R. v. CHEN TAI HWA and Another

IN THE COURT OF APPEAL

1992, No. 321
(Criminal)

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J U D G M E N T

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Hon Yang, CJ:

1. This is the judgment of the Court.

2. The first accused CHEN Tai-hwa ("D1") was convicted of one count of conspiracy to defraud (Count 1) and acquitted of possession of a forged identity card (Count 3). The second accused TANG Pak-chiu ("D2") was acquitted of the same count of conspiracy to defraud, but found guilty of the alternative count of handling stolen goods (Count 2). They now seek leave to appeal against conviction. D2 has abandoned his application for leave to appeal against sentence out of time.

3. The main prosecution evidence concerns the conspiracy of D1 and D2, together with one TAM Hung-por ("Tam") and a person purporting to be LAI Chi-sing, to defraud the Bank of Communications ("BOC") of US$1,865,800. The handling count relates to the US$1,865,800 said to have been stolen from the BOC. The third count alleges that D1 was in possession of a forged identity card in the name of LAI Chi-sing ("Lai").

GROUNDS OF APPEAL: A SUMMARY

4. D1 advances three Grounds of Appeal: -

(1) that the learned trial judge erred in the way he dealt with the issue relating to a hostile prosecution witness, namely, CHENG Kwong-tung ("PW27");

(2) that the judge erred in the way he treated certain charts, viz., Charts 3 and 4, submitted by the prosecution as graphic analyses of disposal of the stolen moneys in Thailand and of fund flows from Thailand to Hong Kong, in that these two charts had no link with two other charts, viz., Charts 1 and 2 as graphic analyses of fund flows from China to Hong Kong and from Hong Kong to Thailand respectively; and

(3) that the conviction is unsafe and unsatisfactory in that: -

(A) D2 having been acquitted of conspiracy, the evidence relating to D1's trip to Thailand with D2 and that contained in Charts 4 and 5 respectively was not evidence to prove the conspiracy.

(B) The cross-examination of PW27 was allowed to go further than was necessary or permissible in relation to credibility and contained a strong element of rehabilitation of the witness.

(C) In ruling that PW27 was hostile, the trial judge made no reference to PW27's demeanour.

(D) D1 having been found not guilty of possession of a forged identity card (which was found in the safe of the premises occupied by D1 and others), the other documentary exhibits found in the safe, which played together with the identity card a major part of the evidence adduced to prove the conspiracy, should not be viewed as such, in the light of the acquittal verdict, particularly as there was no warning or direction as to its potential proper effect.

(E) There was a material misdirection as to D1's lies.

(F) There was a material misdirection in respect of D1's good character.

5. D2 puts forward two Grounds of Appeal similar to D1's Ground 3(E) and (F): see above. D2's Ground 1 is on D2's previous good character; Ground 2 is on lies told by D2.

SUMMARY OF THE PROSECUTION EVIDENCE

6. The case against D1 and D2 depended on circumstantial evidence.

7. Before dealing with the applicants' Grounds of Appeal, I should first give a summary of the evidence relied on by the prosecution.

Fund Flows

8. On 12 January 1991, the BOC's Nanning Branch in Mainland China effected a telex transfer of US$1.86 million to their Hong Kong Branch. The remitter purported to be the Guangxi South Industry Corporation which was a bogus company, and the telex instruction was to credit the account of Oriental Development Enterprise Company ("Oriental") with the BOC's Hong Kong Branch with this sum of money in US currency. The telex making the transfer was encoded with a secret code known only by a Miss Li at BOC's Nanning Branch. The code had been kept in a safe to which only Miss Li and her manager had the key. There were two telex operators at the Branch, one of whom was the Tam who was named as a co-conspirator in the conspiracy charge, and the other was a Miss Gao. Tam went missing on the 17th, and the telex machine was found to have been damaged. On the 18th, BOC's Hong Kong Branch sent a telex to the Nanning Branch, informing them that their foreign exchange account had been debited in the sum of US dollars above mentioned. Subsequent enquiries revealed that only Tam was on duty in the telex room when the telex of the 12 January 1991 was sent. There could be no doubt that this large sum of money was stolen by Tam.

