Man Chi-lun v. Lo Siu-kuen
Read the full judgment text of DCCC 194/1981 on BabelCite. This District Court judgment was delivered on 15 June 1982.
1. The two defendants between them faced 19 charges and at the conclusion of the Crown's case I held there was a case to answer on all charges (except the 16th Charge). This consequence upon a submission presented on behalf of both defendants of no case to answer. A copy of that Ruling is attached here to as an appendix to these reasons for verdict.
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DCCC000194/1981 IN THE DISTRICT COURT OF HONG KONG HOLDEN AT VICTORIA CRIMINAL JURISDICTION CASE NO. 194 OF 1981 ___________________ BETWEEN
_________________ Coram: Judge Caird in Court. Date: 15 June 1982 ------------------------------ REASONS FOR VERDICT ------------------------------ INTRODUCTION 1. The two defendants between them faced 19 charges and at the conclusion of the Crown's case I held there was a case to answer on all charges (except the 16th Charge). This consequence upon a submission presented on behalf of both defendants of no case to answer. A copy of that Ruling is attached here to as an appendix to these reasons for verdict. 2. Before continuing I wish to comment upon the charges as preferred. The heading of this case presents one MAN Chi-lun as 1st defendant and LO Siu-kuen as 2nd defendant. This is not in accordance with the charges as drafted, and throughout this Ruling I intend wherever possible to refer to the defendants by name and if I do otherwise it is related to the heading and to the position in the dock in which each defendant sat. This carelessness does not in my view vitiate the effect of some of the charges. I have been careful to endeavour to keep my note accordingly, and I state at this state that I have been satisfied throughout with the identifications effected, when the 1st defendant has been identified and my note records such and likewise the 2nd defendant. There is no doubt in my mind that it has been the heading in respect of which the defendants have been identified MAN Chi-lun as 1st defendant, LO Siu-kuen as 2nd defendant. NO CASE RULING 3. I dealt with a number of matters of law in my earlier Ruling, and adopt in this judgment my views therein expressed summarised as follows :-
BACKGROUND 4. All alleged offences occurred during September, October and November of 1980. Both defendants together with PW5, one CHAN Kam-shing (a cousin of MAN Chi-lun) were proved to be directors of a company called Emerser Co. Ltd. which company was engaged in trading in plastic materials. 18 charges involved post-dated cheques issued in payment for the purchase of plastic materials and PW5, an important witness, whom I accept as truthful and accurate, explained that MAN Chi-lun and he were the initial two signatories to the company's bank account it being thought there had to be two signatories to the company's cheques. Subsequently, it was ascertained that only one signature was needed and MAN Chi-lun became sole signatory. 5. I hold as facts that Emerser Co. Ltd. was duly incorporated; both defendants enjoyed the status of directors; that MAN Chi-lun was a signatory to both the company's bank accounts and signed all cheques which I have consider i.e. those 18 cheques relating to the 18 charges where cheques were involved. Further that MAN Chi-lun was the "boss" (PW5's description) and was responsible for depositing monies to the credit of the company's account with its bankers. I accept PW5 as being able to identify signatures of both defendants and further I accept his identifications as given in evidence. Again I held as a fact that LO Siu-kuen although a director of the company was not ever a signatory to the company's bank accounts. 6. Under this head it only remains to note in conclusion that Peter kimpton Wong on behalf of both defendants has admitted as facts pursuant to section 650 of Cap. 221, those matter referred to in the summary of evidence proposed to be given by PW6, PW7 and PW8. SUMMARY OF EVIDENCE 7. The charges for the most part fall naturally into groups. Factors affecting these are the common nature of the charges alleged, witnesses in common and defendants charged. 8. I shall deal with the first three charges together. Each of these charges was brought pursuant to section 18(1) together with section 20 of the Theft Ordinance, Cap. 210 and involved the defendant of a debt by Emerser Co. Ltd. allegedly by falsely representing that post-dated cheques would be met. Each is against both defendants and alleges that they connived as directors in the commission of the offence alleged as having been committed by the company. The main witness called by the Crown was PW1 LEUNG Yau, proprietor of Successful Plastic Works (Shing Fu Plastic Material Co.). I accept this witness being truthful and hold that between the 13th to 15th September 1980, LO Siu-kuen telephoned him and ordered two hundred bags of plastic material and that LO said that payment would be made in cash upon delivery. 9. Goods were delivered about the 15th (P1 applies) and payment was made by post-dated cheque. The witness was told that there was not enough cash to pay and took the cheque to PW1 later, after delivery. 