HKSAR v. MAZHAR TAHA AHMED ELMANSOURI

CACC 165/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 165 OF 2012

(ON APPEAL FROM DCCC NO. 1309 OF 2011)

________________________

________________________

__________________________

REASONS FOR DECISION

__________________________

1.  The applicant was convicted after trial in the District Court of one charge of using a false instrument, contrary to section 73 of the Crimes Ordinance, Cap.200. On 25 April 2012, he was sentenced by His Honour Judge Browne to 5 years’ imprisonment. He applied for leave to appeal against conviction and sentence. At the end of the hearing, I refused his application in respect of conviction, but granted him leave to appeal against sentence. My reasons for the decision appear below.

The charge

2.  The charge alleges that on 28 April 2010, the applicant together with Xiao Chufan used a bank draft no. 358487009 dated 18 April 2010 in the sum of US$4,000,000 payable to Dolibat Developement Company Limited, which was and which he knew or believed to be false, with the intention of inducing the staff of Bank of Communications Company to accept it as genuine, and by reason of so accepting it to do or not to do some act to her own or any other person’s prejudice.

The facts

3.  The applicant is an Egyptian national.  It is not in dispute that he and a female known as Xiao Chufan (“Xiao”) are the only two shareholders of a company called DOT.BNS High Tech HK Company Limited, which was incorporated in Hong Kong on 19 November 2008.  On 7 January 2010, the name of the company was changed to Dolibat Development Company Limited (“Dolibat”).  On 6 May 2010, the name was further changed to Dolibat Developement Company Limited (“Dolibat Developement”).

4.  The admitted facts also show that the applicant and Xiao are also 50:50 shareholders of four other companies incorporated in Hong Kong.  At all material times, the corporate secretary of the four companies was a company called HK Xing Hong Registrations Ltd (“Xing Hong”). The five companies owned by the applicant and Xiao as well as Xing Hong share the same registered address, which is an address in Chong Ming Building, No. 72 Cheung Sha Wan Road.  The evidence at the trial shows that this address has been occupied by PW8 and his family, who neither knows the applicant or the companies nor is related to them.

5.  The applicant also does not dispute that at about 1:40 pm on 28 April 2010, he and Xiao went to the Central branch of Bank of Communications (“BOC”).  They presented themselves as husband and wife and asked to open an account in the name of Dolibat.  They produced a Business Registration Certificate of Dolibat and a Certificate of Change of Name showing that the name was changed to Dolibat Development Company Limited on 7 January 2010. 

6.  On the same occasion, the applicant presented the bank draft particularized in the charge (exhibit P2) for encashment.  P2 was purported to be issued by the Dubai Branch of Samba Financial Group (“Samba”) and made payable to “Dolibat Developement Company Limited”.  Later in the afternoon, the bank manager (PW1) contacted Xiao and told her that P2 could not be processed because the word “Developement” in the name of the payee spelt with an extra “e” and did not accord with the name of Dolibat that appeared on the Business Registration Certificate and Certificate of Change of Name. 

7.  On 11 May 2010, the applicant and Xiao went to the Wong Tai Sin branch of BOC and produced documents showing that on 6 May 2010 the name of Dolibat was changed to “Dolibat Developement Company Limited”.  They asked to open 12 accounts, four in the name of the applicant, four in the name of Xiao and four in the name of Dolibat Developement so that P2 could be deposited into one of them.  The applicant and Xiao were to be the signatories of Dolibat Developement’s accounts.  The only deposit made in respect of the 12 accounts was one of HK$500 deposited into an account of Dolibat Developement.  On 19 May 2010, they again went to BOC and chopped a company chop of Dolibat Developement on the back of P2.

8.  BOC sent a communication dated 20 May 2010 to Samba asking for confirmation of P2.  Subsequently, Samba informed BOC that P2 was not genuine.  The original bank draft had been returned to Samba for cancellation.  BOC made a report to the police.

