HKSAR v. WONG SIU KAY AND OTHERS

CACC265/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. CACC 265 OF 2006

(ON APPEAL FROM DCCC 49 AND 423 OF 2006)

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

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

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

REASON FOR JUDGMENT

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

Suffiad J (Giving the judgment of the Court) :

1. All four applicants (D1, D2, D3 and D4 respectively) were convicted on 5 July 2006 after trial before Deputy District Judge Dufton on various counts of conspiracy to obtain property by deception and handling stolen goods. 

2. D1 and D4 were convicted of Charge 1 for the offence of conspiracy to obtain property by deception.

3. All four of them were convicted of Charge 2 for the offence of conspiracy to obtain property by deception.

4. D1 was also convicted of Charge 3 for the offence of handling stolen goods.

5. D2 was also convicted of Charge 4 for the offence of handling stolen goods.

6. D3 had earlier pleaded guilty to Charge 6 for the offence of possession of dangerous drugs.

7. In so far as conviction goes, D1 and D4 now seek leave to appeal against their conviction in respect of Charge 1.

8. All four applicants have now abandoned their appeal against conviction in respect of Charge 2, D1 has abandoned his appeal against conviction in respect of Charge 3 and D2 has abandoned his appeal against conviction in respect of Charge 4.

9. In so far as sentence is concerned, D1 was sentenced as follows :

(1)	Charge 1 — three years and six months’ imprisonment;
(2)	Charge 2 — three years and six months’ imprisonment, of which nine months to be served consecutively to Charge 1; and
(3)	Charge 3 — 12 months to be served concurrently with Charges 1 and 2.

The total sentence in respect of D1 came to four years and three months.

10. D2 was sentenced as follows :

(1)	Charge 2 — three years and six months’ imprisonment; and
(2)	Charge 4 — 12 months to be served concurrently with Charge 2;

11. D3 was sentenced as follows :

(1)	Charge 2 — three years and six months’ imprisonment; and
(2)	Charge 6 — six months’ imprisonment to be served consecutively to Charge 2, making a total sentence of four years imprisonment.

12. D4 was sentenced as follows :

(1)	Charge 1 — three years and six months’ imprisonment; and
(2)	Charge 2 — three years and six months’ imprisonment of which six months to be served consecutively to Charge 1, making a total sentence of four years.

13. D1 now sought leave to appeal against his sentence but only if the conviction on Charge 1 is overturned on appeal.  Counsel for D1 indicated that if D1 was not successful in his appeal against conviction, he will not pursue the appeal against sentence.

14. D2 sought leave to appeal his sentence in respect of Charge 2.

15. D3 sought leave to appeal against her sentence in respect of both Charges 2 and 6.

16. At the conclusion of the hearing, we dismissed all the applications for leave both in respect of conviction and sentence in respect of all the applicants and indicated that we will give our reasons later, which we now do.

The Charge 1 conviction

17. Charge 1 alleged a conspiracy between D1, D4 and Hui Duin Ngan (“Hui”) to use two false credit cards to obtain property by deception on 26 July 2005.  One of the false credit cards was in the name of Hui (referred to as “Credit Card C” at the trial) and the other in the name of D4 (referred to as “Credit Card D” at the trial).  The two false credit cards were used variously on seven occasions on 26 July 2005 obtaining goods to the total value of $17,140.  There was a further attempt to use Credit Card C to purchase an LV bag but which was unsuccessful.

18. The evidence in respect of this charge can be summarized as follows : At 13.54 hours on 26 July 2005, a female attempted to pay for the purchase of a mobile phone at Telecom Digital-K2 by an ATM card, but that payment was rejected due to insufficient funds.  The female then produced Credit Card C for payment.  The sales person checked the female’s identity card which was in the name of Hui before accepting Credit Card C.

19. At 14.35 hours the same day Credit Card D was used to purchase cosmetics at Colourmix Cosmetics.

20. At 16.08 hours the same day, two females entered Only You Home Appliances in North Point.  One of them using Credit Card C purchased a hair dryer and a camera.  The other female, using Credit Card D purchased another camera.

