The Queen v. Chan Hong-ling

DCCC000051/1982

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT VICTORIA

CRIMINAL JURISDICTION

CASE NO. 51 OF 1982

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Coram: H.H. Judge Bokhary in Court.

Date: 19 August 1982

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REASONS FOR VERDICT

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1. The Defendant faces 3 charges of obtaining property by deception contrary to section 17(1) of the Theft Ordinance, Cap. 210 and one charge of attempting so to do contrary to that section and section 81(1) of the Interpretation and General Clauses Ordinance, Cap. 1. All the charges arise out of events which took place in January this year. At that time the Defendant was an authorised clerk with a stockbroker trading on the Far East Stock Exchange. The charges against the Defendant do not, however, arise out of anything which he did in that capacity. They arise out of purchases by him of shares in his wife's name on the exchange to which I have referred.

2. There is a considerable degree of similarity between each of the charges. The Defendant went to the same stockbroker each time, namely, Mr. Chan Chee who trades under the style of Renown Securities Co.. Each time he purchased a substantial parcel of shares through that broker. He. obtained each parcel of shares the subject-matter of the obtaining charges from the saw clerk, a Mr. Li Man-fai in exchange for a cheque representing the price of such parcel of shares together with the brokerage and stamp duty payable on the purchase thereof. There is some dispute over what happened on the occasion cut of which the attempt charge arose. But there is no dispute that on that occasion Mr. Li received from the Defendant a cheque representing the price of the parcel of shares the subject-matter of the attempt charge. Whenever I refer to the price of parcels of shares for which the Defendant gave cheques that reference is to be taken to include the brokerage and stamp duty payable on the purchase thereof. Each of the cheques bore the date on which it was given. Each was duly presented for payment. Each was dishonoured.

3. Having outlined the nature c4 the transactions here in question, I will now examine then more closely.

4. The parcel of shares the subject-matter of the first charge consisted of 29,200 shares in the Hong Kong and Shanghai Banking Corporation 4,800 of these shares were purchased on January 13, 1982. The remaining 24,400 were purchased on the following day. The price of these shares came to $438,986.15. After trading hours on January 14, 1982, the Defendant turned up at the broker's office. There he gave the cheque mentioned in the first charge, namely, one dated January 14, 1982, drawn by him in favour of the broker for $438,986.15 to the clerk, Mr. Li and obtained these 29,200 shares from him in return. Whenever I refer to shares obtained by the Defendant that reference is to be taken as one to the relevant share certificates accompanied by an appropriate instrument of transfer executed is blank.

5. I turn now to the second charge. The parcel of shares the subject matter of the second charge consisted of 30,000 shares in Hutchison Whampoa These shares had been purchased during trading hours on January 14,1982 (and therefore on the same day as but prior to the obtaining the subject-matter of the first charge). The price of these shares came to $534,584.25. After trading hours on the following day, i.e. January 15,1982. the Defendant turned up at the broker's office again. There he gave the cheque mentioned in the second charge, namely, one dated January 15,1982, drawn by him in favour of the broker for $534,584.25 to Mr. Li and obtained these 30,000 shares from him in return.

6. This brings us to the third charge. The parcel of shares the subject-matter of the third charge consisted of 10,000 shares in Cheung Kong (Holdings) Ltd. These shares had been purchased during trading hours on January 15,1982 (and therefore on the same day as but prior to the obtaining the subject-matter of the second charge). The price of these shares came to $217.458. The 15th was a Friday. The Defendant did not collect these shares until Tuesday, January 19,1982, when he turned up at the broker's office after trading hours. There he gave the cheque mentioned in the third charge, namely, one dated January 19,1982, drawn by him in favour of the broker for $217,458 to Mr. Li and obtained these 10,000 shares from him in return.