9. At this point of our narration, it is necessary to go back in time to 24 December 1990, when a person purported to be Lai opened a savings account in his name with BOC's Hong Kong Branch, using a forged identity card for the purpose. That identity card was forged in that the photograph of the true Lai had been removed and replaced by that of another person, the bogus Lai. On 31 December 1990, the bogus Lai opened an account with the same Branch in the name of Oriental. He had earlier registered that company and he was shown to be the sole proprietor of that company. There was evidence that Oriental did not carry on any business: its sole activity was to receive payments.

10. On 12 January 1991, the telex transfer of the US$1.86 million was thus credited to Oriental's account. On the 14th, three cheques were drawn on Oriental's current account; these were signed by the bogus Lai and stamped with the Oriental stamp. The three cheques were: -

(i)  HK$5.6 million for Thye Hong Commercial and Finance Company;

(ii) HK$5.8 million for Man Cheong Company; and

(iii)HK$3.2 million for King Chong (Finance) Company,

totalling HK$14.6 million.

11. There was evidence that D2 handed the three cheques to these three companies. On the same day, i.e., the 14th, the moneys found their way to companies in Thailand: -

(i)   the HK$5.6 million to Nam Sing Company;

(ii)  the HK$5.8 million to Chin Hua Heng Company; and

(iii) the $3.2 million to Wah Kee.

The flow of money from Nanning to Hong Kong, and then from Hong Kong to Thailand is shown in Charts 1 and 2. Chart 3 shows that two hitherto unnamed companies in Thailand transferred money to hitherto unnamed companies in Hong Kong: -

(i) HK$2 million from Shun Lee Company of Thailand to Woo Shing Company in Hong Kong on the 21st;

(ii) HK$1 million from the same Thai company to the same Hong Kong company on the 18th; and

(iii) HK$1.5 million from Choi Po Company of Thailand to Wing Fung Company of Hong Kong on the 23rd.

The Woo Shing Company mentioned above on the 19th paid HK$1 million, and on the 22nd a further HK$2 million to the account of D1's wife, CHEUNG Man-fan, and on the 24th the Wing Fung Company mentioned above paid HK$1.5 million into the account of D1's mother-in-law, WONG Pui-wah. The three sums again come to HK$4.5 million. The flow of those sums may be seen in Chart 4.

The Defendants' Travels and Telexes

12. The circumstantial evidence also relates to the travels of D1 and D2. As D2 has been acquitted of conspiracy, we shall concentrate on D1's movements. Between 9 December 1990 and 12 January 1991, D2 travelled between Hong Kong and Mainland China. On 15 January 1991, D1 and D2 went to Thailand. D1 returned to Hong Kong on the 17th, clearing immigration at the Kai Tak Airport at 11:45 a.m. At 12:19 p.m. the same day, a telex was sent from the telex machine in the Mongkok office of the Luen Tong Hong ("LTH") to the telex in the BOC Nanning Branch. LTH is a tourist agency dealing mainly with travels to Mainland China and Taiwan. D1 is the proprietor of LTH. The agency also offered dormitory type accommodation for travellers who were permitted to use the agency's safe on the premises to deposit their cash, documents and other items. It is the prosecution's case that the telex was sent by D1, but D1 challenged this. There were three other telexes sent from LTH to Nanning; again it was the prosecution's case that they were sent by D1.

Tam

13. On the 19th, D1 stayed at the Liu Hua Hotel in Guangzhou. Either D1, or someone with D1's name, visited Tam, who was at the time on the run. An employee of D1, CHENG Hak-pun ("Cheng"), gave evidence that, on the 18th, Tam telephoned LTH and asked for D1, and Cheng gave Tam D1's home telephone number. Then there was the evidence of a Thai Chinese called TSE Muk-piu, who said that D1 had contacted him from China to arrange for visas for one or more persons to travel to China. It is the prosecution's case that D1's meeting with Tam and his attempt to arrange for visas were in furtherance of the conspiracy.

