HKSAR v. MAK KA CHU

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

1997, No.783
(Criminal)

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J U D G M E N T

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Stuart-Moore, J.A. (giving the judgment of the Court):

1. On 4th December 1997, this Applicant was convicted of a total of eight charges following a trial in the District Court before Judge Kilgour. Four of the charges related to using false instruments, namely cheques in sums varying from $38,300 to $20,000, contrary to s.73 of the Crimes Ordinance, Cap.200. The remaining four charges related to the same cheques but these alleged thefts, contrary to s.9 of the Theft Ordinance, Cap.210 of choses in action, namely the debts represented by the sums shown on the respective cheques, owed by First Pacific Bank to Carleton Limited. The Applicant was sentenced to concurrent terms of two years' imprisonment on each charge. He now seeks leave to appeal against conviction and sentence.

2. The factual background to the case could not be more straightforward. The Applicant was a friend of three others (PW's 1-3) with whom he teamed up to form a hairdressing business which was incorporated in 1992 under the name of Carleton Ltd. A company account was opened at First Pacific Bank. PW's 1 and 2, who each had a 30% shareholding in the company and had provided the capital for the venture, were the two authorized signatories. The Applicant who, with PW3 had a 20% shareholding, was responsible for the running of the business. It was a disputed issue in the case that he was also responsible for the accounts. PW3 was responsible for publicity and promotions.

3. In about July 1994, PW's 1 and 2 noticed that the four cheques, to which reference is made in the charges, had been presented to the bank when neither of them had signed. A meeting was then arranged with the Applicant when he signed Exh. D2 which is in the nature of an "agreement" as it is described in the exhibits' list. The Applicant never made repayment and police were duly informed of what had occurred. In cautioned statements to the police, the Applicant denied the offences along the same lines as the defence which was presented at court.

4. The defence case on the forgery charges was that the Applicant had no responsibility whatsoever for the forgeries on the cheques. He maintained that they had been pre-signed when they were handed to him with other details on the cheques left blank. He agreed that he had made the cheques out to himself and to drawing cash on them. His case was that part of the money was owed to him. The other part was, as the judge found, "additionally or alternatively", as the evidence was not entirely clear, being "husbanded", as the judge put it, towards arrears of rent which would prevent "other cheques from being drawn against this money".

5. In regard to the theft charges, dishonesty was denied for the same reasons as the Applicant had advanced in relation to the alleged forgeries. It was also his case that, in law, he could not have appropriated these choses in action because none existed.

6. This conveniently leads to the first of the grounds of appeal which this Applicant has advanced, namely that he believes that the judge erred in law in holding that he had stolen choses in action and he makes reference to the case of R v Preddy, (1996) 3 W.L.R. 255.

7. The judge, in his Reasons for Verdict, had correctly addressed the questions which needed to be dealt with by asking himself three separate questions to deal with the live issues raised by the defence on this point:

(1) were the choses in action capable of being stolen;

(2) was the Applicant acting dishonestly; and

(3) did he mean permanently to deprive Carleton of the monies obtained on the cheques?

8. The judge said in his Reasons at p.9E:

"I must turn to the legal argument raised by counsel that no chose in action existed for the defendant to steal. I have been referred to the judgment of Lord Goff in R v Preddy. Whilst accepting, as I must, with the greatest respect his Lordship's judgment, I find that the defence argument in trying to put this case on all fours with that judgment is flawed and that they can factually be distinguished from the facts in that case. This was not an electronic transfer from one account to another. This involved the defendant taking cheques, which I found were forged, to the counter and presenting them without authority against an account which he knew was in funds. These acts, I believe, are much closer to the case of Chan Man-sin v R, [1988] Criminal Law Review 319. Whilst accepting that this precedes Preddy, it is a Hong Kong case which was upheld by the Privy Council."

9. Again, from this summary, the trial judge demonstrated that he was alive to the legal issues which had arisen upon the facts of the case. Chan Man-sin v R, (1988) 86 Cr.App.R. 303, was and remains good law and immediately provides for circumstances which are such as those encountered in the present case. There is nothing in the ground raised by this Applicant.

10. Turning to the other grounds of appeal, in his second ground the Applicant states that the document labelled Exh. D2 had nothing to do with the case because it did not mention the four cheques which are the subject of the allegations, nor indeed the sums of money referred to in the charges. He further states that this document was something the judge had said would not be used in court, and that it has misled the judge into believing that he had been dishonest.

11. At p.2 of the Reasons for Verdict, the judge had this to say about the document:

"With regard to the four cheques, both PW1 and PW2 say they never signed those cheques. Eventually a meeting was held between PW's 1 to 3 and the defendant in late October. The defendant signed a document at that meeting, that is D2. He continued to work for the enterprise but no immediate report was made to the police, apparently on the basis that the other shareholders hoped that the defendant would honour the agreement they say they came to. They say he did not and eventually the police were informed."