7. Lastly, I come to the fourth charge. The parcel of shares the subject-matter of this charge also consisted of 10,000 shares in Cheung Kong (Holdings) Ltd. These shares, the price of which came to $217,357.65, had also been purchased during trading hours on January 15,1982. For some reason which does not matter they were not available until one day after the same number of shares in the same company the subject-matter of the third charge were available. Perhaps it had been a different seller and/or selling broker. At any rate they were available on January 20,1982; and, having been asked to come to the broker's office to collect them, the Defendant turned up there after trading hours on that day. He went up to Mr. Li's counter where he and others normally collected shares; and there he wrote out the cheque mentioned in the fourth charge, namely, one dated January 20,1982, drawn by him in favour of the broker for $217,357.65 and gave it to Mr. Li. At this point, a Mr. Tsang Wah-shing, a manager employed by the broker intervened. Mr. Tsang had learned earlier that day that the cheques mentioned in the first and second charges had been dishonoured. He queried the Defendant about these and he certainly was not going to let him take this final parcel of shares away. I am sure that but Mr. Tsang's intervention the Defendant-would have taken them away.

8. I should also mention that  all the cheques were drawn on the Bangkok Bank Limited. The one mentioned in the first charge bore the number 312174. The one mentioned in the second charge was in sequence. It bore the number 312175. The one mentioned in the third charge bore an earlier number, namely, 312162. The one mentioned in the fourth charge bore a still earlier number, namely, 312158.

9. Each and everyone of the cheques mentioned in the charges were, as I have said, duly presented for payment and dishonoured upon such presentment.

10. The Defendant is charged with having obtained and attempted to obtain shares by false representations that the cheques he gave in payment for the same would be good and valid orders for payment of the amount for which they were drawn. To say that a cheque would be a good and valid order for payment of the amount for which it is drawn is to say that the state of affairs at the relevant time was such that, in the ordinary course of events, the cheque would on its future presentment be duly honoured. The very act of drawing a cheque implies a representation to this effect. None of the cheques mentioned in the charges were post-dated. Each bore the date on which it was given. So the relevant time in the case of each cheque is such date. The presentment of each of these cheques was perfectly ordinary.

11. The first cheque was dated-January 14,1982. The last was dated January 20,1982. The relevant statement pertaining to the account on which they were drawn, namely, the Defendant's current account No. 0750-103744-001 with the Central District branch of the Bangkok Bank has been proved and produced. It shows - and this is not disputed by the Defendant - the following state of affairs: At the end of the day on January 14,1982 the account was in credit only to the extent of $13,093.42 (even after two sums, one of $236,000 and one of $370,024 had been credited back to the account on that day because cheques drawn on the account for those sums had been dishonoured). At the end of the day on January 15,1982, the account was in credit only to the extent of $14,503.42 (even after 3 sums of $236,000, $200,000 and $370,024 respectively had been credited back to the account on that day because cheques drawn on the account for those sums had been dishonoured). At the end of the day on January 16,1982, the account was in credit only to the extent of $10,400.42 (even after two sums, one of $438,986.15 and one of $534,584.25 had been credited back to the account on that day because cheques drawn on the account for those sums, being in fact the cheques mentioned in the first and second charges, had been dishonoured). January 17,1982, was a Sunday. At the end of the day on January 18,1982, the account was in credit only to the extent of $65,246.42 (no sums having been credited back to the account on that day by reason of dishonour). At the end of the day on January 19,1982, the account was in credit only to the extent of $78,341.42 (even after 4 sums of $200,000, $177,885, $438,986.15 and $534,584.25 respectively had been credited back to the account on that day after cheques drawn on the account for those sums had been dishonoured - for the second time in the case of the last two). At the end of the day on January 21,1982, the account was in credit only to the extent of $22,531.42 (even after the two by now very familiar sums of $438,986.15 and $534,584.25 had been credited back to the account after the two cheques in question had been dishonoured for a third time). At the end of the day on January 2191982, the account was in credit only to the extent of S28, 701. 92 (even after two sums, one of $95,002.15 and one of $217,458 had been credited back after cheques drawn on the account for these sums, the one for $217,458 being the one mentioned in the third charge, had been dis-honoured).

