HKSAR v. Cheung Wai Chuen
Read the full judgment text of HCMA 300/2018 on BabelCite. This High Court CFI judgment was delivered on 15 October 2018.
1. The appellant was the second defendant in the original trial. He and the first defendant were charged with one count of having the custody or control of counterfeit notes [1] and both of them pleaded not guilty. The magistrate [2] convicted them after trial. The appellant was at first alleged to have possessed counterfeit banknotes, some of which looked like Hong Kong currency and some of which looked like foreign currency. The appellant’s conviction concerned only the counterfeits that looke
Cited by 2 cases · Cites 3 cases
|
[English Translation — 英譯本] HCMA 300/2018 [2018] HKCFI 2333 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MAGISTRACY APPEAL NO 300 OF 2018 (ON APPEAL FROM ESCC NO 2211 OF 2017) ___________________
___________________ Before: Hon Wong J in Court Hearing date: 26 September 2018 Date of Judgment: 15 October 2018 JUDGMENT 1.The appellant was the second defendant in the original trial. He and the first defendant were charged with one count of having the custody or control of counterfeit notes[1] and both of them pleaded not guilty. The magistrate[2] convicted them after trial. The appellant was at first alleged to have possessed counterfeit banknotes, some of which looked like Hong Kong currency and some of which looked like foreign currency. The appellant’s conviction concerned only the counterfeits that looked like Hong Kong currency notes (exhibit P7) since the magistrate found the prosecution failed to prove their allegation in relation to the counterfeit foreign currency. 2.The appellant appealed against his conviction. Prosecution Case 3.On 2 November 2016, inside a private car belonging to D1, police officers found a box containing “prop banknotes” (exhibit P2-P5) which bore the word “prop”. These “prop banknotes” came from the appellant’s company. 4.Police officers conducted a search at the appellant’s company the following day. A total of 21 boxes containing “prop banknotes” bearing the word “prop” were found at his company (exhibit P6-P17). Under caution, the appellant said, “I work as a propman. My company uses the money in filmmaking.” 5.The counterfeit notes expert of the prosecution performed physical and microscopic examinations on all the “prop banknotes” seized in this case. He considered all of them to be fake notes. Defence Case 6.The appellant elected to give evidence at the trial. He also called 3 defence witnesses. 7.The evidence of the appellant can be summarized as follows[3]. He owned a production company and worked as a props master. When he had business, he would oversee the props needed for film production with the assistance of a casual worker who had been his long-time collaborator. Except the office area, the space of his company had been used by other film production companies as a props warehouse. As far as the film industry was concerned, staff of the production department would make an application for permission to film if that was so required. What he said was, none of the staff of the production department or the props department, or even the director, was aware that an application had to be made to the Monetary Authority to print “prop banknotes” for filmmaking. Neither were they aware that it was illegal to possess such “prop banknotes”. 8.The “prop banknotes” seized in this case were connected with a movie “Wild City” filmed in 2014. His assistant was the one who dealt with the props. The assistant was not required to report to him how the props were dealt with. It was possible that the assistant had forgotten to deal with the props after they had been placed there for a long time. He was not aware that there were 21 boxes of “prop banknotes” in his company, let alone seen the “prop banknotes”. The findings of fact of the magistrate 9.The magistrate made the following findings of fact:
Grounds of appeal 10.The appellant was represented by Mr Eric Kwok, SC, and Miss Kitty Tsang in the appeal. The grounds of appeal advanced on behalf of the appellant were as follows:
Discussions and Considerations Ground of appeal (1) 11.Mr Kwok submitted that the magistrate could not rely on the identical printing to find that the “prop banknotes” were “fake notes” as defined in the Ordinance. Particularly, without examining the exhibits, the magistrate would not know the colour or the colour tone of each “prop banknote”; furthermore, there was no evidence or admitted facts to establish that all the “prop banknotes” of the same type were identical. While there was a witness saying that some of the exhibits “seemed to have some colour bleeding”, a finding without an examination was unsafe. 12.There is not much point in raising this ground of appeal criticising the magistrate’s failure to examine. Even if the magistrate had made an error, this is not a ground that can justify allowing the appeal since a magistracy appeal is by way of “rehearing”. I can do the examination myself and make a finding if necessary. 