10. When LO delivered the cheque (subejct of the 1st charge) he ordered a further three hundred bags of plastic material. Upon the witness expressing some concern, LO used LAI Mai-chor (PW2) as a reference and after PW1 telephoned LAI he accepted the order and the cheque subject to the 1st charge believing the cheque would be met. 11. The order was split into two deliveries and post-dated cheques given (P5, P6) some time later. 12. The post-dated cheques were presented in due course and dishonoured. 13. At a meal earlier in October which D2 hosted, the witness met MAN Chi-lun at which meeting LO asked for a thousand bags of black grain after which two hundred bags were delivered. LO then claimed that payment would not be made until all thousand bags were delivered. Despite LO's promise no cheques was ever delivered. "Boss not around" was his explanation. 14. The witness pressed and ultimately received a post-dated cheque to replace the first cheque (P8) was filled in and signed by MAN in his presence and as I understand it, this cheque ultimately bounced. 15. The witness was cross-examined and various statements put to him in particular whether he knew one LAI Wah. He agreed that LAI was an accountant, or rather accounts clerk at Emerser. 16. I accept there was some confusion in the witness's mind but this in my view does not detract from his essential honesty. 17. I turn now to the second group of charges which are charges 5 to 16 inclusive. All brought pursuant to section 18(1) and 20 of the Theft Ordinance alleging that the 1st defendant MAN Chi-lun connived at offences committed by Emerser Co. Ltd. The firm traded with in this incident was Lai Yun Kee Plastic Material Co. Ltd. and PW2 LAI Mai-chor was the Crown's witness. 18. The witness had known MAN Chi-lun for about a year when he was contacted by the 1st defendant, the previous relationship having been when D1 was connected as an employee with a firm called Chong Tak. 19. The initial contact with D1 acting for Emerser was made around August and September 1980. One month's credit was arranged between the parties, and some ten to twelve transactions were effected and cheques were received some four or five days after delivery. The witness going to MAN's office in Wanchai to collect same and on occasion cheques were issued in respect of a number of deliveries. Cheques (P9 to P20) were produced and the signatures were subsequently identified by PW5. 20. The Crown's witness claimed he could produce copies of invoices and was given time to do so, PW3 being interposed. After his recall the witness claimed he had traced duplicates of invoices and produced P45 to P59. He acknowledged that the cheques did not match with the invoices. It appeared and I believed the position to be established that payments on account of deliveries, were made and also that the cheques were post-dated. The witness was cross-examined and asked if he knew a Mr. LAI. He said no and was pressed at length. He maintained his stand saying that he only knew MAN Chi-lun. I accept witness's denials. Also produced by him was as document showing a figure $189,163.25 (P22), this in chief, and I was pointed out in cross-examination this figure did not correspond to the amount owing. I accept the witness's explanation that the 1st accused, MAN, suggested that they settled the amount for cheques by instalments before arranging for payment on the vouchers outstanding. Despite the matters put to the witness in cross-examination, I believed he received cheques as testified to by him and that all were dishonoured. 21. The 17th charge was against both defendants and was brought pursuant to sections 18(1) and 20 of the Theft Ordinance. The firm traded with was Hong Kee Plastic Car Factory and the witness was one TAM Hong-wing, PW3. 22. I found this witness's evidence difficult to comprehend and indicated so to Counsel, and I am indebted to both advocates for presenting to me a very useful summary of Tam's evidence given on the 8th of June and also a useful outline of the accounting position between the two companies. I hold that events transpired as testified to by PW3 and after the series of transactions occurred, as the witness stated, some ABS material was unsatisfactory. Tests were conducted and he stopped payment of a cheque given by him. He telephoned 2nd accused, LO, and informed him the materials did not confirm to sample. During the course of a telephone conversation witness received a telephone call from the Bank asking for written instructions to stop the cheque, and as the witness had two telephones on his desk, the 2nd accused on another line could overhear this conversation. As a result, he asked for payment not to be stopped, because he was in great difficulty. The witness had said to LO that the goods were to be taken back and cheques and invoices were to be returned to himself, PW3 immediately. 