Lo Chun Nam v. HKSAR

FACC000006/2000

FACC No. 6 of 2000

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 6 OF 2000 (CRIMINAL)

(ON APPEAL FROM HCMA NO. 838 OF 1999)

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Date of Hearing and Decision: 20 December 2000

Date of Handing Down of Reasons: 8 January 2001

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J U D G M E N T

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Chief Justice Li :

1. At the conclusion of the hearing on 20 December 2000 we allowed this appeal, quashed the appellant's conviction and we awarded him his costs in the Magistrates Court and in the Court of First Instance. In the Appeal Committee and in this Court there should, if necessary, be legal aid taxation of the appellant's costs. We indicated that we would give our reasons later and we now do so by the judgment of Mr Justice Silke NPJ.

Mr Justice Silke NPJ :

2. The appellant was convicted after trial before Mr James Lee in Eastern Magistracy on a single charge of theft : that he had stolen a chose in action - a cheque - in the sum of $56,871 the property of Luen Tak (Building Supplies) Ltd. He received a sentence of six months imprisonment.

3. He appealed against that conviction to the Court of First Instance and Nguyen J dismissed that appeal on 11 April 2000.

4. On 9 May 2000, and in time, the appellant applied to the Court for leave to appeal invoking the grave and substantial provisions of s.32(2) of Hong Kong Court of Final Appeal Ordinance Cap.484.

5. On 22 June 2000 the Appeal Committee, having heard representations by the appellant who was then in person, granted him bail and adjourned the hearing so that the appellant could apply for Legal Aid.

6. On 12 July the hearing of the application for leave resumed the appellant now being represented by Mr W.N.C. Stirling. The Committee considered, on the state of the papers then before it, that it was reasonably arguable that substantial and grave injustice had been done and granted the leave sought.

7. On 20 December this Court allowed the appeal, set aside the conviction and the sentence on the charge and stated that it would give its reasons later.

8. This I now do.

9. This Court performs a function different from that of an intermediate appellate court. We do not review convictions to see if they are safe and satisfactory. That is not our task. The test here is, as Bokhary PJ stated it to be in So Yiu Fung v. HKSAR (1999) 2 HKCFAR 539 at p.543 F/G :

"In order for an appeal brought under the 'substantial and grave injustice' limb of s.32(2) of the Hong Kong Court of Appeal Ordinance to succeed, it must be shown that there has been to the appellant's disadvantage a departure from accepted norms which departure is so serious as to constitute a substantial and grave injustice."

10. In considering whether the test is satisfied, it is necessary to review the evidential background to this appeal.

The Background

11. Luen Tak (Building Supplies) Ltd was a small company run principally by Mr Lau Chai Kan (PW1) - "the father" - and Mr Lau Wyming (PW2) - "the son". The father said that the appellant was employed as an accountant, at a salary of $18,000 per month, to start on 2 March 1998 and with a probation period of three months. He produced from the computer records of his company an unsigned copy letter to that effect (Ex P4) dated 10 March. The original, he said, with a letterhead on it, had been signed by him and given to the appellant.

12. One of the appellant's duties was to prepare the payment voucher for the monthly salaries of the employees of the company. It was in evidence that he did this for the month of April 1998. Miss Luk Kit Ying (PW4), an accounting clerk in the company, supported this. The March payment voucher had also been prepared by the appellant but under the guidance of a Miss Ho Yiu Hung the previous holder of his post. This contained an alteration in ink of one of the figures. It was Miss Luk's evidence that that alteration was in the handwriting of Miss Ho. This was produced as exhibit D3.

13. These vouchers set out the names of the employees, the amount of their salary, the cheque number and, on a separate sheet, their signatures as having received it.

14. On 29 April 1998 the father had signed the payment voucher for that month and had returned it to the appellant. It contained an entry in the name of the son showing a total due to him of $56,871. This figure was arrived at by deducting advance payments from the son's gross salary of $70,000. Those deductions were $6,000, $3,000, $4,129 and a notation against these showed the ledger entries relating to those advance payments. It would seem that some documents were referred to at trial relating to those ledger entries. They were not marked as an exhibit and are not before us. The father signed the cheque, made out to cash, in the sum due. Its number was 732938.

15. The son said he had received the cheque from the appellant and had then given it back to him asking him to go to the bank and lodge it to his, the son's, account. This was something he had asked the appellant to do on other occasions.

