R. v. WONG WAI MAN

IN THE COURT OF APPEAL

1995, No.395
(Criminal)

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J U D G M E N T

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Power, V.-P.(giving the judgment of the Court):

1. The applicant faced two charges of theft. In the first it was alleged that he, on 21st September 1992 in Hong Kong, stole a chose in action, namely a debt of $1,360,500 Hong Kong currency owed by the China and South sea Bank to Rising Sail Trading Limited. The second alleged that on 7th October, in Hong Kong, he stole a cheque bearing No.379916 drawn on the account of Waymax Development Limited maintained with the Sin Hua Bank in the sum of $880,233.96 Hong Kong currency, the property of Waymax Development Limited. He pleaded not guilty to both of those charges and was convicted after trial before Judge Davies in the District Court and sentenced to two years and six months on each charge, the sentences being ordered to be served concurrently. He originally sought leave to appeal against both conviction and sentence. He has, however, today, in the face of the court, abandoned his application for leave to appeal against sentence which is dismissed.

2. We turn then to deal with his application for leave to appeal against conviction.

3. The facts of the matter were that a company known as the Heshan Trading Development Company ("Heshan") being a state company in Guangdong, was desirous of obtaining some plywood. A Mr. Liu Hang-xing ("Mr. Liu") was its General Manager. In May 1992, the applicant quoted Mr. Liu $400 per cubic metre for the supply of plywood by Mandarin Engineering Company which then employed him. No agreement was reached at that time. However, by August 1992, Mr. Liu had obtained import approval for 3,000 cubic metres which approval expired on the 30th December 1992.

4. The applicant then quoted Mr. Liu a price of $380 per cubic metre. He was by that time associated with Waymax Machine Equipment Development Company ("Waymax Machine") which was a subsidiary of Waymax Development Company Ltd. ("Waymax Development"). A contract of sale was agreed between Waymax Development and Heshan agreeing a sale price of $380 per cubic metre, delivery within three months and a payment of 30% deposit. On 17th September a deposit remittance of $880,233 was made to Waymax Machine.

5. On 20th September the applicant phoned Mr. Liu telling him that Waymax Machine had decided to withdraw but that a company of his own known as Kwan Lee, of which he was the sole proprietor, would take over the order. Mr. Liu agreed to this and agreed that the balance of the purchase price, $1,360,500, would be paid to Kwan Lee. This payment was made on 21st September 1992 through Rising Sail Trading Limited, a Hong Kong Company, in which Heshan had a one-sixth share. It was subsequently shown by police inquiries that on the following day there were three cheque withdrawals from the account of Kwan Lee. $1,138,000 was withdrawn and deposited in the personal account of the defendant at the Hang Seng Bank, $210,000 was withdrawn by a man named Chan Chi-wai and $20,000 was withdrawn by a third man Cheung Chi-hung. By 8th October, only $330 was left in the applicant's personal account, i.e. the account to which $1,138,000 had gone.

6. On 5th October Mr. Chan Kang, the General Manager of Waymax Development, went to China and cancelled the contract between Waymax Machine and Heshan. It appears that Mr. Chan had misgivings about the whole transaction and acted in consequence of those misgivings.

7. On 7th October the $880,233, the deposit amount, was transferred by Waymax Machine to Kwan Lee. On the following day a cheque for $880,000 drawn on Kwan Lee's account was cashed by the applicant leaving a balance of only $1,296. At some time thereafter the applicant left for Panama. The accounts into which money had gone, as can be seen from the foregoing, had been almost totally stripped.

8. The applicant was located in Panama in 1993, about a year later, and during the telephone call with Mr. Liu said that he would pay back the money which had been paid to his company. He asked for a statement of the precise amount together with the interest owing. Eventually he went to China and what was referred to as a "Refund Proposal" was drawn up. He then purported to pay the first instalment of that Refund Proposal using a cheque for $650,000. This was, however, dishonoured upon presentation. He was subsequently arrested when he arrived at Kai Tak Airport on the way back to Panama.

