R. v. LEUNG PAK LUN

IN THE COURT OF APPEAL

1996, No.66
(Criminal)

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J U D G M E N T

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Power, Ag. C.J.(giving the judgment of the Court):

1. The applicant in this matter faced three charges.

2. The first was one of possession a false instrument contrary to s.75(1) of the Crimes Ordinance, Cap.220. That charge particularized that he on 19th August 1994 at Nan Fung Restaurant, Ground Floor, No.4 Hart Avenue, Tsim Sha Tsui, had in his custody or under his control instruments namely two phone cards which were encoded with Mastercard magnetic strips, which were false and which he knew or believed to be false, with the intention that he or another would use them to induce someone to accept them as genuine, and by reason of so accepting would do some act to their own or another's prejudice. The two cards referred to in that charge were Exhs.A9 and A11 at trial.

3. The second charge was identical except that it referred to five phone cards and two Datatech test cards which, it was alleged, were found at Flat B8, 24th Floor, Wang Kong House, 33 Ngau Tau Kok Road in Hong Kong. Four of the cards were found in a wallet in the bedroom, they were Exh.B31-B34 at trial, another card (Exh.B11) was found in the sitting room of the same address in a plastic container along with two test cards (Exh.B8 and B9). It is important to bear all of these exhibit numbers in mind.

4. The third charge was one of possessing equipment for making a false instrument contrary to s.76(1) of the Crimes Ordinance. It alleged that the applicant on 19th August, at the apartment to which reference has been made, had custody or control of computer equipment which to his knowledge was, or had been specially designed or adapted, for the making of a false instrument with the intention that he or another would use the false instrument to induce someone to accept it as genuine and by reason of so accepting would do some act to his own or another's prejudice.

5. It was the prosecution case that in the early hours of 19th August 1994 a police party effected a raid at the Nam Fung Restaurant at 4 Hart Avenue. The applicant was said to be one of four persons sitting at a table near the entrance who were asked to take out their wallets. It was said that those who had wallets did so and that from the applicant's wallet the two cards, Exhs.A9 and A11, were found. The evidence in this regard came in the first place from Senior Inspector Tong Chi Chung who had led the party of officers. He said:

"We asked the four persons to take their wallets out and then we have a frisk."

He denied, when it was put to him in cross-examination, that the four men were simply patted. He said that after the apprehension of the men at the restaurant the party went to the Tsim Sha Tsui Police Station and then at about 2 a.m. to Wang Kong House, Ngau Tau Kwok where entrance was gained to an apartment on the 24th floor by using keys which had been found on the applicant. He said that in rooms in that apartment the items referred to in charges 2 and 3 were found.

6. The second police witness and the most important one was DPC 1544. He also said that the four men had been told when they were apprehended at the restaurant to produce their wallets and to put them on the table. He specifically denied the suggestion that they had never been asked to do so and that they had never in fact produced any wallets at the restaurant. He said that he searched the wallet of applicant at the scene and that two phone cards found and that later at the Tsimshatsui Police Station he made a more detailed search of the applicant's person. He said that the keys which were found on the person of the applicant were later used to enter the premises at Wang Kong House - one of them opened the iron grill and the wooden door of the premises and in a small bedroom on the premises a wallet (Exh.B19) was found. In this wallet there were found four phone cards (Exhs.B31-B34) and eight sheets of paper (Exhs.B23-B30)on which names and numbers which appeared to be credit card information were written. There was also a Hong Kong driving licence in the applicant's name and a pawn ticket which bore the applicant's name and his identity card number. Also found in this small bed room in a drawer in a cabinet was a notebook with the applicant's right palm print on two pages; another notebook with his left palm print on one page and his right palm print on another and a foam box with the applicant's right palm print. There does not seem to be any real dispute that this was the box of a Magcard reader/writer which was found in the sitting room. Also found in the bedroom was a Watson's water bottle with the applicant's left thumb print thereon.

