R. v. LAM CHIN PANG

IN THE COURT OF APPEAL

1995, No. 767
(Criminal)

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J U D G M E N T

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Mayo, J.A. (giving the judgment of the Court):

1. The applicant seeks leave to appeal against his conviction for a conspiracy to use false instruments contrary to the common law and section 73 of the Crimes Ordinance, Cap 73. He was also charged with eight offences of false accounting but was acquitted of these offences.

2. The conspiracy related to the use of credit cards which have stored within them an electronic device containing information concerning the holder of the card.

3. The applicant is one of the shareholders in a company trading under the name Sidewalk Trading Co. Ltd. Sidewalk conducts a garment trading business through four retail outlets. Three of these were at Tsuen Wan and one was at Tuen Mun. They use the names Sidewalk Trading Co. Ltd., Kam Sai II, Pointer and To & Fro Japan Fashion. A so-called Merchants Agreement was concluded in respect of each of these outlets with the Nanyang Credit Card Company. In simple terms each outlet has a computer facility. When a customer effects a purchase using a credit card (in all but a few of the 164 transactions we are concerned with the credit cards are the mastercards) the card is "swiped" through the computer terminal and the information contained electronically on the card is transmitted to the credit card company together with particulars of the contemplated transaction. The object of the exercise is to determine whether or not the card issuing institution authorises the transaction. A record is kept of this and if the transaction is authorised the merchant proceeds with the transaction and is in due course credited with the amount authorised less the commission which is payable to the credit card company.

4. According to the Crown case all of the 164 transactions referred to were effected by using 43 different credit cards. None of these credit cards were genuine credit cards. All belonged to overseas card holders none of whom had reported their cards to be lost or stolen.

5. The conspiracy referred to in the charge is in these terms:

"That (the two defendants) on days between 27 December 1993 and 16 April 1994, in Hong Kong, conspired together and with a person or persons unknown, to use instruments namely cards on which current credit card account information was stored by electronic means, which were, and which they knew or believed to be, false, with the intention of inducing somebody to accept them as genuine, and by reason of so accepting them to do or not to do some act to their own or any other person's prejudice."

6. None of the credit cards which were used were ever retrieved. The Crown built its case around the trading patterns adopted and supported its case by circumstantial evidence.

7. The applicant gave evidence. It was his contention that there had been genuine sales of garments to what were described as itinerant traders. The applicant claimed to have no knowledge that any of the cards were false.

8. The judge considered all of the evidence which was before him and concluded that the evidence of the itinerant traders was incredible. He came to the conclusion that the only reasonable inference he was able to draw from the evidence was that someone had provided the cards to the defendant and who had then processed them in such a manner to enable the shops to receive moneys for non-existent merchandise. The applicant had then divided the spoils with the other person or persons who had provided the cards.

9. A number of factors had convinced the judge that this had been the case. One was the sudden very large increase in the volume of transactions where credit cards had been used. Another was the failure of the applicant to react in a convincing manner on being notified of cards which had been rejected.

10. In this connection the defendants had on a number of such occasions immediately or almost immediately following the rejection swiped the card again for a smaller amount. Examples of other highly suspicious situations were given in the Reasons for Verdict.

11. The repeated use of cards and their use at the different outlets was also suspicious in the context of the evidence relating to the itinerant traders. It appeared much more likely that the reason for using different outlets was an attempt to allay suspicion.

12. There was also evidence to the effect that the self same cards had been used in a similar manner in other unconnected retail outlets.

13. Over and above this was the evidence of substantial withdrawals of cash during the period from the business which would be consistent with the sharing of the proceeds of the scam with some third party.

14. None of the above matters which are only a small selection of the matters referred to by the judge would of itself be in any way conclusive evidence of a conspiracy. However when taken together and in the absence of any plausible explanation from the applicant there was abundant evidence to enable the judge to be satisfied at the appropriate level of the existence of the conspiracy and the applicant's participation therein.

15. The first ground of appeal relates to the judge initially ruling that there was a case to answer on charges 2 to 9. It is suggested that as a consequence of this the applicant may have been prejudiced as this may have been a factor which would have been weighed in the balance when he made his decision to go into the witness box and give evidence. It has not been demonstrated that the applicant has suffered any prejudice as a consequence of this.

16. All that Mr Raffell representing the applicant before us was able to say was that counsel representing the applicant below did experience some difficulty in advising the applicant whether he should give evidence. That is not enough.

17. Grounds 2 to 5 are concerned with findings of fact which were made by the judge. He gave satisfactory reasons for the view he took of the evidence and there are no grounds whatever to suppose that he was wrong to arrive at the conclusion he did.

18. An example of this is ground 2 which reads:

"THAT on 2 occasions when credit cards were allegedly 'swiped' at the Appellant's shop, the learned trial judge was unable to find that the Appellant had acted dishonestly. Such evidence was therefore consistent with that of the Appellant."

19. If the judge was satisfied that the itinerant traders were a figment of the applicant's imagination it is difficult to conceive how he could have come to any conclusion other than being satisfied that the applicant had acted dishonestly. The fact that he did not specifically make a finding to this effect is not of consequence and certainly in no way detracts from the reasons as a whole. It is implicit from his findings that he was satisfied that the use of the cards was spurious and did not relate to genuine transactions.

20. Grounds 3 and 4 read:

"3. THAT the learned trial judge failed to consider whether the Appellant believed that the holders of the forged credit cards were genuine itinerant merchants.

4. THAT the learned trial judge failed to consider that the 'spread' of the use of forged credit cards amongst the Appellant's 4 outlets might have been instigated by the so-called itinerant merchants, rather than by the Appellant himself."

21. The answer to this is that the judge did consider the matter as a whole and clearly and for valid reasons rejected the suggestion that the "itinerant traders" had been a reality.

22. The final transaction referred to in ground 5 was considered by the judge. He was unable to reach any conclusion concerning this. It was not necessary for him to do so.

23. Finally there is no reason to suppose that the conviction is in any way unsafe or unsatisfactory.

24. This application for leave to appeal against conviction must accordingly be dismissed.