HKSAR v. CHENG PO YAN PHILIP AND ANOTHER

(Translation)

HCMA 1147/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 1147 OF 2004

(ON APPEAL FROM ESCC 3374 OF 2003)

------------------------

------------------------

------------------------

JUDGMENT

------------------------

Language of the Judgment

1. Both the Chinese and English languages were used at trial, and the magistrate wrote the Statement of Findings in English.  However, at the appeal hearing, submissions were made predominantly in Chinese.  Therefore, I have decided to deliver this judgment in Chinese.

Background

2. The 1^st and 2^nd appellants were, respectively, the 1^st and 3^rd defendants at trial.

3. The 1^st appellant was charged with the following offences:

(i) Two counts of fraud (charges (1) and (7)), contrary to section 16A of the Theft Ordinance, Cap. 210, Laws of Hong Kong; and

(ii) Eight counts of obtaining a pecuniary advantage by deception (charges (2) to (6), and (8) to (10)), contrary to section 18(1) of the Theft Ordinance.

4. The 2^nd appellant was charged with the following offences:

(i) One count of obtaining a pecuniary advantage by deception (charge (12)), contrary to section 18(1) of the Theft Ordinance; and

(ii) One count of furnishing false information (charge (15)), contrary to section 19(1)(b) of the Theft Ordinance.  This charge was alternative to charge (12).

5. After trial, the 1^st appellant was acquitted of charges (1) to (3) and (8), and for charges (4) to (7), (9) and (10), he was convicted of having attempted to commit the offences.  As for the 2^nd appellant, she was convicted of charge (15).  Both appellants now appeal against conviction.

Prosecution case

6. The 1^st appellant and the 2^nd appellant are father and daughter.  At the material time, the 1^st appellant was employed by the police as a superintendent.

7. In respect of charges (1) to (8), the prosecution case was that the 1^st appellant, being the applicant for loans and with a view to obtaining loans, misrepresented his true and complete financial liabilities in the loan applications he made with the financial institutions concerned.

8. Concerning charge (9), the prosecution alleged that the 1^st appellant, being the guarantor of the 2^nd appellant and with a view to obtaining a loan for the 2^nd appellant, misrepresented his true and complete financial liabilities to the financial institution concerned.  Charge (10) was similar to charge (9) except that the 1^st appellant acted as a guarantor for Tsui Po-sum (the 4^th defendant at trial) when he made misrepresentations.

9. The charges against the 1^st appellant involved the following financial institutions:-

(1)   Charge 1: United Asia Finance Limited (hereinafter “United Asia UA”)

(2)   Charges 2, 8, 9 and 10: Wing Hang Credit Limited (hereinafter “Wing Hang”)

(3)   Charge 3: Pacific Finance (Hong Kong) Limited (hereinafter “Pacific Finance”)

(4)   Charges 4 and 6: JCG Finance Company Limited (hereinafter “JCG Finance”)

(5)   Charge 5: Dah Sing Bank, Limited (hereinafter “Dah Sing”)

(6)   Charge 7: SHK Finance Limited (hereinafter “SHK Finance”)

10. The 1^st appellant did not dispute that the details of his liabilities as set out in the particulars of offence in each charge were true and correct.  He had signed at the declaration column of the loan/guarantor application forms mentioned in the charges and the liabilities stated in the charges had not been disclosed in those forms.

11. The prosecution relied on the video-recorded interview of the 1^st appellant.  The 1^st appellant claimed that, except for Dah Sing’s application form, the contents of the other application forms were filled in by the staff of the financial institutions concerned. He claimed that he had neither read the declarations nor paid attention to the application forms or declarations, and that he had already disclosed to the staff members all the information they required and had not concealed anything.  He did not disclose any mortgage save for the flat he was residing in because the loan application forms did not expressly require him to do so.

12. In respect of charge (12) and, in the alternative, charge (15), the prosecution case was that the 2^nd appellant falsely represented that she had been an employee of Noble Knight Development Limited (hereinafter “Noble Knight”) since 1 September 1998 at a monthly salary of $31,000, with a view to obtaining a personal loan in the amount of $180,000 from Wing Hang.  The admitted facts showed that the 2^nd appellant submitted a reference letter purportedly issued by Noble Knight to Wing Hang in support of her application, and the letter stated that she had been in the employ of Noble Knight since 1 September 1998.

13. The prosecution submitted an Employer’s Return of Remuneration and Pensions (hereinafter “the Return”) to the court.  The defence challenged the admissibility of the Return.  After holding a “voir dire”, the magistrate ruled that the Return was admissible under section 22 of the Evidence Ordinance, Cap. 8, Laws of Hong Kong.

14. According to the Return, the 2^nd appellant joined Noble Knight on 15 December 1998.

Defence case  

15. The 1^st appellant elected to give evidence.  His evidence was an elaboration of what he had said in the video-recorded interview.

16. In short, the 1^st appellant said that he did not pay attention to the application forms and other documents; he focused rather on the correctness of his personal particulars, in light of the experience he gained from handling fraud cases involving banks and other criminal cases. He adopted an “I couldn’t care less” attitude toward the documents he signed for the banks/financial institutions.  He thought that the most that could happen was civil claim against him.  He knew that there was some sort of declaration in the loan application forms, but he did not read it in detail or have any idea what it was about.

17. When he was asked whether the financial institutions might be able to inquire into his liabilities if he did not disclose the details of his liabilities, the 1^st appellant said he had no idea.  He said that, up to the time of the trial, he still did not know how the financial institutions would calculate the figures or approve the applications.

18. The 1^st appellant stated that, when he signed the following application forms, the “credit/loan information” column was blank:

(1)   Charge (3) Pacific Finance;

(2)   Charge (8) Wing Hang;

(3)   Charge (9) Wing Hang;

(4)   Charge (10) Wing Hang.

(Remarks: Concerning the above four application forms, someone had filled in some information in the credit/loan information column in the application forms of Pacific Finance in charge (3) and of Wing Hang in charge (8)).

19. Regarding the application forms of JCG Finance in charge (4) and of SHK Finance in charge (7), the 1^st appellant testified that the credit/loan information column was completely filled out when he signed them.

20. Regarding the application form of JCG Finance in charge (6), a lot of credit/loan information had been filled in when he signed it.

21. As for the application form of Dah Sing in charge (5), the 1^st appellant testified that he personally filled in the form, but he still did not pay particular attention to or read the contents of the form.  When he filled in information about his debts, he only put down “UA Finances & Wing Hang Fin.” and “$400,000 (Approx.)” as he found that there was not enough space.  He did not put down other loans (such as Pacific Finance’s loan of $80,000 and JCG Finance’s loan of $200,000), and afterwards the bank staff did not request him to provide any other information.

22. The 2^nd appellant elected not to give evidence and did not call any witnesses.

Findings of the magistrate

(1) Regarding the 1^st appellant

23. The magistrate found (paragraph 57 of the Statement of Findings) that the various application forms did not clearly state whether the applicant had to disclose mortgage loans for flats other than the one he was residing in.  The witnesses were also of different views as to whether there was such a requirement.  The magistrate found that the prosecution failed to establish the element of failing to disclose mortgage details, and therefore the 1^st appellant was acquitted of charges (1) and (2).

24. On charge (3), the magistrate held that there was no evidence to rebut the 1^st appellant’s allegation (i.e. the application form of Pacific Finance was blank when he signed it) (paragraph 62). The 1^st appellant was acquitted of charge (3).

25. On charge (8), the magistrate also held that there was no evidence to rebut the 1^st appellant’s allegation (i.e. the Wing Hang application form was blank when he signed it) (paragraph 67). The magistrate found that someone filled out the credit/loan information column after the 1^st appellant signed the form. There was no evidence to show that the appellant had knowledge of the information. Whatever the “scope” of the declaration, the 1^st appellant could not be held liable for failing to declare information which was not yet filled in and not known or acknowledged by him.  The magistrate acquitted the 1^st appellant of charge (8).

26. On charge (3), the magistrate did not make any finding similar to that he made on charge (8). However, since credit/loan information had been put down on the application form of Pacific Finance in charge (3) at a later stage, that the grounds on which the magistrate acquitted the appellant of charge (3) should be the same as those for charge (8).