7. The trial judge in his findings describes what was found in the sitting room as follows:

"In the living-room a set of items were found: B1, a computer central processing unit; B2, a keyboard; B3, a monitor; and B4, a Magcard reader/writer Datatech model number DT303A. These four items were central to the Crown's cases and as far as the 3rd charge was concerned, it was pressed upon me by the Crown that B15, to which I have already referred, was found in the plastic bag in the room alleged to be the defendant's bedroom, and that the box to contain B4 had defendant's palm-print on it. From the living-room, B11 and B13 were seized,; these were respectively a phone card and a sheet of paper with a name and number written thereon, were located with a plastic cover, B6 'Datatech'. I observe in passing, there were other items found within this plastic cover. B13 to which I have referred, was found to contain the same credit card information as that encoded on A11 (phone card) which was found, according to PW2, in defendant's possession at the restaurant. B11, the phone card located within the plastic cover, was encoded with the same account information as that encoded on A9 (phone card) which was also found, according to PW2, in defendant's possession at the restaurant. It was also alleged that B8, a Datatech International Inc. test card was found inside B6 and this was encoded with the same account information as that written on B29, one of the sheets of paper to which I have already referred, found in the wallet B19 containing defendant's driving licence and pawn ticket."

8. As to expert evidence which was given the trial judge said:

"I have no better starting point in making findings on the experts' evidence than from following aspects of paragraph 3 of the Crown's written submissions, and I hold as follows:

(a) All phone cards/data test cards were encoded with genuine Mastercard/Visa card account information, and that some of the genuine Mastercards/Visa cards were still in possession of actual account holders.

(b) That such false cards could be used in public telephone booths and also at ETC terminals of collusive merchants to effect transactions on the Mastercard/Visa card accounts.

(c) Eight fraudulent charges were made to the account of Lee Lai-chin, holder of the genuine number which was subsequently encoded on A9 between 11/8/94 and 16/8/94 (Mastercard). I note these were from the valid account numbers stored by A9 and B11."

9. We turn next to the evidence of PW9 DPC 19896. He was asked what had happened prior to the arrest of the applicant and he said:

"A. We approached the table and we revealed our identity and told all the four occupants of the table to produce their wallets and their ID cards.

Q. Now, by the four occupants of the table, does that include the defendant?

A. Yes,he was included.

Q. Yes, go on.

A. They complied with our order. Inspector Tong instructed one of my colleagues to examine the wallets and the ID cards produced.

Q. Who was that colleague?

A. DPC 1544.

Q. Yes?

A. I was responsible for stand by the side of the defendant. DPC 1544 started checking, firstly, the wallet of the defendant. After he had checked the wallet of the defendant, he then also checked the wallets of the other occupants of the table. After checking all the wallets of the four people, Inspector Tong then instructed us to put the four people of the table under arrest. I arrested the defendant of this case and then I cautioned the defendant verbally for suspicion of his possession of a fake counterfeit credit card. The other three occupants of the table were arrested individually by three of my colleagues."

10. So much for the evidence of the witnesses called by the prosecution. The applicant himself did not give evidence. However two defence witnesses were called. The first was Mr. Tong Kim Wah who was the assistant manager of the Nan Fung Restaurant on the night in question. He said that he saw what occurred after the arrival of the police and he described it as being "a very quick search in a casual way", "a frisk". He said that he had seen no wallets produced and no wallet seized by the police.

11. The second defence witness was called in relation to the computer equipment found in the sitting room of the apartment. His evidence was that about a year previously he had sold that equipment to a Mr. Leung Mau-chi who was, as the police evidence revealed, in the apartment on the night when they arrived to conduct their search.

12. The judge made the following findings of fact which I set out in full as considerable criticism has been made of them. He said:

"Finding on Fact:

In considering the evidence of PW2 I make the following determinations:

(a) I believe that the numbering adopted resulted from human error as far as the locations of exhibits are concerned. I accept the witness's explanation during the course of cross-examination and re-examination.

