HKSAR v. KAMARULZAMAN BIN ANNUAR

CACC 38/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 38 OF 2013

(ON APPEAL FROM DCCC 1270 OF 2011)

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REASONS FOR JUDGMENT

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Hon Barnes J (giving the Reasons for Judgment of the Court):

Background

1.  The applicant faced two counts of Possession of False Instruments with Intent, contrary to section 75(1) of the Crimes Ordinance, Cap 200 (1^st and 2^nd charge).  Two further counts of Possession of False Instruments, contrary to section 75(2) of the same Ordinance (3^rd and 4^th charge) were laid as alternative charges to 1^st and 2^nd charge.

2.  The applicant pleaded not guilty to all the charges.  He was convicted of 1^st and 2^nd charge by District Court Judge Sham and sentenced to a total sentence of three years’ imprisonment.

3.  The applicant applied, out of time, for leave to appeal against both the conviction and the sentence.  No issue was taken as to the applications being out of time as they were made shortly after the deadline due to a miscalculation.

4.  On the very morning of the hearing, the applicant handed a duly signed and prepared Notice of Abandoment (sic) dated 12 December, abandoning his “appeal against conviction”.  We will say something more about the reasons tendered to explain the lateness of such a notice at a later stage.

5.  As a result of the applicant’s abandonment, we dismissed his application for leave to appeal against conviction.

6.  The applicant pursued his application for leave to appeal against sentence.  At the conclusion of the hearing we dismissed his application.

7.  After hearing submissions from his counsel Mr Keith Fung, we ordered that four weeks of the time during which the applicant has been in custody pending the determination of his appeal shall not be reckoned as part of the term of the sentence to which he is for the time being subject.  We indicated we would hand down our reasons, which we now do.

Prosecution case

8.  On 17 August 2010 the applicant was intercepted at the departure hall of Shun Tak Centre when he attempted to leave Hong Kong for Macau.  He was arrested and taken to the Central Police Station.  Upon search seven purported US$100,000 Gold Certificates and one purported US$1 million note were found inside his wallet.  These formed the subject matter of 1^st charge (with 3^rd charge as an alternative).  Apart from the above, a USB memory stick (which was later found to contain photographic images of “a huge pile of American bills” and “close‑ups of bundles of $1 million bill and $100,000 bill”) and four mobile phones were found inside a bag carried by him.

9.  A house search conducted at the applicant’s residence revealed 177 purported US$1 million notes, 96 purported US$100,000 Gold Certificates, 10 purported US$1 million Federal Reserve Notes and a Certificate of Balance purportedly issued by the HSBC, showing a credit balance of US$50 billion in a joint account held by the applicant and a person named Zhou Yu Zhong.  All these items formed the subject matter of the 2^nd charge (and the alternative 4^th charge).

10.  All the purported notes, Gold Certificates, Federal Reserve Notes (to be collectively called US dollar bills) were confirmed to be false by an expert (Mr Paul Quick).  Evidence showed that the largest denomination notes ever printed by the US government were the $100,000 bills but they were only produced at the time of the Great Depression in the 1930’s, for the sole purpose of bank‑to‑bank transfers and were never released into general public circulation.  There were never any US$1 million bills.

11.  HSBC also confirmed the Certificate of Balance was a false instrument and the joint account stated thereon did not exist.

12.  It was the prosecution case that the applicant possessed all the false US dollar bills and the bogus Certificate of Balance with the intent to use them to induce someone 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 person’s prejudice.  Alternatively, the prosecution alleged that the applicant possessed them without lawful authority or reasonable excuse.

Defence case

13.  The applicant, who is a Malaysian national, testified that he was engaged in corporate finance and had companies in different parts of the world.  He held shares in a finance company in Singapore and he had come to Hong Kong with a view to setting up a branch company.

14.  As to the US dollar bills, the applicant said that they belonged to an acquaintance of his, an Indonesian old lady called Madam Sitti.  Madam Sitti had asked him to verify the genuineness of the US dollar bills.  Though he was reluctant to do so at first, he later agreed to provide assistance to her on a friendship basis.  Towards that end he requested Madam Sitti to execute, which she did, four documents for his own protection, ie a Limited Power of Attorney, a Letter of Indemnity, a Non‑solicitation Letter and an Authorization to Verify and Authenticate (Exhibits D2(A)‑(D)).

15.  When the applicant was in Hong Kong, a man named Tomo, who was an employee of his father‑in‑law, came to visit him sometime in July 2010. Tomo brought a box containing the US dollar bills to the applicant.