27. In respect of the application forms in charges (4), (5), (6), (7), (9) and (10), the magistrate held that no extra credit/loan information was put down after the appellant signed the forms.  The 1^st appellant did not disclose details of the personal loans he had obtained.  Each of the application forms stated clearly that the information provided must be “true” or “true and complete” (paragraph 71).

28. The magistrate found that the 1^st appellant “deliberately” failed to make full and frank disclosure of his credit/loan information (paragraph 77).

29. The magistrate held (at paragraph 82) that there was no direct evidence or irresistible inference as to the extent of reliance by each of the financial institutions (comprising frontline staff and senior officers) on the information disclosed by the 1^st appellant, or as to whether or how they would re-assess the 1^st appellant’s creditworthiness before releasing the loan to him.

30. Citing Archbold 2002, paragraph 21-201 and R. v. Ko Wong Shuk Chu, HCMA 58/1984 as authorities, the magistrate convicted the 1^st appellant of having attempted to commit the offences particularized in charges (4), (5), (6), (7), (9) and (10).

(2) Regarding the 2^nd appellant

31. The magistrate explained in the Statement of Findings (paragraphs 92-99) why he ruled that the Return was admissible.

32. The magistrate stated that the contents of the Return, to which he attached considerable weight, were inconsistent with those of the aforesaid reference letter.  He found that the 2^nd appellant knew that in the reference letter a material particular ― that is, she had been an employee of Noble Knight since 1 September 1998 ― was misleading, false and deceptive. The magistrate found all elements of charge (15) proved and convicted her of the charge.

Chronology

33. Before dealing with the 1^st appellant’s grounds of appeal, I shall list out, in chronological order, details of the 1^st appellant’s applications to various financial institutions for credit/loan facilities; whether or not the 1^st appellant disclosed the information in the finance, credit and liabilities column of the application forms; the non-disclosure alleged by the prosecution; and the findings of the magistrate.

(A) Charge (1)

Date: 3 January 2000

Financial institution: United Asia UA

Credit facility applied for: $600,000 personal loan

Credit facility granted: $600,000 personal loan

Information disclosed: In respect of East Asia (mortgage)

$500,000 and the amount of the monthly

instalments

Non-disclosed liabilities: (i) Mortgage obtained from a

bank in respect of a flat in Tower 17 in South

Horizons (hereinafter “the South

Horizons Tower 17 Mortgage”)

(ii) Mortgage obtained from a bank in respect of a flat in Merlin Garden, Electric Road (hereinafter “the Merlin Garden Mortgage”)

Findings of the magistrate: The wording in the application forms was not clear enough to show that the appellant must disclose his mortgage loans, and discrepancies were found in the evidence of the witnesses from the banks.  It was arguable whether the non-disclosure constituted a misrepresentation (paragraph 57).  The appellant was acquitted.

(B) Charge (2)

Date: between 19 and 25 January 2000

Financial institution: Wing Hang

Credit facility applied for: $250,000 personal loan

Credit facility granted: $250,000 personal loan

Information disclosed: “UA $600,000 (and the amount of

the monthly instalments); HK Bank (OD) $30,000”

Non-disclosed liabilities: (i) the South Horizons Tower 17

Mortgage

(ii) the Merlin Garden Mortgage

Findings of the magistrate: Reasons same as those mentioned in paragraph57 above, and there was no evidence to show that the appellant knew or acknowledged the information filled in later on by someone else.  The appellant could not be held liable for failing to disclose information which had not yet been filled in (paragraph 70).  He was acquitted.

(C) Charge (3)

Date: 6 April 2000

Financial institution: Pacific Finance

Credit facility applied for: $150,000

Credit facility granted: $80,000

Information disclosed: “1. HKSAR HFS

2. Bank of East Asia (ML) (and 

the amount of the monthly    

instalments)”

Non-disclosed liabilities: (i)    United Asia UA personal

loan of $600,000

(ii) Wing Hang personal loan of $250,000

(iii) Outstanding credit card payment (East Asia Visa Card) in the sum of $73,401.33

Findings of the magistrate: Reasons same as those mentioned in paragraph 57 above;

The wording of the application form required the appellant to disclose all his personal loans and credit facilities (paragraph 61);

 There was no evidence to rebut the appellant’s testimony that the credit/loan information column was blank when he signed the form (paragraph 62). He was acquitted.

(D) Charge (8)

Date: 2 August 2000

Financial institution: Wing Hang

Credit facility applied for: $180,000 (the 1^st appellant

acted as a guarantor)

Credit facility granted: $180,000

Information disclosed: Nil

Non-disclosed liabilities: (i) the South Horizons Tower  

17 Mortgage

(ii) the Merlin Garden Mortgage

(iii) The personal loan of $80,000 from Pacific

Finance

Findings of the magistrate:    Reasons same as those mentioned in paragraph 57 above;

Reasons same as those mentioned in paragraph 61 above;

Reasons same as those mentioned in paragraph 62 above;

He was acquitted.

(E) Charge (9)

Date: 3 August 2000

Financial institution: Wing Hang

Credit facility applied for: $180,000 (the 1^st appellant

acted as a guarantor)

Credit facility granted: $180,000

Information disclosed: Nil

Non-disclosed liabilities : (i)  the South Horizons Tower 17

Mortgage

(ii)  the Merlin Garden Mortgage

(iii) the personal loan of $80,000 from Pacific

Finance

Findings of the magistrate:

- Reasons same as those mentioned in paragraph 57 above;

- Reasons same as those mentioned in paragraph 61 above;

- The credit/loan information column was blank

when the appellant signed, and it remained blank

      up till now (paragraph 68);

- The magistrate rejected the appellant’s allegation that he did not read the contents of the true “declaration” and found that the appellant deliberately held back his true and complete credit/loan information (paragraphs 76-77);

- The magistrate convicted the appellant of attempting to commit the offence (non-disclosure of his liabilities (iii) ― i.e. the $80,000 loan from Pacific Finance) (paragraph 85).

(F) Charge (4)

Date: 28 August 2000

Financial institution: JCG Finance

Credit facility applied for: $200,000

Credit facility granted: $200,000

Information disclosed: “Wing Hang, UA (and the amount of

the monthly instalments)”

      Non-disclosed liabilities: (i) the South Horizons Tower 17

Mortgage

(ii) the Merlin Garden Mortgage

(iii) Mortgage obtained from a bank in respect of a flat in Tower 6 of South Horizons (hereinafter “the South Horizons Tower 6 Mortgage”)

(iv) The personal loan of $80,000 from Pacific Finance

Findings of the magistrate:

Reasons same as those mentioned in paragraph 57 above;

Reasons same as those mentioned in paragraph 61 above;

The appellant admitted that the credit/loan column had already been filled in when he signed (paragraph 63);

Reasons same as those mentioned in paragraphs 76 to 77 above;

The magistrate convicted the appellant of attempting to commit the offence (non-disclosure of details of (iv) ― i.e. the $80,000 loan from Pacific Finance) (paragraph 84).

(G) Charge (5)

Date: 14 September 2000

Financial institution: Dah Sing

Credit facility applied for: $180,000 personal loan

Credit facility granted: $80,000 personal loan

Information disclosed:

“	Bank	Credit Limit
	Unsecured [Loan]	HK Bank	HK$80,000
	Personal Loans	UA Finance & Wing Hang Fin.	HK$400,000 (appro.)
	Credit Cards	HK Bank Visa	HK$31,000
		HK Bank Master	HK$31,000
	Instalment Loan	--	--    ”

Non-disclosed liabilities: (i) the South Horizons Tower 17

Mortgage

(ii) the Merlin Garden Mortgage

(iii) the South Horizons Tower

6 Mortgage

(iv) the personal loan of  $80,000 from Pacific Finance

(v) the personal loan of $200,000 from JCG Finance

Findings of the magistrate:

Reasons same as those mentioned in paragraph 57 above;

The wording in the application form required the appellant to disclose his true and complete credit/loan information (paragraph 59);

The appellant only disclosed 2 of the 4 personal loans (paragraph 60);

Reasons same as those mentioned in paragraphs 76 to 77 above;

The magistrate convicted the appellant of attempting to commit the offence (non-disclosure of (iv) and (v) ― i.e. the $80,000 loan from Pacific Finance and the $200,000 loan from JCG Finance) (paragraph 84).