23. Eventually, LO came to PW3's factory with cheques and invoices and a potentially important conversation conversation was alleged to have ensued. The witness alleged that LO said they (Emerser I assume) were in great difficulty, and would try to find materials to replace those which were substandard. In the event after a series of transactions had been effected between the parties, the witness received a cheque $18,411.25 (P33a) representing the amount finally due after defective materials had been returned (P24 to P30 refers). 24. Evidence of great potential importance arose when the witness asserted that D2 assured him that this cheque would be met. In chief he said this assertion was made repeatedly but after cross-examination he modified this to one occasion only. 25. The cheque was presented on the 4th of December and was dishonoured. 26. It was common ground between Counsel that there was no mention in PW3's statement to Police of D2's assurance. Witness said in evidence that he does not recall whether he told this to Police but he now recalls this conversation clearly. 27. I believe the witness in all respects except these two aspects. He has modified his evidence between examination-in-chief and cross-examination, and further there is nothing in the Police files to show that he raised this at an earlier opportunity. 28. I do not believe him to be a liar that rather that with the passage of time he has unwittingly perhaps with genuine belief embellished his story. 29. These two potentially damaging aspects allegedly said by D2 to the witness are not therefore available against LO in respect of this or any other charges. 30. I confirm I believe the witness in all aspects including those other matters where he came under strong pressure from Mr. Wong, e.g. his method of negotiating a deal. 31. There are two charges, the 18th and 19th, each against MAN Chi-lun, involving goods supplied by Hong Kong Jesco Ltd. these charges were brought pursuant to section 17(1) of Cap. 210. 32. PW4, HO Shuk-wan, Managing Director, gave evidence and said she was introduced to MAN Chi-lun through an introducer called KWAN and subsequently came to have business dealings with them. The first meeting was November the 5th and was more of a social meeting followed by telephone calls, and subsequently on the 10th of November MAN came to visit her at her offices. He had a purchase order with him, produced as P34, which document referred to two types of material with a ten-cent differential in price. The quantities were identical. Payment was to be effected as to 50% in cash on delivery of the 1st consignment on the 14th November, and the second consignment was to be met by a cheque post-dated the 1st of December 1980, delivery to be effected on the 15th of November. 33. Documents and payment were given to PW4 on the 12th of November, and this witness said her business was that of a go-between; that she had nothing to do with "material business". Both deliveries were effected, payment for that of the 14th was not and the post-dated cheque was dishonoured on the 1st of December 1980, but before this there was a further transaction on the 20th November. That day both defendants brought another order to her office, these for two thousand bags of material. 34. As the witness was leaving for the Philippines on the 21st, and a cheque was brought to her office on the 20th in respect of the delivery of five hundred bags to be effected on the 21st (produced P37). 35. On the 24th November, payment was stopped as there was a problem over delivery, the address not being sufficiently clear. However delivery was ultimately made on the 26th. I accept the Crown's evidence in this regard, a receipt being produced from the witness's company records (P38). The cheque was presented on the 27th and was dishonoured, and the witness tried to contact the Emerser Co. Ltd. but all efforts proved fruitless. 36. I do not prepare to deal with the 4th charge in any detail at this stage, except to allege that this was an allegation against LO Siu-kuen of obtaining property by deception. 37. As far as the evidence was concerned, there was only one other witness for the Crown, PW5 CHAN Kam-shing and I have already referred to his evidence as being important. CHARGES BROUGHT PURSUANT TO SECTIION 18(1) OR 17(1) TOGETHER WITH SECTION 20 OF THE THEFT ORDINANCE CAP. 210 38. This comprises the 1st to 3rd charges and the 5th to 19th charges, all inclusive. 39. I am in no doubt that the Crown has proved beyond all reasonable doubt that Emerser Co. Ltd. committed each and everyone of these offences, the debt some was deferred and the goods obtained dishonestly and by deception which deception consisted of impliedly representing that postdated cheques would be good and valid orders for payment of the respective sums contained in those cheques. 40. As stated previously, I believed the Crown's witnesses with the one exception relating to aspects of PW3's evidence, and I believed the offences were committed with knowledge on the part of a responsible officer of the company; that the cheques would not or could not be met upon presentment. 41. Essential to this case, the question arises as to whether there was any connivance in the commission of these offences by either of the defendants. 42. I have been handed dictionary definitions by both advocates. Shorter Oxford English Dictionary by the Crow and Websters by Mr. Wong.
