HKSAR v. Leung Chi Kit
Read the full judgment text of DCCC 855/2022 on BabelCite. This District Court judgment was delivered on 16 August 2024.
1. The defendant faces one charge of ‘Theft’, contrary to section 9 of the Theft Ordinance, Cap 210.
Cites 2 cases
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DCCC 855/2022 [2024] HKDC 1361 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CRIMINAL CASE NO 855 OF 2022 ________________________
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________________________ REASONS FOR VERDICT ________________________ 1.The defendant faces one charge of ‘Theft’, contrary to section 9 of the Theft Ordinance, Cap 210. 2.The particulars of the offence are as follows:-
Outline of the Prosecution case 3.In June 2017, iSunCrowd Limited set up a website, www.tidebit.com, to provide an online trading platform for cryptocurrency. In addition, the company operated a shop in Tsim Sha Tsui. 4.The defendant registered an account online on 15 December 2017. He visited the shop at about 12:45 on 16 March 2018 and requested to deposit HK$405,200 cash into his account. He filled in HK$4,005,200 on a cash deposit form, which exceeded the cash he presented by HK$3,600,000. 5.A staff member at the shop mistakenly credited HK$4,005,200 to the defendant’s account, in accordance with the amount stipulated on the form. The defendant left the shop. 6.At about 13:40 the same day, the said staff member realized the mistake and informed her superior. The supervisor immediately called the defendant and arranged to meet up at 18:00 on the same day in Central. The case was subsequently reported to the police. 7.Computer records showed that:
Prosecution Evidence 1st Admitted Facts (P13) 8.Pursuant to section 65C of the Criminal Procedure Ordinance, Cap 221, the Prosecution and the Defence agreed that:
2nd Admitted Facts (P14) 9.It was further agreed that the defendant has no criminal record in Hong Kong. Prosecution witnesses PW1 – Madam GAO Linda 10.PW1 was the marketing manager of VTC. She testified that around 12:45 on 16 March 2018, the defendant came to the Shop and asked to deposit HK$405,200 into the Account. She verified the defendant’s identity with VTC’s record and took a picture of his HKID card. The defendant then wrote “4005200” on the Cash Deposit Form (P1). She counted the money and confirmed it was HK$405,200 with the defendant. Relying on the amount written on P1, PW1 mistakenly credited HK$4,005,200 (the “Fund”) to the Account. At around 1:40, PW1 realised her mistake and informed her superior. 11.PW1 identified the entry of HK$4,005,200 on the Cash top-up records (P5). She explained that to purchase cryptocurrency, a series of actions were required after logging into an account, and that for withdrawal / transfer of cryptocurrency, 3 to 4 actions were required. She confirmed that between 12:56 and 13:33, a total of 81 purchases had been made using the Fund; and that between 13:06 and 13:34, there had been a total of 11 withdrawals / transfers of cryptocurrencies to other addresses. 12.PW1 said that she had seen the defendant visiting the Shop at least 5 times to top-up the Account. After counting the cash on that day, she remembered asking the defendant to wait outside her office and closed the door. She said that she was not required to deal with the defendant further according to her work procedure. She added that there were two sofas in the lobby outside. 13.Upon clarification from the court, PW1 said that, while she was in her office, the defendant should have been outside waiting in the lobby, and that he probably left after receiving the notification for the top-up. Due to the lapse of time, she could not remember whether a customer should receive an SMS message or an email to inform him that money had been credited into his account. PW2 – Mr TSANG Chun Kit Terence 14.PW2 set up the website of www.tidebit.com since January 2017. He said, to set up an account, a customer would need to provide an email address, HKID card copy, a proof of address in Hong Kong and a Hong Kong mobile number. 15.Based on the Cash top-up records (P5), PW2 confirmed that the defendant had visited the shop on about 10 occasions to top up the Account. According to him, a customer would receive both an SMS message and an email to inform him that money had been credited into his account. The SMS messages were sent by a third-party service provider and VTC did not keep records of them. He was not able to check records of the SMS messages as the service provider only kept them for half a year. As to the emails, he was not sure if there were records kept in the system as he had not been asked by the police to check. 16.PW2 said that he was informed by PW1 on 16 March 2018 about her mistaken transfer made to the Account. He then checked the Cryptocurrency purchase records (P7) and found that the Fund had been used to purchase cryptocurrencies through 81 transactions. 17.As to the time required to make a purchase of cryptocurrency on mobile phone, he said it would only require taking 2 actions on the trading page, which could be done in a second. 18.Regarding some of the entries on P7 that appeared to have taken place in the same second, eg the first 2 entries with time stamp “12:56”, PW2 explained that while a customer may have placed an order for the purchase of a single quantity of cryptocurrency, he could end up getting an aggregate of different batches of the cryptocurrency offered by the same or different seller(s), hence resulting in multiple entries with the same time stamp. 