Monies Received by D1's Wife, D1's Mother-in-Law and D2

14. It will been recalled, when we referred to Chart 4, that, on 18 January 1991, Woo Shing Company having received HK$1 million from the Thai company called Shun Lee Company, remitted the money to D1's wife on the 19th. On the same day, D2's account with the Po Sang Bank in Hong Kong received from D1's wife's account with Yien Yieh Bank HK$120,000. There was no direct proof that these moneys which came back from Thailand formed part of the HK$14.6 million remitted to Thailand.

15. On the 21st, D1 returned to Hong Kong from Mainland China. On the 22nd, D1's wife's account was further credited with HK$2 million from Woo Shing Company. On the 23rd, the sum of HK$860,733 was credited into D2's account from D1's wife's account. Finally, on the 24th, HK$1.5 million was remitted from Wing Fung Company to the account of D1's mother-in-law.

Documents Found in the Safe

16. The other piece of circumstantial evidence was the documents found in the safe of LTH relating to the telephone company's communications addressed to Oriental, and many other documents relating to Oriental. As has been noted, the forged identity card of the bogus Lai was also found in the safe.

17. I now come to two books, purported to be receipt books of Oriental and produced as defence exhibits Nos 4a and 4b. These form the subject matter of D1's Ground 3(E) on lies (supra). The matter came about in this way. When leading counsel for D1 cross-examined the hostile witness PW27, he produced for the witness's inspection the two receipt books in question. On the face of it, they showed receipts for deposits of documents and money by LTH's customers. These were found in the safe at LTH, said to April 1992. LTH was raided by the police on 25 January 1991, but the police did not know about the books until after the trial had begun. Counsel for the Crown suggested to the jury that the forged receipt books constituted a lie by D1 to mislead the jury into believing that Lai had put the documents in the safe.

18. The evidence summarised above, then, constitutes the circumstantial evidence against D1. The learned judge, in concluding his summing up, put the case against D1 as being the evidence of his trips to Thailand on the day following the withdrawal of money from the oriental account, the telexes between BOC and LTH, D1's contact with Tam, and the documents relating to oriental found in the LTH safe.

19. As to D1 and D2, it will be noted that, on 23 January 1991, HK$860,733 came from the Yien Yieh Bank account of D1's wife into D2's Po Sang Bank account; on 19 January 1991, HK$120,000 went from the same account of D1's wife to D2's same bank account. By Chart 5, it is shown that HK$875,733, an amount very similar to D2's HK$872,733 (HK$860,733 + HK$120,000) could be traced to the US$1.865 million, which originally came from the BOC Nanning Branch, converted to HK$14,545,776 at HK$7.796 to US$1.

20. As against D2, there were also three slips found in his possession, namely, Exhibits 185, 192 and 193, bearing his fingerprints. He admitted possession of the slips of paper, but said that Lai had given them to him to make photocopies. He was only a messenger or assistant to Lai. We do not think it necessary for the purpose of D2's appeal to analyse the writings and calculations on the three slips of paper. The writings and calculations on these slips of paper clearly relate to the stolen money which came into Hong Kong from Mainland China on 12 January 1991.

21. Exhibit 185 shows the conversion of US$1,865,800 into HK$14,545,766 at HK$7.796 to US$1. There is also a figure of HK$3,636,444 being 25 percent of HK$14,545,766. Exhibit 192 shows how, after deducting expenses from the HK$3,636,444, the remainder was HK$2,842,444, a third of which (i.e., HK$852,733) went towards D2. Taking the calculations in Exhibits 192 and 193 together, it becomes clear that, with addition to the HK$852,733, that which went to D2 was HK$875,733.

22. D2 gave evidence as to how he was in possession of HK$872,733. He said he had a piece of porcelain which he sold to D1's wife, who was a legitimate dealer. He received from her a deposit of HK$120,000, and later the balance of HK$860,733. There was also evidence that his salary was six to eight thousand dollars a month, and he lived in a wooden but some 200 square feet in area. D2's defence was that he knew nothing of any conspiracy.

23. There was evidence in favour of D1, in that some of the incriminating documents were left in the LTH safe. As the judge put it, "If the first defendant were guilty of any of these counts, why had he allowed them to remain there ? Why had he not disposed of them ?"

