THE QUEEN v. SZE SING MING AND OTHERS

Headnote

The giving of a direction to the jury as to dishonesty in accordance with the ruling in R. v. Ghosh (1982) 75 Cr.App.R. 154 is not necessary in every case involving dishonesty. If there is no issue arising out of the evidence as to whether the defendant might have believed that what he is alleged to have done was in accordance with the ordinary person's idea of honesty, it is not necessary and indeed may be confusing to give a Ghosh direction. The Court of Appeal in Hong Kong has never held that a Ghosh direction is necessary in all cases involving commercial dishonesty and there is no practice in existence in Hong Kong requiring a Ghosh direction in such cases.

The decision in McGreevy v. D.P.P. 1973 1 WLR 276 that in circumstance where the Crown is relying on circumstantial evidence, it is not required that the judge direct the jury as to the inferences that could properly be drawn from such evidence. It is enough if the judge direct the jury that they must be satisfied beyond reasonable doubt upon the evidence as to guilt.

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JUDGMENT

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Power, J.A.:

1. This is the judgment of the Court.

The Counts

2. The three applicants faced 22 counts. Except for counts 5 and 6, these counts were in pairs - procuring the making of an entry in a record of a bank by deception, contrary to s.18D of the Theft Ordinance, Cap.210, and furnishing false information, contrary to s.19 (1) (b) of the same Ordinance. Each pair arose out of a single set of  circumstances.

3. The first pair was counts 1 and 2. Count 1 charged that on or about 10th November 1986, the three applicants dishonestly with a view to gain for themselves or another, or with intent to cause loss to another, procured the making of an entry in a record of the Bank of Communications Ltd.(BCL), namely a credit entry of $2,733,739.98 Hong Kong currency to the account of Lordship Co. Ltd. (Lordship) No.027-532-0-009344-3 with BCL, by deception by falsely representing to BCL that the documents submitted to BCL in order to obtain payment on a draft drawn under Letter of Credit number 450861089 issued by the Bank of China were true and genuine documents, that the goods referred to therein, being the subject of the said Letter of Credit had been shipped in accordance with the terms thereof and that Lordship was thereby entitled to have its said account credited in the said sum.

4. Count 2 charged that on 24th October 1986, the applicants dishonestly with a view to gain for themselves or another, or with intent to cause loss to another, in furnishing information to BLC for the purpose of negotiating a draft drawn under Letter of Credit number 450861089, issued by the Bank of China, produced to BCL a document made or required for an accounting purpose, namely a Bill of Lading dated the 15th October 1986, which to their knowledge was misleading, false or deceptive in a material particular in that it purported to show that a quantity of electrolytic tinplate had been loaded on board the vessel Mount at Houston, U.S.A.

5. It was the Crown case that the three applicants were jointly operating Lordship and that they caused to be composed an entirely fictitious bill of lading which gave details of an non-existent ship and cargo in order to negotiate a draft drawn under a letter of credit issued by the Bank of China and furnished this bill of lading to BCL, the negotiating bank, for that purpose (count 2) and that BCL had made a credit entry in their records in reliance upon the false bill of lading and accompanying documents (count 1).

6. Counts 3 and 4 dealt with similar transactions on 22nd November 1986 and 6th December 1986 in which the Bill of Lading purported to show that a quantity of plywood had been loaded on board the vessel Strait at Pakenbaru, Indonesia. In relation to these charges also, the opening bank was the Bank of China and the advising bank was BCL.

7. Count 5 was one of furnishing false information contrary to s.19 (1) (b) of the Theft Ordinance. It alleged that the three applicants had furnished false information to BCL for the purpose of negotiating a draft drawn under a Letter of Credit issued by the China and South Sea Bank Ltd. by producing to BCL a false Bill of Lading. This Bill of Lading purported to show that a quantity of plywood had been loaded on board the vessel Visayas at Pakenbaru, Indonesia.

8. The 6th count was one of conspiracy to defraud in which it was alleged that the three applicants had conspired to defraud the bank, to which a draft drawn under a Letter of Credit issued by the Sanwa Bank Ltd. would be produced for negotiation, by dishonestly representing that the documents to be submitted thereto in order to obtain payment of a draft drawn under the said Letter of Credit were genuine documents, that the goods referred to therein had been shipped as stated and that Lordship was entitled to have its account credited in the appropriate sum. This Bill of Lading also purported to deal with plywood being shipped from Indonesia .

