THE QUEEN v. TANG FUK-WAI

IN THE COURT OF APPEAL

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JUDGMENT

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McMullin, V.-P.

1. The applicant was convicted in the District Court upon three charges taken under Section 76(1) of the Crimes Ordinance Cap. 200. In each charge it is alleged that he was in possession of a bank note purporting to be a Chartered Bank Note for $1,000 without lawful authority or excuse.

2. The facts were largely undisputed. The applicant is a young man, now about 22 years of age, who came illegally to Hong Kong about two years ago. He then resided with an elder sister who had preceeded him in the same way to this territory. He lived with her for about a year and a half during which time he engaged in work of various descriptions. Eventually however he seems to have settled upon the life of a hawker. In a statement made by him to the police shortly after his arrest, he frankly admitted that it was his practice to smuggle goods across the border in the Lau Fau Shan area for sale to mainland folk living there. These included merchandise such as household prerequisites, clothing, beer etc. He claimed to be making something in the region of $3,000 a month in this trade.

3. On the 2nd June, 1984 the applicant purchased one photo album and one photo frame at the Bee Gee Toys Centre, Shoo 13, G/F., Allway Gardens, Tsuen Wan. He paid for these items with what purported to be a $1,000 note issued by the Chartered Bank and received change of $952.50.

4. About five minutes later, at a nearby shop, the Tsuen Waan Books, Newspaper, Stationery and Paper Produce Centre, also in Allway Gardens, he bought one mirror frame and one ball-point pen. The total value of these goods was $46.  Once again he paid with what purported to be a $1,000 Chartered Bank note. On this occasion the shopkeeper caused the note to be examined by a neighbour, who had the appropriate equipment, under ultra-violet light. This examination persuaded him that the note might be counterfeit. He then contacted the proprietor of the shop which had previously been visited by the applicant and in consequence the note which had been used by the applicant for his purchases there fell under the same suspicion. The police were informed and the applicant was arrested.

5. On 3rd June he made a statement under caution. This consisted principally of answers to questions put to him by DPC YIP Kwok-hung concerning these banknotes which were by then in police possession. Two subsequent statements made by him were in the same form. No objection has been taken on that or any other account and these statements were admitted in evidence as voluntary statements together with certain agreed facts including the fact that the two notes relating to the incident on the 2nd June and a third note which was also in the possession of the police at that date and which relates to the third charge were forged banknotes.

6. In his first statement the applicant explained that he had got the two notes which he had used an the 2nd June from "Mainlanders" when he was trading with them at Sham Chun River, Pak Hok Tung on the 29th May at about 10:00 in the morning. He said that he had purchased these goods in the two shops on the 2nd of June as samples to show to his Mainland customers and because he wanted to have change from the thousand dollar notes which he would use to purchase goods from hawkers on the Hong Kong side of the border who would have been unwilling to change notes of such large denomination.

7. At the trial he said that he would not have been able to change both notes in one of the shops because such shops would be unwilling to change large denomination notes without any sale of goods.

8. In this first statement he also said that he had on a previous occasion, the 10th April, 1984, been arrested by the police in connection with his possession of another thousand dollar banknote which was suspected to be a forgery. It appears that he was never charged with any offence in respect of that incident and was released after inquiry by the police.

9. On the 2nd of July the applicant made a second statement while in custody at Commercial Crimes Bureau in Victoria Barracks. At this time the police had in their possession two other forged banknotes of the same denomination. These relate to the transaction covered by the fourth charge. We are not now concerned with that charge in respect of which the trial judge upheld a submission of no case apparently on the basis that the chain of evidence relating to its production in evidence was unsatisfactory.

10. Prior to the questioning on the 2nd of July there had been an identification parade and the applicant had been identified by two shopkeepers. One of these, the proprietor of a shop known as the Man Pong Furniture Shop, had identified him as a person who had purchased a small kitchen cupboard from him on the 14th March, 1984 using for that purpose a $1,000 Chartered Banknote. When questioned about this alleged purchase the applicant denied that he had been to that shop. The subsequent three questions and answers are of some importance as will later appear.

11. After this interview the police visited the home of the applicant and there discovered a small cupboard and, presumably because it corresponded to some extent with the description given by the owner of the Man Pong Shop, the applicant was further questioned on the 5th July. He then admitted that he had bought the cupboard from that shop and that he had paid for it with a $1,000 note which he had obtained "while doing business".