24. As to D2, his evidence was that he did not know the slips of paper in his possession were of importance. The judge told the jury that D2's conduct on 25 January 1991, the date of the raid and his arrest, was entirely consistent with his evidence because he knew the police were on the premises. He, nevertheless, went to the LTH premises with these slips of paper in his pocket, and when he was searched these slips were found on him. He could easily have disposed of them before going to the LTH premises.

CONCLUSIONS

25. I now come to deal with the Grounds of Appeal more fully.

D1's Grounds

26. Ground 1 - It is contended that on the evidence there was no real basis to treat PW27 as a hostile witness. It is further contended that no limitation was imposed on the prosecution on the cross-examination of PW27, that the decision to treat PW27 as hostile was contrary to the evidence adduced, and no ruling was made as to the voluntary nature of PW27's witness statement in the light of unchallenged evidence that the statement was obtained by inducement.

27. The judge directed the jury that he declared PW27 to be hostile not only because he was adverse, but also hostile to the prosecution. The evidence he gave in Court was quite inconsistent with what he told the police. The witness was being questioned about the contents in the safe at LTH. In reply he said that "very often customers wanted to deposit things with us" in the safe. This was inconsistent with his statement to the police, which made no mention of customers depositing any items in the safe. Counsel for the prosecution then applied to the Court for the witness to be declared hostile. He submitted that the decision to treat the witness as hostile is a matter within the discretion of the trial judge, and he continued, "(the judge) sees the witness and can determine from his manner whether he is hostile. The judge must consider the demeanour of the witness and the former statement of the witness." Archbold describes the discretion as absolute. Shortly after hearing submissions, some three hours later, the judge made his ruling, giving leave to the prosecution to cross-examine PW27 on the ground that his previous statement was inconsistent with what he had said to the Court. He could not have overlooked prosecuting counsel's reference to a witness's demeanour. It was held in R. v. Williams (1913) 29 TLR 188 that there would have to be very exceptional circumstances to justify an appeal on this ground.

28. The judge, in our view, had considered all the relevant issues and exercised his discretion correctly. The witness's statement to the police and his evidence were inconsistent. There was no plausible reason to explain why the inconsistency existed. The cross-examination of the witness by prosecuting counsel occupies eight pages of the transcript: those questions did not go beyond the bounds of propriety.

29. Shortly before prosecuting counsel was given permission to cross-examine PW27, counsel for the prosecution asked him whether the statement had been read through to him that he could correct, alter or add anything he wished. In reply PW27 said he was just told to put down his signatures and he was told that, since he was an old man, if he had been honest, nothing would happen. This answer is now regarded by counsel for the applicant as unchallenged evidence that the statement had been obtained by inducement and was, therefore, not voluntary. No objections were raised at all at the trial to any questions asked in cross-examination thus far, and four further questions and answers later PW27 was declared hostile. No point of inducement was taken on behalf of the defence until now. The answer complained of does not, in our view, suggest an inducement.

30. The evidence of a witness who has been declared hostile can only be relied on if, when his previous statement is put to him, he changes his evidence and agrees that his statement is correct. That did not happen here and the judge, quite correctly, simply told the jury that they may think the witness was unreliable when he said that the safe was used by customers of LTH. He specifically told them that the statement was not evidence. However, he left the evidence of the use of the safe by such customers for their consideration.

We do not think Ground I has been made out.

31. Ground 2 - It is true there is no apparent link between Charts 1 and 2 on the one hand and Charts 3 and 4 on the other. These two sets of Charts are however, in fact, linked together by the three slips of paper found on D2 (i.e. Exhibits 185, 192 and 193) as analysed by Chart 5. The judge, however, pointed out to the jury that there was no connection between Charts 2 and 3. It has been noted that, at the close of the summing up, the judge clearly pointed out to the jury what the case against D1 was. He referred to the trips D1 made to Thailand, the telexes between BOC to LTH, his visit to Guangzhou where he met Tam, and the documents relating to Oriental found in the LTH safe. He also, when dealing with D1, referred to the movements of money from Thailand to Hong Kong, and the sums of money going into the accounts of D2, D1's wife and D1's mother-in-law: vice Charts 3 and 4. All these money movements took place within 10 days of the transfers of money from Hong Kong to Thailand. The coincidence was so strong that the jury might well be asked to consider the Charts together. We do not think there is anything in this Ground of Appeal.