12. I do not propose to go into the details pertaining to the state of this account after January 21,1982. By January 20, 1982, the Defendant had written the last of the 4 cheques mentioned in the charges and the Police had been notified. Up to today the broker has not received any payment on or in lieu say of the cheques.

13. The Defendant had no overdraft facilities. On the facts proved by the Crown at the close of its case, a reasonable tribunal of fact properly directing itself would certainly be entitled to conclude that the only reasonable inference to draw was that the Defendant drew the cheques mentioned in the charges in the knowledge that they would not be honoured. It did not come as any surprise to me that the able and experienced advocate who represented the Defendant did not make any submission of no case to answer on his behalf. In light of what I have said, it was unnecessary to consider whether the presumption contained in section 29(6)(a)(i) of the Theft Ordinance, Cap. 210 applies to attempts.

14. The Defendant's case is that he believed that there were sufficient funds in his account to meet the cheques mentioned in the charges. He says that he was let down by a number of persons and that if they had not let him down there would have been sufficient funds in his account to meet the cheques mentioned in the charges. These instances of his being let down involved (i) two cheques which he had drawn in favour of his own employers, Everlasting Securities Co., (ii) two cheques which he had drawn in favour. of a firm of stockbrokers named Chong and Partners, (iii) a cash cheque which he handed to a Mr. Ram H. Dani, (iv) a cheque drawn in his favour by a Mr. Chung Chun-sang, the chairman of a quoted company, (v) a cheque drawn is his favour by a Mr. Wong Sek-wing, a friend of his who is employed in the Census and Statistics Dept. and (vi) a cheque drawn in his favour by a Mr. Chong Kin-man, a friend of his from the Philippines. The two cheques which he drew in favour of his employers, the two cheques which he drew in favour of Chong and Partners and the cash cheque handed to Mr. Dani were all drawn on the account on which the cheques mentioned in  the charges were drawn.

15. First, I will deal with the two cheques the Defendant drew in favour of his employers. One was dated December 31,1981, and was for $317,000. The other was dated January 5,1982, and was for $200,000. According to the Defendant, these cheques represented loans which he made to his employers but were not to be presented unless and until he indicated that they could be. He says that he handed both these cheques (along with some other cheques) to one of his employers' accounts clerk, a Miss Wong Sau Kuen at their place of work on December 31,1981, telling her that these two cheques were not to be presented unless and until he told her to do so. Miss Hong gave evidence to like effect. She says that she was very busy and the situation in the office was very confused and that after returning to work on January 2,1982, following the New Year break, she simply opened the drawer where she had put all the cheques and, forgetting all about what the Defendant had said, caused the cheques in the drawer to be presented as and when they had reached maturity. The way in which I have recited her evidence does more than justice to the evasive way in which she gave it. The manner in which she gave evidence was most unimpressive. The substance of her evidence was also most unimpressive. According to her, the Defendant had recently borrowed $95,000 in cash from her and she believed the money to be intended as a loan by or through him to their mutual employer who she believed to be in financial difficulties. In such circumstances, it is unlikely in the extreme that she would so easily forget something such as what she says she forgot. There is no denying that she is a close friend of the Defendant's. I do not accept what Miss Hong said in evidence. I am sure it was said out of a misplaced sense of loyalty. I also reject the Defendant's evidence in this connection.. I was not in the least impressed by what he said in this connection or the way he said it. The Defendant made a statement under caution to the Commercial Crimes Bureau on February 19, 1982. The voluntariness of that statement was not challenged. In it the Defendant expressly dealt with being let down by others in the sense I have been discussing. But he never said anything about these two cheques. A Mr. Jonas Wu Fan-ling,  who is and has at all material times been employed by the Defendant's employers as their manager gave evidence. Nothing was put to or asked of him about the loans alleged by the Defendant. I am sure that there were never any such loans.

