HKSAR v. CHAN YIU MING ALLAN

CACC 560/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 560 OF 2001

(ON APPEAL FROM DCCC 701 OF 2001)

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J U D G M E N T

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Stuart-Moore Ag CJHC (giving the judgment of the Court):

Introduction

1. On 5 December 2001, following a trial in the District Court before Judge Sweeney, the Applicant, aged 58, was convicted on five charges. Four of these were brought under the Theft Ordinance, Cap. 210 and one under section 71 of the Crimes Ordinance, Cap. 200. He was sentenced to concurrent terms of three years' imprisonment on each charge. The Applicant now seeks leave to appeal against conviction, having made a prior decision not to pursue his application in relation to sentence which we have dismissed.

The facts

2. We do not need to deal in any depth with the prosecution's case against the Applicant. There was effectively only one issue in the trial and the grounds of appeal do not require any detailed analysis of the allegations.

3. The offences were alleged to have occurred in 1994, shortly before Chinese New Year. They related to three cheques involving a total of about US$500,000. These monies belonged to P2H Design Associates Limited ('P2H') which had employed the Applicant since August 1992 as an architect. In essence, the Applicant was alleged to have amended fee invoices addressed to two of P2H's clients in a way which caused them to issue cheques either to the Applicant himself or to a company Jesmond International Limited ('Jesmond') which was jointly owned by the Applicant and a cousin of his.

4. Having received the cheques, the Applicant then banked one of them in Hong Kong in the 'Jesmond' account and he made arrangements for a banker's draft to be issued in an equivalent sum in US dollars. In due course, he utilised this in the United States of America. Two other cheques from the second client, which were both in United States dollars, were also utilised by the Applicant in USA when he obtained two cashier's cheques in favour of himself, each in the sum of US$56,000.

5. The Applicant departed for USA on 8 February 1994 and later in the same year he went to Australia. He did not return to Hong Kong until his extradition from Australia in July 2001.

6. These facts formed the basis of two charges of false accounting, one of procuring the execution of a valuable security by deception and one of procuring a false entry in a record of a bank.

7. A fifth charge related to forgery between 1 December 1993 and 14 February 1994. This alleged that the Applicant had, with the dual intent required for an offence brought under section 71 of the Crimes Ordinance, made a false instrument, namely a letter dated 28 December 1993 (Exhibit P14) addressed to himself, which purported to have come from P2H agreeing to grant him a bonus fee payment. The prosecution alleged that this letter was intended to create a smokescreen by providing a legitimate explanation for the Applicant's conduct. Importantly, a copy of Exhibit P14 had been enclosed with a letter of resignation (Exhibit P3), dated 9 February 1994, which was addressed to Peter Pun (PW4), the chairman of P2H. This was couched in terms which reeked of guilt. It even made threats to report vague suggestions of company corruption to the ICAC.

8. The Applicant's resignation letter went on to say that "fee references" were enclosed. It was the original (Exhibit P14) of this enclosure which was alleged to have been forged. This was accepted, we were informed by Mr Andrew Bruce, SC, on the Applicant's behalf, following a somewhat unsatisfactory oral agreement between counsel in the court below, to have been discovered in an office at P2H on 14 February 1994. It had been written on company notepaper and it purported to have been signed by PW4.

Issue at trial

9. Ultimately, it was the genuineness of this written agreement (Exhibit P14) to make a bonus payment which became the sole issue at trial. PW4 denied having signed the letter. Other members of the staff of P2H were also called to throw light on peripheral issues. Finally, the prosecution called a document examiner from the Government Laboratory (PW5) who was not able to say positively, "taking into consideration the simplicity in the design of the questioned signature", whether the signature on Exhibit P14 was a forgery.

Defence

10. The Applicant did not give evidence. His case was presented on the footing that the disputed agreement to pay a bonus had been written by PW4 giving authority to the Applicant to retain the monies represented by the cheques he had obtained. A document examiner, Paul Westwood (DW1), was called. He concluded, in the light of all the factors which he had outlined in his evidence, that he was not in a position to say definitely that PW4's signature on the document was genuine for the same reason, effectively, that PW5 had given, in that the signature was not particularly complex. He went on to say, however, that the variations between the signatures on the original of Exhibit P14 and what purported to be another copy of the alleged agreement, itself an original, which was produced by the defence (Exhibit D4) "strongly make me favour the proposition that it's genuine".

