R v. SHUM CHU FUN AND ANOTHER

MA 800 of 1993

H E A D N O T E

A failure on the part of a magistrate to refer in his Statement of Findings to such evidence as there was about the Appellant's good character will result in the court assuming that the magistrate did not take the Appellant's good character into account. Whether the failure to take the Appellant's good character into account is fatal to the Appellant's conviction will depend on the facts and circumstances of each case. It will be fatal to the Appellant's conviction in a case whose the Appellant's credibility is an important ingredient of the case, and whose the Appellant is old enough to have offended before in a way similar to that alleged.

IN THE SUPREME COURT OF HONG KONG

(Appellate Jurisdiction)

MAGISTRACY CRIMINAL APPEAL NO. 800 OF 1993

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J U D G M E N T

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1. On 7th September 1993 at South Kowloon Magistrates' Court, the Appellants were convicted, after pleading not guilty, of an offence of obtaining property by deception. They were each fined $1,500.00. They now appeal against their convictions. At the conclusion of the hearing of the appeal, I said that their appeals would be allowed, and their convictions would be set aside, though I said I would give my reasons later. This I now do.

2. The Appellants are two women who were 19 years old at the time. The prosecution's case was that they had gone into a clothes shop. A1 decided to buy a vest there. She asked if she could pay by the electronic payment system ("EPS"). The shop did not have the facilities to accept payment by EPS, but had an arrangement with the shop next door to use its facilities. The proprietor of the shop, PW1, took the Appellants to the next door shop, and left them with the proprietor of that shop, PW2, telling him that the amount was $580. These facts were not disputed.

3. The crucial evidence was that of PW2. His evidence was that A1 gave him a Hong Kong Bank ETC card, but there was no response from the machine. She then gave him a Standard Chartered Bank Moneylink card. PW2 put that card through the machine, but the transaction was rejected. PW2 told A1 that, and handed her the receipt showing that the transaction had been rejected. A2 was next to A1 at the time. A1 was surprised. She said there was money in the bank, and no reason why the transaction should not go through. PW2 suggested that they return to PW1's shop and pay for the goods by cash. The Appellants then left the shop.

4. PW1's evidence was that having taken the Appellants to PW2's shop, she did not remain there during the transaction. After a while, the Appellants returned to her shop. Although it was A1 who had wanted to buy the vest, A1 waited at the entrance to the shop, though within earshot, and A2 came inside. She had what appeared to be a receipt from an automatic teller machine in her hand, and told PW1 "It's been settled". Thinking that payment had been made by EPS, PW1 gave the vest to A2. She was subsequently told by PW2 that the transaction had been rejected, and that was when she reported the matter to the police.

5. In these circumstances, the deception which it was alleged the Appellants had practiced was falsely representing to PW1 that the vest had been paid for, when they knew that it had not been. It was not alleged that the offence had been a premeditated one: after all, there was evidence that A1 had $9,383.90 in her Hong Kong Bank account, though only $325.63 in her Standard Chartered Bank account. The Crown's case was that the offence had been an opportunistic one, decided upon in the very short time between the Appellants leaving PW2's shop and returning to PW1's shop. When the Appellants realized that PW2 was not going to come back with them to PW1's shop, they decided to see if they could get away with the vest without paying for it, by pretending that the transaction had gone through in PW2's shop. Even on the Crown's case, though, the Appellants were taking a risk: what if PW1 had actually asked to see the receipt or if PW2 had come to the shop while they were still there? And in any event, if the Appellants had applied their minds to it, they would have realized that their chances of being found out were strong. The likelihood was that PW1 would eventually have realized that the vest had not been paid for, and that PW2's machine would have retained the number of A1's Moneylink card.

6. Both Appellants gave evidence. A1's evidence was that she could not remember which of the two cards she gave to PW2 first, but whichever one it was, PW2 told her it had been rejected. PW1 was still there. A1 then gave him another card, and it was while that transaction was going on that PW1 returned to her shop. PW2 then returned the card to A1, with the receipt (which she did not bother to look at) and said to her: "OK, you can go back over to the other side." It was not until she was contacted by the police that she realised that the second transaction had been rejected.

