Raymond Lau Gai-cheung v. The Queen
Read the full judgment text of CACC 140/1980 on BabelCite. This Court of Appeal judgment was delivered on 20 May 1980.
1. The appellant was convicted on two charges: one of theft and one of uttering a forged document and was given concurrent sentences of six months on each charge, suspended for eighteen months. He now appeals against these convictions.
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CACC000140/1980 [Theft and uttering charges - witness for Crown presented as witness to truth gives evidence amounting to innocent explanation of conduct of defendant - conviction based on theory of dishonest collusion between witness and defendant which had not been suggested by prosecution.]
Coram: McMullin, Acting C.J., Li, J.A. and O'Connor, J. Date of Judgment: 20 May 1980 ----------------- JUDGMENT ----------------- McMullin, Acting C.J. : 1. The appellant was convicted on two charges: one of theft and one of uttering a forged document and was given concurrent sentences of six months on each charge, suspended for eighteen months. He now appeals against these convictions. 2. Life Garment Factory Ltd. was a family company manufacturing various kinds of clothing. It was taken over by Murjani Industries Ltd. on 10th December 1972. The properties taken over included various textile quotas. Textile quotas are required for the export of various garments to the U.S. and other countries. They are issued by the Trade, Industry and Customs Department and they are divided into various categories. They are valuable property in their own right and they may be bought and sold by manufacturers and exporters either directly from each other or through brokers who operate in this market. It is important for the holder of any such quota to utilize it fully in any given quota year as under-utilization below 95% may result in reduction of quota in the next year and below 50% in losing the quota altogether. 3. After the take-over the defendant, his father and brother were employed by Murjani Industries to run Life Garment Factory Ltd. Among his duties the defendant was put in charge of quota certificates and he was supposed to report all sales or other dealings with quotas to Mr. B.K. Murjani, the Chairman of Murjani Holdings and to get his approval for such quota deals. 4. Life Garment Factory Ltd. did not prosper and B.K. Murjani put in another employee in February 1975 to check upon the running of the business. The latter instituted a system of weekly reports. These set out the quota situation in detail and was sent for the scrutiny of B.K. Murjani and other directors of Murjani Holdings. They were prepared from information supplied by the defendant. Life Garment Factory Ltd. eventually ceased trading in February 1977. 5. Thereafter investigation by Mr. N.V. Hegde, an employee of Murjani Holdings, into the affairs of Life Garment Factory Ltd. brought to light the fact that in the quota year 1976/77 the Trade, Industry and Customs Department had allocated a quota for 3,214 doz. garments in Category 43/62 (2) relating to certain cotton goods. The evidence of B.K. Murjani was that this was the first he had heard of any dealing in quotas of that category. It is common ground that there had been allocations of the same category in the years 1974/75 and 1975/76 as well. None of these had been reported to B.K. Murjani either in the weekly reports or in monthly schedules covering the business of Life Garment Factory generally, but there was no evidence to suggest that the quotas for 1974/75 or 1975/76 had not been fully utilized for Life Garment Factory Holdings in those years. 6. In December 1976 not long before Life Garment Factory ceased trading the defendant gave two quota allocation certificates to Mr. Hegde. These related to quota year 1976/77. They were said by defendant to be the very copies he had received from Trade, Industry and Customs Department. They contain no mention of any 43 Category quotas. The originals were obtained from the Trade, Industry and Customs some time after February 1977. The department's copy of one of these shows an allocation of 3,214 doz. in Category 43 which does not appear in the copy given to Hegde by defendant. All save one of the remaining entries in that page of the original are the same but the clerk who prepared the document at the Trade, Industry and Customs Department was called to say that those entries in the altered copy were not in his handwriting. The defendant's copy of another such certificate had been similarly altered and another clerk from Trade, Industry and Customs gave evidence to the same effect. 7. No doubt it was this suspicious circumstance which led to the investigation which followed. It was however not until December 1979 that the defendant was charged with the present two offences. The prosecution by then had had for some considerable time evidence that a part of the quota for 3,214 doz. Category 43 had been transferred to a company called Saladin. This is the lot of 1984 doz. shirts and blouses referred to in the first charge and which is said to have been the unutilized part of the quota the whole of which had been purchased by Saladin for $109,000 in cash. It was the prosecution case that this portion of the quota was converted by defendant to his own use thereby defrauding the company. 8. This evidence was from two sources. Firstly, there were the records of the Trade, Industry and Customs Department with which department all such transfers must be registered. Secondly, the police had as early as April 1978 taken a statement from a man called WU Kai-fat, a broker in the quota market, who gave an account of this transaction. It is, however, that account and the manner in which it came before the court and was there dealt with which gives rise to the main ground of appeal in this case. 9. It is conceded by the prosecution that from the very outset Wu's story has remained unchanged. It is unnecessary to enter into it in any great detail. What it amounts to is that in 1976 the defendant through Wu, had taken on temporary transfer for the Life Garment Factory Ltd. a quota of 3,307 doz. garments of another category - Category 45 (also dealing with cotton goods) - from a company called Bud Burma on the understanding that it would be fully utilized. Wu entered into a form of guarantee in favour of Bud Burma to ensure this and the defendant entered into a similar guarantee to cover Wu. The quota was less than 50% utilized by Life Garment Factory Ltd. and thus Bud Burma stood to lose its quota. This would have made Wu liable in a very large sum to Bud Burma under his guarantee. Wu called on defendant to pay up under his corresponding guarantee but Life Garment Factory had insufficient cash resources and so it was agreed that Wu would be allowed to make a permanent transfer of quota 43 instead and to keep the proceeds. He did dispose of it and the agreed price, paid to him by Saladin, was $109,276. Because it was close to the end of the quota year the unutilized portion of Category 45 was of little value and might have been undisposable but in fact Wu managed to dispose of it to a firm called Yip Ying for nothing thus saving Bud Burma's quota. Wu said that the defendant got nothing out of all this for himself and that in the circumstances it was the best he could have done in the interests of Life Garment Factory Ltd. He also said that he had never told defendant that he had managed to dispose of the Category 45 quota to Yip Ying. If this story be accepted as the truth, clearly it would negative any suggestion of dishonesty on the defendant's part so far as the alleged theft of the quota is concerned. 