R. v. WONG WING LUNG and Another

IN THE COURT OF APPEAL

1996, NO. 716
(Criminal)

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J U D G M E N T

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Wong, J.

1. The Applicants jointly faced 7 charges of Evasion of Liability by Deception contrary to S. 18B(1)(b) of the Theft Ordinance. The 1st Applicant, D1 faced two additional charges of the same offence. They were tried before Judge Britton in the District Court. After trial, the 1st Applicant was convicted of 8 charges (Charges 1-5, 7-9) and sentenced to imprisonment for 2 1/2 years. A suspended sentence was partially activated and ordered to be served consecutively. The 2nd Applicant, D2 was convicted of charges 1-5 and 7 and sentenced to concurrent sentence of 18 months on each charge. Both were acquitted of charge 6.

2. The Applicants seek leave to appeal against convictions.

3. The method of committing these charges followed the same pattern. The total value of the goods which the Applicants defaulted to pay amounted to $1.75 million. In about June or July, 1995, the Applicants set up a company called Yicking Industrial Ltd. and became registered directors and shareholders. The company bought goods ranging from plastics to calculator parts, chocolates and toys in Hong Kong and sold them to contacts in Mainland China at a profit. Things went on well until the middle of October when goods worth several million dollars were ordered, supplied and paid for.

4. Yicking maintained three bank accounts from which cheques were issued with the Shanghai Commercial Bank, the Hong Kong Bank and Sin Hua Bank.

5. Trouble began after the Applicants had entered into a joint venture with Chinese partners in Heng Yang, Hunan to provide "food and drinks, lodging, karaoke and gymnasium services". The joint venture was not connected with Yicking and the judge found that it was the intention of the Applicants to develop and finance the joint venture in China with money obtained from the sale of goods provided by innocent suppliers to Yicking.

6. In relation to charges 1, 2 and 3, King Union Enterprises Ltd. had been selling plastic materials to Yicking since July 1995 and up to September of that year payment was made by way of cash or cash cheques. In October, the 2nd Applicant requested that the price of goods to be settled by post-dated cheques and entered into a deed of guarantee that the 2nd Applicant would be personally liable for payment. Three cheques issued to King Union and signed by the 1st Applicant were dishonoured upon presentation. Goods supplied by King Union had in the meantime been sold to a mainland buyer and paid for.

7. Charges 4 and 5 involved the purchase of plastic raw materials from Gedquad Company Ltd. In early September, 1995 Yicking bought 240 bags of plastic raw materials from Gedquad and settled payment by cash on delivery. In the middle of October, a secretary of the company, acting on the instructions of the 1st Applicant, requested the supplier for a credit period to settle future payments to which Gedquad agreed. Post-dated cheques issued to Gedquad and signed by the 1st Applicant were dishonoured upon presentation.

8. Post-dated cheques in charges 7, 8 and 9 issued to Sung Lih Enterprise Ltd. and Cedar Base Electronics Ltd. for toys and calculators were also dishonoured when they were presented for payment. All the cheques were signed by the 1st Applicant.

9. The 1st Applicant gave evidence in the witness box but the 2nd Applicant chose not to do so. Obviously the judge did not believe him and found the charges proved.

10. In their written grounds of appeal, the 1st Applicant raised these matters:

(1) My company is incorporated in Hong Kong with limited liability to the extent of $500,000 under the company law.

(2) The company is still function but was compelled to carry on its function by illegal means of the police.

(3) The company as unable to functions formally. My capital invested in the mainland could not be retrieved. All documentation and certification could not be taken back. So, it was unfair to me and my company.

11. We find no substance in these grounds. The judge dealt with this issue in some length in his Reasons for Verdict at p. 29 and p. 30. We agree with his findings of fact and the conclusion he reached.

12. Before us, he added that the judge applied the wrong test on the question of dishonesty because he failed to take into consideration that:

(i) the suppliers were given prior notice that payment would not be met on due date for payment of the post-dated cheques and

(ii) there was a prospect that the joint venture in China might yield profits which would provide money to meet the payment.

13. We reject these suggestions. We are satisfied that the judge applied the correct test. A good example is when goods were delivered on one occasion, the delivery man was given a cheque dated the next day after he refused to accept a post-dated cheque for a longer period. That cheque was presented for payment the following day, but it was dishonoured.

14. The 2nd Applicant made these complaints:

(1) The door of the company run by me was forcibly locked up by the police. Therefore, I was restrained from going back to my company to manage its business.

(2) After the unreasonable locked up of the company premises, I immediately rented another office to continue to liaise my customers. This was also persistently interfered by the police and finally I was placed in extreme position.

(3) During the trial, I was not called as a witness to give evidence in box. Without giving evidence how on earth could the judge said that I was lying and imposed the sentence on me.

(4) I am of the opinion that at the 1st Court the prosecution had made a serious technical mistake and my solicitor asked with my consent to have the case heard by another judge.

15. We have observed that the judge had adequately and correctly dealt with the question of the locking up of the business premises. The 2nd Applicant did not give evidence out of his own choice. He was legally represented and must have been advised of his right. There is nowhere in the record that the judge said that this Applicant was lying. He found the charges proved on the evidence before him and inferences drawn from the evidence.

16. There is no merit in the applications and they are accordingly dismissed.