21. At 16.37 hours the same day, two females entered another branch of Only You Home Appliance at Metropole Department Store.  One of them produced Credit Card C and purchased a camera.  The other female wanted to buy a camera and produced an ATM card for payment, but payment was rejected and no purchase was made.

22. At 17.45 hours the same day, Hui went to a second hand shop in Tung Ying Arcade, Tsimshatsui where she purchased an LV wallet.  She initially produced an ATM card for payment but payment was rejected due to insufficient funds.  Hui then produced Credit Card C to pay for the wallet which was accepted.  Hui then selected another LV bag but said to the salesperson she had to ask her husband first.  Hui made a phone call.  Several minutes later D1 entered the shop.  Hui showed the LV bag to D1 and asked if it was okay.  D1 replied that it was.  Hui then produced Credit Card C for payment.  The salesperson became suspicious and informed Hui that the credit card centre would not accept that transaction.  Hui and D1 then left the shop.

23. After checking the details of Credit Card C with the credit card centre, the salesperson followed Hui and D1 who went to a nearby café.  The salesperson then reported the matter to a police party on patrol.

24. The police party entered the café and found D1, D4 and Hui sitting together.  Upon search Credit Card C and the LV wallet was found on Hui.  Also found on Hui was the rejected ATM cardholder copy at Telecom Digital-K2 and the cardholder copy of the purchase at Only You Home Appliance at Metropole Department Store branch.  However the mobile phone and the camera purchased in those two transactions were not recovered.  Under caution Hui said, “Ah Sir, I admitted.  The card was forged.”

25. No false credit card or suspected false credit card was found on D4 when she was searched.  Under caution upon her arrest for using a forged credit card, D4 said, “Madam, it has nothing to do with me.  It’s ah Hui Duin Ngan who had swiped the card.”

26. Under caution, D1 said, “Ah Sir, I know nothing, nothing to do with me indeed.”

27. Police investigation has revealed that Credit Card C and Credit Card D are not genuine credit cards in that :

(1)	Credit Card C, which purports to be a Manhattan Visa credit card bearing credit card number 4867 4220 1004 9567, the Business Identification Number (BIN) 4867 42 is in fact assigned to JP Morgan Chase Bank.
(2)	Credit Card D which purports to be a Visa card bearing credit card number 4918 2052 6900 0350, the BIN 4918 20 is in fact assigned to DZ Bank AG Germany and was not in fact issued to D4.  Card D was involved in three fraudulent transactions which occurred on 26 July 2005 :
	(i)	a transaction at Only You Home Appliance for the amount of HK$3,390;
	(ii)	a transaction at Colourmix Cosmetic for the amount of HK$2,154; and
	(iii)	a transaction at A.Y.A Collection for the amount of HK$160.

The prosecution’s evidence was entirely by way of admitted facts.

28. At the trial, Hui was not before the court.

29. D1 and D4 did not give evidence nor did they call any witness.

30. On the evidence before him, the judge made the findings that Hui was the person using Credit Card C on each of the four occasions on 26 July 2005 as that Credit Card C was in her name and found in her possession together with the cardholder copy of the rejected ATM at Telecom Digital-K2 and the cardholder copy for the purchase at the Metropole Department Store branch of Only You Home Appliance.

31. A further reason for the judge so finding was that the name of the identity card produced by the female at Telecom Digital-K2 was that of Hui and matched the name on Credit Card C as well as the appearance of the female matching the photograph on the identity card.

32. The judge also found it inherently improbable that different persons were using the same forged credit card during the relatively short period of four hours the same day.