The application

11. Mr Bruce submitted that the verdicts were unsafe or unsatisfactory on two grounds. In his first ground, he contended that the judge had:

"(a) wrongly considered whether the Applicant could show on the balance of probabilities that he had (the) permission of his employer to (do) what he did when, as a matter of law there was no onus on the Applicant to establish any fact or matter to that standard;

(b) .... wrongly imposed a burden of proof on the Applicant where there is no such burden;

(c) .... erred in importing the issue of whether the Applicant had a reasonable excuse for his conduct when reasonable excuse forms no part of the elements of the offence with which he was charged."

12. The passage in the second and third paragraphs taken from the Reasons for Verdict which was specifically criticised, which Mr Bruce took in a factual vacuum, reads as follows:

"2. The fact that the defendant had these three cheques endorsed to himself and not the company before taking the money and going to America has not been disputed in this trial. The single issue in this trial is whether he did so unlawfully. If the defendant can show on the balance of probabilities that he had his chairman's permission to take this money (i.e. that this 'agreement letter' is genuine), then this prosecution must fail in its entirety. If he can even raise a doubt on whether it is genuine or not, the prosecution must also fail.

3. I say this because the defendant has sought to show in cross-examination and via a handwriting expert that the 'agreement letter' is genuine and so he had a reasonable excuse for doing what he did." (Appeal bundle p. 19)

13. These remarks were made very early on in the judge's Reasons for Verdict under a heading entitled 'General Background'. The judge then moved on to specific consideration of every aspect of the case before reaching his 'Findings' in the penultimate paragraph, expressed as follows:

"22. It has never been questioned at this trial that the defendant took HK$3 million and US$112,000 of his employer's money. The prosecution have shown that he did so dishonestly, that is, by the standards of reasonable and honest people. They have also shown that the defendant himself must have recognised that what he was doing would be regarded as dishonest by reasonable and honest people. Why else would he have fabricated the said agreement letter before fleeing from the jurisdiction? I look back at the evidence of Mr Westwood (DW1) who, as an expert, is entitled to express an opinion in respect of his findings. That opinion, it must be said, flies in the face of .... the overwhelming mass of evidence and in the face of the inherent likelihood of such evidence. Having given the matter careful consideration, I find the prosecution case proved beyond reasonable doubt and I find that the defence handwriting evidence, which is at best tentative, raises no reasonable doubts in my mind." (Appeal bundle p. 30)

14. In his written argument, even Mr Bruce was inclined to describe the approach taken by the judge in the last sentence of this passage as "classical language appropriate where the burden is solely on the prosecution and the standard of proof is beyond reasonable doubt".

15. It is apparent to us, and in saying so we are in full agreement with the way Mr McWalters, on behalf of the Respondent, gave his written reply, that this ground had been advanced as the result of Mr Bruce's misunderstanding of what the judge had been saying earlier on in his Reasons for Verdict. Having briefly described the prosecution's allegations in the first paragraph, when the judge continued with the second and third paragraphs which have been criticised (above), he had correctly spoken of the "single issue in this trial ....." which was whether the Applicant "had his chairman's permission to take this money (i.e. that this 'agreement letter' is genuine)". There was nothing inherently wrong in continuing by saying that if the defence could show a balance of probabilities that the letter was genuine or, alternatively, caused a doubt to be raised, "the prosecution must fail in its entirety".

16. When the Reasons for Verdict are read as a whole, it is clear that the judge had neither imposed on the Applicant the burden of proving anything nor, for that matter, reduced the high standard of proof required of the prosecution.

17. Equally, we can find no justification for assuming that the judge's use of the phrase "reasonable excuse" in paragraph 3 of his Reasons for Verdict (above) was for any other reason than to explain in simple language the general nature of the defence. This had been that the Applicant had a reasonable excuse for doing what he did. There was nothing at any stage of the Reasons for Verdict to give rise to a concern that the judge might have thought 'reasonable excuse' formed an element in these offences.

18. The most that can be said about this ground of appeal is that perhaps the judge was ill-advised to have used the expressions 'balance of probabilities' and 'reasonable excuse', albeit for the laudable purposes of explaining in simple terms what he was saying, when they are legal terms capable of another construction. However, contrary to Mr Bruce's suggestion, it is obvious that this highly experienced judge was not using these terms, in the context in which they are set, arising from a mistaken belief that 'reasonable excuse' was a statutory defence applicable to some or all of these charges casting, in its turn, the civil burden of proof on the Applicant. This was an unimpressive contention.

