HKSAR v. SHEUNG KIT FUNG AND ANOTHER

CACC149/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO.149 OF 2013

(ON APPEAL FROM DCCC 1103 OF 2012)

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DECISION

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1. This is the 1^st and 2^nd applicants’ application for bail pending appeal.

2. On 9 April 2013, the applicants were convicted after trial in the District Court of two counts of using a false instrument, contrary to section 73 of the Crimes Ordinance, Cap. 200. On 24 April 2013, the 1^st and 2^nd applicants were sentenced to total sentence of three years and two years’ imprisonment respectively. The expected date of discharge in the case of the 2^nd applicant is 20 July 2014.

3. The applicants have applied for leave to appeal against conviction. A set of Perfected Grounds of Appeal was filed on 25 July 2013. The applications have yet to be listed for hearing.

4. By summons filed on 26 July 2013, both applicants apply for bail pending appeal.

5. The relevant legal principles are well settled. Bail pending appeal is exceptional and generally speaking should only be granted where it appears that the appeal would be successful (“merits” ground”), or where there is a risk that the whole or a substantial part of the sentence would have been served by the time the appeal was heard (“time” ground”): HKSAR v. Lau Man Kin [2010] 1HKLRD 336. Where the “time” ground is relied upon, an applicant must still demonstrate that his appeal is reasonably arguable.

6. The 1^st applicant’s application is made on the “merits” ground. In the case of the 2^nd applicant, the “time” ground is also relied upon. The respondent opposes the application on the basis that the applicants’ appeal is not reasonably arguable, and also that there is a risk of their absconding having regard to their close connections with the Mainland and the USA. 

7. The false instruments that form the subject matter of the two charges are:

(1)   A Citibank cheque payable to one 李德衡in the amount of US$143,000,000,000 with a validity period up to 15 August 2010 (exhibit P1).

(2)   A HSBC transfer slip dated 15 August 1934 transferring US$143,000,000,000 to Citibank Bank for the account of 李德衡 (exhibit P2).

(3)   A Citibank deposit transfer document dated 15 August 1945 stating that US$143,000,000,000 of 李德衡was transferred from HSBC to Citibank and the amount together with interest may be collected before 15 August 2010 (exhibit P3).

(4)   A Citibank deposit slip dated 27 July 1927 payable to李德衡for an amount of US$143,000,000,000 (exhibit P4).

(5)   A Citibank withdrawal slip in respect of US$143,000,000,000 and the account of 李德衡 with a period of 15 August 1934 to 15 August 2010 marked at the top (exhibit P5).

(6)   97 bank notes each with a denomination of one million US dollars (exhibit P6).

8. Charge 1 relates to P1 to P5 whereas charge 2 relates to P1 to P6. There is no dispute that P1 to P6 are false instruments.

9. The undisputed facts of the case can be stated as follows. The 1^st and 2^nd applicants are father and daughter. On 23 April 2012, they went to the Citibank branch office located at Wheelock House, Central. They were received by PW1, a customer service manager of the bank. During their meeting, the 1^st applicant produced P1 to P5 to PW1. PW1 reported the matter to her senior officer. The bank made a report to the police. On 4 May 2012, there were three telephone conversations between the 2^nd applicant and PW1 and a meeting was arranged for 10 May 2012. The telephone conversations were recorded and the transcript was produced as evidence (exhibits P40A(1), P40B(1) and P40C(1)). On 10 May 2012, the 1^st and 2^nd applicants together with the 1^st applicant’s wife went to the bank and met with PW1, PW2, the bank’s senior investigation officer, and PW3, a police officer posing as a bank officer. During the meeting, the 1^st applicant produced P1 to P6 to PW1 and PW2. The 1^st and 2^nd applicants were arrested by police. On the same day and on 30 May 2012, the 1^st applicant took part in two video recorded interviews with the police. The 2^nd applicant did the same on 11 and 30 May 2012. The voluntariness of the interviews and the accuracy of the transcripts of the records of interview are not disputed.

10. The prosecution case is that at the meeting on 23 April 2012, the 1^st applicant produced P1 to P5 to PW1 and requested to open a bank account in his name and to pay P1 into his account. No bank account was however opened, PW1 having told the applicants that the bank could not accept P1. According to PW1, The 1^st applicant told PW1 that 李德衡 had died and his family requested him to open a bank account for receiving the money, and he had been to Hong Kong Bank and got confirmation that the money had been transferred to Citibank, as shown by P2. The 1^st applicant also produced a metal plate claiming that it could be used to collect the US$143,000,000,000. The 1^st applicant requested to see the senior people in the bank. The 2^nd applicant left her telephone number with PW1 requesting her to reply as soon as possible about opening an account and the documents.