33. In so far as D4 was concerned, the judge made the following findings in his Reasons for Verdict :

“	26.	…
		(ii)	D4 was the person using Credit Card D on the three occasions on the 26th July 2005.  The credit card was in her name.  The two females used Credit Card C and Credit Card D in Only You Home Appliance at the same time (see paragraph 24(e) above).  D4 was together with HUI when the police arrested her later the same afternoon.  I find inherently improbable that someone other than D4 would be using a forged credit card in the name of D4 together with HUI a little over two hours before D4 and HUI were arrested together inside the Yuen Kee Café;
		(iii)	that D4 knew Credit Card D was a forged card, the card not being issued to D4;
		(iv)	D4 was acting in concert with HUI.  Credit Card C and Credit Card D were used by HUI and D4 to purchase goods at the same time in Only You Home Appliance (again see paragraph 24(e) above).  I find inherently improbable that HUI and D4 entered Only You Home Appliance together and both by coincidence used forged credit cards.  Less than 30 minutes later two females entered a different branch of Only You Home Appliance where Credit Card C was used.  I find inherently improbable this was anyone other than HUI and D4.  When intercepted by the police less than two hours later inside the Yuen Kee Café HUI and D4 were sitting together with D1;
		….”

34. In so far as D1 was concerned, the judge made the following findings :

“	26.	(v)	D1 was acting in concert with HUI and D4.  D1 was arrested together with HUI and D4 inside the Yuen Kee Café.  In apparent response to a phone call made by HUI to her ‘husband’ D1 appeared at the Second Hand Shop where he gave a positive reply to HUI when asked if the LV bag was okay.  I find inherently improbable that HUI embarking on a criminal enterprise to purchase an LV bag with a forged credit card would involve D1 unless D1 was a party to an agreement to use forged credit cards to obtain various goods; and
		(vi)	D1 and D4 conspired together with HUI to obtain property by deception as particularized in the charge.  Applying the test in R v Ghosh (1982) 75 Cr. App. R. 154 I find D1 and D4 together with HUI acted dishonestly.”

35. The judge further took into account what was said by D1 and D4 under caution as well as the fact that no incriminating items were found on D4 when she was arrested.  However those matters did not cause him to doubt the findings by inference which he had made.  The judge did not attach any weight to the denials of D1 and D4 when cautioned.

36. Upon those findings made, the judge convicted both D1 and D4 on the 1^st charge upon finding that the prosecution has proved all the elements of that charge beyond reasonable doubt.

D1 and D4’s appeal against conviction re Charge 1

37. Both D1 and D4 rely on substantially the same grounds.

38. Four grounds of appeal have been put forward by both D1 and D4.

39. Grounds 1 and 2 complain that the judge, in holding that the evidence is not viewed in isolation, has failed to consider the evidence for each count separately both in respect of D1 and D4.

40. Ground 3 complains that the judge was wrong to have drawn the inferences that he did which culminated in his findings that D1 and D4 together conspired with Hui to use the forged credit cards.

41. Ground 4 complains that the judge erred in holding that the failure of the accused to give evidence allowed him to strengthen the inferences to be drawn from the prosecution evidence.

Grounds 1 and 2

42. These two grounds can be dealt with together as the complaint relate to the same matter.

43. There is no dispute that the judge had directed himself in the following terms at paragraph 18 of his Reasons for Verdict :

“	…. I direct myself that I must be sure of the defendant’s guilt on each charge before I can convict, each charge to be considered separately and the case against each defendant separately. ….”

44. In so far as those words cited above, it is accepted that that is a correct direction in law.

45. What is complained of are the words which appear at the end of paragraph 20 of the Reasons for Verdict where the judge said :

“

20.

I now turn to consider the individual charges.  Each charge is considered separately and the case against each defendant separately, however the evidence is not viewed in isolation.” [Emphasis added]

46. It was submitted by counsel for D1 and D4 that the last few words cited above showed that the judge wrongly failed to consider the evidence for each count against respectively both D1 and D4 separately and moreover, vitiated the earlier warning which the judge had correctly directed himself on.

47. One has only to look at the findings made by the judge in relation to D1 and D4 respectively in his Reasons for Verdict (as cited earlier in this judgment) to see that the judge did indeed consider the evidence in relation to D1 and D4 separately in so far as Charge 1 is concerned.