16. The appellant did not do so. He cashed it keeping the money for himself. It has been the appellant's case from the time of his arrest that the sum of $56,871 represented an agreed severance payment to him upon his resignation from the company.

17. On 30 April the auditor of the company, Miss Ho Sau Fung (PW3), raised a query concerning three sums in a ledger which was the responsibility of the appellant. The appellant became angry - "rather agitated" according to the auditor - and he refused to answer her questions. The appellant was, according to the father, angry when he went to discuss the query with him.

18. In the course of that discussion, at which Miss Ho Sau Fung was present, the appellant did not give direct answers to questions the father put to him. He said he would resign. To which the father replied that he would accept the resignation.

19. His letter of resignation took the appellant, according to Miss Ho Sau Fung, a long time to type. It was produced as Ex P3 and is dated 30 April.

20. After the appellant had left the company, and the son had discovered that no cheque had been lodged to his bank account, a report was made to the police. The appellant was arrested at the airport on 5 April. In his evidence the appellant said that he was on his way to Canada to take a further accountancy exam prior to taking up a new position he had found for himself in Hong Kong while still in the employment of the company. This was to start on 11 May 1998. He had in his possession Canadian and US dollars. The bulk of the money remained in a savings account in a bank in Hong Kong.

21. In support of his case that his action in depositing the cheque to his own account was legitimate the appellant produced two particular documents. The first was, Ex D1, a letter offering him employment and stating its terms. It was signed by the father and dated 10 March 1998. This differed in certain aspects from the unsigned computer copy of the offer of employment (Ex P4) produced by the father. The main one being the period of probation. In Ex P4 it was three months. In Ex D1 it was one month.

22. The father - in cross-examination - said that, as a "practice", in the company, probation would be for three months.

23. The significance of the differing periods was that, if the probation period were three months, then the appellant had left his employment before that time had expired and he would have had no entitlement to severance pay. If it were one month, then that had been completed before he left the employment and he would have had that right.

24. The second document produced at trial as Ex D2 was headed

"Re: Termination of Services and cancellation of employment contract"

It is a photostat copy and it is dated 29 April.

25. As Mr Stirling, who continues to represent the appellant in this Court, submits in his printed case this "document D2 was prima facie a complete defence to the charge. It was therefore incumbent on the prosecution to lay an evidential basis on which to discredit D2". Further there was no evidential basis for the Magistrate's finding that Ex D2 was created by the appellant.

26. The document is on the headed note paper of the company. It is, on its face, signed by both the appellant and the father. It bears the typing indication "RL/hh". The father signed as "Richard Lau Chai Kan", the "hh" indicated Miss Ho Yiu Hung. The appellant accepted that, after discussions between himself and the father and son on compensation, he had downloaded Miss Ho Yiu Hung's file from the computer, used the body of the download as the model for his letter and inserted the terms that he said were agreed between his employer and himself but without a typing indication of his efforts.

The salient content of Ex D2, which had been in the hands of the investigating officers after it was handed to them by the appellant shortly after his arrest, was the calculation of the compensation sum. It went thus, having made reference to the cheque number 732938 - the same number as the cheque to the son for his salary, -

"1	Salary from May to July $18,000.00*3		$54,000.00
2.	Pro-rata annual leave form (sic) March to July $600 (one day salary)*5 $600*0.215 (annual leave)		$ 2,871.00
3.	Pro-rata annual bonus		$0
4.	Medical leave from March to July		$0 (paid already)
			$56,871	"

The appellant in chief explained these calculations thus:

"It's three months' wages plus five days' leave minus the half an hour early leave from the company in April. And on 29th I left the office at 4, which means that I took an hour early leave. I worked seven hours a day, excluding the lunch break, so the amount which had to be deducted is 5.5 hours over 7 times 600. That is, it should be 1.5 over 7 times 600. For any early leave I took or medical leave I took would be recorded and these records were kept by the company. So the amount 2871 was arrived at by having 5 times 600 minus 1.5 over 7 times 600."

27. Both father and son categorically deny that any such discussion took place and insist that no compensation at all was contemplated or payable.

28. The details of the calculations were not canvassed with either the father or the son.

29. There was, at trial, no forensic evidence led relating to Ex D2 - or indeed Ex D1. No questions were asked of the appellant in cross-examination in relation to either of these exhibits. If it were the prosecution's case that neither of these exhibits were genuine, then the appellant should have been given the opportunity to deal with that case while in the witness box.