13.According to the information provided by the parties during the appeal hearing, it seems the magistrate had viewed very few exhibits. For the $1,000 “prop banknotes”, she had perhaps viewed only two of them, which were samples from P2 instead of P7, on which the appellant’s conviction was based. 14.Mr Michael Wong SADPP[4], for the respondent, contended that there was sufficient evidence to justify finding the “prop banknotes” were fake notes without examining the exhibits. The expert evidence, which was not in dispute, in general was that the expert had examined each “prop banknote” and he was even able to tell that the “prop banknotes”, i.e. articles numbered [4], had the same serial number. Therefore, the magistrate was entitled to accord absolute weight to his evidence and make her finding. 15.Relying on Hocking v Ahlquist Brothers, Limited[5], Mr Wong contended that the magistrate was not required to examine the exhibits personally before making a finding the “prop banknotes” were counterfeit. The case was about whether some clothing manufactured during war time did not comply with certain standards. The court[6] ruled that even though the clothing concerned had not been produced, the magistrate could hear evidence of the witness who had inspected the clothing to determine if it was possible to make a finding that the clothing did not comply with standards. 16.It is difficult to state generally whether the court has to examine the exhibits before making a finding. It all depends on what finding the court has to make and is fact-sensitive. 17.Insofar as this case was concerned, what the magistrate needed to find was whether those “prop banknotes” were counterfeit currency notes. 18.The meaning of a counterfeit of a currency (“fake notes”) is found in section 97(1) of the Crimes Ordinance[7]:
19.The prosecution produced two witness statements made by the expert under section 65B of the Criminal Procedure Ordinance[9] at the trial. The defence did not cross-examine this witness. 20.The evidence of the expert witness is essentially the following. He categorised the “prop banknotes” he had inspected, exhibits P2 and P7 were put in the same category as articles No. [4], since each one of them was a HSBC note bearing the serial number CF6452333. He physically examined the 11,526 pieces of $1,000 banknotes in question, i.e. articles No. [4], and performed microscopic examination of them. All of the exhibits, which were the subject matter of Charge 2, were “prop banknotes” in the denomination of $1,000 and printed with the word “prop”. After careful examination and comparison, the witness formed the view that articles No. [4] were counterfeit notes, for all these “prop banknotes” did not have any watermark, the windowed metallic threads were printed instead of incised into the paper surface, and the graphics were printed with offset lithography without using any raised printing technique. He considered the quality of counterfeiting of the “prop banknotes” to be just fair. 21.What the magistrate found, that the expert had examined each of the exhibits, was a reasonable understanding of the witness report[10], which was admitted unchallenged. The witness was not challenged in this regard at the trial either. 22.As the expert witness had categorized exhibits P2 and P7 into article No. [4], the effect of the magistrate viewing samples of exhibit P2 was no different from viewing that of P7. 23.In her Statement of Findings, the magistrate stated:
24.The witness expert had stated the differences between the exhibits and the real notes in his witness statements. If the magistrate accepted his expert opinion, which was not challenged, then she was fully entitled to find that the exhibit was “not a currency note”. The appellant did not have any objection to that ruling. 25.What the appellant challenged was that it was unsafe for the magistrate to find that exhibit P7 was “a counterfeit of currency notes” without personally examining it. 26.The expert set out in his witness statement the differences between the exhibits and real notes, but he did not state specifically their similarities and/or express his observation or comment as to the extent of their resemblance. What he did say was “the quality of counterfeiting was just fair”. 27.At this stage, what the magistrate had to determine was whether such “prop banknotes” “resemble a currency note” and whether that was “to such an extent that it is reasonably capable of passing for a currency note … of that description”. The expert evidence in this respect was not particularly helpful to the magistrate since the expert was focusing on the differences between the exhibits and real notes. 