(H) Charge (10)

Date: 24 October 2000

Financial institution: Wing Hang

Credit facility applied for: $180,000 (the 1^st appellant acted as a guarantor)

Credit facility granted: $180,000

Information disclosed: Nil

Non-disclosed liabilities: (i) the South Horizons Tower 17

Mortgage

(ii) the Merlin Garden Mortgage

(iii) the personal loan of $80,000   from Pacific Finance

(iv) the personal loan of $200,000 from JCG Finance

(v) the personal loan of $80,000 from Dah Sing

Findings of the magistrate:

Reasons same as those mentioned in Paragraph 57 above; 

Reasons same as those mentioned in paragraph 61 above;

The credit/loan information column was blank when the appellant signed, and it remained blank (paragraph 69);

Reasons same as those mentioned in paragraphs 76 to 77 above;

The magistrate convicted the appellant of attempting to commit the offence (not disclosing (iii), (iv) and (v) ― i.e. the $80,000 loan from Pacific Finance, the $200,000 loan from JCG Finance and the $80,000 loan from Dah Sing) (paragraph 85).

      (I) Charge (6)

      Date: 11 July 2001

      Financial institution: JCG Finance

      Credit facility applied for: $350,000 personal loan

Credit facility granted: $350,000 personal loan Information disclosed: “Dah Sing, UA, Wing Hang (and the  amount of the monthly instalments as well as the total sum)”

Non-disclosed liabilities:   (i) the South Horizons Tower 17

Mortgage

      (ii) the Merlin Garden Mortgage

      (iii) the South Horizons Tower 6

Mortgage

(iv) the personal loan of $80,000 from Pacific Finance

Findings of the magistrate:

Reasons same as those mentioned in paragraph 57 above;

Reasons same as those mentioned in paragraph 61 above;

The appellant said that there was already a lot of information in the credit/loan information column when he signed, and the testimony of the 22^nd prosecution witness      (paragraph 65);

Paragraphs 76 and 77 above;

The magistrate convicted the appellant of attempting to commit the offence (non-disclosure of (iv) ― the $80,000 loan from Pacific Finance) (paragraph 84).

(J) Charge (7)

Date: 16 July 2001

Financial institution: Sun Hung Kai

Credit facility applied for: $150,000 personal loan

Credit facility granted: $150,000 personal loan

Information disclosed: “JCG, Wing Hang Credit, UA,

Dah Sing Bank, (and the monthly instalments and the total sum)”

Non-disclosed liabilities: (i)    the South Horizons Tower 17

Mortgage

(ii) the Merlin Garden Mortgage

(iii) the South Horizons Tower 6

Mortgage

(iv)  the personal loan of $80,000

from Pacific Finance

(v) Outstanding credit card payment

for East Asia Visa Card in the

sum of $66,939.59

Findings of the magistrate:

Reasons same as those mentioned in paragraph 57 above;

Reasons same as those mentioned in paragraph 61 above;

The appellant admitted that all the credit/loan information was already in the form when he signed it (paragraph 66);

Reasons same as those mentioned in paragraphs 76 to 77 above;

The magistrate convicted the appellant of attempting to commit the offence (non-disclosure of (iv) & (v) ― the $80,000 loan from Pacific Finance and the East Asia credit card loan) (paragraph 86).

Grounds of Appeal

1^st Appellant

34. Mr. Ching Y. Wong, SC, leading Mr. David Ma, counsel, raised nine grounds of appeal on behalf of the 1^st appellant.

35. I would first deal with Grounds of Appeal (1) and (2) ― the two grounds that involve points of law.

(1)  Ground of Appeal (2)

36. This ground was directed at the magistrate’s failure to rule “halfway” through the trial that there was a prima facie case of “attempting” to commit the offences and that there was no case in respect of the “full” offences.

37. In essence, the appellant’s complaint was that the magistrate did not “immediately inform” both the prosecution and the defence that the prosecution evidence was in his view insufficient to support the substantive offences but was supportive of the offence of attempting to commit those offences.  Mr. Wong, SC pointed out that the court would usually inform the parties of this before the defence made a submission of no case to answer.  However, the magistrate only did so when the prosecution and the defence had made their final submissions after he had found that there was a prima facie case for the substantive offences and after the appellant had elected to give evidence.  This, Counsel submitted, was a procedural irregularity. 

38. The cases of HKSAR v. Pham Quang-minh [1999] 2 HKC 793 and R. v. Cross & Channon (1971) 55 Cr.App.R. 540 were cited in support of this ground of appeal.

The respondent’s reply

39. Mr. Alex Lee, Senior Assistant Director of Public Prosecutions who acted for the respondent, submitted that the replacement of the substantive offences with the offences of “attempting to commit an offence” had neither caused injustice to the 1^st appellant nor gone against the principles stated in Pham Quang-minh or Cross & Channon.  The reasons were as follows:

Firstly, according to section 159G(3), the substantive charges in this case had already included “attempting to commit an offence”, hence there was no need for the prosecution to lay against the 1^st appellant the charges of “attempting to commit an offence” on top of the existing charges;

Secondly, it was not for the defence to say that it was unprepared by reason of being unaware of the “attempt” charges under section 159G(3);

Thirdly, despite the alteration of the charges, the case and the evidence of the prosecution had remained the same;

Fourthly, the defence case was that the 1^st appellant did not read or pay attention to the contents of the declarations on the forms (paragraph 73 on page 247 of the appeal bundle).  Therefore, whether the charges were of the substantive offences or of “attempt”, the defence case would not have been affected; and 

Fifthly, the magistrate had already given an opportunity to the defence counsel to make submissions in respect of the “attempt” charges (Lines 1287I and 1327O of the appeal bundle).

Therefore, it was submitted, the procedure in the present case had not been tainted with injustice or impropriety, nor had there been any material irregularity.

Judgment

40. I have been told that the counsel on fiat representing the prosecution at trial had, in her written final submissions, invited the court to consider whether the appellant was guilty of “attempting to commit the offence”.  Thereafter, the magistrate had invited the defence counsel to make submissions.

41. I entirely agree with the submissions and views of Mr. Lee for the respondent.  The trial procedure had not been defective and no injustice had been done to the appellant.

42. This ground of appeal fails.

(2)  Ground of Appeal (1)

43. The appellant complained that, in convicting him of the various “attempt” offences (as opposed to the substantive offences), the magistrate failed to consider that he must be sure that the appellant’s declarations in the application forms regarding his financial condition were “material” to the decisions of the relevant financial institutions in approving the applications before he could convict the appellant of the “attempt” offences.  

44. The crux of the submission by Mr. Wong, SC was that the magistrate in the present case had already found that the prosecution failed to prove beyond reasonable doubt that the relevant financial institutions had relied upon the contents of the forms signed by the appellant in approving the loan applications.  An unimportant and immaterial false declaration was not enough to constitute an inducement to others.  Since the magistrate had made the aforesaid finding and the relevant financial institutions had not relied on the contents of the application forms, the representations on the forms must have been immaterial to the decisions of the financial institutions in granting loans.

45. Mr. Wong, SC pointed out that, as a matter of logic, if the representations were material, the financial institutions would definitely rely on them; if they did not rely on them, then they must be immaterial ― since there was no reason for not relying on them if they were material.  

46. Mr. Wong, SC agreed that generally speaking, an applicant’s financial condition and liabilities were material to the financial institutions in deciding whether they would approve loan applications.  However, Mr. Wong, SC submitted that the present case was different: the magistrate had already held that the financial institutions concerned did not rely on the contents of the application forms, and therefore an irresistible inference ― or at least a reasonable inference ― was that the contents of the application forms were immaterial.

47. Apart from referring to the above finding of the magistrate, Mr. Wong, SC specifically pointed out that the application forms involved in charges (9) and (10) were still blank up to the time of trial and, that notwithstanding, the relevant financial institutions still granted the loans.  Furthermore, Mr. Wong, SC described as astounding the “sloppy” way in which staff members of the relevant financial institutions filled out the forms, e.g. by putting down the appellant’s telephone number in the “salary” column.

