HKSAR v. CHANG KIT WAI

CACC444/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO.444 OF 1998

(ON APPEAL FROM DCCC 511 OF 1998)

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J U D G M E N T

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Stuart-Moore V.-P. (giving the judgment of the Court):

1. On 15th August 1998, following a trial in the District Court before Deputy Judge Jenkins, the Applicant (D2) was convicted on charges of possession of false instruments, contrary to section 75(1) of the Crimes Ordinance, Cap. 200, and conspiracy to defraud, contrary to Common Law. She was sentenced to two years' imprisonment on each charge to run concurrently. The Applicant now seeks leave to appeal against conviction.

2. There were six defendants named in the indictment which charged a total of eight offences. D2's name appeared only in charges 3 and 4. Charge 3 alleged that she:

"on or about the 13th of July, 1996, at Room 2614, Tin Lok House, Shun Tin Estate, Kowloon, in Hong Kong, had in her custody the following documents which she knew to be false, with the intention that she or another would use them to induce somebody to accept them as genuine, and by reason of so accepting them to do or not to do some act to his own or any other person's prejudice:-

(a) 4 letters of Hongkong Telecom purporting to be addressed respectively to Cheung Ho-sang, Lee Hing-wun and Lam Kin-lun;

(b) a bill of Hongkong Telecom relating to account No. 96-057087-0001-29 purporting to be addressed to Ho Yun-chun;

(c) documents purporting to be true photocopies of the inside pages of the saving account passbooks No. TAE262783, TAH266425 of account No. 499-3-007873 of Hongkong Bank;

(d) documents purporting to be true photocopies of the inside pages of the saving account passbook of account No. 291-1-280010 of Hang Seng Bank;

(e) documents purporting to be true photocopies of the inside pages of the saving account passbook No. TAB204568 of account No. 155-8-016745 of Hongkong Bank; and

(f) documents purporting to be true photocopies of the inside pages of the saving account passbook No. TAE796568 of account No. 136-5-035540 of Hongkong Bank."

3. In the other charge, which was the fourth charge on the re-amended indictment, D2 was jointly charged with D3. This alleged that they:

"between April 1996 and July 1996, in Hong Kong, conspired together with Cheng Lam-shun and Cheng Lam-kwan to defraud American Express Bank Limited ("the bank") by dishonestly submitting false information relating to applicants for personal loans to the Bank to obtain loans for the said applicants, namely, Cheng Kwan-hung, Lam Chun-hing, Chan Shu-wan, Ho Yun-chun and Wan Woon-cheung."

4. Although other applications for loans are referred to in the charge, the judge did not place reliance upon those.

5. These allegations stemmed from the arrest of D2's brother (D1) on 13th July 1996 and the discovery, at his home address at Room 2614, Tin Lok House ("the premises"), of a large variety of exhibits which were found in D2's room at the premises. They were mainly taken from the drawers of a table in her room.

6. The charges are, to an extent, self-explanatory. The false documents in charge 3 were, it was alleged, for use in an agreement to defraud the American Express Bank ("AEB"). False information was supplied to AEB as the result of which personal loans were obtained from AEB which acted in ignorance of the fraudulent nature of the documentation they were supplied with. In particular, a loan application form required the provision of a business telephone number so that AEB could check to ensure that the loan applicant actually worked at the place stated in the form. Another important document was something which proved the loan applicant's income, such as a tax demand or a bank record.

7. So far as this last aspect is concerned, PW2's evidence clearly established that 19 loan applications submitted to AEB contained bogus information based on documents found in D2's room at the premises. The judge, in his Reasons for Verdict, at page 25R of the Appeal Bundle, cited an example of this when he said:

"PW2 confirmed that in the case of applicant Lam Chun-hing - that is P146 - if he had known that the bank transaction records submitted emanated from D2's savings account, he would not have granted the loan. One only has to compare the transaction records submitted by Lam Chun-hing (P146, pages 441 and 442) with Exhibit 63 pages 282 and 283 (part of D2's savings book found in her room) to see that the former documents emanate from the latter, the only difference being that on the former the dates on the left-hand side and the bank reference on the right-hand side are different."

8. So far as the five applicants' loans referred to in the charge are concerned, loans of $215,000 were granted, and the sums were shown to have been received in bank accounts in those names.

9. As to the provision of business telephone contact numbers in the 19 AEB applications, these also were proved to be false. They were all numbers which were linked to premises at Room 707, Shek Kip Mei Factory Estate. It was there that police found 15 telephone sets with a total of 30 lines providing 30 different numbers. These numbers were specifically referred to in Hongkong Telecom job orders found in D2's room at the premises occupied by D2.

