evidence has been extensively set out in his Reasons for Verdict and we see no reason to interfere with this assessment.  He gave reasons for his rejection of the Applicant’s testimony (and those of the defence witnesses) and these are fully justified in our view.  For example, he rejected as fanciful the notion that because the Applicant demanded repayment of the loan from PW1 on 23 June 2004, this was somehow the motive for her to frame him and this notwithstanding the fact that according to him, the Applicant had been generous enough to help PW1 at a time of need.  Similarly, in relation to the other defence witnesses, the Judge regarded it as unbelievable that they could have been with the Applicant all of the time during the boat trip (with the exception in DW3’s testimony of a brief absence on the Applicant’s part).  The trip lasted some 12 hours with over 30 people on board.  The rejection of the Applicant’s testimony and that of the defence witnesses was all in the context of the Judge having to be satisfied of the prosecution case beyond a reasonable doubt before a conviction could be established.  Despite Mr Oderberg’s reliance on some passages in the Reasons for Verdict, we are not convinced that the Judge erred in reversing the burden of proof or failing to apply the correct burden and standard.
(3)	Far from wrongly analyzing the evidence, the Judge did a commendable job.  The inaccuracy in recalling when the $6,000 was withdrawn from PW1’s account was a minor one (as Mr Goodman has submitted in his written submissions) but what was of greater significance was the fact that, despite her alleged poverty and desperate financial circumstances, PW1 should have withdrawn this amount to give to the Applicant at his office on 21 June 2004, a fact that was not challenged by the Applicant at trial.  As for the fingerprints, the Judge was right to treat this as a neutral factor.

8. For the above reasons, the application for leave to appeal against conviction is dismissed

The application for leave to appeal against sentence

9. The Applicant’s complaint here is against the 50% enhancement that was imposed by the Judge under OSCO.  Simply put, it was said there was no basis for the enhancement in sentence.

10. In his Reasons for Sentence, the Judge noted that the number of forged banknotes involved in the case (1,474) exceeded the total seizure in 2003.  That year the total of forged $20 notes that had surfaced was 999; in 2004, this had gone up to 2,542.  In terms of prosecutions, seven persons were prosecuted in 2003 involving 487 counterfeit $20 notes; in 2004, the number of prosecution was 2 (being the Applicant and PW1) involving, as we have seen, 1,474 counterfeit notes.  The figures for 2005 before the Judge revealed that 49 forged $20 notes had surfaced.  All these figures were proved in the form of statements from a police officer.

11. Mr Oderberg refers to the fact that despite the increase in counterfeit $20 notes since 1999 (from 327 having surfaced in 1999 to 2,542 in 2004), the number of prosecutions has dropped.  In 1999 and 2000, the number of prosecutions was 3 and 7 compared with 7 and 2 in 2003 and 2004, involving respectively 175 and 189 counterfeit $20 notes (in 1999 and 2000) and 487 and 1,474 (in 2003 and 2004).  The figures for 2005 were only for the time up to the date of sentence (8 February 2005) and therefore not necessarily indicative of the trend for 2005.

12. In our view, the Judge was entitled to look at the trend of the increase in volume of counterfeit notes and not just the number of prosecutions.  As the Judge said in his Reasons for Sentence : -

“The use of counterfeit currency undermines the confidence of Hong Kong currency system and Hong Kong as a financial city generally.  Hong Kong currency is not only used in the territory of Hong Kong SAR.  It is also commonly and widely used in Macau SAR, Guangdong Province ie other parts of China.  The integrity of Hong Kong currency is absolutely vital and must be protected.”

Seen in this light, the volume of forged banknotes is obviously relevant.  This was the approach of the Court of Appeal in HKSAR v Yip Kwok Fai, unreported, CACC306/2002, 5 November 2002, when looking at the question of enhancement under OSCO for counterfeit coins ($10 coins in that case).  There, Stuart-Moore VP said at paragraph 17 : -

“Furthermore, in the light of HKSAR v Cheng King-lung (above), an enhancement by 25% was properly imposed.  We should add that in respect of offences of this kind, we consider that in future a 50% enhancement would be justified.”

13. The Judge referred to this case in enhancing the sentence by 50%.  In our view, he was right to do so as a matter of principle.  Accordingly, the application for leave to appeal against sentence is also dismissed.