R v. LIN KUO LIANG DAVID

IN THE COURT OF APPEAL

1996, No. 351
(Criminal)

- Headnote -

Criminal law - Defendant charged with attempting to obtain a debt owed to an account-holder by deception - The debt never existed - Attempting the impossible - Haughton v. Smith [1975] AC 476 applied.

On appeal, conviction quashed.

IN THE COURT OF APPEAL

1996, No. 351
(Criminal)

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J U D G M E N T

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

Introduction

1. On 31 May 1996 the appellant was convicted by His Honour Judge Wilson in the District Court on one charge of attempting to obtain property by deception, contrary to section 17(1) of the Theft Ordinance Cap 210 and section 101B of the Criminal Procedure Ordinance Cap 221.

2. The particulars of the offence, as charged, read:

"Particulars of Offence

LIN Kuo-liang, David, on or about the 14th day of July 1995, in Hong Kong, attempted to obtain from Detective Senior Inspector Peter Hazelwood a chose in action, namely a debt owed to him by the Bank of America in the sum of $10 million Hong Kong currency, with the intention of permanently depriving the said Detective Senior Inspector Peter Hazelwood thereof by deception, namely by falsely representing that:

(i) the Agriculture and Commercial Bank of Cambodia Limited (Hong Kong Representative Office) was authorised to take deposits in Hong Kong.

(ii) The Southern Group's bank account at the Bank of America, Hong Kong was the correspondent account of the Agriculture and Commercial Bank of Cambodia Limited (Hong Kong Representative Office).

(iii) The Agriculture and Commercial Bank of Cambodia Limited had a bank account with the Bank of America, San Francisco."

3. In fact, the chose in action averred in the charge did not exist. There was no debt owed by the Bank of America to Detective Senior Inspector Peter Hazelwood which was capable of being obtained by deception. The appellant was attempting the impossible.

4. On this ground, it is submitted on the appellant's behalf that the conviction is erroneous in law and must be quashed.

Background facts

5. The appellant was, in June 1995, suspected by the police of carrying on the business of taking deposits on behalf of an institution called the Agriculture and Commercial Bank of Cambodia (ACBC) without being authorised to do so under the Banking Ordinance. Accordingly, an undercover operation was mounted. The co-operation of the Bank of America was obtained. For the purposes of the operation Detective Senior Inspector Hazelwood assumed the name of "Peter Bertini" and a fictitious account was created with the Bank of America in that name, and a cheque book was issued.

6. Through the introduction of a financial consultant DSI Hazelwood, purporting to be Peter Bertini, a broker from London, acting for Bertini and Associates, met the appellant at the Grand Hyatt Hotel on 29 June 1995. The conversation was tape recorded. DSI Hazelwood expressed interest in depositing money outside the United Kingdom. The appellant told DSI Hazelwood that he was the Chairman of the ACBC and had been taking deposits for the bank in Hong Kong since 1992. He also said that the ACBC had a correspondent banking relationship with the Bank of America with an account in San Francisco and that a company called Southern Group Limited in turn held the ACBC.

7. In the course of this first meeting the appellant gave DSI Hazelwood account signature cards on printed ACBC forms and a telegraphic transfer instructions form of the ACBC, in favour of Southern Group Limited. The appellant also gave DSI Hazelwood his business card on which was printed "ACBC Limited ... David Lin, Chairman". On the card was a Hong Kong telephone number and a fax number, followed by an address in Phnompeng, Cambodia. The appellant asked for a copy of Bertini's passport. The inspector said he would go back to London to discuss the matter with his family.

8. There were then fax exchanges between the appellant and the inspector who, for this purpose, was using the facilities of the Metropolitan Police in London: disguised, of course.

9. There was another meeting between DSI Hazelwood and the appellant at the Holiday Inn on 12 July 1995 when the question of depositing money with the ACBC was further discussed. A draft contract, produced by DSI Hazelwood, relating to the deposit of US$5 million and HK$10 million in the Agriculture and Commercial Bank of Cambodia Limited (Hong Kong representative office) was put on the table. This was eventually signed by the appellant purportedly as Chairman of that entity. At this meeting the appellant gave DSI Hazelwood a photograph of himself with Imelda Marcos and a card headed "Agriculture and Commercial Bank of Cambodia Limited" bearing the words "Imelda R. Marcos ... Assistant to Chairman".

10. The final meeting between the two men took place on 14 July 1995 at the Holiday Inn. The appellant assured DSI Hazelwood that he was licensed to take deposits in Hong Kong. DSI Hazelwood, acting as Peter Bertini, wrote out cheques on his purported account with the Bank of America for HK$10 million and HK$800,000, payable to Southern Group Limited. The appellant completed a deposit receipt and a passbook both printed in the name of ACBC for HK$10 million. Inspector Hazelwood then revealed his identity and the appellant was arrested.