16. I now turn to the two cheques which the Defendant drew in favour of Chong and Partners. One was dated January 11,1982, and was for $361,980. The other was dated January 13,1982,   and was for $224,226.50. These were cheques he had given to Chong and Partners to pay for shares he had purchased on his own account through them. He says that each time after giving these cheques, it appeared to him that he might not have sufficient funds to meet them so each time he got in touch with Chong and Partner's dealer, a Mr. Akbar Ismail, a friend of his, and asked him not to have the cheques presented for a while. He says Mr. Ismail agreed. It is inherently unlikely in my view that Mr. Ismail would agree to any such thing; and it seems to me no less unlikely that, if he had agreed to such a things, he would neither keep his word nor inform the Defendant that he had gone back on it. Nothing of this matter is mentioned in the Defendant's statement to the Commercial Crimes Bureau. Here too I found myself wholly unimpressed with what the Defendant said and the way he said it and I rejected his evidence on the matter. I should say that whenever I speak of rejecting any evidence given by the Defendant or any of his witnesses I mean that I am sure that it is inaccurate, entertaining no reasonable doubt that it might be accurate. Before leaving the cheques drawn in favour of Chong and partners, I will just mention one matter. Mr. Ismail did not give evidence. In his closing speech Mr. Nguyen said that the Defendant's failure to call Mr. Ismail does not lend any basis for an adverse inference. I agree.

17. I turn now to the cheque for $171,641 given to Mr. Dani. It is a cash cheque dated January 19,1982. Mr. Dani is and was an authorised clerk employed by yet another firm of stockbrokers on the same exchange. The cheque was given in part-payment of money due from the Defendant's employers as buying brokers to Mr. Dani's employers as selling brokers. Mr. Dani used this cheque to purchase a cashier's order in the same amount from the very bank on which it was drawn; and the Defendant's account was debited accordingly. The Defendant says that he had asked Mr. Dani not to present this cheque and that Mr. Dani agreed. When this suggestion was put to Mr. Dani in cross-examination he was surprised to the extent of being confused for a moment. But when he overcame his surprise ho firmly denied that he had been asked let alone that he had agreed to any such thing. I am sure that Mr. Dani's evidence on this point is accurate and that the Defendant's is not. It is inherently unlikely that Mr Dani would agree to anything of this sort. His employers must have been anxious to be paid. It is even less likely that if Mr. Dani had agreed to any such thing he would then quietly turn his back on his promise and present the cheque without a word to the Defendant about it before or after. Mr. Dani gave his evidence with an air of candour which I am sure is genuine. I am also sure that he is not mistaken about this matter.  I was not impressed by the way the Defendant his evidence on this matter either. I reject his evidence thereon. I should mention that is this connection too the Defendant claimed. to have been helping his employers financially. This was never suggested to Mr. Wu. Mr. Wu's evidence was not very explicit on the point; but it appease that the Defendant purchased the shares for which the cheque for $171,641 was part-payment for an account on which dealings had been prohibited by his employers. I certainly do not take this against the Defendant on these charges. I merely mention the matter so that there should be no appearance of insoluble mystery surrounding why the Defendant wrote the cheque for $171,641. What is important here is whether or not Mr. Dani was asked not to present the cheque. I am sure that he was not.