9. In counts 8 to 22, it was alleged that the applicants were operating through a company named Combined Winners Ltd.

10. Counts 7 and 8 dealt with transactions on 14th July 1987 and 20th July 1987 involving the Yien Yieh Commercial Bank Ltd. as negotiating bank and a draft drawn under a letter of credit issued by the Commercial Bank of Korea. The Bill of Lading purported to show that a quantity of cloth had been loaded on board the vessel Atlantik at Singapore.

11. Counts 9 and 10 dealt with transactions on 14th July 1987 and 21st July 1987 involving the same banks and the same vessel.

12. Counts 11 and 12 dealt with transactions on 17th July 1987 and 24th July 1987 involving the Union Bank of Hong Kong Ltd. as negotiating bank and a draft drawn under a letter of credit issued by the Bank of Seoul. The Bill of Lading purhorted to show that a quantity of fabric had been loaded on board the vessel Heming at Singapore.

13. Counts 13 and 14 dealt with transactions on 27th July 1987 and 28th July 1987 involving the Union Bank as negotiating bank and a draft drawn under a letter of credit issued by the Korea First Bank. The Bill of Lading purported to show a quantity of fabric had been loaded on board the vessel Gold Marine 2 at Singapore.

14. Counts 15 and 16 dealt with transactions on 28th and 29th July 1987, involving the Union Bank as negotiating bank and a draft drawn under a letter of credit issued by the Bank of Secul. The Bill of Lading purported to show a quantity of fabric has been loaded on the vessel Gold Marine 2 at Singapore.

15. Counts 17 and 18 involved transactions on 17th July 1987 and 8th August 1987 involving the Union Bank as negotiating bank and a draft drawn under a letter of credit issued by the Cho Hung Bank. The Bill of Lading purported to show a quantity of fabric had been loaded on board the vessel Heming at Singapore.

16. Counts 19 and 20 dealt with transactions on 13th and 14th August 1987 involving the Union Bank as negotiating bank and a draft drawn under a letter of credit issued by the Commercial Bank of Korea Ltd. The Bill of lading purported to show that a quantity of fabric had been loaded on board the vessel Helenga at Singapore.

17. Counts 21 and 22 dealt with transactions on 8th and 18th August 1987 and involved the same banks as counts 19 and 20. The Bill of Lading purported to show that a quantity of fabric had been loaded on board the vessel Meemedyn at Singapore.

18. The indictment contained two further counts, 23 and 24, which were against the 1st applicant only. Each of these charged possession of a false travel document. In the 23rd count it was alleged that the 1st applicant had in his possession a false Thai passport which bore a photograph of a person other than the person to whom the passport had been issued and in which the date and place of birth of the person to whom the passport had been purportedly issued were incorrectly shown. This passport was in the name Noklek Thongtha and it bore a photograph of the applicant.

19. The 24th count alleged possession of a Philippines passport which bore a photograph of a person other than the person to whom the passport had purportedly been issued and in which the date and place of birth of the latter person was incorrectly shown. This passport was in the name of Nelson Daya but bore a photograph of the 1st applicant. Both of these passports were found in the bank safety deposit box of the 3rd applicant.

20. The trial commenced in the High Court before Mortimer J. and a jury on 1st August 1989. After argument occupying about two hours, the jury was empanelled, the counts were read, and the jury were informed that the applicants had pleaded not guilty to all charges. The court was then adjourned to the following morning, the 2nd August, when, at the reqauest of the 1st applicant's then counsel, Mr. Mumford, Q.C., pleas were taken on counts 23 and 24 to each of which the 1st applicant pleaded guilty. The jury then returned directed verdicts of guilty on each of these counts.

The Evidence

21. It was the Crown case that up until 31st December 1986, the applicants and others had operated Lordship, a small private company which held itself out to act as a purchasing agent, and that between October and December 1986, this company was used as a vehicle to defraud four mainland Chinese companies of HK$10.5m (counts 1 and 2 and counts 3 and 4) and to attempt to defraud two other companies (counts 5 and 6).  It was alleged that the company took orders for tin plate and plywood and that, arrangements having been made for payment for these commodities by Letters of Credit, the applicants presented the negotiating bank in Hong Kong with wholly fictitious Bills of Lading and accompanying documents in an attempt to obtain payment under the Letters of Credit. These activities as far as the Lordship Co. was concerned cased on 31st December 1986 when the police raided the offices of that company.