32. Ground 3 - This Ground states that the conviction is unsafe and unsatisfactory in the following manner: -

(A) The argument here is that D1's trip to Thailand with D2 is not evidence to prove conspiracy. The judge did not tell the jury it was.

(B) Having considered the cross-examination of PW27 by prosecuting counsel, we are unable to say it contained a strong element of rehabilitation.

(C) On PW27's demeanour, we do not think the judge could have overlooked this issue, he having been addressed on it only three hours before he made the ruling.

(D) It is not for us to speculate about the jury's reasons for acquitting D1 on the charge of possession of a forged identity card. However, the acquittal did not prevent the jury from taking into account the documents found in the LTH safe when considering the case against D1.

(E) D1's lies which took the form of the two forged receipt books (Defence Exhibits 4a and 4b) were dealt with by the learned judge in this way: -

"..... it has been alleged that the defendant has told lies and therefore, that being the case and in fairness to the defendant, I have to say this: innocent persons, members of the jury, do on occasion tell lies. They lie perhaps to save themselves from being found guilty of an offence of which they are innocent. It is foolish what they do but it does happen. And so you should bear this in mind that it does not follow, if you do find he has been telling lies, again I am not suggesting you should come to that conclusion, but if you do, it does not follow that because he has told lies that he must be guilty."

The lies here could not of course be anything but deliberate.

Prosecuting counsel in his final address to the jury said: -

" Members of the jury, you may ask yourselves why should the 1st defendant tell lies and the only answer that you would be able to give yourselves would be because he is a guilty person, he is guilty of what he is alleged to have done, and he is trying by all means to get out of being convicted, and that is why he is prepared to go to the lengths of making up these false documents. This whole case, the whole of this fraud, is built upon carefully constructed false documents. False documents from TAM Hung-por, false documents from LAI Chi-shing, false setting-up of Oriental Development which had no other purpose than to facilitate the receipt of the money, and false documents that have tried to mislead you into what the real position was."

The summing up did not deal with D1's lies on the basis that the prosecution relied on them as part of the prosecution's case. Indeed, there was no reason for the prosecution to anticipate that the two forged receipt books would be produced in Court. The lies simply came in as part of the circumstantial evidence against D1. The lies here can only be relied on to support evidence which shows guilt; they do not by themselves prove guilt. At the end of the day, the important issue is whether, as Lord Devlin said in Broadhurst v. R. [1964] AC 441, the jury are likely to be misled by their natural tendency to think that lying is inevitably proof of guilt, and thus to convict "without more ado". In our view the answer is "no".

On the facts, there could not be an innocent motive for the lies.

Our attention has been drawn to the latest authority, decided a year after the conviction of the two accused. We must therefore refer to it. The authority is a decision of the Court of Appeal in England in R v. Goodway, No. 92/4559/22. There Lucas (1981) QB 720 was followed, and the Lord Chief Justice observed that, though Lord Devlin in Broadhurst seemed to be referring to lies in evidence, there was no reason to think that his observations were not equally applicable to lies out of Court: see pp.10-11.

The Lord Chief Justice said (at p.8) the Court agreed with the submission of the appellant's counsel that a Lucas direction should be given wherever lies are relied on by the Crown, or might be used by the jury to support evidence of guilt as opposed to merely reflecting on the appellant's credibility. It was further held that there is no reason in principle or logic for drawing a distinction between corroboration and identification cases and any other cases, in which lies may be relied upon in support of prosecution evidence. Accordingly, a Lucas direction should be given, save where it is otiose as indicated in the case of Dehar (1969) NZLR 763, wherever lies are, or may be, relied upon as supporting evidence of the defendant's guilt: see p.11.

In Lucas, it was held that to be capable of being independent confirmation a lie told in or out of Court must fulfil four tests: -

(1) It must relate to a relevant issue.

(2) It must have been deliberate.

(3) It must be clearly shown to be a lie, either by an admission by the defendant or by evidence from an independent witness.