48. Mr. Wong, SC submitted that, apart from the lack of evidence to show that the applicant’s financial condition and liabilities were material, there was also no evidence to show that the 1^st appellant had the requisite mens rea.  The appellant’s acts might only have been reckless.  Mr. Wong, SC complained that the magistrate did not make any finding in respect of the appellant’s belief and failed to consider whether the appellant believed that his financial liabilities were material.

The respondent’s reply

49. Mr. Lee stated that an undisputed fact of the case was that the 1^st appellant did not disclose all his financial liabilities in the application forms of the various financial institutions as particularized in the charges.  Mr. Lee set out the disputed facts of the case as follows:

(1)   Did the application forms of the financial institutions involved in charges (4) to (7), (9) and (10) require the 1^st appellant to make “true and complete” statements about his financial liabilities?

(2)   Even though the relevant financial institutions might not have relied on information about the 1^st appellant’s financial liabilities, did the 1^st appellant believe at that time that his financial liabilities would be relied on by the relevant financial institutions as the basis for approving his loan applications?

(3)   Did the 1^st appellant deliberately misrepresent his “true and complete” financial liabilities in order to mislead the relevant financial institutions into granting him loans?

50. Regarding the legal principle of “attempting to commit an offence”, Mr. Lee stated that the magistrate had referred to Archbold 2002, paragraph 21-201 and the case of Ko Wong Shuk Chu. The paragraphs on “attempting to commit an offence” in Archbold 2002 can also be found in Archbold Hong Kong 2005, paragraph 22-147.

51. Mr. Lee referred to paragraph 36-93 of Archbold Hong Kong 2005, where the learned editor set out two questions which must be considered in respect of “attempting to commit an offence”:

(a)   Did the defendant intend to commit the offence which he allegedly attempted to commit?

(b) In relation to that offence, were the defendant’s acts more than merely preparatory to committing the offence?

52. Mr. Lee submitted that the magistrate’s Statement of Findings showed a firm grasp of the aforesaid two core questions and a correct application of the relevant legal principles.  On question (a) (mens rea), Mr. Lee referred to the magistrate’s findings in paragraphs 76 and 77, where the appellant was held to have “deliberately” failed to disclose a true and complete list of his credit/loan information in the application forms.  On question (b), having referred to the case of Ko Wong Shuk Chu, the magistrate concluded (at paragraph 82) that the appellant’s acts were “sufficiently proximate to his being given the respective loans”.

53. Mr. Lee pointed out that the magistrate’s finding was not on whether the information required to be disclosed was material.  The magistrate merely found that he was not sure whether the financial institutions had relied on the relevant information on financial liabilities.

54. Mr. Lee referred to the evidence of the bank staff and that of the appellant and submitted that the appellant was aware of the financial institutions’ concerns about his “ability to repay”; at the same time, the evidence of the bank staff showed that the relevant information on liabilities was material, and the appellant also knew that such information was material.

55. Mr. Lee stated that paragraph 21-201 of Archhold 2002, to which the magistrate had referred, was about the application of the Criminal Attempts Act 1981 to deception offences; its heading was “Conviction for attempt where operation of deception not proved”.

56. Mr. Lee submitted that the magistrate had already found that the 1^st appellant had the mens rea (paragraph 77, page 248 of the appeal bundle), and it was undisputed that the appellant obtained loans from the relevant financial institutions without fully disclosing his financial liabilities.  If the magistrate accepted that those financial institutions had relied on the declarations in the forms, undoubtedly he would have found the 1^st appellant guilty of the substantive offences and it would have been unnecessary to consider replacing them with the “attempt” offences.

57. Concerning the forms involved in charges (9) and (10), Mr. Lee pointed out that the 1^st appellant signed the forms without putting down details of his liabilities, and this showed that he had no intention to disclose his liabilities to Wing Hang.  To support his argument, Mr. Lee quoted the wording used in the forms, “Have you ever obtained any credit facility/loan from any bank/financial institution?”, and the contents of the declarations.

58. Mr. Lee submitted that the issue in this appeal is not whether the financial institutions had relied on the declarations in the forms, but whether the 1^st appellant believed at the material times that the financial institutions would rely on those declarations as the basis for granting loans.

59. Mr. Lee also submitted that the 1^st appellant’s acts had gone beyond “preparatory acts”: he had made untrue declarations and obtained loans.  Therefore, he had in fact attempted to commit the relevant offences as opposed to merely preparing, getting ready or equipping himself to commit those offences.

Judgment

60. Mr. Wong, SC submitted that, in relation to the two offences which the 1^st appellant was found to have “attempted” to commit (i.e. “fraud” and “obtaining property by deception”), the prosecution must prove that the non-disclosure of liabilities (misrepresentation) by the appellant was material and that the appellant knew that the information on his liabilities was material.  Mr. Wong, SC complained that the magistrate did not make any finding on the issue of “materiality”.

61. Before I consider the submissions made by Mr. Wong, SC on the issue of “materiality”, it is desirable to set out the relevant statutory provisions.

(1)   Section 16A of the Theft Ordinance, Cap. 210, Laws of Hong Kong reads:

(1) If any person by any deceit (whether or not the deceit is the sole or main inducement) and with intent to defraud induces another person to commit an act or make an omission, which results either ― 

(a) in benefit to any person other than the second-mentioned person; or

(b) in prejudice or a substantial risk of prejudice to any person other than the first-mentioned person,

the first-mentioned person commits the offence of fraud and is liable on conviction upon indictment to imprisonment for 14 years.

(2) For the purposes of subsection (1), a person shall be treated as having an intent to defraud if, at the time when he practises the deceit, he intends that he will by the deceit (whether or not the deceit is the sole or main inducement) induce another person to commit an act or make an omission, which will result in either or both of the consequences referred to in paragraphs (a) and (b) of that subsection.

(3) For the purposes of this section ―

……

‘deceit’ (欺騙) means any deceit (whether deliberate or reckless) by words or conduct (whether by any act or omission) as to fact or as to law, including a deceit relating to the past, the present or the future and a deceit as to the intentions of the person practising the deceit or of any other person;
…

(2)   Section 18 of the Theft Ordinance reads:

(1) Any person who by any deception (whether or not such deception was

the sole or main inducement) dishonestly obtains for himself or another any pecuniary advantage shall be guilty of an offence and shall be liable on conviction upon indictment to imprisonment for 10 years.
(2)…

(3) For the purposes of this section ―
…

‘deception’ (欺騙手段) has the same meaning as in section 17;

…

(3)   And “deception” in section 17 of the Theft Ordinance means:

‘deception’ (欺騙手段) means any deception (whether deliberate or

reckless) by words or conduct (whether by any act or omission) as to fact or as to law, including a deception relating to the past, the present or the future and a deception as to the intentions of the person using the deception or any other person.

62. Whether in section 16A or section 18, the express provision on “any deceit”/“deception” is “whether or not (it) is the sole or main inducement”; the Ordinance does not require “deceit” or “deception” to be “material”. Before a defendant can be found guilty, the prosecution must prove that the “deceit” or “deception” practised by the defendant was an effective deceit or deception which operated on the mind of the person deceived. (See Archbold Hong Kong 2005, paragraph 22-142).

63. This point is even more apparent from a comparison between the above two offences and the offence of “false accounting” under section 19(1) of the Theft Ordinance.  This section provides that the offender must furnish information which is or may be misleading, false or deceptive in a material particular:

(1) Where a person dishonestly, with a view to gain for himself or another or with intent to cause loss to another ―

…

(b) in furnishing information for any purpose produces or makes use of any account, or any such record or document as aforesaid, which to his knowledge is or may be misleading, false or deceptive in a material particular,

he shall be guilty of an offence and shall be liable on conviction upon indictment to imprisonment for 10 years.

64. For the above reasons, I do not accept the argument by Mr. Wong, SC that the relevant misrepresentations must be “material”.

65. In any event, as Mr. Wong, SC has conceded, financial institutions generally will rely on the liabilities information as submitted by applicants to decide whether or not to grant loans.  In the present case, all the relevant witnesses (staff members of the relevant financial institutions) had in fact testified that the financial institutions would rely on the liabilities information submitted by applicants.

