LAI Kok-che v. R.

1991, No.202
(Criminal)

IN THE COURT OF APPEAL

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J U D G M E N T

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Nazareth, J.A.

1. On the 26th March 1991, the applicant Lai Kok-che ("Lai"), was convicted of three counts of obtaining property by deception, contrary to s.17(1) of the Theft Ordinance, Cap.210, and on the 9th April 1991, he was sentenced by Her Honour Judge Beeson in the District Court to imprisonment for 21 months on each count to run concurrently. The sentences were suspended for 2 1/2 years.

2. He applied for leave to appeal by notice, and although he appeared in a previous hearing which was adjourned, he has not appeared today. For reasons that will be apparent, it seemed to us that we should proceed to the hearing of his application.

3. The particulars of offence in the three charges are as follows :

1st Charge

" LAI Kok-che ("Lai"), on an unknown date in January 1987, at No. 1, Fleming Road, Hong Kong, dishonestly obtained from Cho Shuet-chun ("Cho"), property, namely HK$111,000 cash, with the intention of permanently depriving the said Cho thereof, by deception, namely falsely representing that a cheque of the same amount (Bank of America cheque No.330903) given to the said Cho then by Lai himself could be honoured when in fact the account on which the said cheque was to be drawn had already been closed."

2nd Charge

" LAI Kok-che ("Lai"), on a date unknown between the 1st day of February, 1987 and the 31st day of March, 1987, at No. 1, Fleming Road, Hong Kong, dishonestly obtained from Cho Shuet-chun ("Cho"),property, namely HK$50,000 cash, with the intention of permanently depriving the said Cho thereof, by deception, namely falsely representing that a cheque of the same amount (Bank of America cheque No.330901) given to the said Cho then by Lai himself could be honoured when in fact the account on which the said cheque was to be drawn had already been closed."

3rd Charge

" LAI Kok-che ("Lai"), on or about the 1st day of June, 1987, at No.1, Fleming Road, Hong Kong, dishonestly obtained from Cho Shuet-chun ("Cho"), property, namely HK$39,000 cash, with the intention of permanently depriving the said Cho thereof, by deception, namely, falsely representing a document, given to the said Cho then by Lai himself and the face of which purported to be the share certificate of one Somaliland Limited, was the proof of a HK$200,000 investment (the total of the present amount and two sums paid over to Lai previously) of the said Cho in the company that the said Cho was invited by Lai to invest in."

4. It is not in question that in such offences of obtaining property by deception, the deception must operate on the mind of the persons deceived (see Archbold 1993, paragraph 21-160) and that the making of the representation must precede the obtaining of the property (R. v. Collis-Smith [1971] Crim.L.R.716, CA).

5. Having said that I turn to the facts. These, as found by the judge and upon which she convicted, were as follows.

6. Cho and Lai knew each other from about 1984, Lai induced her to give him money to invest in his company on the strength of his representation that he was running a viable and prosperous company making electronic watches. Cho gave him a total of $200,000 over a period of time. Lai used to give her a post-dated cheque for each sum she paid to him, telling her that the post-dated cheques were a guarantee that her money would be repaid when she wanted it even if his business lost money. It was Lai's practice to re-issue post-dated cheques to replace those that became stale. Cho got no return on her investment and began to press Lai for repayment. Eventually, he gave her a share certificate in Somaliland Ltd., a defunct company once run by him which he told her was proof that she held 200,000 $1 shares in his company. She did not know English and did not realise it was not the company she had invested in.

7. Lai ceased communicating with Cho in 1988 and she was unable to trace him. The cheques she held bounced and it emerged that the account on which they were drawn had been closed in 1985, some three years earlier.

8. The reasons for verdict given by the judge at page 4 refer to the first count in the following way :-

" [Cho] referred to Cheque No.330909 (Charge 1) being given to her as an acknowledgement of money she gave to [Lai] for investment on her behalf. In cross-examination it was made clearer that this cheque was given to cover a number of payments made to [Lai] over a period of time. For each sum paid by [Cho] she received a post-dated cheque for the same amount from [Lai]. [Lai] assured her that this was a form of guarantee and that it meant she would be able to retrieve her money whenever she wished. The cheque for $111,000.00 represented the total of the cheques and cash that [Cho] had given [Lai] by that time; the beginning of 1987."

9. It follows clearly that all, or possibly all but the last of the individual payments made by Cho comprising the sum of $111,000, preceded the giving of Cheque No.330903 to her and could not have been obtained by the false representation specified. In any case there is no finding that "$111,000 cash" or any part of that sum was obtained by a false representation that Cheque No.330903 "could be honoured".

10. The position on the 2nd charge is similar. There is likewise no finding that a sum of $50,000 was obtained upon a false representation that Cheque No.330901 "could be honoured".

11. With reference to the 3rd charge, the judge said at page 5 of the reasons :

"Eventually [Cho] despite [Lai's] emollient assurances, began to demand her money back and ask for some of the profits that she believed she should receive. At some stage in 1987 after the cheques the subjects of Charge 1 and 2 were handed to [Cho], [Lai] filled out in her presence a share certificate telling her that it was proof that she had a share of 10% in his company, Vito, in which [Cho] had been told her money was invested. By the time he made out the share certificate for her [Cho] had paid [Lai] a total of $200,000.00 which [Lai] told her entitled her to 200000 $1.00 shares. In return for what was in fact a worthless share certificate in a defunct company once run by Defendant (Somaliland Ltd.) [Cho] handed back to [Lai] several of the post-dated cheques she had been given. [Cho] did not read or speak English and did not realise that the share certificate did not refer to Vito at all."

That is the only finding in respect of the 3rd charge and clearly it cannot sustain the conviction on that charge. The obtaining of HK$39,000 is not even mentioned, much less addressed.

12. While worthless post-dated cheques given in replacement of expiring cheques might found charges for obtaining credit by deception, they could hardly do so in respect of property already obtained on the strength of the earlier cheques.

13. Mr Casewell for the Crown did not seek to support the convictions.

14. For those reasons which, it must be said, are not the only unsatisfactory features of the case, the convictions cannot stand. We accordingly grant the application for leave to appeal, treating the hearing of the application as that of the appeal, allow the appeal and set aside the convictions, and the orders made by the judge. The latter include an order for restitution to Cho, in respect of which Lai has paid a total of $144,000. There is clear evidence, and Lai did not dispute, that he had to repay $200,000 to Cho. Although, therefore, the order for restitution has to be set aside, we do not deem it appropriate to make any order for the return of the amount paid.

15. Before we leave this matter we express our surprise and concern that the case outlined in the prosecution's written opening did not accord in material respects with particulars of the 3 offences, that those particulars do not appear to have been addressed at the trial despite the Defendant having been represented, and finally that legal aid was refused apparently because "counsel advised ... that there was no strong grounds for appeal against conviction".