12. The explanation given by the applicant at the trial for his possession of the two notes used by him on the 2nd June was substantially the same as that which he had given in his first statement save that he said he had received them from the Mainland customers on the 31st May, not on the 29th as he had said in his statement.

13. In his second statement, he had said that his turnover for the whole period of his trading in this way was between seventy and eighty thousand dollars. He said that he would normally deposit the money thus gained in the Hang Seng Bank in Yuen Long.

14. At the trial he was asked why, having come into possession of these two thousand-dollar notes together with a Hong Kong Banknote for a thousand dollars (which was also found in his possession but is not under suspicion) he had not deposited that money in the bank on that day - i.e. the 31st of May - since he alleged that he had received it between 3:00 and 5:00 p.m. He said that he had not done so because he was tired on that day and on the following day he used some of it to buy rice. He said that that was a Saturday and after he had bought his rice it was nearly twelve o'clock and he did not try to pay the money in as he assumed that the bank would be closed. He added that his purchases at Allway Gardens had been on Sunday and when it was pointed out to him that the date of those purchases - the 2nd June - was in fact a Saturday, he replied, "My calendar said it was a Sunday." The calendar in fact establishes that the 2nd was a Saturday.

15. One of the points taken by Mr. McKenzie-Ross for the applicant is that the judge wrongly permitted evidence of the previous investigation at the Commercial Crimes Bureau in April 1984 to adversely affect the case of the applicant in evaluating the evidence as a whole. There is nothing in this point. In giving evidence the applicant was asked whether he was aware that forged banknotes did circulate in Hong Kong. This question was admissible as testing the state of his knowledge. The tenor of his reply to several questions along this line was that he had never heard of such a thing. It was permissible for the judge to consider those answers in relation to the question of knowledge and to the fact that he was aware that on a previous occasion the police suspected that a note in his possession was a forgery. The question of the weight to be attached to these rather foolish replies is another matter.

16. The main of thrust of the argument for the applicant has been that the judge permitted evidence which amounted to nothing more than suspicion to constitute proof of the charges.

17. Mr. Ridgway for the Crown concedes that in his reasons for verdict the judge has not expressed himself as clearly or happily as he might have done. That is certainly the case. On the first page of the reasons for verdict having correctly stated that the only issue before the Court was that of knowledge, the judge went on to say, "Did the defendant, when he possessed the notes, know or have reason to know that the notes were forged?" At page five of his reasons the judge says:-

"After final speeches by Counsel I found that the defendant guilty beyond reasonable doubt of the three remaining counts against him and I convicted him accordingly of these offences. I did so because I did not believe the defendant when he said that he had no knowledge the notes were forgeries."

18. Mr. McKenzie-Ross argues that this approach to the case effectively shifted the burden of proof to the defendant. The decision is thus, he says, vitiated by a fundamental error which is not purged by the conclusion on page 6 where the judge, having said that where an inference can be drawn which might either be favourable or adverse to a defendant the course favourable to the defendant should be taken, went on to say: -

"However in this case the inference irresistably to be drawn is that the defendant had 'knowledge' that he possessed forged $1,000 Chartered Bank banknotes and negotiated them for advantages when opportunity arose."

The use of inverted commas in that passage might perhaps be said to lend some additional support to the contention that the judge was directing himself to the question "Did the accused have reason to know that the notes were forged?" rather than the true question, "Did he know that the notes were forged?"

19. While it is true that even an experienced judge or magistrate may occasionally fall into error on a matter of fundamental significance, an appellate court should be slow to attribute to any judge or magistrate a misunderstanding of fundamental principle on the basis of what may merely have been an infelicity of language.

20. It is true that the question before the court was not whether the evidence was sufficient to show that the applicant must have had reason to know that the notes were forged but whether it was certain that he had such knowledge. However it will necessarily be an important part of the court's task in cases such as this to attend to all elements in the evidence which may afford reasons for or against imputing such knowledge to the defendant. Furthermore, in such circumstances as the court-was confronted with here, where the Crown could prove no more than that the defendant had possessed and used such notes, his explanation concerning the way in which they had come into his possession necessarily constituted a most important and material part of the evidence for the courts consideration in resolving the question of knowledge.

21. When considering the evidence as a whole the trial judge, if satisfied that the circumstances lead irresistably to the conclusion of knowledge, will find it difficult to announce that conclusion without expressing his disbelief in the story put forward by the defendant.

22. We would be slow, purely on the basis of this incautiously chosen formula to assume that the judge in the present case had misunderstood the nature of his own task.

