HKSAR v. YEUNG CHUNG MING

HCMA237/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO.237 OF 2004

(ON APPEAL FROM NKCC7346 OF 2003)

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J U D G M E N T

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1. Before this appeal commenced, the appellant requested an adjournment.  That application had also been in writing by a letter from him dated 23 February 2005.  It was his fourth application for an adjournment. 

2. On 29 June 2004, he was granted an adjournment because he had just been refused legal aid and he was not ready for the hearing.  On 28 July 2004, he was granted an adjournment because again, he was not ready and he had applied to the Bar Association for pro bono representation.  On 12 January 2005, he was granted an adjournment to visit relatives in the Mainland.  After that adjournment the present hearing date of 3 March was fixed.  

3. On 23 February, he wrote to the court stating that he had recently applied for legal aid for a judicial review of his employer’s decision (he being a police officer) to suspend his salary because of the conviction against which he now appeals and his bankruptcy, pending disciplinary proceedings.

4. His salary has been suspended from February 2004, but the judicial review proceedings have only been contemplated very recently.  

5. The appellant’s point was that if he got legal aid for the judicial review proceedings and if he was successful in the judicial review, he would be able to afford a lawyer.

6. I refused the application for an adjournment.  The judicial review procedure could take another year or more.  These offences were committed in 2000 and 2001.  The case was heard in the magistracy over a year ago.  This was his fourth application for an adjournment and the first one on this particular ground.  I adjourned the hearing for a little over one hour so that the court interpreter could interpret to the appellant the respondent’s very brief written submission to him.

The appeal

7. The appellant was convicted of two charges of fraud on 27 January 2004 following a two-day trial before a magistrate, Mr Henry Mierczak, sitting in North Kowloon Magistracy.

8. The prosecution case was simple.  The appellant had applied for and been granted two loans, one on 17 October 2000 for $62,000 from GE Capital (Hong Kong) Limited (“GE”) and one on 1 August 2001 for $160,000 from South China Financial Credits Company Limited (“SCFC”).

9. At the time of the first loan he declared that he had three other loans when in fact he had 10.  The total monthly repayments for the undisclosed loans exceeded his monthly salary by approximately $5,000.

10. At the time of the second loan, he failed to disclose over 20 loans that he had at the material time.  The total monthly repayments of those loans were about $30,000 in excess of his monthly salary. 

11. The prosecution had to prove that he had the undisclosed debts at the material time, that he knew he had them, that the application would not have been granted had the loans been disclosed, that the appellant intended to deceive the finance companies and that the finance companies were prejudiced by granting loans which they would not have done had they known of the undisclosed loans.  The prejudice being the risk that the loans would not be repaid.

12. The outcome of the case depended on findings of fact being made.  It is apparent from his comprehensive Statement of Findings that the learned magistrate, having heard and considered all the evidence made the following crucial findings :

i)	The appellant disclosed only three loans to PW1, a staff member of GE.
ii)	It was GE’s company policy not to grant a loan if the applicant’s expenditure exceeded 60% of his income.
iii)	The appellant signed the application form and also signed the declaration stating that the information provided was true and correct.
iv)	The appellant was required to disclose all his outstanding loans and he was told so.
v)	PW2 was a senior staff member of GE who approved the loan having satisfied himself that the application was in order and complied with the company’s requirements as to the appellant’s financial status.
vi)	PW3 and PW4 were similar staff members of SCFC and gave similar evidence in relation to the 2nd charge.
vii)	In particular, PW3 asked the appellant if he had any other loans apart from the two disclosed loans and he answered “None”.
viii)	Both company witnesses confirmed that the applications would have been turned down had the appellant made full and proper disclosure of his other loans.
ix)	Both company witnesses said the loans were in fact approved on the basis of insufficient and untruthful information having been supplied.
x)	The 10 undisclosed loans on the 1st charge and 21 undisclosed loans on the 2nd charge and their monthly repayments were admitted facts.  The total repayments of the undisclosed loans in the 1st charge came to approximately $32,000.  The total repayments of the undisclosed loans on the 2nd charge came to approximately $58,000.  The appellant’s monthly salary at the time was approximately $28,000.
xi)	The appellant’s evidence was substantially rejected by the learned magistrate.  In particular the following matters were rejected :
	(a)	that he never dealt personally with PW1 at all;
	(b)	that he was never asked to list all his debts for either charge;
	(c)	that the forms were not explained to him;
	(d)	that he did not personally fill out the SCFC form, someone else did it for him;
	(e)	that he told a Mr Kwok at the Mong Kok office of SCFC about his loans and that Mr Kwok had nonetheless said his application would be ‘Okay’; and
	(f)	that he was unaware of the true extent of his indebtedness at the time of his applications.

13. The learned magistrate concluded that the appellant was an unimpressive and untruthful witness.  The effect of his findings were, in essence, that the appellant’s contact with reality was as tenuous when he gave his evidence as when he applied for his loans.  At one stage the learned magistrate referred to part of the defence case as being “in the realm of fantasy”.  It seems to me that his choice of phraseology was neither surprising nor wrong.