The prosecution case

9.  The head of internal financial control of Samba in Dubai (“PW12”) gave evidence for the prosecution and produced the genuine bank draft (exhibit P12^[1]).  PW12 testified that P12 was issued on the application of Samba’s customer, Mohamed Assad Said (“Said”).  It was in the amount of US$4,000,000 made out to Dolibat Development Limited. The spelling mistake on P12 relating to the word “Development” originated from Samba, but it was not discovered until sometime in mid to late May 2010.  P12 was delivered to a person called Ahmed Mahmoud Elehemily (“Ahmed”), who was authorized by Said to collect it.  When Ahmed collected P12, he had produced his passport and residence permit of the Kingdom of Saudi Arabia for verification of identity and had further signed on a carbon copy of P12 (exhibit P23(1)) to acknowledge receipt. 

10.  PW12 further testified that on 13 May 2010, Samba received notice of a forgery attempt in relation to P12 in Lebanon.  Samba informed Said about this on the same day.  Sometime between 13 and 26 May 2010, Said returned P12 to Samba.  He also wrote a letter dated 8 May 2010 to request the cancellation of P12.  The cancellation was approved.  The signature on P12 was cut out and P12 was also marked “liquidated 26 May 2010”.  The money debited from Said’s account was returned to the account.

11.  It is PW12’s evidence that P2 is a forgery. He pointed out a number of features on P2 that are different from the genuine bank draft. These include P2 is smaller in size, while the word “Citi” is written continually on the original, this is not the case on P2, the contact information of Citibank and the space for payee’s endorsement that appear at the back of the original are missing from P2, the chained watermark visible when a genuine draft is held up to the light is missing from P2 and the metallic line at the top of P2 does not appear on the genuine one.  PW12 commented that the quality of the paper of P2 would raise doubts as to its authenticity and it did not look genuine.  When it was pointed out to him that some of the letters on P2 and the signature appeared to be in green ink, he said that the bank does not use green ink.

The defence case

12.  The applicant was arrested on 26 June 2011 when he arrived in Hong Kong from Macau.  He was interviewed by the police under caution.  The voluntariness of the video record of interview (exhibit P1) is not disputed.  The applicant explained in the interview that he had entered into a business contract for which P2 was issued.  He stated that P2 came from Said and that Ahmed, who was the financial manager of Said’s company, came to Hong Kong and handed the bank draft to him.    

13.  At the trial, the applicant elected to give evidence and called no witness.  He spoke of his personal background and commercial experience. He claimed to be involved in substantial international trade and enjoyed personal and commercial relationship with members of the Saudi Royal family.  The applicant testified that after he met his wife in 2008, he began to invest in businesses in Shenzhen and set up several Hong Kong companies, including DOT.BNS High Tech HK Co Limited.  He said the registration of the Hong Kong companies had to be conducted through an agent in Shenzhen. At the same time, Xing Hong was his Hong Kong agent who was responsible for handling the correspondence in Hong Kong and forwarding them to the Shenzhen agent.  The applicant also said he had since 2008 maintained private and corporate accounts with BOC Shenzhen.

14.  According to the applicant, his agent in Saudi Arabia called Emad had a relationship with a person called Yousseif, who was the managing director of the SABB bank in Saudi Arabia.  In the beginning of 2010, through Yousseif he came to know Said, who was a substantial businessman.  Following negotiations between Emad, Yousseif and Said, a contract was entered between Dolibat and Said for the sale of electronic gates and accessories (exhibit D6).  P2 was payment for the price of the contract.  Yousseifsent P2 to him two to three days before his first visit to BOC.  The applicant produced a DHL airway bill document dated 21 April 2010 (exhibit D7) that was sent to an address in Zhuhai, China, which he said was his wife’s address.  The description of the item sent is “urgent documents”. It was also the applicant’s evidence that Ahmed had come to Hong Kong on 29 April 2010.