28.I cannot speculate on how helpful it would be if the expert witness were to provide further observations and comments, but given the present evidence, I agree that the magistrate should have examined the exhibits herself before finding the exhibits were counterfeit currency notes under the law. 29.But as I said, the magistracy appeal is by way of “rehearing”, I am entitled to examine the exhibits and make my findings. The appellant could not put forward any reason that the court could not or should not do so. 30.The judgment in this regard is connected with ground of appeal (2). I will deal with it later. 31.Whether the court is required to examine the physical exhibits is a fact-sensitive question. It also depends on the issues in dispute and the possibility of dispensing with the examination or narrowing down the scope of the examination if the evidence already produced can achieve the same result. In many cases, the examination is either unnecessary or examining just a representative sample will do. 32.In any event, this ground of appeal alone has no chance of success at all on appeal. Ground of appeal (2) 33.The finding of the magistrate was that the “prop banknotes” in question were a counterfeit of a currency. 34.The Appellant complains that:
35.I have dealt with the criticism that the magistrate did not inspect each of the exhibits when I dealt with ground of appeal (1). I shall not repeat myself here. 36.The parties held different views and put forward their arguments over the need to inspect the exhibits at the hearing. I indicated that I needed time to consider if it had to be done. The Appellant indicated they also needed time to conduct an inspection. I therefore directed the parties to file written submissions on the question of whether the exhibits were counterfeit within a prescribed time frame. I also directed that a hearing would be held on 12 October 2018 if the court needed further assistance in reaching the judgment in this regard. 37.I gave further consideration after the hearing. Having taken into account the Appellant’s challenge to the magistrate’s finding that the “prop banknotes” were fake notes, and the magistracy appeal is by way of rehearing, it is my duty to inspect the exhibits to ensure that the finding of the magistrate is a correct one. As McWalters J[11] said in HKSAR v Ip Chin Kei[12]:
38.Therefore, I gave my written directions to the Respondent to submit the relevant exhibits to this court for examination after the parties filed their written submissions. 39.This had nothing to do with ground of appeal (1). This only concerned whether the finding that the “prop banknotes” were counterfeit was correct or not. 40.The meaning of a counterfeit of a currency note is stated in paragraph 18 above. 41.The issue of counterfeit is dependent upon the likeness of the “prop banknotes” to real notes and if they could pass for currency notes. This is mainly determined by their appearance; other factors include the material used to produce the fake notes as well as their feel. 42.The magistrate stated that she had paid attention to the colour, the font and the feel of the paper. The appellant criticised the magistrate for ignoring the differences between prop notes and real notes stated by the expert, for example there were no dynamic colour-changing patterns, no watermark and colour-changing windowed metallic threads etc. 43.The magistrate had set out her observations[13], which are in paragraph 23 above. 44.The duty of the magistrate was to make a finding in accordance with the criteria set out in section 97(1). What the Appellant put forward were factors for consideration, but the ultimate indicators are the provisions in section 97(1). What the magistrate stated are all matters that a fact-finder could, and should, take into account. 45.Given the reasons set out in paragraph 37 above, I considered that, in this case, the exhibits had to be examined before making a finding and I have done so. 46.The Appellant submitted that no real note had been produced at the trial, the only thing available for reference was a photocopy of a real note attached to the statement of the expert witness, thus constraining the court’s inspection. 47.Whether a fact-finder needs to use a currency note as a reference when he forms his own judgment on this issue is a fact-sensitive question, too. In this case, the notes concerned are HK$1,000 banknotes. The vast majority of people have some knowledge about them. What a fact-finder has to determine is whether the exhibits resemble “a currency note to such an extent that it is reasonably capable of passing for a currency note … of that description”, which will be done through an overall observation of the articles instead of a careful study of the differences. The standard is being “reasonably capable of passing for a currency note of that description”, which is a HK$1,000 banknote. It is well known that from time to time the banknotes in Hong Kong have a new design, the public will not have a firm impression of each of their styles. Whether an exhibit is a counterfeit of a currency note or not depends on whether it bears a resemblance to an extent as described by the legislation. Very often if the currency involved is $10 or $100, the fact-finder can make his determination without any real notes for comparison. The case for HK$1,000 is not really different. Besides, the prosecution had provided a photocopy of a real note to assist the fact-finder in reaching a decision. 48.The supplemental submission made by the Appellant highlights the following points:
49.Some of the exhibits were printed with the word “props” in Chinese and some with “PROPS”, but they were relatively small and inconspicuous. On one side, such words were so unnoticeable that one would not be able to notice them without looking closely since they were printed somewhere near the signature of the chief executive officer. 50.I paid particular attention to the colour difference Mr Kwok highlighted. 51.I have examined all the “prop banknotes”. Each one of them has the same design. On one side of the note there was mainly the HSBC Main Building and a bronze lion, with a lion’s head printed on the top right corner, the reverse side mainly bears the image of a dragon boat. Many of the exhibits have a stronger reddish tone while a few of them have a yellowish tone, which look like old banknotes. A small number of them has a tiny white border and the proportion is not significant at all. As the expert had pointed out, raised printing technique was not used and there was no watermark. Although printed with a windowed thread, it is not shimmering. A small number of them has something on the surface: it is hard to tell whether they are stains or printing defects. On the other hand, the general design, the graphics, and words of the prop notes are very similar to real notes. In general, I agree with the magistrate’s observation[14]. 52.A pernickety approach is undesirable when judging whether the “prop banknotes” are counterfeit notes. The only criteria are the conditions stipulated in the law. Having inspected each “prop banknote”, I consider that almost all of them satisfy the criteria and they should be confirmed to be counterfeit currency notes. Although not all of them can pass for real notes, most of them fall within the standard set forth in the law. The finding that the “prop banknotes” were counterfeit currency notes was well supported by evidence. The ground of appeal against such finding has no reasonable prospect of success at all. 53.The way defence counsel and counsel conducting the appeal handled this issue was unsatisfactory. While the prosecution has the burden of proof and it is open to the defence to put the prosecution to strict proof, both the prosecution and the defence have an obligation to assist the court within reasonable bounds. It is rarely necessary to require the court to inspect all the exhibits. In this case, with reasonable diligence, the exhibits could have been divided into different categories and the attention of the court could have been drawn to the relevant areas. As the case has come to the appeal stage, it is the appellant’s obligation to review the exhibits and make a proper assessment to decide if they are going to raise this issue. If the answer is yes, what they should do is, with reasonable diligence, to assist the court in reaching a decision in the most effective way. What happened here has imposed a burden on the court unnecessarily and undesirably. The responsibility to assist the court was not discharged. Ground of appeal (3) 54.The magistrate found that the appellant knew or believed that the exhibits were counterfeit currency notes. 55.First of all, she rejected the appellant’s evidence that he did not know the prop banknotes were inside his company. She then found the appellant was in possession or custody of the “prop banknotes” concerned before she proceeded to consider whether the evidence supported an inference of knowledge or belief. 56.The magistrate’s rejection of the appellant’s contention of no knowledge and her findings in relation to possession or control of the “prop banknotes” were not challenged. 57.The following findings of facts made by the magistrate were significant:
58.The crux of this appeal is, under the above circumstances, was there sufficient evidence for the magistrate to draw an inference that the Appellant did know or believe the prop banknotes resembled a currency note to such an extent that they were reasonably capable of passing for a currency note of that description? 59.Based on the consideration that the Appellant had not seen the “prop banknotes”, whether the “prop banknotes” resembled real notes or not is irrelevant in this case. What needed to be decided was whether the Appellant had such a belief when he had not seen the exhibits. To be sure that the Appellant did have such a belief, it has to be the only reasonable inference available on the evidence. 60.“Knowledge” and “belief” are words frequently used in law. In the Pang Hung Fai[15] case, the Court of Appeal agreed with the High Court of Australia in George v Rockett[16]that:
62.The basis of the inference drawn by the magistrate was that the Appellant had no reason to believe that the prop banknotes printed for the movie “Wild City” had a poor likeness, and more importantly, if the quality was poor, they would not have decided to keep these 21 boxes of prop banknotes. 63.The magistrate relied on the following evidence to make such finding[19]. 64.A Miss Ng testified that when she made the request to borrow the “prop banknotes” on D1’s behalf, the Appellant did not agree right away but he did reply to her after a few days that there were “prop banknotes” available and ask her how many she wanted. The magistrate found that it showed the appellant had made enquiries or came to know that there were “prop banknotes” inside his company through other channels after Miss Ng made such a request to him. After talking to D1, Miss Ng told the Appellant that she would like to borrow ten million dollars in “prop banknotes”. The reaction of the appellant was that he would “ask to see if there are so many”. He later told Miss Ng in reply that that was available and asked her when she wanted them. The magistrate considered that the appellant had sufficient “prop banknotes” stored in his company to meet the request for 10 million and it must have something to do with “Wild City” since it was the movie that involved the largest amount of “prop banknotes” he had ever participated in[20]. 65.As pointed out by the magistrate too, the evidence showed that the director of “Wild City” was very demanding, all the props had to look real, printing of “prop banknotes” was thus necessary. When the director was demanding, the “prop banknotes” printed were supposed to look real. Although the Appellant did not actually see this batch of “prop banknotes”, he surely believed that the quality of the whole batch of “prop banknotes” was similar and they looked real.[21] 66.Mr Wong highlighted the following evidence to support the magistrate’s finding:
67.Mr Wong submitted that the overall evidence confirmed that the appellant had attended the props meeting for the movie “Wild City”. He understood the requirements of the director and he knew or believed that the prop banknotes used in “Wild City” had to look real. Since the demand that prop banknotes in “Wild City” be high in both quality and quantity, the appellant would surely remember the prop banknotes well. The evidence reflected that it must be worth keeping the prop banknotes when they were kept in the Appellant’s company without being destroyed. When it was worth keeping the prop banknotes, it must be because they looked real. Therefore, when the Appellant agreed to lend PW1 the prop banknotes and was aware that there was a large number of prop banknotes in his company, he must have known and believed that the prop banknotes no doubt looked real, otherwise his company would not have kept such a large number of prop banknotes in the props room which only had limited space. Besides, the fact that the Appellant urged that the prop banknotes had to be returned showed that he knew it was worth keeping the prop banknotes. The appellant was aware that there would be trouble if the prop banknotes were in circulation because he knew that the prop banknotes looked like real money and could pass for real notes. Therefore, the magistrate was entitled to rule that when P7 was found in the appellant’s company, he knew or believed that P7 bore a resemblance to real notes to the extent that they were reasonably capable of passing for currency notes. 68.The submission of Mr Kwok is that:
69.For point (1), it was true that the magistrate did not expressly say that she rejected or refused the evidence of the Appellant in this respect, however, as Mr Wong said:
70.As for point (2), the basis of the magistrate’s consideration was that the Appellant had not seen the exhibits in question. Mr Wong referred to the possibility that the quality of the “prop banknotes” might have been mentioned to the Appellant. There was no evidence whatsoever suggesting that someone had told the Appellant about the quality of the “prop banknotes” or how realistic they were, and the magistrate did not take this into consideration. 71.Therefore, I do not find it a matter of any concern. 72.Points (3) to (5) can be dealt with together. I agree that the fact that the Appellant did not have any reason to believe that the articles had a poor likeness did not mean that he did believe that they bore a resemblance to the extent required by law. There could be different degrees of resemblance, ranging from high, relatively high, very high to extremely high. The standard required in movie production is not necessarily as high as the one set out in the law. Besides, it seems the magistrate did overlook the observation of the expert. He said he considered the quality of counterfeiting of the “prop banknotes” to be “just fair”. The expert witness did not specify clearly in what way the quality was “just fair”. In any event, had the magistrate inspected the exhibits, she would have been entitled to hold a different view from the expert’s. However, she had viewed only 2 “prop banknotes”. In the circumstances, she could not exclude what the expert had said when she considered the case and she should have explained how she dealt with such evidence and how it affected the verdict. 