THE QUEEN v. TAI SIN FAI

---------------------

H E A D N O T E

---------------------

The least to be expected of a District Judge's Reasons for Verdict is a clear indication that the defence has been given adequate consideration.

-----------------

----------------------

J U D G M E N T

----------------------

Bokhary, J. delivered the judgment of the Court :-

1. This is an application for leave to appeal against conviction. The defendant faced 15 charges before Deputy Judge Surman in the District Court. Five charges - the lst, 2nd, 4th, 14th and 15th charges - were of evasion of liability by deception, contrary to section 18B(1)(b) of the Theft Ordinance, Cap. 210. The remaining ten charges were of obtaining property by deception, contrary to section 17(1) of that Ordinance.

2. The defendant was acquitted on three charges, the 1st, 3rd and 12th charges. He was convicted on April 20, 1989, on the remaining twelve charges. The acquittals on the 1st and 12th charges followed a ruling that the defendant had no case to answer on either - the Crown conceding on the 1st charge. The acquittal on the 3rd charge came at the end of the whole case. More will have to be said in due course about that acquittal. That is so for these reasons : First, it is contended that the acquittal on the 3rd charge - an obtaining charge - rendered all the convictions on obtaining charges - namely, those on the 5th to 11th and the 13th charges - perverse and inconsistent. Secondly, it is contended that the findings which it is said are to be read into the obtaining acquittals left no or no sufficient evidence to justify the obtaining convictions.

3. Turning to the facts, they appear, shortly stated, to be as follows: The defendant is a diamond dealer. He operated through a limited company, Hope Warm Jewellery Company Limited which, on any view, appears to have been his alter ego since he held all but one of the 300,000 shares issued in the company and was one of its two directors, the other director being the gentleman who held the one remaining share and who, the defendant admitted in cross-examination, had never taken an active part in the company's affairs.

4. There is a marked similarity between all the charges. As we have indicated, there were two types of charges, those of obtaining and those of evasion. In the case of each charge of obtaining on which the defendant was convicted, the allegation is that he had, with the intention of permanently depriving a diamond merchant of certain diamonds, dishonestly obtained the diamonds by falsely representing that the post-dated Hope Warm cheque or cheques which he gave the merchant for them would be honoured upon maturity.

5. In the case of each charge of evasion on which the defendant was convicted, the allegation is that he had, with intent to make default on an existing liability to pay a diamond merchant for diamonds, dishonestly induced the merchant to wait for payment by falsely representing that the post-dated Hope Warm cheque or cheques which he gave to the merchant for them would be honoured upon maturity. All the cheques were in the event dishonoured. Cheques were given on various dates in June, July and August 1987. Their maturity dates were in August and September that year. Millions of dollars were involved.

6. The defendant's case included this background : On August 3, 1987, in Taiwan he was, it was his case, given two cheques : one dated August 3, 1987, for Taiwan $18,000,000 and another post-dated to August 13, 1987, for Taiwan $29,000,000. Bath were dishonoured : The first on August 4, 1987, and the second on August 14, 1987. Had they been met the resulting funds would have been transferred into the accounts on which the cheques the subject-matter of the charges had been drawn and would have been sufficient to back those cheques. That was the defendant's case or part of his case.

7. The learned Deputy Judge considered first of all the cheques the subject-matter of the 2nd, 4th, 14th and 15th charges, all of evasion. Those cheques were all given after August 14, 1987, by which time both the Taiwanese cheques had been dishonoured. In convicting on the 2nd, 4th, 14th and 15th: charges, the learned Deputy Judge said:-

"Concerning these I am quite satisfied so that I am "sure about it that the Defendant well knew he had no sensible or real prospects of finding the money to fund those cheques. Those cheques were drawn quite recklessly without regard to whether there were any chances of them being met or not, and indeed when there was every prospect that they would not be met. To issue cheques against the prospect of finding an elusive defaulter in a foreign country is in my view both dishonest and deceitful. Those particular charges are proved."

8. It is not clear whether the judge actually held that the merchants had indeed been induced to wait for payment. Certainly, is not clear that he applied his mind to the very many factors bearing upon that issue. Even on this basis alone, we do not regard the convictions on the evasion charges to be either safe or satisfactory.