15.  The applicant claimed that when PW1 called Xiao on 28 April 2010 about the discrepancy in the spelling of the name, she asked them to return to the bank the following day. When they did so on 29 April 2010, PW1 suggested that he and his wife could either change the name of the company or get a new draft.  He discussed the matter with Ahmed who said it was a very urgent contract, that it would take a long time to obtain a new draft and that if the goods were not delivered quickly, the contract would be cancelled.  After discussing with the agent in Shenzhen who helped him to register companies in Hong Kong, he decided to change the name of his company as this was quicker.

16.  According to the applicant, he later received a letter dated 7 June 2010 from Said (exhibit D9) cancelling the contract due to “change in design”.  He said because the bank draft was not honoured, he did not obtain the goods from the manufacturers.  It is his evidence that after this incident, he continued to have business dealings with Said.  They entered into a contract for the sale of LED screens at US$5 million.  Also in September 2010, he travelled to Saudi Arabia to meet Ahmed and Yousseif and concluded a new contract (exhibit D10).  The deal however did not go through.

The Judge’s reasons for verdict 

17.  The Judge accepted the evidence of the prosecution witnesses, namely, PW1 and PW2, who are the officers of BOC, PW8, who resides at the address that was used as the registered address of Dolibat, Dolibat Developement and the applicant’s other companies as well as Xing Hong, and PW12, the officer from Samba.  The Judge found as a fact that P2 was a forgery and a false instrument within the meaning of section 69 of the Crimes Ordinance.

18.  The Judge went into the applicant’s evidence in details and concluded that he was lying.  In paragraphs 92 to 152 of the Reasons for Verdict, the Judge analyzed the various documents that the applicant produced in an attempt to demonstrate that he was involved in substantial international trade and concluded that the documentation was false.  In coming to this conclusion, the Judge noted that the contents of some of these documents were vague, contradictory or incomplete and that for some of the transactions mentioned by the applicant, there was no supporting documentation.  The Judge took into account that there would be different business practices between people coming from different parts of the world. Nevertheless, he was sure that the applicant was producing the documents to create a misleading impression that he was a businessman of substance.

19.  The Judge went on in paragraphs 154 and 155 to consider the applicant’s act of changing the name from Dolibat to Dolibat Developement instead of getting an amended draft, after PW1 informed Xiao of the spelling problem on P2.  He had regard to the evidence of PW2 that since working for the bank in 2004, he had never come across a situation where a customer would change the name of the company to correspond with the name of the payee on a financial instrument.  The Judge also considered that the course taken by the applicant would create problems for existing contracts, company stationary and corporate paraphernalia.  One such example was the use of the original corporate authorized signatory chop on an agreement signed almost one year later in April 2011 (exhibit D11). 

20.  The Judge also referred (in paragraphs 156 to 158 of the Reasons for Verdict) to a material discrepancy between what the applicant said in his interview with the police and his oral evidence about how he obtained P2.  While he said during the interview that Ahmed personally delivered P2 to him, his evidence in court was that P2 was sent to him by DHL courier, although he also said Ahmed was in Hong Kong on 29 April 2010.  The Judge rejected his explanation that this was due to misunderstanding or mistranslation during the interview, observing that the applicant had in his evidence frequently used English and given many answers in English and did so before questions were translated to him, that many of the documents he produced were in English and further that it was his evidence that he had attended a course in England that was conducted in English. 

21.  The Judge further pointed out in paragraphs 159 to 162 of the Reasons for Verdict that the applicant’s evidence on his dealings with PW1 was very different to the case that his counsel had put to PW1.  Notably, it was not put to PW1 that she had dealings with the applicant on 29 April 2010.

22.  The Judge rejected the applicant’s case that he was involved in substantial international trade.  He also disbelieved the applicant’s evidence as to the circumstances in which he came into possession of P2.  The Judge found there was no genuine underlying commercial transaction to account for the possession of P2.  He further found that the applicant knew it was a false instrument when he presented it to BOC and he did so with the intention of inducing the staff of BOC to accept it as genuine and by so accepting it, to do an act to the prejudice of the bank.  He therefore convicted the applicant as charged.