the definition in Websters :
43. For purposes of this my judgment the usuage of the words in section 20"… proved have been committed with the consent or connivance of any director … He as well as the body corporate shall be guilty of that offence and shall be liable … ". is the same as section 84 of the Interpretation and General Clauses Ordinance Cap. 1 and I am bound to hold that a situation where officers deliberately shut their eyes to an obvious means of knowledge founds criminal liability R. v. Mirchandani & others (1977) H.K.L.R. p.522. 44. To elaborate, taking the dictionary definitions, I think the less onerous parts do not apply. In my view, there has to be a tacit sanction where an officer has, officially or legally, a duty to act, in other words a failure as an officer of a company to take action against the known activity being conducted on behalf of the company. FINDINGS 45. I now deal with LO Siu-kuen, D2. Firstly in respect of the charges one to three. 46. From the evidence he appeared to me to be acting as a salesman. He did not have signing power on the company's cheques. From PW5's evidence it appeared that MAN Chi-lun was the boss or rather the ultimate boss and was responsible for payments into the company's bank accounts, MAN having arranged for his cousin PW5 to be the second signatory. 47. In these circumstances, I do not accept that the Crown has established beyond reasonable doubt the requisite knowledge of the company's financial position at the banks for LO Siu-kuen to have sanctioned, the tendering of post-dated cheques which would to his knowledge not be met. 48. Turning to the 17th charge, with my views, as to PW3's evidence already expressed, the same considerations apply, again I am not convinced to the standard required of LO Siu-kuen's guilt. 49. Still dealing with the 2nd accused LO Siu-kuen, I now turn to the 4th charge. This was brought pursuant to section 17(1) of Cap. 210, and of course this is a charge not alleging or involving connivance imported by virtue of section 20 but nevertheless, I believe the same considerations apply to his knowledge or rather lack of knowledge of the company's affairs, and that here he must be given the benefit of the doubt. I stress that this arises from the evidence of PW5, an honest witness. 50. I turn to MAN Chi-lun, He was the boss. He is responsible to pay in monies. He signed all cheques and had PW5, his younger cousin, sign with him leaving his other director unconnected with the bank account. 51. He took part in some of the meetings conducted as described by witnesses and in fact was the principal figure dealing with Lai Yun Kee. The evidence shows a pattern of ordering plastic materials and affecting supposed payment by post-dated cheques. 52. It is of interest, and in my view of evidential value, that Jesco was paid (18th charge) upon delivery and then further payment was post-dated, but before that post-dated cheque was presented, another five hundred bags had been ordered and delivered (19th charge). Again the change of bank accounts is in my view of some significance. 53. The evidence in respect of each charge considered in isolation together with the evidence in respect of the other charges taken into account as proof of knowledge or intent is sufficient in my view to establish beyond reasonable doubt that he connived in the commission of these offences.