16.  Regarding the HSBC Certificate of Balance, the applicant testified that he came to know a couple, a Madam Lau and a Mr Zhou Yu Zhong who had expressed interest in doing business with him.  The couple told the applicant that they had a balance of US$50 billion in a HSBC account.  The applicant was to go with the couple to the bank to check the balance by putting his name down at the counter.  However, before they went to the bank, the couple produced the Certificate of Balance with the applicant’s name on it.  The applicant knew that the document was false as he had not yet signed anything at the bank.  The couple left and never returned as promised.  The applicant had forgotten about that document until it was discovered by the police during the house search.  The applicant kept that document as he considered it unimportant after he decided not to talk to the couple anymore.  Further, he would call the police if he later found out that his name and the Certificate of Balance were used in connection with any fraud.

17.  The defence never challenged the expert’s evidence on the falsity of the US dollar bills and the applicant himself admitted the falsity of the Certificate of Balance.  His case was that he did not know that the US dollar bills were false and he never intended to use the US dollar bills or the bogus Certificate of Balance to induce anyone to accept them as genuine.

The judge’s findings

18.  The judge rejected the applicant’s evidence of how he came to be in possession of the US dollar bills.  The judge found it defied common sense for a person to hand over the whole lot of possibly genuine bills worth billions of dollars when just handing one piece of each denomination over for verification would suffice.

19.  The judge analysed the evidence and came to the conclusion that the applicant knew the US dollar bills were false.  The judge relied on the fact that the US dollar bills were printed on plain papers as opposed to genuine bills which were printed on paper containing fibre.  Given the applicant’s background experience in the business world, the applicant would have noticed the difference between the fake bills in his possession and the genuine ones.  The applicant’s story of carrying some of the US dollar bills with him when he travelled in case he might encounter someone who could verify them was not believable.  The judge further relied on the casual way the applicant treated the US dollar bills at home: not locking them in a secure place but placing them in bags and cupboards, and allowing his 9‑year‑old daughter to use some such bills to play “Monopoly”, to conclude that the applicant knew they were “worthless fakes”.

20.  Regarding the applicant’s assertion of how he came to be in possession of the Certificate of Balance, again the judge did not believe the applicant’s story.  The judge noted that US$50 billion was not a small sum and he found it unbelievable that a person in his right mind would have shared with a stranger (as in the case of the applicant) such a large sum of money.

21.  The judge found that the applicant knew the Certificate was false.  Indeed the applicant himself admitted in evidence that as soon as he saw his name on the Certificate he knew it was false.

22.  As to the intended use of these false instruments, the judge found that the applicant must have kept the Certificate for a purpose.  Having considered the applicant’s evidence of doing different kinds of business all over the world and having come to Hong Kong with a view to start a branch of the Singaporean finance company, the judge found that the applicant intended to use the bogus Certificate as a proof of his wealth, and the judge drew the irresistible inference that the applicant intended to use the Certificate to defraud others by inducing them to accept it as genuine and eventually to cheat them out of money.

23.  The judge found that the US dollar bills and the Certificate had “something to do with each other”.  The judge referred to the images stored in the USB memory stick and the bogus Certificate and came to the conclusion that those US dollar bills found on his person were used as a sample of a much larger quantity.  The possession of all these false instruments was for one purpose only: to cheat others out of their money.

Reasons for sentence

24.  The applicant was a 46‑year‑old man with no previous convictions.  The judge agreed with defence counsel that the applicant’s case should be treated differently from that of a case involving counterfeit money in that the US$1 million bills were never in existence so could not find their way into any financial system, and the US$100,000 were unlikely to get into general public circulation as the genuine US$100,000 issued in 1930’s were confined to use among the banking sector.

25.  The judge nevertheless took into account the significant amount in face value represented by the false instruments.  Given the applicant’s background as a financial adviser, the judge found that the applicant was targeting wealthy but gullible people, and if successful, the losses to the third party could have been substantial.

26.  The judge adopted 12 months as the starting point for the 1^st charge and three years for the 2^nd charge. No discount was given as the applicant was convicted after trial.  The judge ordered the two sentences to run concurrently on the basis that the subject matter of the 1^st charge were used as samples of a larger quantity—the subject matter of the 2^nd charge.

Grounds of appeal

27.  The grounds of appeal against sentence in the Amended Perfected Grounds of Appeal dated 7 August 2013 settled by Mr Fung were as follows:

“4. The Learned Judge erred in:

a.   Adopting too high a starting point for each charge;

b.   Not ordering a concurrent sentence on all charges[.]

5. The sentences are manifestly excessive.”

28.  One can see right away that ground 4b above was completely erroneous as the judge did order the two sentences to run concurrently.

29.  Mr Fung never sought to amend the grounds of appeal accordingly but merely abandoned ground 4b in his written submission.

30.  We made it clear to Mr Fung that what he had done was not acceptable.  Counsel has a duty to file proper grounds of appeal.