(b) Such discrepancies as existed within prosecution witnesses, ie police officers, I believe to be no more than what one would expect due to lapse of time and different perceptions of what happened at relevant times.

I have considered carefully the evidence of DW1. He was unshaken in cross-examination and his evidence contradicts that of the principal Crown witnesses in this regard, PW1, PW2 and PW9. I accept that he may have believed he was telling the truth. I am conscious, in considering his evidence, his good demeanour and the fact that he was unshaken during cross-examination, of the comments of Lord Steyn in Barray v. Public Prosecutor of Brunei [1995] 4 All E.R. 300 at 311. This is a reminder of the proper approach in an instance such as this:

'It is important to bear in mind that, in deciding on guilt or otherwise, a trial court will not usually compartmentalise the evidence. It will make its finding of credibility and reliability in respect of particular witnesses against the possibilities, probabilities and certainties emerging from the whole body of evidence before it. In Attorney General of Hong Kong v. Wong Luk-ping [1987] 2 All E.R. 488 at 493, [1987] AC 501 at 510, Lord Bridge explained the intellectual process underlying such a decision:

"It is a commonplace of judicial experience that a witness who makes a poor impression in the witness box may be found, at the end of the day, when his evidence is considered in the light of all the other evidence bearing on the issue, to have been both truthful and accurate. Conversely, the evidence of a witness who at first seemed impressive and reliable may, at the end of the day, have to be rejected. Such experience suggests it is dangerous to assess the credibility of the evidence given by any witness in isolation from other evidence in the case which is capable of throwing light on its reliability ..."'

(c) I have come to the conclusion that the police officers were telling the truth and their evidence was accurate. DW1 may have been susceptible to suggestion. I do not accept his evidence where it was in conflict with that of the Crown witnesses. I do not believe that his evidence casts any doubt upon that of the Crown witnesses.

(d) DW2
I accept his evidence that he purchased the computer - B1, B2, B3 - and that he sold it to Leung Mau-chi who was an occupant of flat B8.

(e) Defendant
I believe that the evidence, particularly that of the fingerprints, overwhelmingly established that he was an occupant of the premises concerned and that the room at the top left-hand corner was his bedroom. In particular, there is (i) his possession of the keys to the premises, showing that he had access to the premises in general; (ii) there were fingerprints and palm-prints, including prints found on notebooks discovered within a drawer; and (iii) within that drawer there was a wallet which contained, inter alia, his driving licence and a pawn ticket.

Elements of the Charges:

Dealing first with the 1st and 2nd charges, section 75(1), Cap. 200. The elements are as stated by C.Y. Wong:

(a) possession - ie, under defendant's custody or under his control;

(b) a false instrument;

(c) which he knew or believed to be false;

(d) with intent that he ... would use it to induce somebody to accept it as genuine; and

(e) that person, by so accepting it, to do or not to do some act to his own or any other person's prejudice.

The 3rd charge, pursuant to section 76(1), the elements are:

(a) possession - ie, had in his custody or under his control;

(b) equipment (machine or implement ...);

(c) which to his knowledge;

(d) has been specifically designed/adapted for the making of any instrument;

(e) with the intention that he ... shall make a false instrument;

(f) by using it to induce somebody to accept it as genuine; and

(g) by reason of (that person) accepting it to do ... some act to his own or any other person's prejudice.

Possession - 1st and 2nd Charges

I hold that the Crown has established clearly that the defendant was in possession: (a) of the two credit cards A1 and B2; (b) in possession of the eight credit cards B8, B9, B11, B31, B32 and B34.

Possession of the computer equipment B1, B2 and B3 - 3rd Charge

The evidence establishes that Leung Mau-chi had purchased these and there was evidence that he was an occupant of flat B8. This does not exclude any question of joint possession or subsequent sole possession by defendant.