66. The magistrate found that there was no direct evidence, nor could any irresistible inference be drawn, as to the extent of reliance by each of the financial institutions (comprising the frontline staff and the senior officers) on the 1^st appellant’s disclosed liabilities or as to whether or how they would re-assess the 1^st appellant’s creditworthiness before releasing the loan to him.  In other words, the magistrate was not sure whether the “deceit” or “deception” practised by the appellant operated on the mind of the deceived.

67. The above finding, however, did not mean that the appellant could not possibly have committed the “attempt” offences.

68. Whether the appellant had the mens rea to commit the offences of “attempting to defraud” and “attempting to obtain a pecuniary advantage by deception” was to be determined by reference to his intention at the time of signing the declaration section of the application forms.  The magistrate had to consider the appellant’s state of mind when he signed each of the forms.  I agree with and accept Mr. Lee’s submissions on the law concerning attempts to commit offences.

69. I should mention in passing that I do not agree with Mr. Wong, SC that the appellant might have had no mens rea by reason of his being reckless.  Section 16A, which I have quoted, clearly stipulates that “deceit” means “any deceit (whether deliberate or reckless)”; section 18 also clearly stipulates that “deception” means “any deception (whether deliberate or reckless)”.  (See also Archbold Hong Kong 2005, paragraph 22-148).  

70. Ground of Appeal (1) fails.

71. I will proceed to deal with Grounds of Appeal (3) to (8) and the newly added Ground of Appeal (1).  Mr. Ma made submissions to the Court on behalf of the 1^st appellant.

(3)      Ground of Appeal (3)

72. This ground of appeal is directed at the magistrate’s findings on the evidence of the appellant.

73. Mr. Ma submitted that the magistrate rejected (at paragraph 76) the appellant’s allegations on the basis of his demeanour in the witness box.  However, the magistrate failed to consider that the demeanour of the appellant when giving evidence in the witness box could not fully reflect how he would have behaved when dealing with other matters.  Mr. Ma contended that what the magistrate did was unsafe.

74. Mr. Ma also pointed out that the magistrate plainly did not believe the appellant’s evidence concerning “declarations” although he did accept certain evidence of the appellant (e.g. the application forms involved in charges (3) and (8) were blank when he signed them).  However, the magistrate appeared to have failed to consider the following evidence of the appellant:

(a)   The 1^st appellant said he had forgotten about the loan of $80,000 from Pacific Finance because he had obtained this loan on behalf of a friend of his and repayments were made by that friend, and the debit transactions were processed through an account which he seldom used.

(b)    The 1^st appellant said that (except Dah Sing Bank in charge (5)) every time after the requisite documents were submitted, a staff member of the bank or financial institution would inform him that the loan was granted and would make an appointment with him to collect the cheque and sign the application form.

(c)    When the 1^st appellant applied for a loan from Pacific Finance, the credit/loan information column on the application form was blank.  He asked the staff why this was so and was told that it was not necessary to fill out the column. 

75. Mr. Ma said that the convictions on charges (4), (6) and (9) are unsafe since the magistrate failed to make any finding on or even consider what the 1^st appellant said under item (a) above.

The respondent’s reply

76. Mr. Lee said that the magistrate had legitimately and reasonably rejected the 1^st appellant’s defence.  The reasons were as follows:

(1)   The 1^st appellant was an experienced police officer and had dealt with cases involving deception;

(2)    The 1^st appellant agreed that the financial institutions would look at his proof of income and bank passbooks when they processed his loan applications in order to find out his income and whether he owed any financial institutions any debts;

(3)    At the material times, the 1^st appellant could be regarded as a regular customer of financial institutions, and it was hard to believe that he never knew the contents of the declarations in the loan application forms;

(4)    The 1^st appellant gave evidence in the witness box for nearly 6 days. The magistrate had the opportunity to observe his demeanour in the witness box over an extended period of time.  Furthermore, the respondent pointed out, the fact that the magistrate did not mention parts of the 1^st appellant’s evidence did not mean that he had not considered them.  Besides, the magistrate had obviously grasped and understood the defence case and had correctly assessed the appellant’s credibility.  Therefore, this ground of appeal cannot stand.  Mr. Lee referred to Chung Wai Leung v. HKSAR, FAMC 64/2004 in support of his argument.

Judgment

77. With respect, I do not agree with Mr. Ma that the magistrate rejected the appellant’s allegations on the basis of his demeanour in the witness box.  It was not improper for the magistrate to disbelieve the appellant’s evidence on the “declarations”.  However, when the magistrate dealt with charges (4), (5), (6), (7), (9) and (10) together  (paragraphs 71-77), he only pointed out in paragraph 77 that the appellant “deliberately” failed to make full and frank disclosure of his credit/loan position. The magistrate made no mention whatsoever of the appellant’s allegation that he had forgotten the $80,000 loan from Pacific Finance. Although it is true that the magistrate’s silence on certain evidence did not mean that he had not considered it, I still have to consider whether or not he might indeed have failed to consider such evidence.  Not only did the magistrate make no finding on the above, but he also made no mention of it at all when he summarized the 1^st appellant’s evidence (paragraphs 41 to 51).  The loan of $80,000 was in fact not a huge sum of money when compared with other loans.  I am not sure if the magistrate had taken the above into consideration.

78. In respect of charges (4), (6) and (9), the magistrate found that the appellant had attempted to commit the offences which only involved the $80,000 loan from Pacific Finance.  In my judgment, the convictions on the above charges are unsafe.

79. The particulars which involved the $80,000 loan from Pacific Finance in charges (5), (7) and (10) shall also be struck out.

(4) Ground of Appeal (4)

80. The appellant referred the Court to HKSAR v. Chan Shu Hung (transliteration) & another, CACC 512/2001 and Johnson v. Nobbs, which was citedinChan Shu Hung, for the proposition that, for concealment of fact to constitute false representation, the concealing party must be under a duty to disclose the relevant fact to the other party.

81. Mr. Ma submitted that in the present case, it was apparent from the layout and wording of the forms that the loan approval procedures started when the relevant financial institutions received the applicant’s personal identity documents, address and income proof as well as account records for the past few months.  Save for Dah Sing, all the relevant financial institutions “asked” the appellant to go to their branch offices to sign on the application forms and submit the originals of the documents for verification after they had approved his loan applications.  Cheques were handed to the appellant almost at the same time.   

82. There was no evidence, Mr. Ma submitted, to show that before the appellant signed, the financial institutions had required him to disclose his “true and complete financial liabilities”.  Nor was there sufficient evidence to show that the financial institutions had clearly alerted the appellant to this requirement.  The appellant was therefore under no “duty” to disclose. 

83. Mr. Ma said that the magistrate had overlooked the following matters when he held that the wording of the application forms constituted a duty to “disclose true and complete financial liabilities”:

(a)    The staff members of the financial institutions either had diverse views on the meaning of “credit loan” or had no idea what it was about;

(b)    Such a requirement was not clearly stated in the forms;

(c)    The declaration at the bottom of the form was relatively brief and was printed in a relatively small font size;

(d)    When the staff members asked the appellant to “sign if there is no problem”, they failed to clearly alert the appellant to the importance of knowing the contents.

84. More importantly, Mr. Ma contended, the magistrate found that the wording of the forms did not constitute a requirement to disclose other mortgage loans (see Statement of Findings, paragraph 57).  As the magistrate harboured such doubt, he should have given the appellant the benefit of doubt in respect of other financial information (such as credit card information).

The respondent’s reply

85. Mr. Lee submitted that the 1^st appellant’s act of concealing part of his liabilities constituted “positive false representation”, meaning that he falsely represented to the relevant financial institutions that he only had such loans as were listed in the application forms.

86. Mr. Lee submitted that the 1^st appellant was clearly aware that the financial institutions had to know his liabilities before granting him loans: see pages 1541L to 1542C of the Appeal Bundle.

87. Moreover, the declarations in the relevant forms clearly stated that the information provided by the appellant must be true and complete.

88. The magistrate quoted (at paragraph 74) the wording of the application forms and then had this to say (at paragraphs 76 and 77):

76.    … In my judgment he had read and had a full understanding of the declaration and the entire contents of all documents laid out in front of him by the financial institutions before he signed them.     