(4) The defendant must have lied because he realised he was guilty and feared the truth coming out.

In the present case, D1's lie about the documents was clearly relevant and that, in any case, was a matter for the judge. It was also, as noted earlier, a deliberate lie. There was no dispute that it was a lie and it was unnecessary for the judge to leave that question to the jury.

As to the fourth category, we can see no possible motive for the lie that is consistent with innocence. Here the police evidence showed beyond doubt that the documents were forgeries. The forgery of the documents amounted to a deliberate manufacture of false evidence in order to support the defence case. There is no other explanation for their existence. This in our view is so self-evident that it was not necessary for the judge to leave this to the jury either.

A Lucas direction would in our opinion have been superfluous in these circumstances. The judge having given a proper Broadhurst direction, we are satisfied that this aspect of the summing-up cannot be criticised.

(F) The complaint under this head is that the learned judge had misdirected the jury on D1's good character in relation to the issue of D1's propensity. In the course of his direction to the jury, the judge made brief references to character. He reminded the jury that both D1 and D2 were men of good character, in that they had no previous convictions. When dealing with D2, he said, "The second defendant, like the first defendant, is a man with a clear record".

D1 did not give evidence. D2 did.

It is pertinent to examine the recent case of R. v. Vye (1993) 1 WLR 471. The judgment concerns three appellants in three different cases, namely, Vye, Wise and Stephenson. I take the facts from the headnote: -

 

R.v.Vye

" The appellant, John Arthur Vye, on 17 October 1991 in the Crown Court at Winchester, before French J. and a jury, was tried on a count of rape. He was aged 50 of previous good character and the defence was that the complainant consented. He was convicted by a majority of 10 to 2 of rape and was sentenced to imprisonment for four years and six months. He appealed, with leave of the single judge, on the grounds that the trial judge had failed to direct the jury on the relevance of the appellant's good character to the consideration whether he was the kind of man who was likely to have behaved in the way alleged.

 

R.v.Wise

The appellant, Peter Frederick James Wise, aged 36, on 6 December 1991 in the Crown Court at Croydon, before Judge Pullinger and a jury, pleaded not guilty to an indictment containing two counts: count 1 charged handling stolen goods, a repaired motor car; and count 2 charged obtaining property by deception, in the sale of the car. He was of previous good character, had been a car repairer and saleman and had worked in the second-hand car trade for over eight years. He was convicted and sentenced on each count to imprisonment for six months concurrent, suspended for two years, and, on count 2 was also fined ￡ 650 and ordered to pay ￡ 876 towards the costs of prosecution. He appealed by leave of the single judge on the grounds that the judge had erred in failing to direct the jury that they could treat the appellant's good character as making it less likely that he was guilty of the charges or alternatively, the judge had erred in exercising his discretion in that he had failed to give such a direction and that, therefore, the convictions were unsafe and unsatisfactory.

 

R.v.Stephenson

The appellant, Malcolm John Stephenson, aged 36, in the Crown Court at Aylesbury, before Judge Slack and a jury, pleaded not guilty to a count of conspiracy to supply cannabis resin. He had several previous convictions for burglary and illegal possession of controlled drugs. He was tried with a co-defendant, Gary Michael Hughes, aged 22, of previous good character except for what was described as a 'peccadillo' when he was 16 years old. Neither the appellant nor Hughes gave evidence. In directing the jury the judge referred to Hughes' good character as relevant to credibility and propensity. Hughes was acquitted. On 19 April 1991 the appellant was convicted and, on 22 April 1991, he was sentenced to imprisonment for nine years. He appealed with leave of the single judge, on the ground that in emphasising the good character of Hughes the judge highlighted the appellant's bad character, which had a prejudicial effect on him and rendered the conviction unsafe."

Lord Taylor said (at p.475D): -

"That decision therefore confirmed that, whatever the position may have been previously, it is now an established principle that, where a defendant of good character has given evidence, it is no longer sufficient for the judge to comment in general terms. He is required to direct the jury about the relevance of good character to the credibility of the defendant. Conventionally this has come to be described as the 'first limb' of a character direction. The passage quoted also stated that the judge was entitled, but not obliged, to refer to the possible relevance of good character to the question whether the defendant was likely to have behaved as alleged by the Crown. That, in effect the Stannard direction, is the 'second limb'." (See R. v. Stannard (1837) 7 C & P 673, 675.)