11. On 4 May 2012, the 2^nd applicant telephoned PW1, during which PW1 reiterated that the bank would not accept the cheque and no bank account could be opened. When pressed by the 2^nd applicant for the reason, PW1 said the bank had checked and found it had not issued the cheque. The 2^nd applicant made a second call later to request to transfer the account into the 1^st applicant’s name, and also asked to arrange for the 1^st applicant to meet with PW1’s senior to further discuss the matter. Subsequently, PW1 called the 2^nd applicant and a meeting was fixed for 10 May 2012. In this third conversation, however, PW1 pointed out to the 2^nd applicant that the bank would not accept the cheque.       

12. At the 10 May 2012 meeting, the 1^st applicant repeated what he had said on 23 April 2012, adding that it was one 袁玉成 who entrusted him with the documents for the purpose of collecting the fund. The 1^st applicant also produced a bottle of magic ink and two certificates (exhibits P15 & P16), which he claimed contained invisible secret codes that would be revealed when the ink was applied to them. The 1^st applicant also produced four large and one small metal plates (exhibits P23 and P24 respectively), explaining that the figures on P23 would add up to the figure of 143000000000 on P24, signifying that the money had been transferred from Hong Kong Bank to Citibank. The 1^st applicant requested to open an account and to deposit the fund into his account, saying that he would not withdraw the money. Later the 1^st applicant took out P6. When PW2 asked why he showed the bank notes to her, he replied he wanted to deposit the money into his bank account to be opened.

13. In his interviews with the police under caution, the 1^st applicant said he went to university in the Mainland. He came to Hong Kong to work in 1984 and has since resided in Hong Kong. The trial judge had in the Reasons for Verdict set out a detailed account of what he told the police. In gist, he said he went to the bank to make an enquiry, to confirm whether P1 to P6 were genuine or not and if they were what should be done. If they were false, the bank could issue a note. He denied requesting to open a bank account. He also stated that P6 were not bank notes but were US government bonds issued in the 1920s and that he wanted to check with Citibank whether they were genuine or false.

14. The 2^nd applicant stated in her interviews with the police that she was a law graduate of a mainland university and held a US master degree in law. The trial judge had also given a detailed account of what she told the police in the Reasons for Verdict. In short, she said the 1^st applicant went to the bank to find out whether P1 to P5 were genuine or false and whether the account still existed. About the telephone conversations she had with PW1, she said she wanted to know the reason why the bank did not accept the cheque, so she asked to speak to the senior people of the bank. About P6, she said she had not seen them before the meeting and that the 1^st applicant was intending to ask the bank to examine them to see if they are genuine.     

15. Both applicants elected not to give evidence and called no witness. From counsel’s closing submissions, it would appear that the defence case is that the 1^st applicant merely went to the bank to verify whether P1 to P6 were genuine and that the 2^nd applicant was on both occasions acting as the interpreter for the 1^st applicant who speaks Putonghua.   

16. The Perfected Grounds of Appeal contain two grounds:

(1) The Judge erred in:

(a) failing to correctly consider the prosecution evidence that supports the defence case and to consider the defence closing submission, in particular the case of HKSAR v. Song Chang Moo (unreported) CACC235/2010;

(b) relying on the telephone conversations between PW1 and the 2^nd applicant on 4 May 2012 in that they did not take place on the date of the offences; and

(c)failing to give the applicants the benefit of the doubt having regard to the reasoning in HKSAR v. Song Chang Moo.

(2) By reason of the above, the conviction is unsafe and unsatisfactory.  

17. In respect of Grounds 1(a) and (c), Mr Wong SC, who appears together with Mr Kwong for the applicants, submits that the trial judge failed to have regard to the evidence of the prosecution witnesses. In the cross-examination of PW1, she was asked about her report to her senior, Carol Ma, after the first meeting. PW1 agreed the report recorded that the applicants insisted on the bank carrying out further verification of the documents (i.e. P1 to P5) and whether they could be accepted by the bank (堅持要求銀行進一步核實有關文件及可否被銀行接納). In PW2’s cross-examination, she stated that the applicants had insisted upon further verification of the documents by the bank, and her department was thus required to investigate. PW3 agreed in cross-examination that the 1^st applicant had mentioned in the second meeting that the documents had to be verified before the bank would make payment. It is argued that these parts of PW1 to PW3’s evidence and the fact that the bank had arranged for PW2, a senior investigating officer, to attend the second meeting prove that the applicants had insisted upon verification and the bank well understood that. In respect of P6, it is argued that the police entered the room to make arrest when PW2 was looking at them; and given his previous insistence upon further verification, it was logical and possible that the 1^st applicant would also have insisted on the bank verifying P6 as well, but for the interruption by the police arrest. Mr Wong SC’s submission is that this “verification” defence is sufficient to raise a reasonable doubt on the element of “knowledge that the documents were false” on the basis of the decision in HKSAR v. Song Chang Moo.