7. A2's evidence was that while A1 was dealing with PW2, she was looking at jewellery in the shop. She heard PW2 tell A1 that the card had been rejected, and heard him ask A1 for another card. She subsequently heard PW2 tell A1 that the two of them could go back, presumably to PW1's shop. She assumed that the transaction had been successful.

8. A vital question which was not explored in the evidence was whether any document has to be signed when a transaction for payment by EPS has been accepted. If, for example, a debit voucher has to be signed by the purchaser, and if A1 knew of that requirement, it would have been impossible for her to say that she thought that the transaction had been accepted. However, there was no evidence on the issue at all. I do not have any experience of payment by EPS, and I therefore cannot take judicial notice of what the practice may have been. I therefore make no assumption adverse to the Appellants on the issue.

9. It is plain that the crucial factual question in the case related to the conversation between PW2 and A1 after the second transaction. If his account of that conversation was correct, she must have known that the transaction had not gone through. If her account of that conversation was correct, she may well not have appreciated that the transaction had not gone through. After all, she would not be expected to look at the receipt if she thought that the transaction had been effected.

10. The magistrate correctly noted that the case turned on her assessment of the witnesses - in particular, PW2, A1 and A2. This was a case in which credibility was all important. PW2 impressed her as a witness of truth and reliability, but the Appellants did not. She believed PW2 and disbelieved the Appellants.

11. However, there was one vital matter which the magistrate did not refer to in her careful Statement of Findings, and that was the good character of both Appellants, despite the fact that they had both given evidence about their clear records and lack of previous convictions, and despite the fact that counsel for A1 had referred to A1's clear record in his closing submissions. Why, he asked rhetorically, would she risk all that for $580? Good character was an important ingredient in this case - both on the issue of the Appellants' credibility since they had both given evidence, and on whether they were likely to have committed the offence at all.

12. Two recent decisions of the Court of Appeal are relevant to the failure of Judges in the District Court to refer to the relevance of the Appellant's good character in their Reasons for Judgment. In R. v. CHAN Wu-nam (CA 274/92), the judge had merely referred to the Appellant's good character in the course of dealing with the Appellant's evidence. In the course of giving the judgment of the Court, Mortimer J. (as he then was) said:

All the more so in a case where, unlike CHAN Wu-nam, the magistrate did not refer to the Appellant's good character at all.

13. However, a different view was reached by another division of the Court of Appeal in R. v. YUE Pei-li (CA 347/92). In delivering the judgment of the Court, Bewley J. said:

I assume that Bewley J. meant by that that a judge is not required to say in his reasons for judgment that he gave himself a direction of good character.

14. YUE Pei-li was decided after CHAN Wu-nam, but since Bewley J. did not refer to CHAN Wu-nam, I assume that it was not cited to the Court. In R. v. LAW Chi-cheung (MA 696/92), I had to decide which of these two conflicting authorities I preferred. I said:

Ryan J. in R. v. LAU Kai-sing (MA 746/93) agreed with that view.

15. I do not know whether the magistrate weighed the Appellant's good character in the scales. It may be that she did. However, I cannot assume that she did. Her failure to refer to it in her reasons means that I must assume that she did not. Is that failure fatal to the Appellants' convictions? I agree with Stock J. when he said in R. v. McDade (MA 698/93) that much depends on the facts and circumstances of each case. That was a case of a 16 year old who had been convicted of indecent assault. Although Stock J. allowed the appeal on the basis of the magistrate's failure to refer to the Appellant's good character, he said:

16. In my view, the magistrate's failure to refer to the Appellants' good character is fatal to the Appellants' convictions. The magistrate herself regarded the credibility of the witnesses as central to the case, and the Appellants were old enough to have offended before if they had a propensity towards dishonesty. The fact that they had not been dishonest before was a factor to be taken into account in determining whether they acted in the opportunistic way alleged by the Crown. For these reasons, I allowed their appeals and set aside their convictions. I did not think that justice would be served by my ordering a retrial of their case before a different magistrate. The gravity of what they were alleged to have done can be gauged by the relatively modest fines which the magistrate imposed.