10. A further link between D2 and the fraudulent activity was provided by PW1 who testified that it was D2 who had responded to the advertisement for a tenant to sublet Room 707. She paid a $500 deposit and agreed to sublet for two months. It was she who again paid the balance of $6,500 in rent.

11. In addition to this evidence, the court heard testimony from PW12 who gave his evidence under immunity. His general evidence was that he fell into a scheme with D2 and D3 to obtain for reward the identity cards of drug addicts in order to apply for loans which were not to be repaid. He enlisted the help of others and obtained some of the documentation necessary to enable the intended fraud on the AEB to proceed. He would then return the documents after they had been photocopied. The photocopies were given to D2 and D3.

12. In her defence, D2 accepted that she had lived at the premises but explained that she no longer lived there. As for the visits to see PW1, there is in the Reasons for Verdict, at page 31B, a summary of her explanation:

"... these were prompted initially by D1's request when he asked her when he wanted to rent Room 707 for Tsui Sai-kit, and that on the occasion the balance of the rent was paid, she had been accompanied by DW1, Tsui Sai-kit's girlfriend, known as Jo, since D1 was unavailable that day. On that occasion, it had been DW1 - that is Jo - who had had the dealings with PW1 about the premises, Room 707. This was confirmed by DW1 in her evidence."

13. In his re-amended perfected grounds of appeal, Mr. Allan advanced four substantive grounds. Firstly, he submitted that D2's convictions were unsafe and unsatisfactory in that the judge failed properly to consider in his Reasons for Verdict the major inconsistencies, contradictions and discrepancies in the evidence of PW12, and further failed to evaluate his evidence properly or at all in the light of the lies told by PW12 in the course of his evidence and also in the light of his earlier statements to police dated 18th December 1996 and 15th January 1997. In this ground, Mr. Allan also complains that the judge accepted material parts of PW12's evidence having found other parts to be "unsafe", and that despite this the judge's conclusions show that he accepted the majority of PW12's evidence on crucial issues.

14. In a final aspect to this ground, Mr. Allan suggested that the judge erred in failing to direct himself properly or at all as to the dangers of convicting D2 on the uncorroborated evidence of PW12 who was an accomplice. Mr. Allan complained that the judge did not consider what evidence was capable of amounting to corroboration. Dealing with this last matter straightaway, this aspect of the application, it seems to this court, was wholly misconceived. The judge did in fact give a perfectly adequate and clear direction as to how he approached PW12's evidence, at page 32H, where he said:

"So far as PW12 was concerned, I have approached his evidence with caution, as if his oral testimony was correct, then quite clearly he was an accomplice witness. On his own admission, he had lied to the police when he had initially been arrested and there were discrepancies between his oral testimony and the content of what he claimed to be his truthful statement to the police in March 1997."

15. The mandatory requirement of an "accomplice warning" was abolished by section 60 of the Criminal Procedure Ordinance, Cap. 221, and such warning that the judge felt it right to give himself was, in the circumstances, more than sufficient.

16. As to the other matters raised, it is quite clear from the passage just cited that the judge was fully aware of the generally unsatisfactory nature of PW12 as a witness and, in particular, that he had lied to the police and that he had given a story in evidence which revealed discrepancies in itself as well as when compared with the contents of his earlier statements. The judge went on to demonstrate that he was not prepared to rely on PW12 unless there was supporting evidence because he said on page 32 O:

"Whilst it is highly unlikely that he (PW12) has invented all the allegations as against D2, D3 and D6, I find it unsafe to rely upon his testimony in this regard. There was some evidence from him, however, that I did accept, regarding his own handling of bank documents, copies of ID cards and withdrawal cards and PIN numbers. I was also satisfied that he had, as he said, transferred a total sum of $85,000 to D3's bank account which was supported by the four slips he produced.

Having heard all the evidence, I was satisfied that I could infer that in relation to these transfers of money, he had transferred these at the instance of D3 and when she had received these sums and he had transferred them, they both had done so in the full knowledge of the source, namely, the bank loan applicants' accounts and in full knowledge of how those monies had been obtained, namely, by way of loans obtained from AEB with false documentation."