77.   In my judgment, he deliberately failed to disclose a true and complete list of his credit/loan information in the application process because he wanted to conceal his true financial status from the finance company or bank so as to mislead them into thinking that he was financially more sound than he actually was. (Pages 247 to 248 of the Appeal Bundle)

89. It was therefore the finding of the magistrate that the 1^st appellant, with clear knowledge of the requirement to furnish true and complete credit/loan information in the forms, nevertheless only made partial disclosure in order to mislead the financial institutions into thinking that he was financially more sound than he actually was. This was positive false representation; as stated in the charges, it was “a misrepresentation of his true and complete financial liabilities”.

90. Alternatively, Mr. Lee submitted that the various forms clearly showed that the applicant had an obligation to make a true and complete disclosure of his liabilities to the relevant financial institutions, and the appellant’s concealment of some of his liabilities constituted false representation.

91. Mr. Lee pointed out that the term “credit loan” obviously included personal loan.  Prior to the personal loan mentioned in charge (4), the 1^st appellant was already experienced in filling out loan application forms, and hence it was impossible for him not to know what the declarations were about.  As for the mortgage loans, they were obviously different from personal loans since there was a designated section on each form for the applicant to fill in the amount of residential mortgage loan.  Therefore, the finding of the magistrate on mortgage loans was neither incompatible with nor contradictory to his finding on personal loans.

Judgment

92. Having considered the submissions of both counsel and the case of Chan Shu Hung, I concur with Mr. Lee.  The appellant’s act was falsely representing to the financial institutions that he only had the loans listed in the application forms (I will make findings on individual application forms later on). The present case can be distinguished from Chan Shu Hung.

93. In view of the appellant’s capacity as an applicant for loans and of the wording of the application forms, I hold that the appellant was required by the forms to disclose his financial liabilities to the financial institutions.  I agree with this finding of the magistrate and, with respect, do not accept Mr. Ma’s submissions on this issue.

94. This ground of appeal therefore fails.

(5) Ground of Appeal (5)

95. Mr. Ma pointed out that, on charges (9) and (10), the appellant had signed the application forms but the sections in the forms concerning financial information were blank; this situation was the same as that on charges (2), (3) and (8) – the relevant sections in the forms were blank when the appellant signed them.  The magistrate found, in relation to charges (2), (3) and (8), that the information was filled in after the forms were signed (i.e. after the applications were completed), and, on this basis, proceeded to find that the appellant should not be liable for this (see Statement of Findings, paragraphs 62, 67 and 70).  This being the case, the appellant should, Mr. Ma contended, also not be held liable on charges (9) and (10).  Mr. Ma submitted that, since the appellant was not liable for information which was filled in subsequently, he should all the more not be held liable for information which was not filled in subsequently.

The respondent’s reply

96. Mr. Lee submitted that the key issue in the present case was that the 1^st appellant deliberately failed to disclose part of his liabilities.  Mr. Lee quoted the magistrate’s finding (at paragraph 85) and stated that the magistrate’s findings on charges (9) and (10) were correct.  As regards charges (2), (3) and (8), Mr. Lee submitted that the magistrate had given the 1^st appellant a generous finding.

Judgment

97. With respect, I fail to understand why the magistrate convicted the appellant of having attempted to “obtain a pecuniary advantage by deception” in respect of charges (9) and (10) but acquitted him on charges (3) and (8).

98. It was the evidence of the appellant that when he signed the application forms of Wing Hang (charges (2), (8), (9) and (10)) and Pacific Finance (charge (3)), the relevant credit/loan columns were blank.  The magistrate found that the appellant should not be held liable for the information which was filled in subsequently in respect of charges (2), (3) and (8).  However, on charges (9) and (10), where no information was subsequently added to the application forms, the appellant was convicted of having attempted to commit the offences.  Whether the appellant had the mens rea of attempting to commit the offences was to be determined by ascertaining his intention when he signed on the application forms and made the declarations.  The question whether the appellant had the requisite mens rea should not be affected by whether or not someone filled in the information subsequently – unless the appellant had expected that the staff of the financial institutions would fill in the information for him subsequently.

99. The magistrate convicted the appellant of the “attempt” offences on those charges where no information had subsequently been added to the application forms.  On the other hand, regarding those charges where the application forms were subsequently filled out by others, the appellant was not convicted of the “attempt” offences.  These two verdicts are indeed inconsistent.

100. As regards the Pacific Finance loan in charge (3), the application form which the appellant signed was blank. Later, someone wrote down “HKSAR HFS (Bank of East Asia (ML))” – which should be referring to the mortgage loan over the property in which the appellant was residing.  The form made no mention at all of the $600,000 and $250,000 loans which the appellant had just obtained from United Asia UA and Wing Hang respectively.  The magistrate held that the appellant should not be liable for information that was filled in subsequently.  But what was the appellant’s state of mind when he signed the “blank” form?  Did he commit the offence of attempting to obtain a pecuniary advantage by deception?  The magistrate did not seem to have considered these issues. 

101. Charge (9) was similar to charge (8) in that the application form in question was “blank” when the appellant signed it.  These two charges both involved Wing Hang, and the two dates of application were consecutive (2 August and 3 August). The information “UA$600,000 and HSBC (O.D.)” that was filled in subsequently in relation to charge (8) was the same as that filled in by someone in relation to charge (2).  It appeared that such information was inserted in the application forms by the staff of Wing Hang for the appellant.  As the appellant and Wing Hang had had previous dealings by the time of the two applications in question (i.e. August 2000), the appellant might, on the evidence before the magistrate, have relied on the staff at Wing Hang to fill in the relevant information for him.  Although I have already found the conviction on charge (9) unsafe (see the above judgment on Ground of Appeal (3)), the conviction on charge (9) is also unsafe for the reasons I have just set out.

102. Turning to charge (10), the date of application was 24 October 2000, which was more than two months after the applications in relation to charges (8) and (9).  The financial institution involved was also Wing Hang.  During the two months, the appellant obtained a $200,000 loan from JCG Finance (28 August) and a $80,000 loan from Dah Sing (14 September).

103. There was no evidence to show that the appellant had informed Wing Hang’s staff of the said two loans.  These two loans, unlike the Pacific Finance loan of $80,000, were obtained by the appellant for himself and not for others, and the total amount involved was considerable ($280,000). Although the staff at Wing Hang were very “sloppy” in filling out the application forms, the appellant never claimed that he had already informed the staff at Wing Hang of the above two loans and thus had expected them to fill in the information for him.  On charge (10), the magistrate’s finding that the appellant had “deliberately failed to disclose” was in no way improper.  The conviction on charge (10) involving the details of the aforesaid $280,000 loan is not unsafe.   

(6) Ground of Appeal (6)

104. Concerning charge (5), Mr. Ma argued that the magistrate had not considered the evidence given by PW24, one of the prosecution witnesses.  PW24 was the staff member who handled application forms.  Her evidence showed that the application forms concerned did not provide sufficient space for filling in all credit/loan information.  Even where there were many items, the applicant could only fill in one or two of them.

105. Mr. Ma submitted that the magistrate had also failed to consider the appellant’s allegation that he had forgotten about the loan he obtained from Pacific Finance (i.e. item (a) mentioned in Ground of Appeal (3) above).  The appellant testified that, judging from the brevity and rather simple layout of the form used, he believed that the form was just for a preliminary application.  For the same reason, he did not list out all the information, believing that the bank would make further enquiries.  This was supported by the evidence of PW24 and was also apparent from the way in which the appellant filled in his credit card information. The magistrate had not taken all this evidence into account, thereby rendering the verdict improper.

The respondent’s reply

106. Mr. Lee pointed out that when the magistrate considered charge (5), he was not only aware of the defence (“Dah Sing’s loan application form had little space”), but he also noticed that the information on liabilities that the 1^st appellant wrote in the application form ([P116A], p. 531(1)) was incorrect (Statement of Findings, paragraphs 59 and 60).

107. Mr. Lee pointed out that the declaration in the form stated clearly that the applicant confirmed and guaranteed the “truth and completeness” of the information, and therefore the 1^st appellant’s allegation that he did not fill in all the information as he believed the form was just for a preliminary application was not credible.

Judgment

108. This ground of appeal concerns charge (5), which involved the only application form in which all the information had been filled in by the appellant.

