THE QUEEN v. HUNG KWONG PUI AND ANOTHER

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

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

J U D G M E N T

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

Cons, V.P., delivered the judgment of the Court:

1. HUNG Kwong Pui ("1st Defendant") pleaded guilty in. the District Court before Judge Leong to one charge of obtaining property by deception contrary to Section 17(1) of the Theft Ordinance, Cap. 210, and 14 charges of evading liability by deception contrary to Section 18B(l)(b). He was sentenced to three years on each of the charges, the sentences to run concurrently. Today he seeks leave to appeal against these sentences.

2. YUNG Siu Ming ("2nd Defendant") was charged jointly with the lst Defendant on the same charge of obtaining by deception and on the same first four charges of evading liability. He pleaded not guilty but after trial was convicted on all five and today seeks leave to appeal the convictions.

3. The two men were in business together running three companies trading in electronic goods. The 2nd Defendant was the sole owner of one company but was assisted therein by the 1st Defendant. Both were shareholders and directors of the other two companies. The charges arose from post-dated cheques, signed by one or other or both of them, which were not met in due course.

4. So far as the 2nd Defendant is concerned, it was not disputed that the property had been obtained or the liabilities evaded by means of the subsequently dishonoured cheques. The sole question was whether he had rebutted the presumption contained in Section 24(6)(a) of the Ordinance. His case was that he had an honest belief that the cheques would be met in due course.

5. As to the first charge he said that the goods were^., sent, after their receipt from the payee of the cheque, to China for processing as part of a contract for the manufacture and sale of radio sets, which contract was lost due to the defective state of the goods. He therefore told the payee not to present the cheque. In this respect he was supported by the 1st Defendant's evidence; who in addition said that when the goods eventually came back from China he sold them for his own account and privately pocketed the proceeds. The judge observed in his Reasons of Verdict that there was no documentary evidence to support that sale, or indeed the original contradt for the manufacture etc of the radios. In addition he noted that, throughout the-period during which the cheque was post-dated, the bank account of the company in question, which was one that was owned solely, by the 2nd Defendant, was in a poor state and was at no time sufficiently in credit to meet a cheque of the amount which had been given.

6. The cheques in the charges nos. 2, 3 and 5 were drawn on a company in which the 2nd Defendant said that he was no more than a 5% shareholder, responsible only for internal matters, and that he was a signatory for the account solely to fulfil the bank's requirements of two signatures; that the 1st Defendant was the major shareholder and responsible for the sales; that he knew that there were to be onward sales with regard to the three cheque s in question but he had not seriously checked them. Again the 1st Defendant's evidence supported that of the 2nd Defendant, and again the 1st Defendant said that he appropriated the proceeds of the onward sales without telling the 2nd Defendant, not even when the 2nd Defendant particularly questioned when the three cheques would be met. Again too the judge observed that there were no documents to support the suggestion of the onward sales and that the company's bank account had not been in good shape, with many large cheques being dishonoured.

7. Finally as to the 4th charge, the 2nd Defendant said the monies to meet the cheque were due from a particular customer of the lst Defendant, the customer at one stage having postponed payment, and that he trusted the lst Defendant to collect the monies in time. Once again the 1st Defendant said he pocketed the monies and then spent them himself. In this instance as well the judge noted the absence of any documents and the unsatisfactory state of the bank account of that company. And then he added:

"The general picture of the accounts of all the three companies involved is inconsistent with what the defendants expected me to believe i.e. they had sales orders from customers and they expected the proceeds from such sales to be collected to meet the date for payment of the cheques they had issued.

I do not believe the evidence of both defendants. Their demeanour in Court giving evidence added to my belief that they were not honest in their evidence. I find the 1st Defendant was trying to exonerate the 2nd Defendant by putting all the blame on himself and testifying that the 2nd Defendant had no knowledge of his misdeeds,in the belief-that because he has pleaded he cannot be worse off. I do not believe that the 2nd Defendant was an innocent participant in the issue of the cheques. I find he was fully aware of what was going on I find the 2nd Defendant has not on the balance of babilities rebutted the presumption that he had knowledge that the cheques would not be honoured when due."

8. Mr. Alderdice, who appears as he did below for the 2nd Defendant, has filed Grounds of Appeal to the number of three. With his usual frankness he accepts this morning that by them he is doing no more than attacking the assessment of credibility by the judge, and that as all the matters which he has mentioned to us were put as well to the judge below, the burden is on-him to satisfy us that no reasonable judge, having heard the evidence and having considered the matters put forward, could have come to the conclusion that the judge below did.

9. With every respect to him and despite all that he has urged upon us, we are unable to accept that contention and need say no more than that the application for leave to appeal against conviction is refused.

10. The judge, when giving his reasons for sentence upon the 1st Defendant, observed that he was responsible in all for 15 offences involving some $1.5 million in transactions which occurred within a period of only five months; he took into account the plea of guilty and accepted the 1st Defendant as having a clear record; he took note also of the fact that a prison sentence of whatever length would in itself be a shock to the 1st Defendant, and that there were several civil actions outstanding against him to recover the money taken. (We understand from Mr. Miller, who appears for the 1st Defendant today, that such actions are unlikely to produce any effective results. Nevertheless the judge concluded that an immediate custodial sentence was warranted, and with that we would agree. Indeed Mr. Miller has not suggested otherwise. What he does suggest is that the sentence of three years is too long. He draws our attention to the fact that the 1st Defendant is 36 years old has a clear record and for a long time was running a genuine business. He suggests that the Defendant's trouble arose from his addiction to gambling, and that being foolish he turned to dishonesty. We accept that these are proper factors for consideration, but even so we are not persuaded that the sentence of three years was excessive. Rather do we find it appropriate to the circumstances. The application for leave against sentence is therefore also refused.