17. This passage reinforces the view that PW12's evidence was only relied upon in any material way against D3. It goes without saying that the judge was fully entitled to believe parts of the evidence of PW12 and to disbelieve or distrust other parts. The judge was doing his duty in setting out which parts he was able to accept and which he was not. There were in D2's case numerous other factors showing her involvement, all of which were independent of PW12's general allegation that D2 was involved with D3. These are best dealt with in regard to the second ground of appeal. So far as the first ground is concerned, there is no merit to it.

18. In the second ground, Mr. Allan submits that the judge failed to consider properly or at all the basis of the conviction on the conspiracy charge and the necessary mens rea required to support that charge as it relates to intent and dishonesty.

19. The evidence which linked D2 to the conspiracy apart from the account given by PW12 was substantial, and in his extremely helpful and industrious written reply, Mr. Albert Wong has listed no less than eleven telling points that were made against D2 in the course of the evidence. These were:

(1) incriminating documents found inside the drawer of a table in her room;

(2) she had arranged for the telephone lines and numbers which had been used in the loan applications;

(3) she was involved in the renting of the premises in which the telephone lines (a total of 30 lines) were installed;

(4) her fingerprint was lifted from one of the handsets installed in those premises;

(5) the bank passbook of D3 was amongst the documents found in the room;

(6) D2's passbook was also amongst the documents in the room;

(7) D2's passbook had been updated during the time that she claimed Tsui Sai-kit was living in the room;

(8) some of the documents found inside her room were false photocopies produced from the passbooks of D2 and D3;

(9) some of the false photocopies had been submitted for the purpose of loan applications;

(10) money had been transferred from the bank accounts of three of the successful applicants to that of D3; and

(11) accuracy of the business telephone number and income proof were the two main considerations for the Bank to consider on the applications for loans.

20. It appears that all of these factual matters were taken into account by the judge. In combination, they provided a powerful circumstantial case against D2. Indeed, Mr. Allan accepted that, taken by itself, this body of evidence was more than sufficient to provide a prima facie case against D2.

21. As to mens rea, this court has on frequent occasions said that it is always desirable in cases which are other than simple and straightforward, to set out the essential ingredients which the prosecution must prove before guilt is established. In the present case this was not done. Having said this, if the judge could be satisfied that the factual basis of what was alleged in the conspiracy had been established it followed, as night follows day, that this could only have been carried out with dishonest intent. In the present context there was, therefore, no need for the judge to set out the ingredients of the offence having found that D2 had, notwithstanding her previous good character, sought to distance herself from the exhibits found in her room by a false claim that she had moved out. As to that, the judge said at page 33P:

"Her evidence as to Tsui Sai-kit moving in was as half-hearted as her claims initially to PW7 on 13th July 1996 that the documents found in the room were Tsui Sai-kit's. Her untruthfulness was exemplified when she was unable to explain satisfactorily how it was that D3's passbook - which she claimed to have for updating - and her own passbook which were found in her room on 13th July 1996 had been updated during the time that she claimed Tsui Sai-kit was living in the room. She also sought deliberately and untruthfully to distance herself from the transactions which she herself quite clearly had with PW1 regarding Room 707.

DW1's account was equally contrived and untruthful. I rejected both D2's and DW1's evidence."

22. There is no merit in this ground.

23. The final grounds can be dealt with very shortly.

24. In ground 3, it is submitted that the judge failed, in relation to the third charge, to give sufficient reason as to why he was satisfied that D2 appreciated the falsity of the documents found in her room. In this context, it is unnecessary to recite again the long list of circumstantial evidence which pointed only in that direction. The inferential reasons given by the judge could not have been more obviously made.

25. In ground 4, it was submitted that the judge failed properly to evaluate the evidence of DW1, and failed also to give any sufficient reason why he rejected that evidence as "equally contrived and untruthful" which is the expression used in the passage cited earlier. This might, perhaps, have been a somewhat peremptory way of dealing with DW1 as a witness had that witness stood alone, but it has to be appreciated that the judge was not looking at DW1 in isolation. Her evidence was related in part to the payment of the balance of the rent owed for the premises and the judge was also able to look at D1 and D2's evidence on the matter. Bearing in mind D2's deep involvement in everything to do with the premises, it is not surprising that the judge rejected the suggestion made by D2 and DW1 that it was DW1, known as "Jo", who dealt with PW1 in regard to the premises.

26. There is absolutely no substance in any of the grounds which have been advanced and there is nothing, in the view of this court, which makes these convictions unsafe or unsatisfactory. On the contrary, there was an abundance of evidence upon which the judge was entitled to convict.

27. Accordingly, the application is dismissed.