Attempting the impossible

11. There is no doubt that the false representations as particularised in the charge were made by the appellant. Equally, there is no doubt that he intended to obtain from DSI Hazelwood the sum of $10 million which he thought stood to Peter Bertini's credit in his Bank of America account. He had performed all the acts which he thought were necessary to obtain the sum of $10 million from DSI Hazelwood: Southern Group Limited was under his control and once the $10 million was credited to Southern Group Limited's account the appellant could have disposed of it as he pleased.

12. What else was necessary to constitute the crime of attempting to obtain property by deception as charged?

13. There was one flaw. The chose in action which, as averred, the appellant had attempted to obtain by deception never existed. The appellant was attempting the impossible.

The law

14. It would not be fruitful to add in this judgment to the immense volume of learning which already exists on this subject. In the court below much time was taken up, in the course of a submission of no case, with discussing Haughton v. Smith [1975] AC 476 where the House of Lords came firmly to the view that if, at the time of the attempt (or the "last proximate act"), it was in fact impossible to complete the crime, then no offence known to the law has been committed. An instance given by Lord Morris at p502-B is that of a man taking an umbrella and having the intent to steal it. The umbrella turned out to be the man's own property. He could not be convicted of attempting to steal it.

15. In Haughton v. Smith itself, the defendant clearly intended to handle stolen goods, contrary to s22 of the Theft Act 1968. The acts he performed were acts proximate to the crime and would have constituted the offence of attempt except for one thing: The goods were by that time, unknown to the defendant, in police custody and ceased to be "stolen goods". The conviction for attempting to handle stolen goods was quashed. The Crown's appeal to the House of Lords was dismissed.

16. We said earlier that it was unnecessary to add to the jurisprudence on this subject for this reason: The present case is likely to be the last conviction in Hong Kong prior to the change in the law which came into force on 2 August 1996. By amendments to the Crimes Ordinance which became effective on that date, the law as enshrined in Haughton v. Smith has been reversed. Section 159G of the Crimes Ordinance Cap 200 states:

"159G. Attempting to commit an offence

(1) A person who, intending to commit an offence to which this section applies, does an act that is more than merely preparatory to the commission of the offence is guilty of attempting to commit the offence.

(2) A person may be guilty of attempting to commit an offence to which this section applies even though the facts are such that the commission of the offence is impossible."

17. The appellant was convicted prior to s159G coming into operation. It seems to us that the position here is indistinguishable from Haughton v. Smith. There is no escaping the conclusion that, there being no chose in action as averred in the particulars, the appellant could not have been convicted of the crime of attempt as charged.

18. His conviction on this charge must therefore be quashed.

Alternative charge

19. In the charge sheet, there was an alternative to the charge of attempting to obtain property by deception. This was charge 2, of attempting to take deposits by an unauthorised institution, contrary to s12(1) of the Banking Ordinance, Cap 155. The particulars of that charge states:

"Particulars of Offence

LIN Kuo-liang, David, on or about the 14th day of July 1995, in Hong Kong, attempted to carry on the business of taking deposits, not being an authorised institution."

20. Section 12(6) of the Banking Ordinance states:

"(6) Any person who contravenes subsection (1) ... commits an offence and is liable -

(a) on conviction upon indictment to a fine of $500,000 and to imprisonment for 5 years; or

(b) on summary conviction to a fine of $50,000 and to imprisonment for 6 months."

21. On the facts as found by the judge, it is beyond doubt that the appellant was guilty of this alternative offence.

22. By s83A(2) of the Criminal Procedure Ordinance Cap 221 we have the power to substitute for the judge's verdict a verdict of guilty of the alternative offence.

23. In the circumstances we discharge the conviction and sentence on the 1st charge and convict the appellant on the 2nd charge of attempting to take deposits, contrary to s12(1) of the Banking Ordinance.

24. We now need to hear from counsel regarding the appropriate sentence.

Sentence

25. The maximum term for the substantive offence on which the appellant now stands convicted under s12(1) of the Banking Ordinance is 5 years' imprisonment: half of what the substantive offence of obtaining property by deception would have attracted under s17(1) of the Theft Ordinance.

26. In our judgment the appropriate sentence would be two years and we so order. In doing so we have in mind the fact that the appellant has been in custody in consequence of the sentence passed by His Honour Judge Wilson since 31 May 1996 and that by the operation of s67A of the Criminal Procedure Ordinance that period in custody will go towards reducing the actual term served. The sentence of two years which we have just imposed will be served concurrently with the sentences we have imposed in relation to Crim.App. No. 356 of 1996. We do this having regard to the totality principle.