19. This ground fails.

20. The remaining ground complained that the judge had failed:

"properly to resolve the issue of whether signatures of the Chairman of the firm that employed the Applicant on a letter which gave (or, on the prosecution case, purported to give) the Applicant permission to take certain cheques and convert them to his own use were forged or genuine because he failed properly to resolve:

(a) the conflict between witnesses called for the prosecution and the defence on the genuineness of the signatures on that letter; and

(b) the conflict between the defence expert's testimony and the other evidence adduced by the prosecution which showed or tended to show that the relevant signatures were forged.

That was particularly so when the testimony of the expert for the defence was virtually unchallenged by the prosecution in cross-examination."

21. Mr Bruce was able, with some force, to point to an almost completely irrelevant cross-examination of the defence handwriting expert (DW1) by prosecuting counsel on fiat in the court below where, at no stage, was it even suggested by him that DW1's findings were incorrect or insupportable. Counsel, whilst generally described by Mr Bruce as able and highly experienced, plainly lacked the necessary skills required for a searching cross-examination of an expert witness in the field of handwriting because he began by saying:

"I hope you forgive me if some of my questions seem a bit amateurish because this is obviously a very complicated area and you have vast expertise......" (Appeal bundle p. 225)

22. The questioning then meandered off, as it may well have done if counsel had failed to keep the prosecution's expert in court for the purposes of finding out what questions should be asked, onto theories without any factual foundation. Eventually, the judge was forced to invite counsel to move on to another topic because there had been "no evidential basis" for counsel's suggestions.

23. However, the fact that the cross-examination failed to put a challenge to the defence expert does not alter and could not have altered the sense of the expert's evidence. Nor could this omission amount to a ground which could affect the validity of the verdicts in this case.

24. The prosecution and defence cases were a long way apart. The whole essence of the prosecution's case was that PW4 denied being the author of a letter recording an arrangement between himself and the Applicant whereby the Applicant would be allowed to take what amounted to about HK$4 million out of P2H. There were other factors also. Leaving aside the fact that the Applicant had been employed by P2H on a monthly salary of $50,000 for only about eighteen months, and that he had left the firm without notice, it was perhaps curious, putting it mildly, that having received this enormous bonus on the defence case, the Applicant should then make implied threats in his resignation letter about going to the ICAC if legal action was taken against him.

25. Furthermore, the judge in the court below had heard testimony from PW7, the senior accounts clerk at P2H, that the Applicant had caused her to remove the words appearing at the bottom of the two relevant invoices: "Please make payment to P2H Design Associates Limited". The Applicant had said that the Chinese clients would be writing their cheques in Chinese and such wording would confuse them. In their place, the receptionist at P2H (PW2), at the Applicant's request, had printed the characters in Chinese meaning "Please pay to" on the two invoices. PW2 had never previously dealt with invoices and she said that she agreed to make these additions as a favour to the Applicant.

26. By the time the two invoices reached the two clients of P2H, one in China and the other in Taiwan, the words "Please pay to" were followed by "Jesmond International Limited" and "Mr Allan Chan" respectively. There was no direct evidence that the Applicant was responsible for these additions but the judge, not surprisingly, found the inference to be irresistible.

27. In our judgment, despite prosecuting counsel's failure to conduct a proper cross-examination of the defence handwriting expert, it is apparent that the central issue throughout the trial was the integrity of the so-called written agreement with the Applicant to pay him a substantial bonus. Indeed, in his final submission, prosecuting counsel had alleged that the Applicant had engineered the situation to coincide with Chinese New Year in the knowledge that he could be safely overseas before his employer realised what had happened.

28. In the face of so much evidence, with no evidence from the Applicant to be taken into account, it is hardly surprising that the judge's 'findings', which we have cited already, included the passage (taken from paragraph 22 of the Reasons for Verdict) where he said:

"I look back at the evidence of (DW1) who, as an expert, is entitled to express an opinion. That opinion, it must be said, flies in the face of ... the overwhelming mass of evidence .... I find that the defence handwriting evidence, which is at best tentative, raises no reasonable doubts in my mind." (Appeal bundle p. 30)

29. The evidence was, as the judge had found, overwhelming. The judge may not have spelt out in the most blunt language that Mr Westwood's (DW1's) opinion, in the event, carried no weight, but there is no doubt that this is what the judge, perfectly properly on this evidence, had found. Realistically, he could have come to no other conclusion.

30. It was accepted by Mr Bruce that Mr Westwood had given his evidence in a vacuum, knowing nothing of the surrounding circumstances of the case. It was those circumstances which were conclusive.

31. This ground also fails.

Conclusion

32. The application is dismissed.