ATTORNEY GENERAL v. CHEUNG WAI SHU

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JUDGMENT

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1. On 2nd November 1983 Mr. T.F.T. Davis, sitting at San Po Kong, heard an information proffered pursuant to section 3 of the Prevention of Bribery Ordinance, Cap. 201, on behalf and with the consent of the Attorney General, which was couched in the following terms:

"CHEUNG Wai-shu, being Crown servant, namely Detective Sergeant 11311 of the Royal Hong Kong Police Force, on or about the 24th day of October 1981, in this Colony, without the general or special permission of the Governor accepted an advantage, namely a loan of HK$50,000, from Murray Arthur Hoare."

Section 3 of the Prevention of Bribery Ordinance reads :

"Any Crown servant who, without the general or special permission of the Governor, solicits or accepts any advantage shall be guilty of an offence."

"Advantage" is defined in section 2(1) but by reason of the provisions of the Acceptance of Advantages (Governor's Permission) Notice 1981 it is common ground that the loan alleged, if it was indeed a loan, was an advantage which had neither the general nor the special permission of the Governor.

2. Having heard and read evidence led by the Crown the learned magistrate found that there was no case for the respondent to answer. He dismissed the information accordingly. The Attorney General then asked the learned magistrate to state a case for the consideration of the High Court; which he duly did.

3. On 28th February this year O'Connor J. ruled that the evidence which had been led by the Crown did disclose a case to answer and directed that the learned magistrate should continue the hearing on that footing. Accordingly on 2nd April the hearing was resumed. The respondent elected not to give evidence and, having heard counsel on his behalf, the learned magistrate dismissed the information. Against that dismissal the Attorney General once more appeals to the High Court by way of case stated.

4. The facts found below were as follows :

5. As Mr. Eddis, who appears for the respondent, submits this wording shows that the learned magistrate accepted and found as facts the matters related by the respondent in the course of the trio interviews. What the respondent said, and here I must be forgiven for being selective, was as follows :

"It happened all on a sudden. It was not until we're at the airport that Mr. Hoare said this sum of money was gratuity from the police force and that he didn't wish to carry it during his trip. Therefore he gave it to me and said that if I needed it, I could use it. If he needed-it, he would write a letter to me or use another means to get back the money from me. In 1981 before Mr. Hoare went on vacation, he gave me a cheque at the airport and asked me to keep it for him. He asked me to pay it in my bank saying that when he was in need or when I was in need we could use this sum. Later I gave him back the sum by two payments. It was Hoare who asked his father-in-law to ask me for it."

He went on to say that before re-payment he had used some of the money for his own purposes and that there was no mention of any time-limit in relation to date of repayment.

6. The question for this court falls within a brief compass and is expressed in these terms in the Case :

"Was my decision that the said receipt of the said sum of $50,000 was not a loan within the meaning of s.21 of the Prevention of Bribery Ordinance, Cap. 201, right?"

In the present context a loan may be defined as an advance of or possibly an agreement to advance money repayable on demand with or without interest. Generally a loan creates a debt where, as here, no specific notes or coins are delivered to the borrower or alleged borrower. Again it would be unusual for the proceeds of a cheque to be regarded as identifiable at law albeit in certain circumstances traceable in equity.

7. Unlike the learned magistrate I regard the case of Seldon v. Davidson⁽¹⁾ as helpful guidance to the construction to be put upon the evidence which I have sought to describe. At p.1088 Wilmer LJ said :

"Payment of the money having been admitted primafacie that payment imported an obligation to repay in the 'absence of any circumstances tending to show anything in the nature of a presumption of advancement."

And Edmund Davies LJ, as he then was, at p.1090 :

"I ask myself what is to be inferred as to the nature of the transaction when the simple payment of money is proved or admitted between strangers. I entirely agree with My Lord that, on that bald state of affairs, proof of payment imports a prima facie obligation to repay the advancement in the absence of circumstances from which presumption of advancement can or may arise. My Lord has expressed the view that the loan would be repayable on demand. I would say, if not repayable on demand, at least repayable within a reasonable time of a request for repayment."

In my opinion this authority may be taken to support the conclusion that, in the absence of any circumstances tending to show that a presumption of advancement arose or that the cheque had been given in settlement of an existing debt or in return for cash, the admitted payment imported a prima facie obligation to repay and therefore that the transaction could properly be characterized as a loan. I so find on the footing that no one had suggested that Mr. Hoare was making a gift of the proceeds of the cheque to the respondent or was depositing either the cheque or its proceeds with him only for purposes of safe custody. If I am right the remaining question is whether the evidence before the learned magistrate could reasonably have been relied upon by him to find, on the balance of probabilities, that this prima facie presumption was rebutted. Mr. Eddis relies on three points in furtherance of his submission that such evidence was available. They were firstly that there was no request for the loan, secondly that no terms were agreed in relation to repayment or as to its use, and thirdly that there were no express provisions for repayment. As to the second and third, these are only incidents of a simple payment of monies between strangers and I cannot accept that the absence of a request for the loan avails him.

8. When asked what were the terms of any trust that might have been constituted Mr. Eddis was unable to improve on the formula "until Mr. Hoare needed it"; namely to hold the money until Mr. Hoare needed it. That is, again, really no more than an incident of a common-form contract of loan. The evidence shows a simple payment of money on terms that the respondent could use it if he needed so to do, as he did in whole or in part, and would repay on demand, as he did by two instalments. The conclusion that the transaction was one of loan rather than, for example, one of trust or bailment appears to me to be inescapable quite apart from any presumption of law. In the premises I am bound to answer the question posed in the Case in the negative.

9. The matter will be remitted to the learned magistrate with a direction to convict. In the meanwhile I will grant the respondent bail in the sum of HK$5,000 to be furnished to the satisfaction of the Registrar. Recognisance to be taken before a Superintendent of the Correctional Services Department.