31.  By a Notice of Motion dated 10 December 2013 (which we received on 11 December, one day before the hearing), the applicant sought leave to adduce fresh evidence in the form of a medical report on him, to support his application for leave to appeal against sentence.

32.  Mr Fung filed a Supplemental Ground of appeal against sentence, in which he wrote:

“1. The Applicant intends to adduce, subject to the Court’s leave, the following additional evidence to support his appeal against sentence:

‘A medical report from the Stanley Prison Hospital dated 25^th Nov, 2013.’”

33.  According to the said medical report, the applicant complained of symptoms of gastro‑esophageal reflux disease, high blood pressure, and left facial nerve palsy, for all of which he was given medication and necessary follow‑up.  The facial palsy occurred in April and the last physiotherapy session was on 24 May 2013.

34.  No particulars were given as to how the said medical report would have supported the grounds of appeal against sentence.

35.  In his oral submission, Mr Fung asked this Court to consider the medical condition of the applicant and to reduce the sentence “as an act of mercy”.  Mr Fung further submitted that he intended to supplement, orally from the bar table, with greater details concerning the applicant’s condition were this Court minded to grant leave to receive the medical report as fresh evidence.

36.  As to the sentences imposed, Mr Fung’s argument was that realistically, the possibility of these false instruments being accepted by others as genuine was rather low, the starting points adopted were therefore too high, and the resultant three years manifestly excessive.  No authorities were cited to support his contention.

The respondent’s response

37.  Mr Michael Wong, Senior Public Prosecutor, for the respondent referred us to the case of HKSAR v Tarazona Edgar Henry & Nakamori Shinri, CACC 346/2003, 8 April 2004.  In that case, the 1^st applicant Tarazona and the 2^nd applicant Nakamori were found guilty of possessing 750 false US$500,000,000 United States Treasury Bonds, contrary to section 75(1) of the Crimes Ordinance and were each sentenced to three years’ imprisonment.  Mr Wong submitted that the sentence of three years was upheld by the Court of Appeal.

Fresh evidence

38.  We will deal with the application to adduce fresh evidence first.  The power of this Court to receive fresh evidence is governed by section 83V of the Criminal Procedure Ordinance, Cap 221 (reference to which was omitted from both the Notice and the Supplemental Ground of appeal against sentence).

39.  Section 83V(1) and (2) provide:

“(1) For the purposes of this Part, the Court of Appeal may, if it thinks it necessary or expedient in the interests of justice-

(a) order the production of any document, exhibit or other thing connected with the proceedings, the production of which appears to it necessary for the determination of the case;

(b) order any witness who would have been a compellable witness in the proceedings from which the appeal lies to attend for examination and be examined before the Court of Appeal whether or not he was called in those proceedings; and

(c) subject to subsection (3), receive the evidence, if tendered, of any witness.

(2) Without prejudice to subsection (1), where evidence is tendered to the Court of Appeal thereunder the Court of Appeal shall, unless it is satisfied that the evidence, if received, would not afford any ground for allowing the appeal, exercise its powers of receiving it if-

(a) it appears to it that the evidence is likely to be credible and would have been admissible in the proceedings from which the appeal lies on an issue which is the subject of the appeal; and

(b)     it is satisfied that it was not adduced in those proceedings but there is a reasonable explanation for the failure to adduce it.”

40.  The power of this Court to receive fresh evidence under section 83V(1) is discretionary.  On the other hand, if the applicant satisfies the conditions under section 83V(2), this Court shall receive such evidence.

41.  The conditions to be satisfied, provided in section 83V(2), before receiving such evidence are: the fresh evidence is likely to be credible; it would have been admissible in the courts below; it is relevant to an issue in the appeal; there is a reasonable explanation for the failure to adduce it in the courts below; and the court is satisfied that it would afford a ground of appeal (see Mohammad Mahabobur Rahman v HKSAR (2010) 13 HKCFAR 20).

42.  Whist the conditions in section 83V(2) are not imported into section 83V(1), this Court should, in the exercise of its discretion, have regard to them without treating them as decisive.  This Court will not receive inadmissible evidence nor will it receive evidence under section 83V(1) if it is satisfied that the new evidence would not afford any ground for allowing the appeal (see R v Tam Chung Shing and others [1989] 1 HKLR 42).

43.  Whilst the medical report was not available at the time of sentence, this Court has to consider whether the information contained therein would afford a ground of appeal.

44.  This Court has said on many occasions that ill‑health will rarely be a mitigating factor that a court can properly take into account when determining the appropriate sentence (see HKSAR v Lkhaijav Bayanmunkh [2012] 2 HKC 233, R v Ho Mei Lin [1996] 4 HKC 491, Yip Kai Foon v HKSAR (2000) 3 HKCFAR 31).