19.As to the whereabouts of the cryptocurrencies purchased with the Fund, PW2 said that, according to investigation, once they had been purchased, they were quickly transferred to other addresses by 11 withdrawals. Thereafter, they were further transferred to some other addresses which made it hard to trace. 20.PW2 stated that, according to the Terms and Conditions of VTC, apart from the account holder, other people were not allowed to use the account. 21.In cross-examination, PW2 explained that when a customer registered an account online, he had to give a ‘tick’ to acknowledge his agreement to the Terms and Conditions; otherwise, he would not be able to proceed to the next step. Nevertheless, he accepted that the Terms and Conditions did not specify that it was a criminal offence not to comply, and that they were merely commercial in nature. 22.PW2 said that (1) in theory, if a customer passed on everything to another person, including his mobile phone, that other person would be able to operate the account just like a husband sharing his bank account with his wife, (2) a customer could use Google Authenticator to obtain verification codes for withdrawal, and (3) he could not be sure if it was actually the defendant who made the withdrawals in the Account. 23.PW2 also confirmed that someone in his company had contacted the defendant on 16 March 2018 to arrange a meeting, and that he and other staff members met the defendant at Starbucks in International Finance Centre. However, he could not remember whether he was the one making the phone call. 24.Regarding the meeting at Starbucks, Counsel for the defendant asked the following:
25.It was therefore suggested to PW2 that he had made up the evidence as there was no mention of the Alleged Response in any of his 3 witness statements. PW2 denied and insisted that he had mentioned it to the police officer when he gave the first statement. According to PW2, the officer told him that it was not necessary to put down the details of the whole meet-up at Starbucks because the witness statement was already too long. 26.When it was further put to PW2 that the defendant never said he had deleted any records from the phone, he disagreed and said that it was “because of … what the defendant said was totally illogical that we called the police”. As to the duration of the conversation at Starbucks, PW2 said it lasted for about 20 to 30 minutes. PW3 – SPC51120 27.PW3 was the arresting officer. He testified that he arrested the defendant on 17 August 2022 in relation to a ‘theft’ case in Tsim Sha Tsui. Upon arrest and caution, the defendant said he understood. There was nothing suspicious found on him. PW4 – Mr FUNG Tsz Kwan 28.PW4 was the computer engineer of VTC since December 2017. He prepared the computer certificate (P11) and produced the information / documents of the Account including its records of top-up, trade and withdrawal transactions. 29.PW4 testified that while a customer was not required to link his account to a phone number at the time of registration, he would have to do so when he deposited money into his account in order to receive the SMS and email notifications for the top-up. 30.As to why he deleted the defendant’s phone number “9215 2658” from paragraph 4 of the computer certificate, PW4 explained that he was told by the police to do so as the SMS service provider was unable to provide the SMS records after the expiry of 3 months. Nevertheless, he said he could still see the customer’s phone number in the system. He also added that once a customer’s phone number was linked to his account, it would remain so linked. 31.PW4 explained to the court that if a customer wanted to make withdrawal from an account, he would have to obtain a 6-digit verification code via his linked mobile number. However, the customer could also choose to set up a Google Authenticator and link it to his account to obtain the verification code. Due to the lapse of time, he was unable to tell if the defendant was using his mobile number or had chosen to use a Google Authenticator instead. 32.In cross-examination, PW4 agreed that a customer could change his registered mobile number, and he had not checked if the defendant had done so. PW5 – Mr TSANG Tat Yuen 33.PW5 was an employee of SmarTone Telecommunications Ltd. He prepared the computer certificate (P12) and produced the subscriber’s information of mobile number 9215 2658. He testified that the defendant was the registered user of the mobile number since 7 September 2016. PW6 – DPC16751 34.PW6 was tendered for cross-examination upon the Defence’s request. He was the police officer who took 3 witness statements from PW2, and the statements were dated 27 October 2020, 15 June 2021 and 20 October 2021, respectively. 35.PW6 confirmed the first statement was in ‘narrative’ form while the other 2 were in ‘question and answer’ form. He agreed that the only mention about the meeting at Starbucks was in “Q.1 & A.1” of the second statement, namely, :
36.Counsel for the defendant then asked the following:
37.Upon the close of the Prosecution case, Counsel for the defendant submitted there was No Case to answer on the charge as the Prosecution failed to prove it was the defendant, not somebody else, operating and controlling the Account. Having considered parties’ submissions, I ruled there was a Case to answer. The Defence case 38.The defendant elected not to give evidence or call any witness. Directions 39.The burden of proof is on the Prosecution and the standard is one of proving the offence beyond reasonable doubt. The defendant has nothing to prove and that no adverse inference could be drawn against him for his election not to give evidence or call any witness. 40.The defendant is a man of clear record. I remind myself that he is less likely to commit an offence, and his evidence is more credible. Issue in the case 41.At the outset of the trial, counsel for the defendant indicated that the only issue in the case is whether the defendant was the one “operating the Account and had the ultimate control” of it. Evaluation of evidence 42.There was little challenge to the evidence of PW1, PW3, PW4 and PW5 which was by and large uncontroversial. In fact, the computer certificates (P11 and P12) of PW4 and PW5 were already admitted under section 65C. Having carefully considered their evidence, I find them honest and reliable witnesses and accept their evidence. 43.On the other hand, the evidence of PW2 and PW6 is closely related to the key issue of the trial, I shall deal with that later in my Reasons for Verdict. Evidence pointing to the defendant operating and in control of the Account 44.The following evidence, whether by way of Admitted Facts and/or undisputed evidence, clearly pointed to the defendant being in control of the Account:
Evidence pointing to somebody else operating and in control of the Account 45.Evidence showed that the time for the 81 purchases of cryptocurrencies with the Fund and the 11 withdrawals overlapped. The purchases started at 12:56 and completed at 13:33. The withdrawals commenced at 13:06 and ceased at 13:34, just one minute after the last purchase. 46.Counsel for the defendant submitted that as each purchase would require taking multiple actions in the Account, and that there was also a ‘two-factor authentication’ for withdrawal, it would be difficult for the defendant to have conducted the transactions within such a short period of time. Besides, it was also suggested that the defendant could have just left the Shop at the time and be walking in the street, and therefore it would be extremely difficult for him to carry out so many transactions. 47.First, given PW1 was not required to deal with the defendant after she returned to her office to process the top-up, the defendant’s whereabouts was unclear in the evidence. 48.Second, whether the defendant was able to carry out all those transactions within the time frame would depend on various factors such as: how good he was at operating his phone or tablet or indeed some other electronic devices, how familiar he was with the operation of the Account, whether he was using any software / programs to help him with the transactions and whether he had planned his investment in advance, etc. After all, with the advanced technology of this day and age, I do not find it impossible for the defendant to have conducted the transactions himself. 49.Third, even if another person was able to operate the Account, the defendant could still have been a knowing party and remain in control of it. More importantly, there was no evidence of the defendant having completely given up his control of the Account except his claim to PW2 during the meeting at Starbucks. According to PW2, the defendant said, “the Account wasn’t his, it belonged to another person” or (to use Counsel’s words) “he wasn’t investing, he’s helping other people to invest”. 50.On that, I now turn to the evidence of PW2 and PW6. Evidence of PW2 and PW6 51.Counsel for the defendant submitted that PW6 was an honest and truthful witness and that, as an experienced police officer, he would have made a record of what PW2 told him, especially of important matters such as PW2’s request to check the defendant’s phone and the Alleged Response of the defendant. 52.PW2 was criticised for failing to mention anything about the meeting at Starbucks in his first statement. Counsel for the defendant emphasised that even when PW2 was asked specifically about the defendant’s ‘reaction and reply’ in his second statement, he still failed to mention the Alleged Response. It was submitted that PW2 only mentioned that for the first time in his cross-examination and the absence of any mention in his statements raised serious question about the reliability of his testimony. 53.In addition, PW2 was further criticised as being ‘selective’ with his memory, as he was able to remember his request to check the defendant’s phone on the one hand yet failed to recall if he was the one calling the defendant to set up the meeting. 54.First, it is not in dispute that the meeting at Starbucks did take place. The conversation between PW2 and the defendant lasted for about 20 to 30 minutes, according to PW2, which appeared not to be in issue. So, apart from the defendant telling PW2 that he was not in control of the Account, or it was somebody else investing, there was ample time for them to talk about other matters. As the incident involved a loss of some HK$3,600,000 to the company of PW2, obviously he would be anxious to find out the whereabouts of the money. As such, it would not be unreasonable for him to verify the defendant’s claim by checking his phone. While PW2 may not be able to remember the details of their conversation which took place some 6 years ago, he did say in his evidence that the matter was reported to the police because he found what the defendant said ‘illogical’. That being the case, I find that the Alleged Response must have left the witness with a deep impression, so much so that he would hardly forget. 