18. Mr Wong SC also refers to PW1 to PW3’s evidence that touches upon the role played by the 2^nd applicant during the two meetings. PW1’s evidence is that the 2^nd applicant claimed to be the 1^st applicant’s lawyer and his contact representative and any clarification could be sought through her. During the first meeting, the 2^nd applicant would make explanations and acted somewhat like an interpreter. She played a similar role in the second meeting, repeating at times what was said by the 1^st applicant. Both PW1 and PW2 said that at the second meeting, PW2 and the 1^st applicant communicated directly in Putonghua. PW2 also said the 2^nd applicant had interjected and commented that it involved Chinese history and it was difficult to give a detailed account. It is also PW3’s evidence that after the 1^st applicant stated in Putonghua that he would not withdraw the money in the bank account, the 2^nd applicant reiterated that the 1^st applicant would not withdraw the money. It is submitted that the evidence of the three prosecution witnesses proves that the 2^nd applicant merely acted at the 1^st applicant’s interpreter in the two meetings, but the trial judge did not have regard to it and found to the contrary that she was not merely acting as an interpreter. This is said to constitute a material irregularity.

19. Ground 1(b) relates to the telephone conversations between the 2^nd applicant and PW1 on 4 May 2012. It is pointed out that PW1 was not cross-examined on them because they took place after the date specified in the 1^st charge and did not take place on the date specified in the 2^nd charge. It is submitted that it is a material irregularity for the trial judge to rely on the telephone conversations in concluding that the 2^nd applicant was not just acting as an interpreter for the 1^st applicant.

20. Ms Ching, who appears for the respondent, points out that in considering the “verification” defence, it is unrealistic to refer to the prosecution witnesses’ evidence in isolation. Instead, the overall picture of the evidence must be looked at. She submits that the prosecution evidence shows that in both meetings, the applicants were engaged in persuading the bank to accept P1 to P6 as true by, for example, saying that Hong Kong Bank had confirmed the transfer of money to Citibank and using the magic ink and the metal plates as supportive of the existence of the transfer of money from HSBC to Citibank. Ms Ching submits that the trial judge was not required to cover every aspect in the Reasons for Verdict. The Reasons for Verdict had given a succinct summary of all the salient facts covered in the evidence of the prosecution witnesses and the trial judge had considered and analyzed all the evidence before making findings of fact. He was aware of the “verification” defence but he rejected it upon his analysis of the evidence which shows that the applicants’ sole aim was to persuade the bank to accept P1 and P6 as true and there was no intention to verify the genuineness of P1 to P6.

21. Ms Ching further submits that HKSAR v. Song Chang Moo was decided on an entirely basis. In that case, the trial judge rejected the defence case that the purpose of the visit to JP Morgan was to simply verify the genuineness of the bank drafts on the basis of the prosecution witnesses’ evidence that no request to verify was raised at the meeting. The Court of Appeal considered the trial judge fell into error because the applicant communicated with the prosecution witnesses through a Korean interpreter so that the prosecution evidence on what was said by the applicant at the meeting was hearsay in the absence of evidence from the interpreter that he had faithfully interpreted that said by one to the other and vice versa (at paras.19 & 21). In the present case, both PW1 and PW2 are conversant with Putonghua and could comprehend and communicate directly with the 1^st applicant. Further, unlike in Song Chang Moo, the trial judge had made analysis of the evidence and observations on the defence case before concluding that the applicants in fact knew that P1 to P6 are false. It is therefore submitted that the trial judge was not bound to have regard to the Song Chang Moo case.  

22. With regard to the role of the 2^nd applicant, Ms Ching refers to the evidence that she was introduced as a lawyer rather than an interpreter. The three telephone conversations between the 2^nd applicant and PW1 on 4 May 2012 are both relevant and admissible. Although they took place not on the date of the offences, they form part of the circumstances of the case and are demonstrative of the actual role of the 2^nd applicant in the whole incident. They show that she took an active role and was not a mere interpreter as she claimed.             

23. Application for bail pending appeal is not the occasion for in-depth discussions of the merits of appeal. I will not therefore embark upon a detailed analysis of the arguments on both sides. Instead, I will take a broad view of the case and come to a preliminary view on the merits of the appeal.  