109. I do not accept the submissions made by Mr. Ma on the evidence of PW24 and that of the appellant.

110. The magistrate dealt with charge (5) at greater length than the other charges (see paragraph 44 (the appellant’s evidence) and paragraphs 59-60 (the magistrate’s findings)).

111. The appellant filled in the information himself.  He applied for a loan of $180,000 from Dah Sing.  At that time he was still owing United Asia UA a principal sum of $497,813 and owing Wing Hang a principal sum of $200,000.  The “approx. (sum of) $400,000” that he declared was therefore a far cry from his actual indebtedness.  He did not disclose the $200,000 loan which he had obtained from JCG Finance just about 2 weeks earlier (28 August), and $200,000 was by no means a small amount.

112. On the evidence before the magistrate, I see nothing improper in his finding on charge (5) that the appellant had “deliberately failed to disclose”.  The conviction on that charge which involved the $200,000 loan from JCG Finance is not unsafe.

(7)   Ground of Appeal (7)

113. This ground solely concerns charge (6).  I have already held that the conviction on charge (6) is unsafe, and I will not deal with this ground of appeal further.

(8) Ground of Appeal (8)

114. On charge (7), Mr. Ma submitted that the prosecution only called one witness, Wu Kam Kwong (transliteration) (PW18).  That witness was only responsible for processing and approving applications and did not take part in filling out application forms.  Other than what the appellant said in his evidence, the prosecution did not have any evidence of what happened when the appellant signed the form.  (See the appellant’s evidence from pages 1530U to 1532G of the Appeal Bundle.)  The evidence did not confirm that the “credit information” which could now be seen in the form had already been filled in when the appellant signed it.  Nor had the prosecution pursued this matter in cross-examination.  Therefore, there was insufficient basis for the magistrate to find as he did at paragraph 66 of his Statement of Findings that “all the information” in the form had been “fully” filled out when the appellant signed it.   

115. Mr. Ma reiterated that the wording of the form did not constitute a requirement to disclose credit card information.  Furthermore, the prosecution had not called any witnesses to give evidence as to whether the appellant was asked to disclose credit card information before he signed the form.  Item (v) of the magistrate’s findings on charge (7) is improper.

116. Moreover, information submitted by the appellant at the time of the application was no longer complete because it had been destroyed. (See the evidence of PW18 Wu Kam Kwong – page 58C-F; page 71H-L of the transcript.)

117. Mr. Ma submitted that the magistrate’s finding that the appellant had not disclosed the information referred to in charge (7) is also not safe.

The respondent’s reply

118. Mr. Lee pointed out that the 1^st appellant’s testimony in court was that he “signed on an application form that was already filled out” (Appeal Bundle page 1532B).  The 1^st appellant did not deny that the information about his liabilities was already there in the application form when he signed it ([P136], p.563).  Therefore, the magistrate said:

The 7^th charge

66.    The 1^st defendant admits in his evidence that when he signed SHK’s

loan application form, it was fully filled out.

(Appeal Bundle page 245)

119. The application form required the applicant to fill in “other bank/financial institution credit information”.  The respondent submitted that this included the applicant’s credit card debts.  Even if it did not, the conviction on charge (7) would not be affected since the magistrate found that apart from the failure to disclose credit card debts, the 1^st appellant had also failed to disclose all of his personal loans.  

Judgment

120. This ground of appeal concerns charge (7) – SHK Finance.  Regarding the magistrate’s finding (at paragraph 66), I agree with and accept Mr. Lee’s submissions and views on credit card debts, and reject Mr. Ma’s submissions.

121. I have already made a finding regarding the $80,000 loan from Pacific Finance.  In this charge, the information that the appellant had allegedly failed to disclose was the Bank of East Asia visa credit card debt of $66,939.59.

122. The words used in the application form were “Have you ever obtained any credit facility/loan from any bank/finance company?”.  When the appellant signed the form, it was already filled in with “JCG, WING HANG CREDIT, UA, DAH SING BANK”.  The magistrate found at paragraph 61 that the words used in the form had made it clear that the applicant (the appellant) had to disclose all personal loans and credit card loans.

123. The magistrate did not believe that the appellant had never read the contents of the “declaration” (paragraph 26), and, taking into account the appellant’s background and work experience, the magistrate held that the appellant had “deliberately failed to disclose”.  This holding was not unsafe.  I do not agree with Mr. Ma’s submissions that the words used in the form were not sufficient to constitute a disclosure requirement and that there was no evidence to show that the financial institutions had required the appellant to disclose information before he signed the form.  Nor do I accept Mr. Ma’s contention about the information submitted having become incomplete.

124. The conviction of the appellant on charge (7) involving information on credit card debt is in no way unsafe.

(9)   Newly added Ground of Appeal (1)

125. Mr. Ma pointed out that at paragraph 56 of the Statement of Findings, where the magistrate began his analysis of the key issues in the case, he categorically stated that there were only 3 ways through which the appellant could disclose his credit/loan information.  This finding, Mr. Ma submitted, had left out an obvious way of disclosure, namely that the staff of the financial institutions could verbally ask the appellant, and the appellant could verbally disclose the information, upon or before the signing of the application forms.

126. As the magistrate had not considered the above matter, he had also not taken into account that, in respect of charges (7), (9) and (10), the prosecution had not called any witness to give evidence as to the circumstances under which the forms were signed.  The magistrate had failed to consider whether the prosecution could preclude the possibility of verbal disclosure in the absence of evidence and prove the case beyond reasonable doubt.  Mr. Ma submitted that this failure rendered all the convictions unsafe.

The respondent’s reply

127. Mr. Lee stated that this additional ground of appeal did not assist the 1^st appellant and was contradictory to the defence case at trial.  The 1^st appellant’s evidence at trial was that he did not pay attention to the contents of the declaration on the forms.  He had never said in evidence that he only verbally disclosed to the staff of the financial institutions the liabilities that he did not put down in the forms (see pages 241 to 242 of the Appeal Bundle).

128. Furthermore, if the 1^st appellant had made verbal disclosures, it was difficult to imagine why the staff of the financial institutions did not record the disclosed information in the application forms.

Judgment

129. I do not accept Mr. Ma’s submission on “verbal” disclosure.  I accept Mr. Lee’s submission.  Moreover, I have already stated my views when dealing with Ground of Appeal (5) in respect of charge (10).

Conclusion

130. For the above reasons, I allow the appeal in respect of charges (4), (6) and (9).  The 1^st appellant’s convictions on these charges are quashed and the sentences thereon set aside.

131. In respect of charges (5), (7) and (10), the particulars in each charge concerning “personal loan of $80,000 from Pacific Finance” are to be struck out.  After such deletion, the 1^st appellant’s convictions of attempting to commit the relevant offences are affirmed, and his appeal is dismissed.

The 2^nd appellant

132.   Mr. David Ma for the 2^nd appellant raised 3 grounds of appeal.

(1)   Ground of Appeal (1)

133.   The magistrate found that the Employer’s Return was a “documentary record” under section 22 of the Evidence Ordinance which was admissible as evidence, and he relied on its contents to hold that the letter (i.e. Exhibit P75) submitted by the 2^nd appellant in her application for loan was misleading, false or deceptive in a material particular. 

134.   At paragraph 95 of his Statement of Findings, the magistrate stated that the Employer’s Return (i.e. Exhibit P146) was provided by Raymond Tsang to PW16 (an accountant) for the purpose of preparing accounts.

135.   Mr. Ma stated that this document was significant in that it showed the commencement date of the 2^nd appellant’s employment by Noble Knight.  Therefore, the person who supplied this information had to be the person in charge of Noble Knight – i.e. the 2^nd appellant’s employer; otherwise, the information was not supplied by a person who “had personal knowledge” of it.  (See section 22(1)(b) of the Evidence Ordinance).

136.   Investigations by ICAC officers revealed that Raymond Tsang was the only person in charge of Noble Knight – he was responsible for everything in Noble Knight. (See Statement of Findings, paragraph 98.)

137.   The magistrate stated at paragraph 97 that it was immaterial whether the information in P146 was supplied or compiled by Raymond Tsang or a subordinate of his because section 22(1)(b) had been complied with.  This, Mr. Ma said, was wrong because someone working under Raymond Tsang would not be a person who had “personal knowledge” of the date of employment of the 2^nd appellant, with the result that the information failed to comply with section 22(1)(b). 