48. Nor can we see anything wrong with the judge’s reference to “the evidence not being viewed in isolation” since all the evidence ought to be considered together particularly where Charge 1 is a conspiracy charge and the acts of not only the defendants, but also of Hui, may be acts done in furtherance of a conspiracy once that conspiracy is established.

49. We see no merit in Grounds 1 and 2.

Ground 3

50. This ground complains that the judge had no proper basis to draw the inferences which he did when making those findings upon which he convicted D1 and D4.

51. In the case of D1, it was submitted that the prosecution evidence established no more than the mere presence of D1 at the Second Hand Shop as well as his presence at the Yuen Kee Café at the time of arrest which is insufficient to constitute agreement in a criminal conspiracy.

52. It was also submitted by counsel for D1 that in calling D1 to the Second Hand Shop, a possible alternative inference which could be drawn by the judge was that Hui was making use of D1 in her criminal undertaking, but which was wholly unknown to D1.

53. In those circumstances it was submitted that on the prosecution evidence there could not be any compelling or the only inference to establish guilt of D1 to Charge 1.

54. It is an oversimplification for counsel for D1 to say that the prosecution evidence went only as far as to establish mere presence of D1 at the Second Hand Shop.

55. The judge made the specific finding that it was in apparent response to a phone call from Hui to her “husband” that D1 not only appeared at the Second Hand Shop but also gave a positive reply to Hui when asked by her if the LV bag was okay.  In those circumstances, the judge found that D1 had a role to play in the matter.

56. Moreover, the judge found it inherently improbable that when Hui was embarking on a criminal enterprise to purchase an LV bag with a forged credit card, she would involve D1 if D1 was not a party to that conspiracy to use the forged credit card to obtain goods by deception.

57. We consider that the judge was well justified to draw the inferences that he did given all the circumstances of this case and he cannot be faulted for so doing.

58. We think that the judge was correct in drawing the inference which he drew.  We have considered whether the facts are compatible with an inference of innocence but one is faced with the fact that Hui, on a fraudulent spree, was seeking to obtain an expensive item by deception and obviously felt the need to give her conduct a semblance of verisimilitude : there was otherwise no need to call in a third party to seek approval for an item that was costing her nothing.  Were D1 an innocent party she ran a risk that he might say or do something that would not tie in with her scheme.  That apart, it is unlikely in itself that she would draw an innocent friend into danger of a false accusation.  Then shortly after the episode in the shop, D1 is in the company of Hui and others who that day had been on a fraudulent spree and who were then found in possession of these bogus cards.  Moreover the only person apart from Hui who knew what D1 was up to, was D1 himself and he gave no testimony to counter the inference that was in the circumstances the natural one to draw. 

59. We therefore cannot accept that the judge had erred in drawing the inference as he did against D1.

60. In respect of D4, upon similar lines, it was submitted that there was insufficient basis upon the evidence for the judge to have inferred that D4 was the person who had conducted the fraudulent purchases together with Hui using the forged credit cards.

61. We do not agree with that submission.

62. It must be recognized that the name of D4 being on Credit Card D, a forged credit card, was put on it for a purpose, the purpose being to facilitate the user to prove that she is the person to whom the credit card was issued if asked for her documents of identity.  That itself is already a compelling inference as to the user of Credit Card D.  This is further strengthened in the present case by D4 being found sitting together with Hui and D1 at the Yuen Kee Café just three or four hours after Credit Card D had been used a number of times that afternoon, and on one of those occasions almost at the same time and in the same shop, the Only You Home Appliance in North Point, with Credit Card C.

63. Moreover, although the judge did not give any weight to the denial by D4 under caution, what was said by D4 would indicate her knowledge that Hui had been using the forged credit card, a matter which is inconsistent with the Agreed Facts which stated that on the occasion in the North Point branch of Only You Home Appliance, Credit Card C and Credit Card D were used respectively by the two different females who had entered that shop together.

64. In conclusion and for the above reasons, the judge was well justified in drawing the inference that he did in relation to D4 and we see no merit in this ground of appeal.

Ground 4

65. D1 and D4 complains that the judge in holding that the failure of the accused to give evidence allowed him to strengthen the inferences to be drawn from the prosecution evidence.