24. Ground 1(a) and (c) of the appeal are directed at the trial judge’s rejection of the “verification” defence and of the argument that the 2^nd applicant merely acted as the 1^st applicant’s interpreter. On the “verification” defence, the applicants premise the appeal on the evidence of PW1 and PW2 that the applicants had insisted on the bank verifying or further verifying the genuineness of P1 to P5 and also PW3’s evidence that the 1^st applicant had mentioned that the documents had to be verified before the bank would make payment. In considering these grounds, four matters have to be taken into account. First, the transcripts of the evidence of PW1 and PW2 show that the applicants were insisting on the bank conducting further verification of the documents after they had been repeatedly told the bank did not accept the cheque and would not open the bank account for the 1^st applicant. Importantly, during the telephone conversations, PW1 had made it plain to the 2^nd applicant that the bank had checked and found the cheque was not issued by Citibank. Second, it is not the evidence of the prosecution witnesses that the applicants produced the documents to enquire whether they were genuine or to pay P1 into an account if it was genuine. Their evidence, which was accepted by the trial judge, is that the applicants wanted to open a bank account and to pay P1 and P6 into the account. Third, the trial judge had analyzed the evidence and came to the view that what was said and done by the applicants during the two meetings and the telephone conversations were all with a view to persuading the bank into accepting the cheque (P1) and making payment. Fourth, the trial judge had referred to the various obvious and fundamental problems and mistakes appearing on P1 to P6 and took the view that, with the applicants’ education background and life experience, the suggestion that they did not know whether the documents were genuine, thus went to the bank to seeking verification, is improbable. 

25. As to the case of HKSAR v. Song Chang Moo, important to the Court of Appeal’s reasoning is its view that the evidence was incapable of ruling out the possibility that the applicant’s intention was to open a bank account and to deposit the bank drafts into it if the bank drafts were authentic. The evidence in this case is however very different. There were two meetings and several telephone conversations in which the bank’s position had been made clear, namely, it did not accept P1, which was found not to be issued by the bank, and would not open a bank account for the 1^st applicant. Despite this, the applicants were determined to pay in P1 and/or to effect a transfer of the account to the 1^st applicant. In her second telephone conversation with PW1, the 2^nd applicant even sought to exert pressure on PW1 by saying that the matter would have to be referred to the central government in Beijing if it could not be resolved through the 1^st applicant.

26. This is particularly the case with P6. When being asked by PW2 why he showed them to her, his reply was he wanted to deposit the money into his bank account to be opened. It is argued that it could be inferred from his previous modus operandi that the 1^st applicant would also have insisted on the bank verifying P6 as well, but for the interruption by the police arrest. However, it is PW1’s evidence under cross-examination that the 1^st applicant had finished talking about P6 when the police officers entered to make arrest and she was sure about this. It is also PW3’s evidence that there was 3 to 5 minutes between the time he left the room and the police officers went into the room to make arrest.

27. As for the role of the 2^nd applicant, the appeal relies on the evidence of the prosecution witnesses which suggests that the 2^nd applicant acted like an interpreter to the 1^st applicant, repeating what he said during the meetings and did not say much during the second meeting. The trial judge did not accept that the 2^nd applicant was simply to interpret for the 1^st applicant. He found her to be acting in concert with the 1^st applicant. Among the reasons he gave for his finding, is the evidence of the bank staff that the 1^st applicant did not introduce her as his daughter. Instead, he said she was his lawyer. Also, although the 1^st applicant does not speak Cantonese, he can understand it and the bank staff could and did communicate with him in Putonghua. There was no challenge to these parts of the prosecution evidence. The trial judge also referred to her telephone conversations with PW1 on 4 May 2012, from which it can be seen that the 2^nd applicant was trying to convince PW1 that the cheque was genuine. In considering whether the 2^nd applicant was merely present as the 1^st applicant’s interpreter or whether she was in joint enterprise with the 1^st applicant, the trial judge was entitled to look at all the relevant evidence and to assess the evidence objectively.

28. Under Ground 1(c), it is said that the trial judge was wrong to have taken into account the telephone conversations on 4 May 2012 because the two meetings, which are the dates of the offence, took place on other dates. While this may be an arguable ground in respect of the first  meeting which took place before the conversations, it is difficult to see why this should be the case for the second meeting which came about as a direct result of the telephone conversations. What was said by the 2^nd applicant in these telephone conversations is relevant and reflects her purpose and intention in attending the second meeting.

29. Mr Wong SC complains that the trial judge had not in the Reasons for Verdict referred to and dealt with the evidence of the prosecution witnesses relied upon in the appeal and also the case of HKSAR v. Song Chang Moo. However what is crucial for the purpose of the present applications is whether the omissions could arguably have the effect of rendering the convictions unsafe and unsatisfactory.  Taking the case as a whole and considering the arguments advanced on both sides, I am not persuaded that this is so.

30. The applicants’ leave applications have yet to be listed. Mr Wong SC suggests it might not be heard until February 2014. It is difficult to say whether this is going to be the case. But even if it is and that the 2^nd applicant will have already served more than half of her sentence when the appeal is heard, having regard to the merits of the appeal, I do not consider it is unjust not to grant her bail pending the hearing of the appeal.

31. For the reasons set out above, the applications of both applicants are therefore refused.