138.   Furthermore, if this subordinate was the 2^nd appellant herself, then the prosecution could not rely on section 22 all the more since the identity of the 2^nd appellant as a defendant did not meet any of the conditions under section 22(1)(c). (See Criminal Evidence in Hong Kong, Bruce and McCoy, para.XII, (354))

139.   Mr. Ma further submitted that all the evidence showed that Raymond Tsang was the person who supplied the information.  The magistrate’s finding at paragraph 99 that the information supplier’s identity could not be identified was therefore wrong.  Although Raymond Tsang had been uncooperative, he did have the right to refuse to provide information subsequent to his arrest.  In any event, this was not tantamount to being unable to identify the “information supplier”.  Moreover, the magistrate only found that the steps taken by the ICAC were reasonable, without considering whether all reasonable steps had been taken.  Therefore, the finding that section 22(1)(c)(iii) had been complied with was wrong.

140.   Mr. Ma specifically pointed out that there was nothing to show that the ICAC had tried to apply for a subpoena requiring Raymond Tsang to testify in court.

The respondent’s reply

141.   Mr. Lee submitted that the magistrate correctly held that the identity of the supplier of the information concerning the 2^nd appellant’s employment record in P146 could not be identified.  The reasons were as follows:

(1)  Those information must have come from someone at Noble Knight, and even if that person did not have personal knowledge of the 2^nd appellant’s employment, he/she must have relied on the records of Noble Knight, and those records must ultimately have come from someone who did have personal knowledge of the 2^nd appellant’s employment;

(2)  That Raymond Tsang was the person in charge of the company did not necessarily mean that the 2^nd appellant was recruited by him personally.  She might have been recruited by his subordinates or agents;

(3)  Raymond Tsang refused to supply relevant information to ICAC investigators;

(4)  ICAC officers lost contact with Raymond Tsang subsequently and were therefore unable to summon him to court (Appeal Bundle page 236, paragraph 17); and

(5)  Lee Kwok Yiu, Raymond Tsang’s partner, had no knowledge of the 2^nd appellant’s employment.  He did not take part in Noble Knight’s operation.

For these reasons, the respondent submitted that the magistrate correctly held that the source of the information in P146 could not be identified and that all reasonable steps had been taken to identify the person who supplied the information.

(2)   Ground of Appeal (2)

142.   Mr. Ma complained that the magistrate failed to direct himself that on section 22, the prosecution had to prove its case beyond any reasonable doubt.

The respondent’s reply

143.   Mr. Lee submitted that there was nothing to show that the magistrate had not borne in mind the burden and standard of proof required of the prosecution on the issue of the admissibility of P146.

(3)   Ground of Appeal (3)

144.   Mr. Ma said that Exhibit P146 and other accounting documents were supplied by Raymond Tsang to PW16.  Paragraph 102 of the Statement of Findings showed that the magistrate had doubts about the reliability and accuracy of the documents.  This affected the reliability of all the documents as well as the probative value of P146.  The magistrate should accordingly have given the 2^nd appellant the benefit of doubt.

145.   Mr. Ma said that the letter in question (Exhibit P75) was dated August 2000.  Whether the date of employment of the 2^nd appellant was December 1998 or September 1998, the magistrate should have considered if it was possible that the person who issued the letter and/or the 2^nd appellant had had a memory lapse and/or had been careless.  The possibility of inadvertence must be excluded before the 2^nd appellant could be found to have been deliberate.

146.    Mr. Ma submitted that whether the length of employment was a “material particular” was not to be determined merely by reference to the discrepancy between the contents of the letter and the actual situation, as the magistrate had done.  He should also have considered whether the recipient of the letter (Wing Hang) had any requirement on it and, if it had, what that requirement was.  Mr. Ma submitted that the magistrate had obviously not considered this question.

The respondent’s reply

147.   Mr. Lee said that P.146 only showed the 2^nd appellant’s salary from 15 December 1998 to 31 March 1999, but not her salary at the material time (August 2000).

148.   When the magistrate said that the prosecution had failed to prove that the 2^nd appellant’s income was less than or substantially less than $31,000, he was referring to the other documentary evidence relied on by the prosecution, i.e. the exhibits mentioned in paragraph 22 of page 236 of the Appeal Bundle, and those exhibits had nothing to do with the commencement date of the 2^nd appellant’s employment.

149.   Mr. Lee submitted that the magistrate had duly considered Exhibit P75, the letter which showed the commencement date of the 2^nd appellant’s employment.  The magistrate said:

20.   The date shown on the letter stated a longer history of

         employment, namely 2½ months more, than that on the

         Employer’s Return.  This longer history would serve to

         support her claim on the application form that she had

been so employed for 2 years. (Appeal Bundle page 236)

150.   Mr. Lee stated that, as the applicant was required to fill in the “Number of Years of Service” in the application form (Exhibit P73), the magistrate was justified in ruling that it was a “material particular” to be submitted by the applicant.

151.   Mr. Lee submitted that the magistrate was entitled to accord full weight to Exhibit P146 and hold that the date of employment of the 2^nd appellant as stated in Exhibit P75 was not true.  Given the 2^nd appellant had declared in the loan application form that all the information furnished was true and complete, and in the absence of her testimony in court, the magistrate was entitled to find that the 2^nd appellant knowingly did what she did: see Appeal Bundle page 254 paragraph 100.

Judgment

152.   On the question whether the “Employer’s Return” was admissible under section 22 of the Evidence Ordinance, the person who had “personal knowledge” of information on the 2^nd appellant’s employment should, on the evidence before the magistrate, be her employer Noble Knight.  As Noble Knight was a limited company, its director (i.e. Raymond Tsang) should be the one who had personal knowledge of that matter.  Although he refused to cooperate, he had indeed been identified.  It was not the case where the person “cannot be identified” within the meaning of section 22(1)(c)(iii). 

153.   On the evidence before the magistrate, there was nothing to show that the information in question had been supplied by any person other than Raymond Tsang.  Nor was there anything to show that that person’s identity was unknown and could not be identified notwithstanding all reasonable steps having been taken.

154.   The “Employer’s Return” should not have been admitted as evidence.

155.   The false information that the 2^nd appellant was charged with furnishing was that she had been employed by Noble Knight since 1 September 1998 at a monthly salary of $31,000.  The magistrate found that the monthly salary of $31,000 was not proved.  He found that the appellant had dishonestly furnished a false date of employment and that such information was a “material particular”.

156.   Although I have held that the “Employer’s Return” was not admissible as evidence, the statement in the letter that the appellant had been employed since 1 September 1998 was obviously false because, according to the agreed facts (Appeal Bundle page 123 paragraph 43), the 2^nd appellant left Hong Kong on 6 January 1998 and did not return until 1 November 1998.

157.   I am rather more concerned about another aspect which has not been raised:  Has the 2^nd appellant been wrongly convicted?

158.   Section 19(1) of the Theft Ordinance provides as follows:

(1) Where a person dishonestly, with a view to gain for himself or another or with intent to cause loss to another ―

(a)  destroys, defaces, conceals or falsifies any account or any record or document made or required for any accounting purpose; or

(b)  in furnishing information for any purpose produces or makes use of any account, or any such record or document as aforesaid, which to his knowledge is or may be misleading, false or deceptive in a material particular,

he shall be guilty of an offence and shall be liable on conviction upon indictment to imprisonment for 10 years.

159.   The heading of the section was “False accounting”.  Under subsection (1)(b), the document produced or made use of by the offender was not any document, but an account, or a record or document made for any accounting purpose, or a record or document required for any accounting purpose.

160.   In the present case, the letter furnished by the 2^nd appellant was a “certificate” issued under the letterhead of Noble Knight.  Such a letter could not on any view form an “account”, or a “record or document made for any accounting purpose”, or a “record or document required for any accounting purpose”. 

161.   The facts found by the magistrate were insufficient to establish the elements of the offence under the aforesaid section.

162.   For the above reasons, I allow the appeal of the 2^nd appellant.  Her conviction is quashed and the sentence thereon set aside.