66. What the judge said in paragraphs 14 and 15 of his Reasons for Verdict was :

“	14.	All the defendants elected to remain silent and called no witnesses.  No adverse inference is drawn against the defendants for remaining silent.  That is their right.  This proves nothing one way or the other.  It is for the prosecution to prove the charges beyond reasonable doubt.
	15.	It does however mean that there is no evidence from the defendants to undermine, contradict or explain the evidence led before me by the prosecution.  The absence of any explanation may strengthen the inferences to be drawn from the prosecution evidence (see the judgment of Lord Hoffmann in LI Defan v HKSAR (2002) 5 HKCFAR 320)”  [Emphasis added]

67. Nowhere in his Reasons for Verdict did the judge say that he relied on the absence of any explanation from the D1 or D4 to strengthen the inference against them.

68. The reference to Li Defan was one made in the context of two paragraphs — 14 and 15 — in which the judge was doing no more than stating general principles of law applicable to cases where no evidence is given by a defendant at trial. 

69. We agree that in the circumstances it would have been better had the judge said in terms whether he had applied Li Defan in the sense of using D1’s silence as strengthening the inference, but we are satisfied from the reasons he gave that he did not do so.  Even had he done that, it would not have been an error. 

70. We find no merit in this ground of appeal either.

Conclusion

71. For the reasons given, leave was accordingly refused to D1 and D4 in so far as their application for leave to appeal the conviction in respect of Charge 1 was concerned and their applications were dismissed.

Appeal against sentence

72. As already stated above, D1 upon his conviction appeal in respect of Charge 1 being dismissed, did not wish to pursue his appeal against sentence, which was therefore dismissed.

73. That left only D2 and D3 who sought leave to appeal against their sentences.

74. There is no appeal by D4 against her sentence. 

75. One common ground in respect of D2 and D3 in their appeal against sentence was that the sentences were manifestly excessive in that the judge had adopted too high a starting point of three and a half years in sentencing in respect of Charge 2.

76. D2 and D3 further submits that the judge failed :

(a)	properly to assess or distinguish their respective roles and/or criminality in relation to Charge 2;
(b)	to consider the absence of usual aggravating factors; and
(c)	to accord any mitigation to them in that the starting point of three and a half years was not reduced at all.

77. In the case of D3, it was also contended that the sentence for simple possession of dangerous drugs (Charge 6) was manifestly excessive in that the starting point of nine months adopted by the judge was too high and that the judge erred upon the totality principle in that the total sentence passed on D3 came to four years.

78. The facts relating to Charge 2 can simply be stated as follows.  All four defendants had conspired on 29 August 2005 to go on a shopping spree in Mongkok and Shaukiwan using two forged credit cards in the names of D3 and D4 who were the two persons actually using the forged credit cards to make purchases.  The two credit cards were used that day on five occasions obtaining goods to the value of $21,697.  A further attempt to use the forged credit card in the name of D3 to purchase Levi’s jeans valued at $2,589 was rejected by the bank.

79. The handling charges (Charges 3 and 4) relate to goods found in the possession of D1 and D2 respectively on arrest which goods were obtained by the use of the two forged credit cards.

80. All the defendants were arrested by the police as a result of police having kept surveillance on the four of them throughout that day during their shopping spree.

81. At times they were seen by police to have split up in pairs, with D1 assisting D4 as one pair and D2 assisting D3 as another pair.

82. When a body search was conducted on D3 in the Wan Chai Police station after her arrest the same day, a packet of cocaine was found inside her right bra.

83. In passing sentence, the judge took into account the factors set out by the Court of Appeal in R. v. Chan Siu To [1996] 2 HKCLR 128.

84. The judge properly and correctly noted that while the amounts involved in the present case can be said to be relatively small, that is only one factor to be considered and not the most important factor.  The potential loss rather than the actual loss is more important in considering sentence.

85. The judge also noted that in the present case, the defendants’ activities were only curtailed by a highly efficient police surveillance operation and took the view that the defendants were operating as part of an active syndicate engaged in using forged credit cards.