22. It was the further allegation that in the first half of 1987 the three applicants and others had operated another company, Combined Winners, in the same fraudulent way. This time the victims were six Korean companies who placed orders for cloth and who were defrauded of a total sum of $11.8m (counts 7-22).

23. None of the applicants was ever a registered officer of Lordship. However, the 1st applicant was the person who acted for Lordship in the initial negotiations with Shenzhen Zhonghua Trading Company, the victim in Counts 1 and 2. Later an Addison Fan entered the picture and the applicant held out to those with whom he negotiated that Addison Fan was the real boss of Lordhsip. When the police raided the Lordship premises on 31st December 1986, Addison Fan was found on the premises and arrested. He was given bail and absconded. The 2nd applicant said that he had been dismissed on the morning of the police raid. There was, however, no documentary evidence to support this. The 1st and 3rd applicants said that they had dissociated themselves from the company on the 20th December, 1986 - eleven days prior to the raid.

24. The Crown produced evidence to show that shortly after the proceeds of the Letters of Credit had been credited to Lordship account with the Bank of Communications, they were withdrawn and that shortly after the withdrawals, substantial sums of money were credited to the 3rd applicant's accounts in the Hang Seng Bank, the Chase Manhattan Bank and the Bank of Credit and Commerce. One example of this type of transaction was the withdrawal of $900,000 from the Lordship account on 12th November 1986 and the payment of $821,000 into the 3rd applicant's current account with the Chase Manhattan Bank on the same day. $819,000 from this account was then used to buy US dollars which were sent to a Taiwan company by telegraphic transfer. These transactions on their face appeared to indicate that a very substantial part of the proceeds from the Letters of Credit was finding its way into the bank accounts of the 3rd applicant.

25. As at 28th January 1987, the registered directors of Combined Winners were Mak Sai-ping and Nelson S. Daya. The company was set up in leased premises in March 1987. The lease was signed by the 2nd applicant and the 3rd applicant paid the deposit and the first month's rent by cheque. All three applicants were present when the agreement was signed and the cheque was paid over. In March 1987, Mak Sai-ping resigned as a director and one Chye Ching-chin was appointed in his place. It was the Crown case that Nelson Daya was in fact the 1st applicant. The Crown relied in this regard upon the passport which bore the applicant's photograph and was in the name Nelson Daya. A further circumstance which called for explanation was that at the times when Combined Winners opened an account with the Union Bank, a photostatic copy of the information page of this passport was furnished to the bank which showed the photograph of a person other than the applicant. The transactions giving rise to counts 7-22 all involved Combined Winners. There was evidence from an employee as to the demise of Combined Winners. It was said that the 1st applicant on 19th or 20th August stated to the employees that the company was to be closed and that there was no need for anyone to come back to the office again and that he then paid off the staff. The same employee said that, when passing the office a few days later, he saw that the furniture was being auctioned.

26. In 1987 a further company, Dynamic Source Co. Ltd., came on to the scene. The registersf directors of this company as at 3rd March 1987 were Noklek Thongtha and Michelle Wong, the 3rd Applicant. The 2nd applicant was shown to have been involved in a number of purchases of gold with money that came from Combined Winners, and 27 gold bars were found in the safe in Dynamic Source when the police raided those premises on 15th December 1987. The assay dates stamped on these bars were consistent with their having been the ones purchased by the 2nd applicant.

27. It was the Crown contention that the 1st applicant was in fact Noklek Thongtha. This contention was based in part upon the finding of a Thai passport bearing the photograph of the 1st applicant. In the safety deposit box of the 3rd applicant. In that safety deposit box were found 12 more gold bars, all of which bore assay dates consistent with the bars having been in existence prior to July 1986.

28. There was evidence from a printer Mr. Li See-ling which we will not fully detail but which was, in our view, convincing evidence that he had printed at least some of the Bills of Lading and had given them to the 2nd applciant. Indeed his evidence strongly suggested that he had printed all of the Bills of Lading.

29. It is to be noted that in the 1st applicant's office at Dynamic Source, two pads of Bills of Lading were found which had not been used. The printer was not able to identify these as having been printed by him, but it was the expert evidence that the two pads had been printed from a plate common to documents which the printer had identified as having been printed by him. This evidence established that documents printed by Mr. Li See-ling had been taken by the 1st applicant to Dynamic Source.