As to B4, the evidence which goes to establish defendant had possession, includes: (a) that it was found on premises to which defendant had access; (b) that the recorder had been in a phone[foam] box which was found within a plastic box inside defendant's bedroom and that this box bore his palm-print.

I believe that the defendant was an occupant of the flat, the room on the left top corner shown on the plan was his bedroom, and that it was clearly shown, by reason of his occupancy of the flat and, in particular, his connection to B4 - ie, his palm-print on the phone box, this being a container that he had custody or control of - that all the evidence points irresistibly to this and it matters not whether he was in sole custody or control - ie, sole possession or in joint possession.

I find that he (the applicant) was in possession of all four items, B1, B2, B3 and B4, and it is common ground that these items with the appropriate computer programme which was present in the computer when it was seized, were capable of producing the various credit cards concerned.

I particularly hold that the defence evidence failed to establish that Leung Mau-chi was in possession of B1 (containing the computer programme), B2, B3 and B4 to the exclusion of the defendant - i.e. sole possession by Leung Mau-chi.

The Cards and the Equipment

In relation to the false cards, the Crown relies on the fact that account information was written on B13 and B23 to 30, and that such information could only be obtained by illegal means. I believe that, in general terms, such is a correct proposition. In the instant case I have to determine what is the position which pertains on the facts.

The information was encoded on to the false cards, and I accept that there are compelling inferences that such cards would be used to effect fraudulent transactions on both Mastercard and Visa card accounts."

13. The judge then goes on to deal with each of the charges as follows:

"1st Charge

Defendant was in possession of A9 and A11 and I hold the evidence shows that the defendant must have known or believed A1 and A11 to be false and, further, that he had the intention to use them to induce somebody to accept them as genuine and that such would be to another's prejudice, ie, either the possessor of the genuine credit card or of the credit card company or those behind the credit card company, whether anyone be solely prejudiced or there be a joint prejudice.

2nd Charge

As far as the 2nd charge is concerned, I believe, likewise, all the elements as to intention have been made out in respect of B8, B9, B11, B31, B32, B33 and B34.

3rd Charge

I have already dealt with the question of the equipment being specifically adapted for the making of an instrument. I believe that he was in possession of the equipment (with programme) with the intention that these would be used to produce false instruments, and thereafter to induce somebody to accept same as genuine and by reason of so accepting it to do some act to his own prejudice.

I believe that all elements have been clearly made out on the evidence before me.

I have considered each charge separately."

14. The applicant is represented today by Mr. Mumford Q.C. with him Mr. Raymond Yu and Miss Annie Lai. Mr. Mumford's first ground is that the judge misdirected himself "in accepting the evidence of the police officers and in disbelieving the evidence of DW1 where it conflicted with that of the police officers and that on the first charge the conviction is unsafe in that the learned judge must have been influenced by his findings on the third charge as to which he misdirected himself. In any event, the evidence of DW1 must create at least a reasonable doubt as to the guilt of the applicant on the first charge which leads the doubts on the second and third charges."

15. As to Charge 1 there was a stark conflict, as can be seen from the passages which I have already read, between the evidence of the police officers and that of DW1. It can also be seen from what I have read that the trial judge was very clearly aware of this conflict and of the need to resolve it. He did so saying, as I have indicated:

"I have come to the conclusion that the police officers were telling the truth and their evidence was accurate. DW1 may have been susceptible to suggestion. I do not accept his evidence where it was in conflict with that of the Crown witnesses. I do not believe that his evidence casts any doubt upon that of the Crown witnesses."

16. Criticisms were made today and at trial of the evidence of the Crown witnesses. It is submitted that the police officers when they gave their evidence showed themselves to be, to a significant extent, unreliable. The trial judge was, however, fully aware of all of those matters and of his duty, having heard the evidence and seen the witnesses, to resolve them. This he did. Nothing has been said which would allow us to call those findings into question. We are satisfied that the judge gave careful consideration to the evidence before him and properly resolved the issues that it threw up. We reject without hesitation the submission that when so deciding the judge might somehow have been influenced by his findings on Charge 3.