86. He took into account that D1 and D4 were not deterred by their earlier arrests in July 2005 for a similar offence.

87. The judge stated that he had considered the roles played by the defendants as submitted by counsel but on the evidence could see no reason to distinguish between the defendants.

88. The judge then referred to the case of Chan Siu To in which it was said that a starting point of 18 months imprisonment has often been used for a single use of a forged credit card. He also noted however that the Court of Appeal have repeatedly stated that each case is to be decided on its own facts.  As an example, he cited HKSAR v. Ho Ka Yee (CACC 245/2005) where a sentence of 30 months imprisonment after trial was upheld for a single use of a forged credit card.  Furthermore, he noted that the Court of Appeal held in HKSAR v. Zhou Jianguo (CACC 480/2005) that the starting point for use of a forged credit card was three years imprisonment.

89. With that approach, the judge then decided that the starting point in the present case for Charges 1 and 2 after trial should be three years and six months imprisonment.

90. The judge also took the view that there was no mitigating factors in this case to reduce the starting point albeit that the admission of facts by the defendants saved a good deal of time, but that the trial still lasted 11 days with all defendant pleading not guilty to the conspiracy charges.

91. Looking at the approach adopted by the judge in arriving at the starting point of three years and six months in the present case, we are of the view that the judge cannot be faulted for it.

92. It was entirely proper for him on the evidence to take the view that the defendants were operating as part of an active syndicate engaged in using forged credit cards.

93. Moreover, as to the roles played by each of the defendants, bearing in mind that Charges 1 and 2 are conspiracy charges, in offences of this nature, where usually different roles are required of different persons taking part in the conspiracy, it is more often than not impossible to distinguish the different roles between them since the act of each in furtherance of the conspiracy becomes the act of all in that conspiracy.

94. For this reason alone, the judge, correctly took the view that he could not differentiate the roles played by the defendants in this conspiracy.

95. As for the other grounds of appeal against sentence submitted by D2 and D3 that the judge failed to take account the lack of the usual aggravating factor, the short answer to that contention is quite simply that the lack of aggravating factors is not itself a mitigating factor.

96. Lastly, the complaint that the judge failed to accord the defendants any mitigation in that the starting point of three and a half years was not reduced, the judge, in our view, had properly concluded that there was no mitigating factor in this case.

97. The judge rightly acknowledged that time had been saved by facts being agreed by the defendants, but at the same time because the trial took some 11 days due to the not guilty pleas by all the defendants to the conspiracy charge, he took the view that no discount should be given even though some court time had been saved by the admission of facts.

98. In this respect we are unable to say that the judge was wrong either in his approach or on principle.

99. Turning now to D3 in relation to Charge 6, the possession of dangerous drugs, to which D3 pleaded guilty, we are satisfied that the starting point of nine months is well within the range of sentence opened to the deputy judge to impose.  The judge correctly gave the normal one-third discount to D3 for her guilty plea.

100. Neither could it be said that the judge erred in principle in making that six months sentence consecutive with the sentence on Charge 2 as the possession of dangerous drugs offence was one which was wholly separate and distinct from the conspiracy to obtain by deception.

101. One matter which did cause us some concern was the fact that D4 had a much longer criminal record than the other defendants, some 16 previous convictions mostly for theft, three for possession of drugs, one for robbery and two for obtaining or attempting to obtain by deception.

102. Quite apart from her poor conviction record, there were aggravating factors in the case of D4 in that she had committed these offences while on police bail.  The same starting point having been used by the judge in respect of all defendants, nothing was done by him to reflect these aggravating factors in the final sentence of D4.

103. That may well explain why D4 did not pursue any appeal against sentence before this court.

104. Be that as it may, having come to the conclusion that the judge cannot be faulted for using the starting point of three years and six months in the present case, given the evidence, it follows that D4 should consider herself lucky in that the same starting point was used in relation to her without any upward adjustment of the starting point.

105. For the above reasons, the applications for leave to appeal against sentence by D2 and D3 were dismissed.