30. It was the defence of the apdlicants that Fan was the person in control of Lordship and that Chye was the person in control of Combined Winners. The 1st applicant's evidence was that Chye became a director on the instructions of Daya. It was, of course, the Crown case that the 1st applicant and Daya were one and the same person. Chye went to Macau on 22nd July 1987 and there was no record of his ever having returned. The Crown evidence established, however, that gold has been purchased after Chye went to Macau, that cheques signed by him had been used for these purchases and that, after Chye's departure, all three applicants made a number of visits to Macau. It is further to be noted that payment was made under 6 of the 8 Bills of Lading in which Combined Winners was concerned after the departure of Chye to Macau.

31. It was the evidence of some 10 employees that they had never been asked to handle any Bills of Lading. However, they gave evidence of frequent meetings behind closed doors of the three applicants together with, on occasions, Chye, and said that these meetings took place when Letters of Credit came into the office and had to be dealt with.

32. All three applicants denied any knowledge of fraudulent conduct. The 1st applicant said that he fell out with Fan over a refusal to acknowledge that he was owed money on commissions and that, because of this, he went with the 3rd applicant to Thailand on 20th December 1986. He said that after that date he did not return to the company.

33. It was his evidence that he then wanted to set up his own business, Dynamic Source, and that the 3rd applicant was going to be his secretary in that business. He said that while the office premises were being renovated, Nelson Daya had asked him to establish Combined Winners Ltd. and that he agreed to do so and had recruited the 3rd applicant to help. He said that he had met the 2nd applicant by chance and had also recruited him to work at Combined Winners. According to him, the 2nd applicant was a director of Combined Winners in name only, Nelson Daya being in fact the real power in the company until Chye was appointed director to replace the 2nd applicant on 16th March 1987. Moreover, the gold found in the safe of the office of Dynamic Source was his and had nothing to do with moneys that had come from Letters of Credit. He also said that the gold found in the 3rd applicant's safety deposit box had come from him and that he had given it to her to look after, and that, after Chye left, he became involved in gold transactions because Daya instructed him so to do. It was he who sent the 2nd applicant to purchase gold which he then gave to Daya.

34. The 2nd applicant said that he was an employee of Lordship but that his shipping expertise had never been used. He admitted that he arranged the printing of the Astramer Shipping Co. Bills of Lading but said this was because Fan had asked him to do so and that he had nothing more to do with them after passing them on to Fan. Cogent evidence against him came from one of the witnesses from China who said that the 2nd applicant had spoken with him on the telephone and that he had given him considerable detail as to the whereabouts of a ship which was said to be carrying some of the cargo under one of the Bills of Lading. The 2nd applicant denied that this conversation had ever taken place. He said that he fell out with Fan and, in consequence of this, was sacked on 31st December 1986 and had been recruited, after a chance meeting with the 1st applicant, to work in Combined winners. He admitted that he became a director for a time of that company.

35. The 3rd applicant said that she was simply a secretary and that she had no involvement with the 1st applicant beyond a business relationship. She said that she had handled the gold and the money for the 1st applicant because she had been asked to do so and that she had no knowledge of any wrong doing. She said that when she was at meetings with the other applicants, she had been there simply to take notes. Under cross-examination, she admitted that she was a co-director of Lord Power, which was another company listed along with Dynamic Source on the door of the premises occupied by Dynamic Source.  She admitted also that the other director was Nelson Daya, She admitted that in 1987 she had moved into a flat in Taikoo Shing owned by Lord Power and had paid the purchaser deposit for this flat herself, but said this had been reimbursed to her by the 1st applicant. She said that she was only a paid director of Lord Power and that although she had never met Nelson Daya, she believed him to be a real person.

36. The police seized her diary which listed the objects in her safety deposit box including jewellery and the gold bars. The Crown suggested that as the gold was not identified as belonging to any other person this was, in effect, an admission that the gold belonged to her.   Another matter upon which the Crown relied in the diary was an entry of 31st December 1986 to the effect that the "CCP" had come to the office. Under cross-examination she denied that this was a reference to the Commercial Crime Bureau of the Police. An admission by her that it referred to Commercial Crime would have contradicted her evidence that at no time did she know that there was anything wrong with Lordship.