12. A little later in his Reasons at p.7, the judge went on to say:

"... with regard to the document, D2, the defendant said he was forced to sign this despite continuing to work for the salon for several months. With regard to D2 I should say this: that the prosecution initially did not insist on its production. I indicated that I was prepared to hold a voir dire on it even though that may not have been strictly necessary. In any event, the document was put to the prosecution witnesses in cross-examination and, not unnaturally, the prosecution then sought to further examine on it. For the avoidance of doubt, I have carefully examined this document and I find beyond reasonable doubt that it was voluntarily made."

13. Finally, on the topic, at p.8Q, the judge said:

"... the defendant's own evidence is at odds with the assertion in D2, which I am satisfied beyond reasonable doubt, was really made."

14. Although the Applicant asserts that the judge's handling of this topic was unfair to him, these passages reveal that the trial judge had given a thoroughly balanced appraisal of all of the evidence relating to D2. There is nothing in the point raised by the Applicant.

15. Grounds 3 and 4 are concerned with evidential matters which were for the judge to assess. The Applicant complains in ground 3 that PW3 said in the witness box that he did not regularly administer the Account Day Book of Carleton. However, the book when shown in court did indicate that most of the time it was PW3 and not the Applicant himself who had administered the book. One could tell, says the Applicant in his complaint, that PW3 was an unreliable witness, and the judge was misled by that witness into believing that it was the Applicant who administered the accounts of the Carleton.

16. The fourth ground is that the handwriting expert (PW10) had expressed the opinion at one stage of his evidence that he was 100% certain that the signatures on the four cheques were forgeries. However, he agreed that it was possible and that there was a chance that PW's 1 and 2 might have put their signatures onto the cheques with deliberate "discrepancies" between their real signature and those on these cheques. Indeed, today the Applicant has said that he suspects that there was a deliberate difference made when signatures were provided to the expert six months after these events which may well have been very different to the signatures at the time of the events in this case. In any event, the expert did agree that it was possible that deliberate discrepancies had been made. The complaint of the Applicant is that the expert should not have said that he was 100% certain because that may have misled the judge in his assessment of the handwriting evidence.

17. There is nothing in the Reasons for Verdict which indicates that the judge erred in his approach to the evidence on either matter raised in these grounds. So far as PW10 was concerned, the judge did make specific reference to the fact that he, as a very competent expert, accepted that "certain possibilities may exist" and went on to say that he, the expert, was 100% certain that these were forgeries. There is nothing in the points raised by the Applicant.

18. In his fifth and sixth grounds, the Applicant regards the judge as having been prejudiced and unfair to him. This suggestion stems from what the judge said about the Applicant in the Reasons for Verdict, in particular at p.5N:

"I have to say that the defendant, in my impression, made an extremely poor witness. I thought that he tended to say the first thing that came into his head when difficulty loomed and as a result, there were a great many inconsistencies between his case, as put by counsel, his records of interview, the other documentary evidence and his testimony in the witness box. Frequently, in difficult circumstances in his evidence, he said he would explain later but he never did.

I was extremely concerned about the submission of D4 as an exhibit. I made it the subject of a special ruling and will be inviting the prosecution to return the papers to the Secretary for Justice for further investigation. Although I do not find it proved, I was afraid that D4 was itself a forged document which was being used to bolster the defence case.

The anomalies between the defendant's evidence and that of other witnesses were enormous."

19. The judge then went on to list eight significant points. As to the poor impression created by the Applicant, his Grounds of Appeal state that he had given his account already to the police and was consistent throughout. In relation to Exh. D4, he takes issue with the judge having assumed it was a forgery.

20. These were largely matters of assessment by the judge. He did not find Exh. D4 was a forgery but, concerned that it might be, the matter has now been referred to the Department for Justice for proper investigation.

21. There is nothing of any substance in these grounds. Indeed, there is no merit in any part of the application so far as it concerns conviction and, accordingly, we shall dismiss it.

22. Turning now to the application in relation to sentence, the trial judge said when passing sentence:

"This is a breach of trust case in which the hands-on administrator of the business deliberately and cynically defrauded his fellow shareholders. He has maintained throughout that it is in fact he who has been hard done by. He has also maintained what I regard as a thoroughly dishonest defence. And I have already indicated that I am referring the papers or that they should be referred to the Secretary for Justice to consider whether there should be any prosecution arising out of his presentation of Exh. D4 to this court.

I do not consider these to be aggravating features but the defendant does not receive any credit for plea. Not one penny has been returned and I learn that he has bankrupted himself as a result of judgment in parallel civil proceedings.

I give you credit for good character. I accept that the intrinsic amount of the charges is not that great, but breach of trust coupled with forgery must be serious matters in Hong Kong."

23. The judge then went on to deal with other aspects in mitigation, including the fact that the Applicant suffers from asthma and the effect that that might have upon him in prison. He took a starting point of 2 1/2 years but deducted from that six months on account of the Applicant's previous good character and then imposed sentences, on each charge concurrently, of two years.

24. The Applicant today maintains his innocence. In fact he says much the same as he must have said in the District Court to the trial judge. He also referred us to a number of other cases for comparison purposes which were no doubt judged on their own circumstances. We have not the slightest doubt that, on the circumstances in this case, the sentences of two years were entirely appropriate.

25. There is no merit in this application and it is dismissed.