The Judge’s reasons for sentence

23.  The applicant was 50 years of age at the time of sentencing.  He and Xiao have a young daughter.  He has a clear criminal record.  In mitigation, the applicant’s counsel pointed out that the offence took place over two years ago and the delay in prosecution was not the fault of the applicant.  It was said that the applicant had passed through Hong Kong in June 2010 but was not arrested or detained.  Counsel also told the court that the applicant came under enormous pressure since his arrest as he was not able to return to China to visit his family while his wife, Xiao, could not visit him in Hong Kong as she was a suspect in the case and she also suffered from ill health.  In sentencing, the Judge took into account the huge amount of money involved, being in excess of HK$31.2 million, there was an obvious international dimension to the case and that it was an attempted fraud on the bank.  The Judge considered that a substantial sentence of imprisonment is called for and sentenced the applicant to 5 years’ imprisonment.

Application for leave to appeal against conviction

24.  The applicant had written a total of six letters to the court.  He also adopted the contents of the three letters written by his wife, two of which were addressed to the court and one was addressed to the Director of Public Prosecution.  In his letters, apart from maintaining his innocence, requesting for legal aid and emphasizing the distress and suffering that the case has brought to him and his family, the applicant also raises the following grounds:

(1) The Judge was wrong in his evaluation of the applicant’s evidence and credibility with regard to how he came to possess P2.

(2) There was an abuse of process by the prosecution and there should have been a permanent stay of the prosecution.

(3) There are reasonable doubts in the case.

(4) PW12’s evidence that P2 is a forgery is a piece of hearsay evidence and should be rejected.

(5) The Judge failed to give adequate reasons for the conviction.  It has not been proved that the applicant knew that P2 was a forgery. 

25.  Before dealing with these complaints, it is important to make two points.  Firstly, as the Judge identified in paragraph 116 of the Reasons for Verdict, much of the prosecution case against the applicant is not in dispute.  The main issues at the trial were: (1) Whether P2 is a false instrument; and (2) If it is, whether the applicant had knowledge of it when he presented it to BOC for payment. Secondly, it is settled law that an appellate court will not lightly interfere with a trial judge’s conclusion on credibility of witnesses and findings of fact, and will only do so if it is demonstrated that the judge is plainly wrong in his assessment and findings on the evidence.

26.  The first point raised by the applicant challenges the Judge’s rejection of his evidence as to how he came to be in possession of P2.  The Judge had in the Reasons for Verdict dealt extensively with the applicant’s evidence and had provided clear reasons for his evaluation of and conclusion on the applicant’s credibility and evidence. Much of what the applicant and his wife contended in their letters to the court is a repetition of what the applicant had said at the trial, which had been considered and rejected by the Judge.  I am not persuaded that the applicant had shown that the Judge is plainly wrong in rejecting his evidence that P2 was from Said as a result of a business deal.

27.  As to the second point, it is a fact that the applicant was only arrested on 26 June 2011, some 14 months since the date of the offence.  He was prosecuted later in the year and the trial took place in April 2012.  The fact that the applicant was not arrested when he travelled in and out of Hong Kong before his arrest does not support a case of abuse of process by the prosecution.  Further, there was no inordinate delay in bringing the trial on.  More importantly, there was no application by the defence for a stay of the proceedings on account of delay or otherwise.  

28.  The applicant referred to a number of authorities, including HKSAR v. Lee Ming Tee & Another (2001) 4 HKCFAR 133; and HKSAR v. Lee Ming Tee & Securities and Future Commission (Intervener) (2003) 6 HKCFAR 336.  They do not advance his case.  Firstly, the applicant has not pointed to any basis for contending that there has been an abuse of process by the prosecution or that it was not possible to have a fair trial in 2012 by reason of the fact that the offence took place in 2010. Secondly, given that there was no application for a permanent stay, the Judge was not called upon to exercise any discretion, hence the principles discussed in R v. Horseferry Road Magistrates’ Court, ex p Bennett (No.1) [1994] 1 AC 42 and R v. Latif (Khakid) [1996] 1 WLR 104 are not engaged.   In any event, it cannot be said that the prosecution in the present case is an affront to the public conscience. 