He then referred to three problems : -

"(a) whether a 'first limb' direction needs to be given in a case where the defendant does not give evidence but has made statements to the police or others; (b) whether the 'second limb' direction should now be regarded as discretionary or obligatory; and (c) what course the judge should take in a joint trial where one defendant is of good character but another is not." (See p.475F.)

The answer to the first problem is that the judge should direct the jury to have regard to the defendant's good character when considering the credibility of those statements. When the jury is to consider the truthfulness of any such statements, it would be logical for them to take into account his good character, just as they would in regard to his evidence. Clearly, if a defendant of good character does not give evidence and has given no pre-trial answers or statements, no issue as to his credibility arises and a "first limb" direction is not required: see p.476A-C.

Applying those observations to the present case, D1's out of Court statement in the form of the forged receipt books called for a "first limb" direction. However, D1's "statement" was so palpably false that the direction would be nothing more than a purely academic exercise.

According to Lord Taylor, a "second limb" direction should also have been given where the accused did not give evidence (infra). But here the circumstantial evidence against D1 was very strong. The jury would have returned the same verdict even if a direction had been given.

In our judgment, the absence of both a "first limb" direction and a "second limb" direction may be cured by the proviso. There being no miscarriage of justice, we apply the proviso.

D2's Grounds

33. For the sake of convenience, we take D2's Grounds 1 and 2 together that the jury's verdict is unsafe and unsatisfactory.

34. D2's defence was that he was simply a messenger boy. He did what Lai told him and asked no questions. He knew nothing of any conspiracy. It is argued that it was implicit in the prosecution's case that D2's defence was a lie.

35. As D2 had given evidence, we must now turn to the second of the three problems considered in Vye (supra, at p.476) under the heading of propensity. The conclusion of the Court of Appeal in England is that a "second limb" direction should be given where the defendant is of good character. Lord Taylor said (at p.477F-H) : -

" We can see no logical ground for distinguishing in regard to a 'second limb' direction between cases where the defendant has given evidence and cases where he has not.

Having stated the general rule, however, we recognise it must be for the trial judge in each case to decide how he tailors his direction to the particular circumstances. He would probably wish to indicate, as is commonly done, that good character cannot amount to a defence. In cases such as that of the long serving employee exemplified above, he may wish to emphasise the 'second limb' direction more than in the average case. By contrast, he may wish in a case such as the murder/manslaughter example (Reg. v. Richens, The Times, 25 November 1992), to stress the very limited help the jury may feel they can get from the absence of any propensity to violence in the defendant's history. Provided that the judge indicates to the jury the two respects in which good character may be relevant, i.e., credibility and propensity, this court will be slow to criticise any qualifying remarks he may make based on the facts of the individual case."

36. Following the observations above quoted, clearly the judge in the present case ought to have given a "second limb" direction as regards D2's evidence that he was an innocent messenger However, the evidence against D2 was overwhelming. It is again a suitable case for the proviso, which we apply.

37. We conclude simply by quoting Lord Taylor again (at p.479F): -

" To summarise, in our judgment the following principles are to be applied. (1) A direction as to the relevance of his good character to a defendant's credibility is to be given where he has testified or made pre-trial answers or statements. (2) A direction as to the relevance of his good character to the likelihood of his having committed the offence charged is to be given, whether or not he has testified, or made pre-trial answers or statements. (3) Where defendant A of good character is jointly tried with defendant B of bad character, (1) and (2) still apply."

38. As to lies, here again the important question is not whether D2 had lied, but whether the jury was satisfied that there was sufficient circumstantial evidence for them to infer guilt. The prosecution did not rely on lies as part of their case. The simple fact is that if the jury found that D2 was not telling the truth, then they could, on the evidence adduced by the prosecution, properly convict.

39. For the reasons given above, we allow the applications of D1 and D2, treat the hearing of the applications as hearing of the appeals and dismiss the appeals.