IN THE DISTRICT COURT OF HONG KONG HOLDEN AT VICTORIA CRIMINAL JURISDICTION CASE NO. 194 OF 1981 ___________________ BETWEEN
_________________ Coram: His Honour Judge Caird in Court. Dates: 11 June 1982 RULING (Dictated in Court) 54. The two defendants jointly faced 4 charges (1, 2, 3, 17) have obtaining pecuniary advantage by deception pursuant to section 18(1) and section 20 of the Theft Ordinance. 55. In addition MAN Chi-lun faces two charges of obtaining property by deception (18 & 19) and 12 charges of obtaining pecuniary advantages by deception (5, 6, 7, 8, 9, 10, 11, 12, 14, 16) and LO Siu-kuen faces one further charge of obtaining property by deception (4). Basically each charge concerns one of defendants ordering a quantity or quantities of plastic materials and arranging credit for payment by means of a post-dated cheque. 56. At the close of the Crown case Mr. Perter Kimpton Wong submitted there was no case to answer and in brief the submissions were.
57. Mr. Wong also analysed the evidence admitted in the light of the law as submitted by him saying that there was no evidence of "dishonesty inducement" applicable or "deception" upon which convictions could be founded and postulated the submission that the company only may be liable in a civil suit and that MAN Chi-lun by signing the cheques could not become even civily liable. 58. I now consider these submissions in turn : 59. Firstly, with regard to the status of the evidence it is trite law that my decision whether to uphold or reject his submission, does not depend upon whether I could acquit or convict but whether it is such that a reasonable tribunal might convict. 60. I believe the witnesses have not been so discredited by cross-examination are shown to unreliable that I acting reasonably could not convict and accordingly reject this submission. 61. Secondly, to consider the strength backed by authority of Mr. Wong's submission as to what implied representations are made in Hong Kong by the drawer of a post-dated cheque. 62. The cases referred to by Mr. Wong relate to "present facts" not to a future state of affairs i.e. an unstated intention to pay in sufficient funds to meet each cheque before presentment. 63. I am indebted to Miss Crabtree for drawing my attention to section 15(4) of the Theft Act (U.K.) :- "For the purposes of this section "deception" means "any deception (whether deliberate or reckless) by words of conduct as to fact or as to law, including a deception as to the present intention of the person using the deception or any other person." However, in Hong Kong the definition is extended : "For the purposes of this section – "deception" means any deception (whether deliberate or reckless) by words or conduct as to fact or as to fact or as to law, including a deception relating to the past, the present or the future and a deception as to the intentions or opinions of the person using the deception or any other person." 64. The words "including a deception relating to the past, present or the future" are added. It appears to me that the concept of a deception relating to the future is applicable here. And consequently the drawing and handing over of a post-date cheque in Hong Kong constitute an implied representation that (adopting the statement of professor Kenny Archbold para. 1031) : "the cheque is a good and valid order for the payment of that amount, i.e. that the present state of affairs is such that in the ordinary course of events the cheque will on its future presentment be duly hounoured." 65. Thirdly, the presumption relied upon by the Crown and submitted by Mr. Wong to be imapplicable in respect of the first three charges together with the 17th charge reads as follows :
66. The sections referred to are sections 17, 18, 18A and 18B. 67. Section 20 refers to a body corporate committing an offence under sections 17, 18 , 18A, 18B and then in the case of Directors etc. imposes liability by stating he, as well as the body corporate "shall be guilty of that offence and shall be liable to be preceeded against and punished accordingly." Of course such liability is consequent only upon proof of consent or connivance of the officer concerned. 68. Section 18 by way of comparison uses the words "….. shall be guilty of an offence and shall liable on conviction ….." 69. It appears to me that reference in section 20 to "that offence ….." makes the matter clear in that section 20 does not of itself create the offence. This being effected by virtue of section 18(1) with section 20 providing that certain additional parties enjoying the relationships there listed are guilty of the section 18 (17, 18A, 18B) offence. 