29.  The third point made by the applicant relates to PW12’s evidence that the original bank draft was collected by Ahmed on the authority of Said.  The applicant said he had already told the police during the interview that he received P2 from Ahmed.  He further contended that in 2010, the world was having financial disasters and as he believed P2 to be a genuine document, he was prepared to change the name of his company.  It was argued that had he known that P2 was a false document, he would not have spent 21 days on changing the name of the company. 

30.  There is no merit in the argument.  Although the applicant had stated in the interview with the police that Ahmed personally delivered P2 to him in Hong Kong, this is not his evidence at the trial.  His oral evidence is that P2 was delivered to him by courier service and he even produced D7 to support this.  As the Judge had noted, this is a material discrepancy and it goes a long way to undermine his credibility and case and the Judge was entitled to disbelieve his evidence that he had no knowledge of the falsity of P2. 

31.  As to the fourth point, the applicant’s argument is that PW12 is not a forensic expert and is not in a position to speak on the differences between P2 and P12.  It was also argued that PW12 could not testify on whether it was P2 or P12 that Samba gave to Ahmed and in turn to the applicant.  The applicant therefore said that the evidence of PW12 that P2 is a forgery is hearsay and that PW12’s evidence should not have been admitted. 

32.  PW12 is the head of internal financial control of Samba which issued the bank draft in question.  He had produced to the Judge the original of the bank draft (P12).  Given his position in the issuing bank, he will be conversant with the documentation and affairs of the bank.  His evidence on why P2 is not a genuine document of the bank is based on his personal understanding and knowledge of what a genuine bank draft issued by Samba is like.  It is not hearsay evidence.  It is factual evidence and does not involve any forensic comparison between P2 and P12.  It is also to be remembered that there is in evidence a blank/ sample bank draft of Samba (exhibit P24).  Further, although PW12 was not personally involved when Ahmed collected the bank draft from Samba, he would be able to speak from the record that P12 was the one handed over to Ahmed and that it was P12 that was returned by Said to Samba for cancellation.  In short, the Judge did not err in admitting the evidence of PW12.  Neither did he err in accepting PW12’s evidence that P2 is a forgery.

33.  Turning to the fifth point, the applicant complained that the Judge failed to give adequate reasons for his conviction.  As mentioned above, most of the prosecution case is not disputed and the main issues for determination were whether P2 is a false instrument and whether the applicant had knowledge of its falsity when he presented it to BOC for encashment.  There is ample evidence before the Judge to justify his conclusion that P2 is a false instrument.  As to the knowledge of the applicant, the Judge, for reasons he had detailed, rejected the applicant’s evidence that P2 was payment for a business contract and that he did not know it is a forgery. The Judge rightly reminded himself (at paragraphs 114, 154 and 164 of the Reasons of Verdict) that the rejection of the applicant’s evidence does not mean the applicant is guilty of the offence and that he must consider whether the evidence accepted by him satisfies him to the required standard.  An important undisputed piece of evidence, which the Judge had regard to, is that immediately after being informed of the spelling problem in the payee’s name on P2, the applicant changed the name of the company to correspond with the payee’s name on P2.  As observed by PW2 and also the Judge, this is most unusual and the applicant has given no credible reason for doing so.   It should not be forgotten that it was not long before the applicant’s first visit to BOC that the name of the company was changed to Dolibat Development Company Limited.  There is, at the same time, no credible and legitimate reason for the applicant to be given the bank draft.  The Judge is quite entitled to infer guilty knowledge from these circumstances and drew the irresistible inference that the applicant knew that P2 is a false instrument.