45.  We do not see how the medical condition as disclosed in the medical report of the applicant would amount to a mitigating factor that this Court can properly take into account when determining whether the sentence of three years imposed is proper.

46.  We noted in particular the facial palsy suffered by him was in April 2013.  The facial palsy clearly necessitated physiotherapy but the applicant does not seem to be in need of any further treatment since the last session was more than six months ago (in May 2013).

47.  Since the proposed fresh evidence would not afford a ground of appeal, we refused to grant leave to the applicant to adduce such evidence.

Our consideration on the submission

48.  The maximum sentence of imprisonment for the 1^st and 2^nd charge is one of 14 years.

49.  We noted that in Tarazona, the 2^nd applicant applied for leave to appeal against sentence on compassionate grounds, in that his wife was ill with cancer and his father just had a heart bypass operation.  Ma CJHC (as he then was), giving the judgment of the court said (at para 18 of the judgment):

“We are of course sympathetic to the 2^nd Applicant’s family. However, nothing in [the letter from the Consulate-General of Japan] shows the necessity of an early release. Taking into account also the fact that the present sentence is one of 3 years, we are of the view that no grounds have been made out to enable us to exercise our discretion in favour of the 2^nd Applicant.”

50.  The 2^nd applicant’s application was dismissed upon a very narrow basis.  There does not appear to be any argument as to the appropriateness of the 3‑year sentence imposed.

51.  We are of the view that the judge had carefully assessed the culpability of the applicant.  He had correctly distinguished the present case from one in which counterfeit money could not find its way into any financial system or into public general circulation.  As the judge had found, the applicant possessed these false US dollar bills and the bogus Certificate of Balance with the intention of “targeting the wealthy but gullible people”, and if the applicant had succeeded, “the losses could have been substantial to the third party.”

52.  Having regard to the substantial number and the enormous face value of the US dollar bills and the Certificate of Balance; the international dimension; the potential substantial loss to third parties, and the impact on the image of Hong Kong as an international finance centre, we do not agree that a starting point of 12 months and three years respectively was too high.  The judge had fairly and properly ordered the two sentences to run concurrently, resulting in a total sentence of three years’ imprisonment.  We do not agree that this total sentence is manifestly excessive.

Conclusion

53.  For these reasons, the application for leave to appeal against sentence was also dismissed.

Loss of Time

54.  Section 83W(1) of the Criminal Procedure Ordinance, Cap 221 provides:

“The time during which an appellant is in custody pending the determination of his appeal shall, subject to any direction which the Court of Appeal may give to the contrary, be reckoned as part of the term of any sentence to which he is for the time being subject.”

55.  After we dismissed the application for leave to appeal against sentence, we invited Mr Fung to address us why we should not order “loss of time” in the present case (having made it clear that we would not consider loss of time on account of the late filing of the Notice of Abandonment in relation to the application for leave to appeal against conviction).

56.  Mr Fung submitted that since there are no guidelines or tariff for this type of offence, it would not be appropriate to say that the application was wholly unmeritorious.

57.  We were mindful that the application was made upon legal advice, nevertheless, we are of the view that the application was totally unmeritorious.  Valuable judicial time has been wasted.  Having considered the gravity of the offence and the length of sentence (three years), we were of the view that it was proper to order loss of time of four weeks.  We therefore ordered that four weeks of the time during which the applicant has been in custody pending the determination of his appeal shall not be reckoned as part of the term of the sentence to which he is for the time being subject.

Lateness of the filing of the Notice of Abandonment

58.  We will now address the issue of the lateness of the filing of the said Notice of Abandonment.

59.  We were informed by Mr Fung that the applicant confirmed, upon his advice, his willingness to abandon his application for leave to appeal against conviction on 3 December 2013 (nine days before the hearing).  He was instructed that the form prepared by the solicitors for the applicant was repeatedly rejected by the High Court Registry for failing to conform with the required format: using an old and outdated version of the form; failing to fill in the sentence imposed, and so on.  Mr Fung said he himself was made aware of the solicitors’ failure to file the Notice by 10 December 2013 but he did nothing to alert the court of his client’s intention to abandon the application relating to the conviction.

60.  We found it astonishing that a firm of solicitors was unable to properly file a Notice of Abandonment on behalf of a client, particularly when (in our experience) an unrepresented applicant in custody has no difficulty in filing such a notice via the Correctional Services Department.  The reasons tendered did not sound convincing.  As a result of the lateness, valuable judicial time was wasted in reading the papers in this case and preparing for the hearing. Practitioners should be mindful of the need to inform the court as soon as possible of any intention to abandon an application for leave to appeal so that judicial time could be directed to where it is needed.