14. The learned magistrate found all the four prosecution witnesses to be honest and reliable.  He was satisfied that the company procedures for lending money were proper procedures, properly applied to this applicant which resulted in the loans being granted on written applications which were deficient.  The deficiency had resulted from the appellant’s failure to disclose his known debts which the appellant knew would have resulted in the loan applications being rejected had the disclosures been made.

15. On appeal, the appellant has advanced seven grounds of appeal, contained in a lengthy and detailed document containing 112 paragraphs.

16. His grounds were :

(1)	the investigating officers had not made any enquiries into the reputation of the finance companies involved;
(2)	the magistrate failed to take into account the interests of prosecution witnesses involved in the case;
(3)	the magistrate failed to fully consider an important loophole in a prosecution exhibit;
(4)	the magistrate did not fully consider the meaning of the word “declarations” in the prosecution exhibits;
(5)	the magistrate did not consider the implication of the finance companies’ high interest rates;
(6)	the investigating officers did not investigate in what manner SCFC actually operated; and
(7)	the magistrate did not consider sufficiently the importance of DW2’s evidence.

17. I was not persuaded that there was any merit in any of the grounds of appeal.

18. Grounds 1 and 6 were complaints against the police, that they had not made a sufficient or any investigation into unspecified “reputations” of the finance companies.

19. Grounds 2, 3 and 4 were complaints that the magistrate did not consider certain aspects of the evidence which, if he had, may have caused him to come to a different conclusion about the honesty and reliability of the prosecution witnesses.

20. Ground 2 refers particularly to the suggestion put to the prosecution witnesses that their year-end bonus depended on the number of loans which were approved and, therefore, they may have been untruthful when they said the applications were dealt with properly and in accordance with company procedure.

21. At trial, PW1 pointed out that the annual bonus was affected by the number of bad loans as well as the number of approved loans.  The learned magistrate had heard all the evidence and he stated that he had considered all of the evidence.  He does not have to repeat each and every item of evidence in his Statement of Findings.

22. As for Ground 3, no “loophole”, surprising or otherwise, in the application forms was established by either the evidence or in argument. 

23. The purpose of the forms was for the appellant to provide full details of his financial position so the company could properly decide if the loan could be made according to the company’s own policies and regulations.

24. Ground 4 is of no substance.  The “declaration” at the foot of each form is clear and unambiguous.  It required no separate consideration by the learned magistrate.  The proven facts demonstrated clearly and simply that the appellant was in breach of its terms.

25. Ground 5 raises an irrelevant issue namely the companies’ interest rates.  The submission seems to be that because the appellant was applying to a finance company and not a bank, the finance company must have realized that the appellant had many other loans and not just those that he disclosed and further, so the submission goes, the financial companies did not care about any other loans and did not ask about any other loans.

26. The submission is wholly without merit.

27. Finally, in Ground 7, the appellant complains that DW2’s evidence was not fully considered.  DW2 had given evidence that he had got a loan from GE in August 2001 and had experienced lax procedures when doing so.

28. The learned magistrate rightly said that DW2’s evidence “did not advance the case too far”.  It related to a separate application unrelated to this appellant’s loan, at a different time and the prosecution had no opportunity to investigate its truth.

29. At the conclusion at his Statement of Findings, the learned magistrate concisely summarized both the crux of the case and his findings in the following terms :

“	… the irresistible inferences from the whole of the evidence is that it was a deliberate omission and practice of deceit which he knew full well would operate on the minds of those approving the loans.  They were deceived.
	I considered the only income available to the appellant was that set out in the application forms and he was clearly obliged to pay, in respect of all outstanding debts, a greater sum of money than he was earning each month, especially in respect to the second charge, even taking the wife’s income into account, which is not fixed.  The irresistible inference is that the deceit was deliberate.  He clearly aimed to put into the companies’ mind that he was in fact in a better financial position than really existed.
	There was clearly little prospect that he would be able to repay the whole of the loan, and a substantial risk of prejudice to each of the companies existed at the time of making such application.  It is true that some repayments were made on the loans.  But an overall view of his financial position from the taking out of the first loan showed that he would never have been able to repay in full either of the two loans he applied for.
	It was not a case of the two companies turning a blind eye to the appellant’s situation, or that they did not care much about his having a debt status, or matters like that.  They did care, and that is why the information is required on the application form before the loan is approved.
	The irresistible inference from the whole of evidence here is that, by the false representations, the appellant deceived the relevant Pw’s of the two companies and, by that false representation, which did operate on their minds at the time, the appellant induced them to lend him the sum as set out in the charges.  And, clearly, this resulted in prejudice or substantial risk of prejudice to the companies.”

30. In my judgment, this appeal had no realistic prospect of success.  The appellant had a fair trial, he was rightly convicted and the learned magistrate’s written reasons deal fully with all the important issues of fact and law.  The appeal is dismissed.