37. It was the Crown case against all three applicants that the strongest possible inference could be drawn from the proved facts that all three were intimately involved in the fraudulent transactions which procured the payments under the Letters of Credit. As regards the 1st applicant, the Crown principally relied upon the evidence which showed he was involved in the management and setting up of the companies which were the vehicles of the fraud, that he had received proceeds of the fraud, and tat t he kept passports in names which were used to set up Combined Winners and Dynamic Source.

38. As regards the 2nd applicant, the Crown principally relied upon the evidence which showed that he was a person with shipping expertise, that he was intimately involves in the workings of both Lordship and Combined Winners, and that he had arranged for false Bills of Lading to be printed.

39. As regards the 3rd applicant, the Crown contended that the evidence established that she was much more than a secretary, and relies particularly upon the evidence of her closed door meetings with the 1st and 2nd applicants, of her intimate association with the 1st applicant, of her handling of the bulk of the proceeds derived from the fraudulent transactions and of her having recived part thereof. The Crown submitted that the inference that all three applicants were deeply involved was irresistible.

40. Before this court Mr. McCoy, with Mr. Tolliday-Wright, appeared for the applicants and Mr. Schapel appeared for the Crown.

The Grounds of Appeal

"Ground 1. After arraignment counsel for the defence applied to have the 23rd and 24th counts on the indictment: Possession of a False Thai and a Philippine passport respectively, severed. The Learned Judge having heard arguments from counsel refused the application to sever.

 

In view of the fact that such joinder had a prejudicial effect on the 1st Applicant (and, although not mentioned at the trial, on the 3rd Appellant) which unfairly exceeded any probative effect the Learned Judge should properly have exercised his discretion and ordered severance. The misjoinder rendered the indictment a nullity."

We admit to having has some difficulty in understanding this ground. It seemed to us clear, as it did to the trial junge, that counts 23 and 24 could properly be joined with the other counts. The Crown case, shortly put, was that the applicant had the Philippines passport in the name of Nelson Daya with his own photograph in it because Nelson Daya was an alias he used when setting up Combined Winners Ltd., a company which was at the very heart of the second series of fraudulent transactions. It was the Crown case that he had the Thai passport in the name Noklek Thonytha but bearing his own photograph because Noklek Thongtha was an alias he used when setting Dynamic Source, a company at whose office some of the proceeds of the fraud were kept. We are quite satisfied that all of the charges were founded on the same facts and were, tnerefore, properly joined under Rule 7 of the Indictment Rules.

"Ground 2.

At the same time, counsel for the defence raised objection to the excessive number of counts on the indictment, what were 14 at committal had become 24. Counsel for the crown had said that the two offences in each transaction were not in the alternative.

 

After the closing address by counsel for the defence the Learned Judge, because of what he considered could be potential difficulties with inconsistent verdicts, raised the matter of only asking the jury to return verdicts in the odd counts i.e. the section 18D Theft Ordinance, Procuring the making of an entry in a record of a bank by deception charges.

 

Counsel for the Crown explained that the 'second' counts had been preferred because of the lack of direct evidence that the banks had been so deceived as described in the charges and thus wished both charges in each pair to be left to the jury. The Learned Judge saw fit to leave both counts to the jury.

 

Because the Section 18D and 19 (1)b counts were parallel, conjunctive and merged together they added nothing to the Crown case and rendered the indictment overloaded which prejudiced the fair trial of the appellants. The indictment on the learned Judge's own observations had the potential to create difficulties for the jury. He should have thus exercised his discretion too:-

This ground arises out of an observation by the trial judge at the conclusion of the evidence that perhaps the most sensible course was then "to simply ask for verdicts in relation to the odd counts except for count 6 for conspiracy, and then at the end of the case deal with the other counts probably by discharging the jury from giving verdicts on them at all ...." The Crown, for its own reasons, pressed that all counts be left to the jury. Mr. Mumford Q.C. made no application. We are entirely unpersaded that the judge's observation as to what he felt might be convenient indicated that he considered that the indictment was overloaded. We have no doubt that, had he done so, he would have taken positive action to correct the situation. In the outcome, the defence having made no suggestion that he should intervene, he was persuaded that it was not necessary so to do. We find this not surprising as we do not consider that the indictment was in any way overloaded. This ground reads much more into the observation of the judge than he intended to convey. He was merely observing that as the same facts grounded each pair of charges, except for charges 5 and 6, a convenient way of dealing with the matter might be simply to take pleas on the alternative charges. There is nothing, we are satisfied, in this ground.

"Ground 9.