70. Accordingly in my view the presumption applies to those instances where section 20 is prayed in aid by the Crown to make the two defendants liable i.e. charges 1, 2, 3 and 17. 71. Forthly, dealing with similar facts. In D.D.P.V. Boardman (1974) 60 C.A.R. 165, the emphasis as stated by thee House of Lords in determining the admissibility of this type of evidence is whether the acts sought to be introduced in evidence bear a "striking similarity" to those acts relating to the charges presently being dealt with. 72. In the instant case, I have no hesitation in concluding that the acts relied on by the Crown are not strikingly similar. MAN Chi-lun was the boss allegedly handling money, controlling office staff and dealing with some sales. LO Siu-kuen was on the evidence, the salesman and, although a director, did not have signing authority on the company's bank account. 73. In arguing for the admissibilty of evidence adduced on some charges being admissible in respect of other charges Miss Crabtree relies on three cases, first, R. v. Simmonds 2 Cr. App. R. 303 :
74. Second, R. v. Ollis (1900) 2 QB 758 which was a cheque case where evidence of other cheques which were dishonoured on presentation was admitted :
75. Both these cases precede in point of time Thomaon v. D.D.P. (1918) AC 221 at 232 where Lord Sumner said :
76. I believe there is nothing in Boardman's case to detract from the authority of Thompson and that the evidence in the instant case is admissible for the purposes sought. Any Tribunal must in such circumstances disregard the prejudicial effect in considering each charge separately as against such accused separately. 77. Dealing with Mr. Wong's final submission I believe that there is evidence which may be regarded by a reasonable tribunal to prove "dishonesty, inducement or deception", (I use Mr. Wong's words) which is not to say that such evidence is sufficient to find guilt. That is a question which is not be considered by me at this state. 78. Finally, the question of the company's responsibility and the 1st defendant's MAN Chi-lun's relation to that responsibility in the civil sense are not germane at present as I am dealing with statutory offences. 79. There is a case to answer as follows :- 80. Against both accused 1st, 2nd, 3rd and 17th charges. 81. Against 2nd accused LO Siu-kuen in respect of the 4th charge. 82. Against 1st accused MAN Chi-lun in respect of the 5th to 15 charges inclusive. 83. 16th charge against Man Chi-lun only and I confirm and record my earlier ruling of no case to answer against Lo Siu-kuen. 84. Against the 1st accused MAN Chi-lun in respect of both the 18th and 19th charges.
Representation: Miss M. Crabtree, Crown Counsel for the Crown Prosecutor. Mr. Peter Kimpton Wong of Messrs. Peter Kimpton Wong & Co. for accused. IN THE DISTRICT COURT OF HONG KONG HOLDEN AT VICTORIA CRIMINAL JURISDICTION CASE NO. 194 OF 1981 _____________________ BETWEEN
_____________________ Coram : His Honour Judge Caird in Court --------------------------------- REASONS FOR SENTENCE --------------------------------- 85. I don't propose to review the evidence at length, there has been a sum of approximately $400,000 involved involving post-date cheques in which obviously from the evidence you have played a large part in organising, you being the main signatory and in some instances as sole signatory. You were "the boss" in an enterprise where a number of people have been hurt financially, and hurt to a very substantial extent. In my view in these circumstances the law calls for a deterrent sentence, on the one hand to deter you from committing it again and the other to deter anyone else from typing to undertake the same form of activity. 86. I have listened to what you Counsel has had to say and of course it is of great importance from Miss Crabtree has told me that you have a clear record. Your age is a factor which I must and do take into mitigation. You are young, immature in business and I strain to take this into account in your favour but nevertheless an immediate custodial sentence is called for. In view of the number of offences and the total amount of money involved I sentence you to a term of three year's imprisonment in respect of each offence committed, all sentences to be served currently. So that is charges one to three, five, through to nineteen, each inclusive.
Representation: Miss M. Crabtree Crown Counsel for the Crown Prosecutor. Mr. Peter K. Wong and Peter Kimpstone & Co. for both Accused. IN THE DISTRICT COURT OF HONG KONG HOLDEN AT VICTORIA CRIMINAL JURISDICTION CASE NO. 194 OF 1981 _____________________ BETWEEN
_____________________ ADDENDUM _____________________ Representation: Miss M. Crabtree Crown Counsel for the Crown Prosecutor. Mr. Peter K. Wong and Peter Kimpstone & Co. for both Accused. |