23. But the matter does not end there. The judge lists some five points in a summary of his reasons for finding the case proved. The first of these relates to the demeanour of the applicant in giving evidence. Notwithstanding the somewhat dismissive treatment given to this factor by Mr. McKenzie-Ross, we are satisfied that in any criminal trial demeanour remains a consideration of importance.

24. It must, however, be borne in mind, as Counsel has pointed out, that the judge in the present case did not elaborate upon such features of the applicant's demeanour as led him to form an adverse impression of his evidence, and also that the applicant, an illiterate Cantonese villager, speaking in a language not understood by the judge, was giving evidence in a court of law for the first time.

25. Secondly, the trial judge noted that "the defendant had knowledge about forged notes by the 10th April, 1984 when he went to Commercial Crime Bureau." The difficulty about that point, however, is that we do not know what the circumstances were which led to the defendant's arrest on that occasion or what the result of the investigation was. There is nothing to show that any proceedings were taken as a result of it, nor is it even certain that the applicant was at that time apprised of the fact that the note in which the police were interested was in truth a forgery - if such was the case. The farthest this evidence takes the matter is to fix the applicant with the knowledge that a $1,000 note had fallen under suspicion of being a forgery. Had it been clear that the note found on that occasion was a forgery, and that the applicant was made aware of the fact, his subsequent denial when giving evidence that he had ever heard of such a thing might have assumed greater significance. As the matters stood however these denials were clearly not something to which any great weight could attach as an indication of guilty knowledge.

26. Thirdly, the judge relied on the fact that the applicant had, in his view, lied about his purchase of the cupboard in the Man Pong Furniture Store on the 14th March. Notwithstanding Mr. McKenzie-Ross's contention to the contrary it does seem very unlikely that the applicant would not have remembered that purchase, more especially since his denial of having being to the Man Pong was made on the 2nd July, the day on which an identification parade had been held at which he had been identified by the proprietor of that shop. His subsequent admission would, in those circumstances, seem much more like the reluctant abandonement of a falsehood.

27. What seems, however, to have principally impressed the trial judge about this part of the evidence was the fact that the applicant had, as the judge believed, changed his story as to how he had come into possession of the note used for the purchase of the furniture at the Man Pong. In his third statement on the 5th of July, following upon his admission to having bought the item of furniture from the Man Pong Furniture Shop, the applicant went on to say that he had got the note with which he had paid for that furniture "while doing business". This was in accord with the explanation given by him both in his first statement and in his evidence as to how he had come by the other two notes used by him on the 2nd June.

28. In his statement of the 2nd July (the second statement) this matter was also touched upon the lie discerned by the trial judge concerns an alleged contradiction between what he then said as against his later admission to having used a $1,000 note to purchase the cupboard. The questions and answers relating to this matter in his statement of the 2nd July are as follows:

29. Put at its highest that sequence of questions and answers leaves the final answer ambiguous. Indeed, since at that point the applicant was denying that he had used any note to buy anything at the Man Pong Shop his reference to the Hang Seng Bank would seem more probably to relate to his allegation that he had purchased things with such notes between April and June. In other words he may merely have been saying that he had used notes drawn from the Bank for purchases between April and June which had nothing to do with the Man Pong transaction.

30. The fourth point relied upon by the judge was the fact that all three notes, coming from a 1982 series and all emanating from a single source of manufacture, were found in the applicant's possession upon dates over two months apart. The judge took the view that the applicant could not have come by three such notes in his trading with Mainlanders by chance. The point is certainly not without substance but it was accommodated within the applicant's explanation which was that the Mainlanders were the source of the false money and it might have had more weight if the applicant's story had been that he obtained these notes while trading in widely different areas.

31. There is no doubt that the strongest point against the applicant is that finally made by the judge when he refers to the fact of his having used two of these notes in two different shops within a very short space of time to make minor purchases. That is itself necessarily raises suspicion of a high degree. Nevertheless, the trial judge did clearly attach considerable importance to the other factors which he believed must have given the defendant "reason to know" that the notes were forged. Two of those at least, as we have indicated, were dubious and the third, the question of demeanour, unparticularized as to its nature, is unhelpful at this level of evaluation.

32. Although there was clearly evidence upon which a conviction could follow it cannot be said with certainty that had the judge not relied on these dubious factors he would inevitably have convicted. We are not satisfied that the conviction is safe or satisfactory. The application for leave to appeal against convictions is granted. The appeal is allowed, the convictions quashed and the sentences set aside.