73.In general, the magistrate was entitled to consider the matters from which she drew her inference. However, given what I just said above, I do not agree that the only reasonable inference that could be drawn from the evidence was that the Appellant believed the “prop banknotes” were fake notes. Conclusion 74.Possessing realistic-looking “fake notes” is a serious matter even if there is no intention to deceive, for it is hard to ensure that they will not fall into the wrong hands. Therefore, it has to be handled with care and this is also the reason for enacting the relevant law. Even if the person who possesses them does not have any intention to break the law, as in this case where the articles concerned were “prop banknotes” and they were only used as props, one still has to be very cautious and act in accordance with the law. In this case, it is not disputed that the Appellant made no application for approval to the Monetary Authority. I would be astonished if he, who was such an experienced man in the business, claimed he did not know there were irregularities. In any event, it is hoped that the rule will be made known to the industry and the public after this case and will be complied with. 75.It is hard for the court to comment on the connection between this rule and the development of the film industry, or the effect of this rule. The duty of the court is to see if the evidence supports a conviction. 76.The outcome of this case is determined by the fact that there was no sufficient evidence to prove that the Appellant did know or believe the exhibits were counterfeit currency notes as described by the law, it does not suggest that possessing “prop banknotes” was not a problem. 77.This is a conclusion largely based on the magistrate’s finding that the Appellant had not seen the exhibits. The magistrate’s finding is not one that everybody would agree with, but having had the benefit of hearing and observing the witnesses, her finding should not be interfered with lightly. 78.On the whole, I consider that the evidence available was not sufficient to prove that the Appellant knew or believed the “prop banknotes” in question resembled real banknotes to such an extent that these articles were reasonably capable of passing for currency notes of that description. The appeal is allowed and the conviction is quashed.
Eric Kwok, SC, and Kitty Tsang, for the appellant Michael Wong SADPP and Charles Lee, PP, of the Department of Justice, for the HKSAR Translated by the Judgment Translation Unit of the Judiciary and vetted by Mr. P. Y. Lo, Barrister-at-law. [1] Contrary to section 100(2) of the Crimes Ordinance, Cap 200, Laws of Hong Kong. [2] Ms CHEUNG Kit-yee. [3] Extracted from paragraphs 7 and 8 of the Statement of Findings. [4] He appeared for the respondent together with Mr Charles Lee. [5] [1944] 1 KB 120. [6] King’s Bench Division, High Court of England. [7] Cap 200, Laws of Hong Kong. [8] Irrelevant parts deleted. [9] Cap 221, Laws of Hong Kong. [10] Exhibits P35 & P36，see pages 380 – 446 of the Appeal Bundle. [11] McWalters J (as McWalters JA then was). [12] [2012] 4 HKLRD 383. [13] Paragraphs 41-43 of the Statement of Findings. [14] See paragraph 23 above. [15] CACC 34/2012. [16] [1990] HCA 26. [17] Paragraph 57 of the Statement of Findings [18] “D2” referred to here is the appellant. [19] See paragraphs 46-55 of the Statement of Findings [20] See paragraphs 48 & 49 of the Statement of Findings. [21] See paragraph 52 of the Statement of Findings. [22] Pages 599K-O, 602H-I and 612E-G, Appeal Bundle. [23] Pages 597L, 617U-618A, 623G and 623T-624I, Appeal Bundle. [24] Pages 633A-C & 637T-638A of Appeal Bundle. [25] Pages 598U-599A & 642J of Appeal Bundle. [26] Pages 621I-M & 622B-F of Appeal Bundle. [27] Pages 618K & 641U-642A of Appeal Bundle. [28] Pages 633C-E & 671P-U of Appeal Bundle. [29] Pages 601E, 622F-I & 674E-F, Appeal Bundle. [30] Pages 601E-Q & 612E-K, Appeal Bundle. [31] Pages 593J, 675L & 678F, Appeal Bundle. [32] Pages 645N-646E, 674R & 675D-G, Appeal Bundle. [33] Pages 606E-F & 648F-J, Appeal Bundle. [34] Pages 643D, 643F, 644H-M & 644R, Appeal Bundle. [35] Page 615J-L, Appeal Bundle. [36] Page 656K, Appeal Bundle. [37] See paragraph 52 of the Statement of Findings. [38] Paragraph 11 of the Statement of Findings. [39] Paragraph 57 of the Statement of Findings. | ||||||||||||||||
Cases cited in this judgment
Other judgments that cite this case
Further hearings and rulings under HCMA 300/2018