17. We turn then to the second ground which submitted that the judge misdirected himself

"........ in holding that the applicant was a normal occupier of the premises in question. The evidence established at the most that the appellant had been present in the premises, and in particular did not establish that he had a bedroom or that, if he had a bedroom, any room was his bedroom. In the premise the judge erred in concluding that the appellant had possession of the items which were the subject of the second charge."

18. The finding that the applicant was the occupant of the premises and the further finding that the small room was his bedroom were, we are satisfied, quite unnecessary findings as regards Charge 2. The necessary findings were as to the wallet found in the bedroom. This was the evidence critical to be considered when dealing with the second charge.

19. As regards the items that were found in that wallet the judge was, upon the evidence, unarguably entitled to be satisfied that those items were in the control of the applicant. Was there evidence upon which the judge was similarly entitled to rely as regards the items found in the sitting room, B11, the credit card, and B8 and B9, the test cards? B11, found in the sitting room, was a phone card which was encoded with the same account information which was encoded upon A9 one of the phone cards found in the possession of the applicant at the time of his arrest. Exhibit B8, one of the test cards found in the living room, was encoded with the same account information as was found on B29 which was one of the eight sheets found in the applicant's wallet in the small bedroom. The information on those sheets was consistent with details which related to Mastercards and to Visa Cards and was described by the expert witness Mr. Sammy Ip as vital for the production of counterfeit credit cards. We have no hesitation in holding that there was ample evidence upon which the judge could properly act in coming to his conclusion as to guilt on the second charge and we do not consider that there is any real weight in the second ground argued before us today.

20. We turn then to the third ground argued and in particular to item (d) of that ground where it was urged that the judge erred in law in holding that the defence evidence failed to establish that Leung was in possession of B1 to the exclusion of the defendant. Mr. Mumford submitted that this was a reversal of the standard of proof.

21. The passage of which complaint is made we have already read but for the purpose of examining this ground we read again. The judge stated:

"I find that he (the applicant) was in possession of all four items, B1, B2, B3 and B4, and it is common ground that these items with the appropriate computer programme which was present in the computer when it was seized, were capable of producing the various credit cards concerned.

I particularly hold that the defence evidence failed to establish that Leung Mau-chi was in possession of B1 (containing the computer programme), B2, B3 and B4 to the exclusion of the defendant - i.e. sole possession by Leung Mau-chi."

This direction which the judge gave himself was clearly incorrect in law. There was no onus of any sort upon the defence to prove anything. The argument advanced today by Mr. Bruce, who appears for the Crown, is that we can regard the second paragraph of the above passage as inessential surplusage as the judge had already in the preceding passage come to a conclusion, which Mr. Bruce submits was a correct one based upon the evidence, that the four items were in the possession of the applicant. We find ourselves unable to accept this proposition. The two passages are integrally linked and, given the judge's clearly incorrect direction of law, we must hold that the argument advanced by Mr. Mumford must succeed. The conviction on the third count is unsafe and unsatisfactory.

22. In the outcome we allow the application and the appeal to the extent that the conviction on the third count is quashed.

Sentence

23. The facts, canvassed extensively in the judgment just delivered, satisfy us that the applicant was deeply involved in a substantial credit card fraud. He was in a very different position from that of a person who possesses a single false credit card. On each of the two offences on which he remains convicted, he was sentenced to two years and the sentences were ordered to be concurrent. He was, however, also sentenced to 4½ years on the now quashed third charge. The trial judge, being satisfied that a totality of 4½ years was proper, sought to effect this by making all of the sentences concurrent. It falls to us to look anew at totality given that convictions now stand on only two counts. As we have said the facts reveal deep involvement in substantial credit card fraud. We are satisfied that, even when his clear record is taken into account, the sentences must be varied to ones of three years upon each count but should, as originally ordered, be concurrent. The sentences are, therefore, ordered to be varied accordingly.