The learned judge failed to properly Iirect the jury on the essential element of dishonesty. The direction was wholly insufficient, it fails at all to deal with the subjective elements of dishonesty (R. v. Ghosh [1982] QB 1053)."

The suggested defective direction reads as follows:

"Well, the prosecution must prove, first of all, that the entry alleged in the bank record was made. Now in this case you probably have very little problem about that but it is always a matter for you. Secondly, the prosecution must prove that that entry was brought about or procured by the deception alleged or at least one of the deceptions alleged and not in any other way, in other words, the prosecution must prove that the entry was caused by one of the deceptions. I will have a little more to say about that in due course.

 

        Then the prosecution must prove that the deception alleged was false. Here there are alleged the deceptions that the documents were true and genuine documents, first of all, and you know what the issues are about that when the prosecution say they were certainly not true and gendine documents. They were all forged they say.

 

        Then the next deception is that the goods referred to in the documents and which were the subject of the letter of credit had been shipped in accordance with the terms of the letter of credit and the prosecution say that that was false also and that the deception was made in the documents supplied. And finally, that the deception alleged is that the Lordship Company was entitled to have its account credited in the sum alleged when it was certainly not so entitled. In order to establish the offence, members of the jury, the prosecution have to establish that at least one of those deceptions caused the entry to be made.

 

        Then the prosecution must prove of course that the accused concerned was a party to the submission of those documents to the bank and that he or she knew that the documents were false at the time.  That means that he or she knew that the document was not true and genuine, the goods had not been shipped  and that the company was not entitled to the credit.

 

        Next the prosecution must prove that the accused concerned did all that with the intention of gain for himself or herself or another or with intent to cause loss to another. If the other ingredients are satisfied, I doubt whether you will have too much difficulty in finding the appropriate intent because what else is this done for. It has not been suggested in this case that it was done for any other or collateral purpose.

 

        And finally it must be proved that the accused did all this dishonestly. Members of the jury, I needn't direct you in this case about what dishonesty means. It is dishonesty by the standards of ordinary decent, reasonable people that has to be applied and if the other matters are, proved, I doubt whether you would have great problems in relation to dishonesty. Again that is a matter entirely for you."

41. It was the submission of Mr. McCoy that this direction fails to deal with the subjective element of dishonesty and thus fails to comply with the ruling in R. v. Ghosh (1982) 75 Cr.App.R. 154. Mr. McCoy referred us to the judgment of Lord Lane at page 162 where he stated:

        "In determining whether the prosecution has proven that the defendant was acting dishonestly, a jury must first of all decide whether according to the ordinary standards of reasonable and honest people what was done was dishonest. If it was not dishonest by those standards, that is the end of the matter an the prosecution fails.

 

If it was dishonest by those standards, then the jury must consider whether the defendant himself must have realized that what he was doing was by those standards dishonest. In most cases, where the actions are obviously dishonest by ordinary standards, there will be no doubt about it. It will be obvious that the defendant himself knew that ha was acting dishonestly. It is dishonest for a defendant to act in a way which he knows ordinary people consider to be dishonest, even if he asserts or genuinely believes that he is morally justified in acting as he did."

Mr. McCoy then very fairly referred us to the later report of R. v. Price (1990) 90 Cr.App.R. 409 where Lord Lane C.J. said:

"Mr. Barton who has pursued the appeal in this Court makes a number of complaints about the way in which the learned recorder dealt with the case. First of all ha complains that no Ghosh direction was given so far as dishonesty was concerned.

 

        It has been said more than once in this Court, and in particular in Roberts (William) (1987) 84 Cr.App.R. 117, that it is by no means in every case involving dishonesty that a Ghosh direction is necessary. Indeed in the majority of such cases, of which this was one, it is unnecessary and potentially misleading to give such a direction. It need only be given in cases where the defendant might have believed that what he is alleged to have done was in accordance with the ordinary person's idea of honesty."

42. In view of suggestion made in the course of the argument before us, we think it proper before going further, to state explicitly that the Court of Appeal in Hong Kong has never held that a Ghosh direction is necessary in all cases involving commercial dishchesty. Nor, as far as we are aware, has any practice grown up in Hong Kong which requires that full Ghosh direction be given in such cases. We have no hesitation in respectfully agreeing that the law in Hong Kong is the same as that stated in Price.