9. At trial the applicant gave no evidence but the cross-examination of the prosecution witnesses proceeded upon the basis that the transaction for the sale of the plywood while an entirely bogus one was not negotiated with no intention to defraud anyone but rather to create a situation where, in effect, the amount involved would be lent to the applicant. The trial judge made the following finding having reviewed all of the evidence:

"The inference drawn from the totality of the evidence leads me to the inescapable conclusion that the Defendant dishonestly appropriated these two sums with the intention of permanently depriving Heshan of the monies. By application of the Ghosh test of dishonesty, I am satisfied that the Defendant was dishonest at the time the sum of approximately HK$1.36 million was credited to his account on the 21st September 1992 and when the cheque for HK$880,000 was received by him on the 7th October 1993 when he knew that no plywood would be supplied. He Shan still had a proprietary interest in both those sums represented by the 'chose in action' and the cheque respectively. As was said by the House of lords in Queen v. Gomez [1993] 1 All ER 1 -

'A person could be guilty of theft contrary to Section (I) of the 1968 Act, by dishonestly appropriating goods belonging to another if the owner of the goods was induced by fraud, deception or a false representation to consent to or authorize the taking of the goods, since it was the actual taking of the goods, whether with or without the consent of the owner, in circumstances where it was intended to assume the rights of the owner that amounted to the "appropriation" and the fraud, deception or false representation practised on the owner made the appropriation dishonest.'

The evidence relating to the refund proposal is, I find, irrelevant. This was a man who was anxious to 'turn the clock back' if he could. Also, the evidence relating to PW1's efforts to retrieve the money is irrelevant. It merely reflected PW1's priorities. He was acting no differently to the vast majority of persons who are duped and who regard the return of their property a higher priority than ensuring the perpetrator of the fraud is brought to justice. This does not affect my view of him as a witness of substantial truth in this matter.

I find the Defendant guilty on both counts as charged beyond reasonable doubt."

10. The applicant today urges that there was no sufficient evidence to support those convictions. It is claimed, and it is no more than a claim as he gave no evidence in the trial, that he was annually paying interest on what was, in effect, a loan. There was no evidence to substantiate this suggestion before the trial judge. However, the applicant has, in an affidavit and orally, suggested that there could and should have been evidence before the trial judge that an amount of US$25,000 was paid in May 1994. He says that this was a matter which he revealed to his solicitor and that his solicitor failed to act upon it. The solicitor denies that any such matter was brought to his attention. We do not, however, need to pursue this matter further as, given the evidence and the sequence of events, a suggestion of a payment of interest in May 1994 could hardly help the applicant. Indeed the trial judge dealt with the bona fide of any suggested repayment of a "loan" when he said

"The evidence relating to the refund proposal is, I find, irrelevant. This was a man who was anxious to 'turn the clock back' if he could."

The trial judge carefully reviewed the evidence. Everything in the evidence pointed inescapably to the conclusion to which, after that careful consideration, he came. There is nothing, we are satisfied, in the conviction that was either unsafe or unsatisfactory.

11. We were occasioned some concern at the outset by the way in which the charges were framed. Whether they were correctly framed as charges of theft or should, as originally framed, have remained charges of obtaining by deception. We are no longer concerned by this matter for the reasons which I will now ask my Brother Keith to deliver.

Keith, J.:

12. I agree that this application for leave to appeal against conviction should be refused, but I add a few words of my own at the invitation of Power V.-P. to explain why I think that the charges which the Applicant faced were properly framed because I too had initial misgivings about them.

13. The facts in relation to charge 1 were that Heshan owed Waymax Machine the balance of the deposit due under the contract for the supply of the plywood, i.e. $1,360,500.00. Instead of paying that sum to Waymax Machine, Heshan caused an associate company, Rising Sail, to pay that sum to Kwan Lee because Heshan had agreed that its contract was to be with Kwan Lee rather than with Waymax Machine. In my judgment, in the light of R. v. Gomez [1993] A.C. 442, the applicant would have been guilty of stealing the sum of $1,360,500.00 if Rising Sail had been induced by the applicant's fraud, deception or false representations to consent to the payment of the sum to Kwan Lee. As it was, on the facts found by the judge, the Applicant represented that Kwan Lee intended and was able to supply the plywood to Heshan according to the contract. That representation was false because the Applicant had no intention of causing Kwan Lee to supply the plywood. The Applicant intended to make off with the money.

14. The facts in relation to charge 2 were that Heshan had paid $880,233.86 to Waymax Machine as part payment of the deposit. On Heshan's instructions, Waymax Development caused that sum to be paid to Kwan Lee, because Heshan had agreed that its contract was to be with Kwan Lee rather than Waymax Machine. In my judgment, in the light of Gomez, the Applicant would have been guilty of stealing the sum of $880,233.86 if Waymax Development had been induced by the Applicant's fraud, deception or false representations to consent to the payment of the sum to Kwan Lee. Again, on the facts found by the judge, the Applicant represented that Kwan Lee intended and was able to supply the plywood to Heshan according to the contract. That representation was false because the Applicant had no intention of causing Kwan Lee to supply the plywood. The Applicant intended to make off with the money.

15. Both charges were therefore correctly framed as charges of theft even though they would also have amounted to the offence of obtaining property by deception.

Power, V.-P.:

16. Both applications are refused.