10. Though this was the essential burden of Wu's explanation he was represented as a witness for the prosecution before the trial commenced and the summary of evidence given to the defence made this clear. His position, so far as the defence was concerned, was effectively that of a witness named on the back of an indictment. 11. The trial commenced and three witnesses were called for the Crown, Murjani, Hegde and Ahmed and then counsel for the Crown informed the court that the witness Wu would not be called for the prosecution. This was immediately made the subject of a strong protest by Mr. Mathew for the defence. What happened thereafter is very important in relation to the principal ground of appeal. Counsel for the Crown made it clear that the only reason for not calling him was that the prosecution were satified with the evidence already adduced and that the witness Wu could not add anything to it, and further that Wu was not expected to say anything which was inconsistent with what the other witnesses had said. It was never said at any time that Wu's evidence was regarded by the prosecution as being to any extent suspect or unworthy of belief. He was not tendered for cross-examination but at this very late stage he was offered to the defence - his two previous statements to the police having been made available to the defence very shortly before these exchanges in court. 12. The trial judge adjourned briefly to consider the matter. He was clearly troubled by the line taken by the prosecution and on his return to court he stated that he thought the witness should be called by the prosecution, adding - according to the note of counsel which has not been disputed - words to the effect that the sooner he was called the better since if he gave evidence in accordance with his statement it might shorten the proceedings. 13. Wu was then called, examined by counsel for the Crown and cross-examined by Mr. Mathew. His evidence was to the effect set out above. 14. The general result of this procedure was therefore that the witness was presented to the court as a witness to the truth. There followed a submission of no case which was overruled and the defendant did not give evidence. 15. The judge found that the defendant had stolen the quota. He rejected the evidence of Wu insofar as it amounted to an innocent explanation. He evidently did so on the basis that there had been a dishonest collusion between Wu and the defendant to defraud the company of resources which rightfully belonged to it. But even in his brief closing address counsel for the Crown had never made that case. To the end Wu was proffered as a witness unimpugned. 16. Mr. Hagon puts it that the matter is simply one of credibility and that a judge may like a jury accept a witness' evidence in part and reject what seems to be unreliable. That is undoubtedly so. But here the judge was in effect constructing out of inferences from the evidence a case which the prosecution had not seen fit to put forward and was using that to discredit a witness who had never been challenged to affirm or deny the suspicion which the judge entertained in his regard. Moreover because of the course which the trial took the defence may well have been misled into believing, even after the ruling of no case, that Wu was not likely to be disbelieved and may thus have been deprived of an opportunity of calling evidence. 17. What occurred is not dissimilar to the circumstances considered by the Court of Appeal in England in R. v. Halvorsen a short report of which may be found in the Law Society's Weekly Gazette for 28th of February, 1979. 18. The Crown relied upon a confession in which a wife accused herself and her husband of murdering three women. The husband gave evidence for the prosecution which included a denial of any participation by him in the killings. The trial judge invited the jury to consider the evidence on three alternative bases one of which was that the confession was true in part and might be relied on as an admission by the wife to killing the women without her husband's assistance. Allowing the appeal, Brown, J. said -
19. One must sympathize with the approach of the judge in this case who was confronted with evidence which, on its own and apart from the testimony of Wu, was arguably enough to support the convictions. 20. No doubt the evidence as to uttering the forged quota certificates must have powerfully affected the judge's mind, for that evidence if accepted, strongly suggests that the defendant, in giving Mr. Hegde a certificate from which was absent the reference to quota 43 which appears in the original, must have known that it had been altered. 21. Mr. Mathew listed a number of points telling against the involvement of his client with any such forgery. It is unnecessary to consider these and unnecessary also to consider the points of detail made by counsel against any implication of dishonesty deriving from the non-disclosure of dealings with quota 43 in any of the three years. We cannot say that these points are without any substance, but on their own and apart from the major ground which has been dealt with already, they would not have compelled us to interfere. 22. There was, of course, much to arouse suspicion in the behaviour of the defendant both in failing to make disclosure of any dealing in Category 43, and in handling the altered documents. It may be that the inference drawn by the judge on the theft charge is a reasonable inference but in the circumstances running counter, as it does, to the way in which the evidence of Wu was presented it is too speculative to be regarded as safe and satisfactory. 23. With that charge must go the uttering charge as well. It is true that the evidence on that is simple and straightforward and if the Crown's case on it had been that the intent to defraud was something other than the intent by that means to conceal the theft - as for example an intent to deceive Mr. Murjani so that he was deprived of the opportunity of making his own arrangements for the disposal of Category 43 quotas - then it may be that the conviction could stand. It was, however, made clear from the outset that the intent on the second charge was directly linked to the first charge and was said to be part of the means used to conceal the theft of the quota. Thus at the beginning of the trial Mr. Mathew, immediately after the defendant had pleaded to this charge, asked the prosecution what was the intent to defraud on which they relied. The note of what was then said by counsel for the Crown reads as follows -
24. For these reasons the appeal will be allowed and the convictions and sentences set aside. Representation: John Mathew, Q.C. & Eddie Soh (Peter Mo & Co.) for appellant. Hagon for Crown/respondent. |