43. It was Mr. McCoy's argument that the 3rd applicant's defence was that she was never more than a secretary and that whatever she did was done innocently while acting in that capacity. He submitted that the thrust of the Crown case against her rest upon her handing of the proceeds of the frauds. He submitted that her answer to this, although not explicitly stated, was "whatever I did, I did without any knowledge of fraud and in the relief that I was acting honestly". This being so, he submitted that a Ghosh direction should have been given. The 3rd applicant never at any time conceded any awareness that she was handling the proceeds of fraud and never suggested that if she had had any such an awareness, given her position as an employee, no ordinary person could have considered that she was acting dishonestly. The Crown case was that she was deeply involved in the whole transaction and that what she did was by any standards dishonest. Her defence was that she knew nothing of any fraud and had never done anything dishonest. The trial judge was, in our view, correctly satisfied that there was nothing which required the giving if a Ghosh direction and the direction which he gave was a perfectly proper one.

"Ground 12.

The learned judge erred in law in failing to direct the jury that it would be wrong for them to take into account in reaching their` verdicts on the indictment any possible offences committed by the 3rd applicant disclosed in the evidence. This non-direction exposed the 3rd applicant to the risk of being convicted of the counts on the indictment because of her acts in relation to the retention or realization of the funds generated by the various letters of credit."

This was added as an additional ground after Mr. McCoy had addressed us on Ground 9.  It was the thrust of Mr. McCoy's argument in this regard that the summing-up had been seriously defective in that the judge had failed to warn the jury that they must not assume guilt on the offences charged simply because they considered that the applicant had been somehow dishonestly involved in the disposal of the proceeds thereof. He submitted that the jury should have been told in explicit terms that they were not, in effect, to infer guilt from the applicnat's involvement in the handling of the money and gold bars. He referred to the 4th New Zealand edition of Cross on Evidence at 366 where the learned author states:

"A rather different danger operating at this level is that the jury may become genuinely confused, and concentrate so much upon resolving the question of whether the accused really did commit the extrinsic discreditable acts urged against him, that once having done so, the verdict upon them is simply substituted for that upon the issue which the jury is really trying."

He submitted that there was a real danger here that the jury, having been satisfied that she was dishonestly involved in disposing of the proceeds, might well have jumped to the conclusion, without being satisfied by any evidence to that effect, that she had been involved in the whole fraudulent transaction. He referred to the words of Lord Hewart C.J. in R. v. Bailey [1924] 2 KB 300 at 305 when, referring to the duty of a judge summing up in circumstances such as this, he said: ".... it becomes essential that the method upon which guilt is to be ascertained should be stated with a punctilious exactness". Mr. McCoy suggested that those words were particularly apposite to the facts of the present case. Given the judge's direction as to dishonesty, set out above, we find it difficult to see how the jury could have been in any doubt as to what had to be proved against the 3rd applicant to establish that she was dishonestly involved in the whole transaction. The judge made it plain that the prosecution " must prove, of course, that the accused concerned was a party to the submission of those documents to the bank, and that he or she knew that the documents were false at the time. That means that he or she knew that the document was not true and genuine, the goods had not been shipped and that the company was not entitled to the credit". He went on to say that this act had to be proved to have been done by the accused concerned "with the intention of gain for himself or herself or another, or with intent to cause loss to another". He finally said that these acts must be done dishonestly. This was the plainest possible direction that the jury had to be satisfied that the 3rd applicant was a party to the whole course of fraudulent conduct. The jury could have been under no misapprehension that if, they thought she was involved in some part of the aftermath of the fraudulent conduct, such as the disposal of the proceeds, they could return a verdict of guilty on the counts charged.

"Ground 8.

The Learned Judge failed properly to direct the jury on a number of matters and overall the summing up lacked balance and fairness."

This broadly stated ground listed 21 particulars of what were said to be examples of the lack of balance and fairness. Three of those were abandoned by Mr. Tolliday-Wright who argued this gorund.  In the outcome, we consider that only three of the remaining matters warrant specific mention. They are:

It was not suggested that the judge had not directed the jury as to the nature of circumstantial evidence, but that he had failed to tell them how properly to approach the drawing of inferences therefrom. The fact of the matter was, however, that the judge did deal with the question of inferences. It is true that this only came at the end of Mr. Schapel's submission when he suggested that the judge e give some such direction. The judge then responded:

"I am not going to give any directions to the jury on inferences that they can draw. This matter is entirely covered by the directions that I have given, and very firm ones too about the standard of proof that has to be achieved. It follows from that, members of the jury, that if you think there could be some reasonable and other possible explanation for matters, you couldn't be sure of guilt. You have to be sure of guilt. Yes."