55.Second, regarding the absence of any mention of the meeting at Starbucks in his first statement, PW2 explained that he was told by PW6 that it was not necessary to put down the details of the whole meet-up. If PW2 had really said nothing about the meeting on that occasion, one wonders what caused PW6 to ask specifically about the ‘reaction and reply’ of the defendant at Starbucks in the second statement. I note the first statement was taken in a narrative form and therefore one does not know what had transpired between PW2 and PW6 before the statement was compiled. After all, it is not uncommon for civilian witnesses, like PW2, to rely on police officers to tell them what is important for the purpose of investigation. It is also worth noting that PW2 did not volunteer evidence of the Alleged Response. It was only given because of a direct and specific question asked of him which did not seem to have been asked when he gave his 3 witness statements. 56.Coming to the evidence of PW6, he is a police officer with 11 years of service. I am sure he must have handled numerous other cases and have taken many similar witness statements in his police career. As such, it would be unrealistic to expect him to remember the dealings he had with PW2 when he took the statements. Indeed, when counsel for the defendant put to him that PW2 had never said to him about the Alleged Response, his answer was “he could not remember”. When he was further asked, “As a professional police officer, you would have written it down if it was said?”, his answer was “I believe it will be recorded”. 57.Having carefully considered the evidence of PW2 and PW6, and the circumstances regarding the taking of the statements, I find PW2 an honest and reliable witness and I accept his evidence. As to the evidence of PW6, while I find him to be an honest witness, I do have reservations about his recollection of what PW2 had told him at the time when the first witness statement was taken. Issue of mixed statement 58.Regarding the defendant’s claim to PW2 about the ownership or control of the Account at Starbucks, the Prosecution and the Defence took the view that it should be treated as a mixed statement. I take the view that the whole conversation between the defendant and PW2 at Starbucks should be taken as a whole to consider. 59.In dealing with the mixed statement, I am conscious that both the inculpatory and exculpatory parts are admissible as evidence of the truth of what had been said (R v Sharp [1988] 1 WLR 7), but when a defendant chose not to give evidence of his version of events, any exculpatory explanation in the statement is an out of court self-serving statement, not being given under oath or subject to test by cross-examination, can carry only little weight. 60.I have carefully considered the whole statement including the exculpatory part and find the defendant’s claim that, “the Account wasn’t his, it belonged to another person” or “he wasn’t investing, he’s helping other people to invest” contradictory to the weight of evidence in the case and I reject it as being the truth and attach no weight to it. 61.At this juncture, I would like to point out that this is not a simple case of ‘common assault’ where the defendant could simply say he acted in ‘self-defence’ and that would leave the Prosecution to disprove his defence beyond reasonable doubt. At any rate, the exculpatory part of the mixed statement would only leave the court with a series of questions which were clearly within the defendant’s knowledge to answer, eg:
62.Taking all the evidence into account, I find the considerations set out in the case of Li Defan v HKSAR [2002] 5 HKCFAR 320 relevant. Of course, there is no burden on the defendant to prove anything, but if the facts were capable of an innocent explanation which the defendant chose not to tell the court, his absence from the witness box would only strengthen the inference to be drawn against him, namely, that he was the one “operating and in control of the Account” at the time in question. 63.In doing so, I am aware of the fact that I can only draw an adverse inference from facts proved beyond reasonable doubt and such an inference must be the only inference that can be reasonably drawn from such facts, and it must be an irresistible one. Elements of theft 64.Section 6(4) provides that:
65.In the present case, I find the HK$3,600,000 mistakenly credited into the Account constituted “property belong to another” namely, VTC, and the defendant must have had knowledge of it. In conducting the 81 purchases of cryptocurrencies and the subsequent 11 withdrawals as discussed above, the defendant’s conduct clearly amounted to an “appropriation” of VTC’s property with the “intention to permanently deprive” VTC of it. Such conduct was no doubt “dishonest” according to the two-fold test in the case of R v Ghosh [1982] 75 Cr App R 154. Conclusion 66.I find that Prosecution have proved the offence against the defendant beyond all reasonable doubt and I therefore convicted him.
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Cases cited in this judgment
Further hearings and rulings under DCCC 855/2022