18. This brings me to the cheque drawn in the Defendant's favour by Mr. Chung Chun-sang. It was a cheque dated January 13,1982, and was for $341,259. The witness called by the Crown to deal with this aspect of the case was a Madam Leung Wing-yee. She used to hold the position of honorary consultant to the company of which yr. Chung is the chairman, namely, Trans Hong Kong Properties Ltd. One of the matters of which she gave evidence was something referred to as 'the Sze Har Kam account'. This was a margin account with the Defendant's employers. Originally, this account was maintained by Madam Leung and a friend of hers whose name the account takes. Subsequently, Mr, Chung traded on that account. By January 13,1982, the position was that certain shares deposited as security against purchases on that account were to be returned to Mr. Chung and Mr. Chung was to provide two cheques in return. One of the chequess was the one for $341,259. The other was one for $1,203,329.40 payable to the Defendant's employers. The reason the cheque for $341,259 went to the Defendant was because he had to appease his employers it seems - paid that much of what was owing to his employers on that account. Madam Leung was dealing with the matter for Mr. Chung. She expected that the shares would be returned upon the handing over of the cheques on the morning of January 13,1982 They were not. She let him have the two cheques anyway. But, according to her, she told him that if the shares were not delivered by the morning of January 14,1982, the cheque for $341,259 would be stopped. She says that she told him this casually in the morning and seriously in the afternoon. The shares were not delivered until January 16,1982. Madam Leung says that she carried out her warning to stop the cheque. When the shares were in fact delivered on January 16,1982, the Defendant was given a cashier's order in the very sum for which the cheque was drawn. The Defendant denies that he was ever warned that the cheque was going to be stopped. Indeed, Mr. Nguyen submits that the evidence suggests that the cheque was never stopped at all. He points to the fact that in the advice from the bank on which it was drawn a cross appears in the box against the words 'refer to drawer' and says that this is a polite indication of insufficient funds. It could, in my view, also be a polite way of saying that payment was counter-manded. The manager of the branch of the Bangkok Bank where the Defendant has his account did not seem to think so; but he was in no position to give reliable evidence of the practice of the bank on which the $341,259 was drawn. To say that the expression 'refer to drawer' Would never be used to cover a countermanding simply does  not accord with the experience of the Courts in dealing with claims on cheques. In any event, the use of those words here do not cause me to doubt Madam Leung's evidence. The Defendant did refer to this matter in his statement Crimes Bureau. He said that it was sometimes after 4.00 p.m. on January 20,1982, that he discovered that the cheque for $341,259 had been dishonoured. This is a rather odd thing for him to say in light of the fact that he had received a cashier's order on January 16,1982, in replacement of this cheque. Mr. Nguyen submit that this part of his statement involves an honest mistake. Having observed them both in the witness - box end having carefully considered their evidence, I find myself sure that Madam Leung's evidence on this matter is accurate and that the Defendant's is not. I am sure that she did warn him on January 13,1982, about stopping the cheque as she says and that the cheque was indeed stopped. Finally in this connection, I should mention that the Defendant never paid the cashier's order for $341,259 into his account.

19. The cheque drawn in the Defendant's favour by Mr. Wong Sek-Wing can be dealt with quite briefly. It was a cheque dated January 21,1982, for $223,168which Mr. Wong drew in favour of the Defendant. The Defendant called Mr. Wong to give evidence. Mr. Wong said that he gave the cheque to the Defendant 2 or 3 days before January 21,1982, telling him that he did not have the funds to back the cheque and that he would try to borrow money from his mother-in-law for the purpose but was not sure if he would be able to do so. I accept this evidence. But it hardly helps the Defendant. The respect in which he claims Mr. Wong let him down is that, quite apart from dishonour, Mr. long was supposed to pay the cheque in by January 21, 1982, but failed to pay it in until January 23,1982.I am sure that Mr. Wong handed the cheque to the Defendant (with the warning referred to) and that the Defendant was not let down by any failure on the part of Mr. Wong to pay in the cheque. Having regard to the dates, dishonour probably does not matter; but for the sake of completeness, I should say that I am sure the Defendant knew full well that unless and until Mr. Wong brought him the happy news that he had managed to get the necessary funds from his mother-in-law the cheque for $223,168 could not relied upon. Finally on this matter, I should add two things. First, the Defendant did not mention this cheque to the Commercial Crimes Bureau in his cautioned statement. Secondly, he was no more impressive in the way he gave his evidence about this cheque than he was in giving his evidence on the other matters I have discussed.