30. In support of this proposition Mr Stirling has referred us to a passage in Fenlon and Others (1980) 71 Cr.App.R. 307 at p.313 which in turn quoted a passage from the judgment of Lord Herschell LC in Browne v. Dunn (1893) 6 R.307 - to the effect that, where it is intended to suggest that the witness is not speaking the truth on a particular point, Counsel should :

" ... direct his attention to the fact by some questions put in cross-examination showing that that imputation is intended to be made, and not to take his evidence and pass it by as a matter altogether unchallenged, and then, when it is impossible for him to explain, as perhaps he might have been able to do if such questions had been put to him, the circumstances which it is suggested indicate that the story he tells ought not to be believed, to argue that he is a witness unworthy of credit".

and again, further down p.313 :

"It need not be done in minute detail, but it is the duty of counsel to make it plain to the witness ... that his evidence is not accepted and in what respects it is not accepted."

31. There are cases where the "raised eyebrow" approach can discharge the duty of counsel but, as was stated in the commentary to R. v. Lovelock [1997] Crim.L.R. 821 at 823 :

" ... in a criminal trial it is better, and less likely to lead to confusion, to take issue more obviously".

32. Here the prosecutor contented himself with a general question towards the conclusion of his cross-examination :

"Q. I put it to you that PW1, PW2, PW3 and PW4 all were telling the truth"

to which the appellant replied

"A. Disagree".

33. This was not a "raised eyebrow" case. In its peculiar circumstances - the father's allegation of "counterfeiting" : the difference as between Ex P4 and Ex D1 (the confirmation letters); Ex D2 and the importance to the whole case, not just to the defence, of its contents and make up : the fact, known to the appellant, that the original second charge of using a false document contrary to s.74 of the Crimes Ordinance Cap.200 - which is an indictable offence punishable with a maximum of 14 years imprisonment - had been withdrawn prior to trial - it was not enough for counsel to simply ask the general question he did in cross-examination.

34. The rule in Fenlon is not an inflexible one but here - even though the appellant was fully aware of the nature of the evidence given by the prosecution witnesses - confusion, which later did occur, might well have been avoided had a fuller cross-examination taken place.

35. The coincidence that those calculations coincided exactly with the amount of the cheque intended as payment of the son's salary was never explored nor was the point that Ex D2 is dated 29 April whereas the resignation letter is dated the 30 April.

36. The appellant, in his turn, had suggested that the father and son were fabricators of documents. He referred to his signature on various of these as being forged. In particular he said that Ex P1 - the April salary voucher - was made up after the events of 29 and 30 April in order to incriminate him. He said that there was bad blood as between himself and other staff members. His employers disliked his questioning of them as to the accounts of the company which he suggested were in disarray.

37. The defence introduced, as Ex D4, a report of the Government Forensic Scientist, Mr Cheng Yau Sang, relating to the appellant's suggestion that his signature had been forged. He gave it as his opinion.

" ... that while the writer (the appellant) of the non disputed signatures could not be confirmed as that of the questioned signatures, he could neither be eliminated".

38. The magistrate, not surprisingly, did not find this to be of help to him on the appellant's allegations.

39. What concerns us here is the question : were there deficiencies in the way the prosecution was conducted and were all the issues properly dealt with by the magistrate and fully considered by the Court of First Instance - bearing in mind the So Yiu Fung test.

The approach of the magistrate

40. The magistrate in his oral verdict given at the conclusion of submissions clearly confused himself as to who should have the original of Ex D2. The record reads :

"Here Exhibit D2 was produced by the defendant but this is only a photocopy. According to this document, it is a letter addressed to him, he should have the original. If there is anybody to keep the copy, it should be the company keeping the copy and the original kept by the defendant.

Mr Chui : No, sir, this is to "Dear Mr Lau", addressed to the ...

Court : Yes, "Dear Mr Lau". As far as this aspect is concerned, I still see the -- yes, I forget about this bit. As far as this letter is concerned, then I will forget about this part of the letter."

41. He then went on, with respect, somewhat obscurely to say :

"But as far as this document P2 and the document P3 are concerned, document P3 and document P2 need not coexist together. They should only need one, not both. Document P3 already clearly indicated the termination of the employment agreement. If all has been agreed between the defendant and PW1 and PW2, then I see no reason for this matter to get the police involved."