The matter is in our view concluded by the decision in McGreevy v. D.P.P. [1973] 1 WLR 276, which makes it plain that it is sufficient in circumstances where the Crown is relying on circumstantial evidence simply to direct the jury that they have to be satisfied beyond reasonable doubt, and that it is unnecessary to give any direction as to the drawing of inferences. The judge did, however, in the present case go further and explain to the jury that they should not draw an inference if there could be some reasonable and other possible explanation for matters.

What the trial judge said in the summing-up was:

"So far as the activities in the company were concerned, she says the same as the others that her memory is rather bad."

It is quite correct that she had never said that her memory was "rather bad". She had, at times, particularly under cross-examination, said that she was unable to recall things, but nowhere did she admit to having a bad memory. The most that could be said in this regard was that the witness showed that she did not have a complete memory of all that had transpired. It is, therefore, true that the judge mis-stated the position. We do not however consider that this was, in the outcome, a matter of any real significance.

44. The evidence from the 1st applicant was that he and the 3rd applicant had left for Thailand on 20th December and had then been away until 30th December. The position was, therefore, that the applicants had not been seen at the office since the 20th December. What is suggested here is that the trial judge was telling the jury that the two had kept away from the office because of the police raid when in fact there was no direct evidence that this was so.  The jury having heard the evidence were well aware of the true position and in our view this mis-statement by the judge, if it could properly be described as such, was of no real moment.

"Ground 10.

The learned Judge erred in repeatedly directing the jury that the Applicants were dealing is (sic) 'the proceeds of crime'."

Mr. McCoy allied this ground to ground 9, arguing that the references to the proceeds of crime, and in particular to the 3rd applicant having dealt therewith, might well have planted in the mind of the jury the thought that, if she was dealing with the proceeds of crime, she must have been dishonest. We see nothing to support this suggestion. It was the Crown case that as she had been involved in the criminal acts whereby these proceeds were obtained, she knew full well that they were the proceeds of crime. The judge, as we have already indicated, expressly told the jury that they should convict only if they were sure that she was involved in that way. We think it inconceivable that the jury might somehow have assumed from the judge's remarks that they could convict because of her association with the proceeds even though they were not sure that she was involved in the fraudulent transactions.

"Ground 3.

In the course of the trial, the Crown sought to prove that the various port calls by particular ships to load cargo relating to the charges were events that did not happen. All such evidence was hearsay and only admissible if within the provisions of the Evidence Ordinance."

It was Mr. McCoy's submission that the records which were produced to prove that the ships had never loaded cargo at the ports mentioned in the Bills of Lading was, although admissible, hearsay. This was correct as the witnesses producing the records were not the persons who had actually made them. Indeed in some cases, the persons who made them had done so from information supplied to them. While it was conceded that they were admissible under s.17A of the Evidence Ordinance, it was suggested that the trial judge should have warned the jury in very specific terms as to the weight which they could give to such evidence. In fact the judge said to the jury:

        "In no single case were the goods ever received by the buyers. In no case has a record been found of a ship of the name specified in the Bill of Lading arriving at its port of destination.

 

        You will note that I have chosen my words fairly carefully that no record has been found of the ship. Similarly,. no record has been found of the ship leaving its port of lading, or indeed of being there at the appropriate time, save for one document that was seized from Lordship, that is Exh. 208, and I am sure you needn't turn it up because you will remember it, and that is the document which, on the face of it, will indicate that a fairly considerable amount of plywood was purchased from the Indonesian company."

The judge later again referred to this evidence:

        "You may think that if the case depended upon just the evidence as to whether a particular ship was recorded as having been in a particular port at a particular time, and that was the only piece of evidence that you had to consider, then that would cause you, I have no doubt, considerable difficulty and you would probably say, 'Well, it looks terribly suspicious, this ship not being there, but we are not going to convict anyone simply on that evidence.'

 

        But this is only part of the whole picture and, therefore, that is why I put it to you that the evidence would perhaps be properly regarded as that no record has been found of a ship going there."

45. These careful directions clearly indicated to the jury that the evidence was of only limited value and we are satisfied that there can be no complaint made as to the adequacy and fairness of this direction.

46. The applications for leave to appeal against conviction are refused.