34.  In addition to the above grounds raised by the applicant, the applicant’s wife also in her letter dated 24 December 2012 to the court put forward two propositions.  The first (at page 2, lines 14 to 17) is that P2 originated from someone within the issuing bank for the purpose of framing the applicant up.  The second (at page 2, lines 25 to 32) is that the registered office of the companies was procured by the applicant’s Shenzhen agent. The applicant’s wife queried why the Companies Registry never raised any issue on the address if it were indeed a false address.  She also said that because of this, the applicant did not suspect the address was false. 

35.  There is no evidential basis for the first proposition.  This was also not the applicant’s case or evidence at the trial.  Further, it is in direct conflict with the evidence of PW12, which the Judge accepted.   As to the second proposition, the Judge had found on the basis of PW8’s evidence that the registered address of Dolibat, Dolibat Developement and other Hong Kong companies owned by the applicant was a false address.  There is no evidence that the Companies Registry checks the addresses provided for company registrations.  Importantly, the applicant’s evidence that he had been involved in substantial international trade and the setting up of the various companies was not accepted by the Judge.

36.  In his oral submissions, the applicant further made the following points.  Firstly, he asserted that the reverse side of P23 (which was a photocopy of P12) was different from that of P24 (which was a blank copy of Samba’s draft).  The reverse sides of P23 and P24 that are kept on the court’s exhibit file, however, are the same. Secondly, he said that the companies had been using PW8’s address as registered address for a number of years and he queried why PW8 would have tolerated this for so long.  However, it is not PW8’s evidence that he was aware that his residential address had been misused as the registered address of the applicant’s companies.  Thirdly, the applicant complained there was no proper police investigation.  He claimed Said is the only person who stands to benefit from the incident because if the cheque were stopped after the goods were sent, he would get the goods free.  He also questioned why Said was believed whereas his version was not believed.  In light of the Judge’s findings, this assertion of the applicant cannot stand.  Furthermore, it is incorrect to suggest that the applicant stood to gain nothing because had the forgery not been discovered, US$ 4 million would have been credited to a bank account controlled by the applicant and Xiao. Fourthly, the applicant said there is no direct evidence to show that he knew P2 is a forgery.  He said when he went to BOC on 28 April 2010, he was sure P2 was good and there was fund to cover it.  For reasons mentioned above, this argument cannot stand.  Fifthly, the applicant claimed he had a defence witness but that his defence lawyer did not call this witness.  This is not a valid reason for appeal.

37.  For the reasons set out above, there are no merits in the applicant’s appeal against conviction.  Leave to appeal was therefore refused.

Application for leave to appeal against sentence

38.  In support of his application for leave to appeal against sentence, the applicant said that the sentence was too severe when compared to other cases.  He also said the imprisonment has caused hardship to his family and he has not been able to see his baby daughter.

39.  In reply, Ms Cheng who appeared for the respondent drew my attention to HKSAR v. Ng Jit Man (unreported) CACC 137/2005 in which the applicant was convicted after trial of three charges of using a copy of a false instrument and two charges of using a false instrument.  In brief, the applicant used a variety of false documents to open accounts and to secure financial advantage from three banks in the course of two years.  No actual loss was suffered by the banks.  The Court of Appeal considered the total sentence of 4½ years was appropriate.  Ms Cheng submitted that the sentence of 5 years is not manifestly excessive.

40.  There is no tariff or guideline on offences of using a false instrument.  I accept that the present case is an attempt of a serious bank fraud and the amount involved is also substantial. However, having regard to the facts and the sentence passed in HKSAR v. Ng Jit Man and the fact that the present applicant faces only one charge, it is arguable that the sentence of 5 years is manifestly excessive.  I therefore give leave to the applicant to appeal against his sentence. 

[1] Exhibit P12 was returned to PW12 upon a photocopy of it (exhibit P23) being made and kept on the court file.