9. Next, the judge dealt with the cheques, the subject-matter of the 5th to 11th and the 13th charges, all of obtaining. Those cheques were all given in June and July, before the defendant received either of the Taiwanese - cheques. In convicting on the 5th to 11th and the 13th charges, the judge said this:-

"In the present case the existing facts on dates before 3rd August 1987 is that there was no certainty that there would be money forthcoming in Taiwan in the normal course of business. For the cheques at charge 5 (issued on 22.7.87) the Taiwan transaction had not taken place; same for cheque at charge 6 (issued on 22.7.87) and the one at charge 13 (issued on 20.7.87) and the cheques at charges 7 -11 (all issued during June 1987)."

Having said that the judge went. on to conclude in these terms:-

"All these charges are proved because. I am quite satisfied so that I am sure that the cheques preferred by the Defendant was to either dishonestly induce the respective Indian trader to part with his diamonds or dishonestly obtained them by deceiving the Indian traders that the cheques would be honoured.

(I do not accept that the defendant told any of the Indian Diamond Merchants that they should refrain from presenting the post dated cheques until he received his money from Taiwan)."

10. As we said earlier, in challenging his obtaining convictions, the defendant seeks to rely on his acquittal on the 3rd charge. Let us see what the judge said in acquitting on the 3rd charge. He said: -

"This was issued on 3.8.87 - the date that the first Taiwanese cheque was issued and before it was dishonoured on 4.8.87. I will give the benefit of that to the Defendant on the basis that he considered it would be met, and enable him to meet his own issued cheque. He will be acquitted on this matter."

11. In so far as the defendant relies on inconsistency, there is a problem which arises in this way : The Crown has been able to say that the acquittal arrived at in the way in which the learned judge arrived at it is itself open to question. This is because it proceeds on the basis of some general reference to reasonable doubt, and appears to ignore the presumption contained in section 29(6) of the Theft Ordinance. The presumption provides that any person who obtains property by means of a cheque which is refused payment upon presentation on or after becoming due shall, until the contrary is proved, be deemed to have obtained the property with knowledge that such cheque would not be honoured.

12. Be all that as it may, the crucial issue which the learned judge had to decide was whether the evidence was such as to satisfy him that the applicant's actions were dishonest. In relation to the 5th to 11th charges and the 13th charge he said that he was so satisfied. That finding, is however in sharp contrast to other things which he said. In relation to the Crown's allegation that the whole system of dealing with the diamond merchants was dishonest, he said :-

"The prosecution has suggested that the defendant set up his company with fraudulent intent and that throughout the defendant had the intention to abscond and leave his creditors without their money. The evidence I have heard does not persuade me that either of these allegations have strong foundations. Indeed there is positive evidence (as defence counsel points out) that the defendant did not abscond and positive evidence that he had unblemished dealings before 1987."

That must also be coupled with the finding in relation to the 3rd charge. It was the applicant's evidence that he drew the cheque which is the subject-matter of that charge in Hong Kong and went to Taiwan on the same day expecting to be paid in cash. He did not at that time expect that he would himself receive post-dated cheques. If the learned judge, even bearing in mind the provisions of section 29(6) of the Theft Ordinance, thought that when the applicant drew that cheque he thought that he would be paid for the diamonds in Taiwan and would remit the funds back to Hong Kong to meet his own cheque on the due date, it is not apparent why he did not reach the same conclusion in relation to the other obtaining charges - or at least have a reasonable doubt about the matter. No reason is given to justify what, in the absence of some explanation, appears to amount to inconsistency.

13. We are satisfied for these reasons that the convictions on the obtaining charges cannot be sustained either. There were here many factors bearing on the question of dishonesty which required careful consideration; and the learned judge's Reasons for Verdict should have indicated first, that the question had received such consideration in relation to each charge; and, secondly, his thinking in distinguishing between the charges. We cannot regard these convictions as safe or satisfactory.

14. In the result : we treat the application as the appeal; allow the appeal against all the convictions, all of which we quash; and set aside all the sentences.