42. "P2" is the cheque 732938 : he must have intended to refer to Ex D2. He continued in his oral verdict to say that :

"Having considered the evidence of the defendant, I do not believe what he said."

43. In his subsequent Statement of Findings the magistrate, while referring to his misunderstanding as to who should have the original of Ex D2, said that this aspect did not affect his decision.

44. In the second of the above quoted passages from the record what the magistrate seems to be saying is that there was no need for a letter of resignation and a separate letter setting out compensation terms. A conclusion not easy to understand. In the normal course one would come after the other and "coexist" properly together.

45. In his Statement of Findings the magistrate concluded by saying :

"10. This case is a simple case of the appellant having banked a cheque of $56,871 and then made up documents to purport to make this act look legitimate. But the evidence is clear that once Exhibit P1 is compiled, a series of cheque (sic) was also made up. Evidence regarding the company did not only come from the two Mr Lau (sic) but also from other staff who had no reason to lie. It was quite clear that the appellant used his accounting skill to effect this theft. I have also looked at the case from a converse point of view and considered that it was impossible for the Company to have agreed with the appellant regarding the terms of his termination, paid all the money, and then reported the case to the Police. This would be absurd."

46. These passages give all the appearance of the magistrate's mind being clouded in his resolution of this matter by his view that Ex D2 was false because the appellant, whom he thought should have the original, did not and deciding to come to his decision on guilt on the basis of his misunderstanding : whatever disclaimer he may subsequently have made.

The approach of the Court of First Instance

47. The judge recited the salient points of the evidence, referred to what he termed the magistrate's "Oral Reasons for Judgment" and quoted from his Statement of Findings. He went on to consider the five grounds of appeal raised before him and found against each of them in turn.

48. The grounds argued before him, are encapsulated in the respondent's printed case. They were that the magistrate (1) failed to properly evaluate the evidence in favour of the appellant; (2) failed to give any or any proper reasons for his conviction of the appellant; (3) wrongly expressed the view that the defence case was "absurd"; (4) having misdirected himself as to who should have the original of D2 as against the appellant, cannot merely forget this when assessing the evidence and (5) his reasons for accepting the evidence of the prosecution witnesses and for rejecting the testimony of the appellant were wholly inadequate.

49. The judge was of the view, considering this to be "an extremely simple case", that the magistrate had properly evaluated the evidence at trial and that :

" ... the magistrates findings are unassailable and that there was the required evidence to support those findings."

50. We accept that, in a busy magistrates court, an oral verdict or a Statement of Findings does not have to go into minute detail but the trial magistrate is required to indicate with clarity in a case of this nature where there are disputed documents and facts the basis for his acceptance of the evidence for the prosecution and his rejection of that for the defence.

51. With respect to the appellate judge, this was not the "extremely simple case" he considered it to be. While we do not know how the arguments were presented to him the difficulties inherent in the findings of the trial magistrate were not adverted to in his judgment. They are not something to which he appears to have fully turned his mind.

52. Ex D2 was, as the appellate judge correctly said, "one of the very few pieces of evidence that he [the magistrate] actually referred to in his judgment ....". But the trial magistrate's findings on this document were by no means "unassailable" and it was not enough to dismiss the confusion in the mind of the magistrate by saying that :

"In my view, it is implicit when he [the magistrate] accepted the evidence of the prosecution witnesses and rejected the evidence of the appellant that he was finding that this document had been created by the appellant."

when the approach of the trial magistrate was fatally flawed by reason of that very confusion.

53. This was not simply an issue of credibility as between the acceptance of one set of witnesses and a rejection of the other as can well occur in a large number of magistrates court trials. There were serious issues on the documents and on the facts which needed, but with respect, did not get, careful consideration.

Conclusion

54. The accumulation of all the deficiencies attendant upon all the processes which led to this appeal brought us to the conclusion that there has been to the appellant's disadvantage a departure from accepted norms such as to satisfy the test in So Yiu Fung and, in consequence, at the close of the argument we allowed this appeal and quashed the conviction, set aside the sentence and awarded the appellant his costs in the Magistrates Court and in the Court of First Instance. There will be legal aid taxation of his costs, if necessary, in the Appeal Committee and in this Court.

Representation:

Mr W.N.C. Stirling (instructed by the Legal Aid Department) for the appellant.

Mr Cheung Wai-sun and Ms Irene Poon (of the Department of Justice) for the respondent.