20. Now I come to the cheque dated January 15,1982, for $650,000 drawn by Mr. Chong, a friend and former colleague of the Defendant's Mr. Chong now resides in the Philippines. He is in business there with two brothers of his. They sell confectionary on a wholesale basis and they also operate a biscuit factory. The Defendant's evidence with regard to this cheque is broadly as follows: In December 1981, Mr. Chong was in Hong Kong. The two of them decided to speculate in shares. Shares would be purchased in the Defendant's discretion. Half were to be his and half were to be Mr. Chong's. As his share of what one might call the initial working capital, Mr. Chong drew the cheque for. $650,000 and gave it to the Defendant. It was given towards the end of December 1981, but was post-dated to January 15,1982, because funds had to be brought over from the Philippines to back the cheque, and that took time. On January 15,1982, after the Defendant had written and given the cheque mentioned in the second charge, he learned from Mr. Chong, who telephoned him, that he ought not to present the cheque yet because there was some delay in bringing money over from the Philippines. Under cross-examination, Mr. Chong said that the date, January 15,1982, was just an arbitrary date which he put on the cheque chosen as the earliest possible date, that the Defendant knew all about the difficulties of smuggling money out of the Philippines and that he would not expect the Defendant to rely on the cheque for $650,000 in any matter of importance. I am stirs that this is right. The way and the circumstances in which Mr. Chong went back on this evidence later on only went to convince me that such evidence was accurate. The cheque for $650,000 was not mentioned in the Defendants statement to the Commercial Crimes Bureau. The money from the Philippines never arrived. Mr. Chong says that after receiving a series of excuses from his brothers over difficulties in having the money brought to Hong Kong, he discovered that they, or one of them, had spent the money on something else. This was, on his story, done despite their earlier agreement to the joint venture and their earlier promise to have the money brought over. Having seen and heard the Defendant and Mr. Chong, I am sure that the Defendant never relied on the cheque for $650,000. I have a just a reasonable doubt as to whether or not the cheque was given. But I am sure that the Defendant never entertained any honest belief that the funds would be available to back the cheque for $650,000 at any  time when he wrote the cheques mentioned in the charges.

21. Dealing with matters generally once more, I will say a word about certain notebooks produced by the Defendant in support of evidence as to the understanding which he had of the state of his account. I am sure that they were fabricated for the purpose of the trial. That conclusion leads me to place no reliance on them whatsoever one way or the other. I do not infer guilt from such fabrication. Innocent men may well foolishly lie or fabricate evidence in the fear that the simple truth might not be good enough. As to why I am sure the notebooks are fabricated' my reasons are as follows: They were never mentioned to the Police. The Defendant's cautioned statement does net accord with the an entries in the notebook. The entries have every appearance of being too neat to be true. The very first page of the Defendant's used cheque book contains an entry which coninoides what is set out (accurately) in his bank statement as the balance in his account at the end of the day on January 13,1982. While this entry coninoides with the bank statement, it is at variance with the relevant notebook. The Defendant was quite taken aback when Counsel for the Crown asked him about this matter. After some hesitations, he put forward the wholly unconvincing explanation that he made the entry after he discovered the true state of affairs after January 21,1982.

22. Before I pronounce my verdicts on each of these charges, there is one aspect of the case I would like to deal with. When this matter was first reported to the Police the report was made at a Police Station. The officers there declined to deal with the matter because they took the view that it was a civil matter. It would appear that the complainant persisted and drew the matter to the attention of the Commercial Crimes Bureau (doing so on legal advice I expect). That bureau dealt with the matter with a commendable measure of thoroughness. I do not wish to be critical of the officers who had declined to deal with this matter. There is, however, a lesson for them and others in their position to learn from this case. Just because something is a civil matter does not mean that it does not involve the commission of a crime. It is quite right that the police should be careful to see that their intervention is not being sought merely to enforce claims (as may sometime happen although it certainly did not happen in this case). But equally, officers should be careful not to turn complainants away merely because they claimants too. As to the Commercial Crimes Bureau, the officers of that bureau who investigated this case have, as I said, done so with a measure throughness which I commend.

23. As I am sure that the Defendant's explanations are untrue, the statutory presumption to which I have referred does not really arise. It follows, however, that anything he has to prove on a balance of probabilities he has failed to prove. I am satisfied beyond reasonable doubt that he is guilty of all the offences with which he is charged; and I convict him on each and every one of the 4 charges against him.

Representation:

Mr. J. Conyngham, Crown Counsel, for the Crown.

Mr. P. Nguyen (instructed by Messrs. P. T. Yeung & Co.) for the Defendant.