Cheng To-kin v. The Queen

CACC000288/1972

IN THE SUPREME COURT OF HONG KONG

(APPELLATE JURISDICTION)

CRIMINAL APPEAL NO. 288 OF 1972

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Coram: Full Court (Huggins and McMullin, JJ.)

Date of Judgment: 13th October 1972.

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JUDGMENT

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McMullin J.

1. The appellant was tried in the District Court on seven charges of theft. Each charge was concerned with the theft of a quantity of gems, principally emeralds, rubies and diamonds, the complainant on each charge being one of seven different business concerns. At the conclusion of the Crown's case, Mr. Leong who then appeared for the appellant and who now appears on this appeal, submitted that the appellant had no case to answer on any of the charges. On the admission by the Crown that the evidence did not support the third charge, the District Judge ruled that the appellant had no case to answer on that charge. His ruling went upon basis that the property in the gems described in that charge had passed to the Ka Fung Jewellery Company on the payment therefor of the purchase price by means of a post-dated cheque purportedly signed by the sole proprietor of the Ka Fung Company, a Mr. WONG Chow. It had not been proved that the appellant either represented that the cheque would be met on due date or that he was aware that there were not at the time sufficient funds in WONG Chow's account to meet the cheque. There was in addition the fact that the complainant company on the third charge had been permitted by WONG Chow to take away a quantity of jewellery from the Ka Fung Company at a discount of 60% in partial settlement of the outstanding claim regarding the gems covered by that charge. On all the other charges, the learned District Judge ruled that the appellant had a case to answer. But despite the fact that the appellant did not give evidence and did not call any witnesses, he was acquitted on the second, sixth and seventh charges for reasons of a similar nature to those which had prevailed in relation to the third charge upon the submission of no case. He was, however, convicted of the theft of certain gems from a company called Fantana Limited, the victim of the first charge. As regards the remaining charges - the fourth and the fifth charges - he was found not guilty of theft but guilty under Section 32 of the Theft Ordinance of the offence of obtaining the property laid in those charges by deception from the two complainant firms named therein viz. Paras Jaims and Sputnik Manufactory respectively. He was given concurrent sentences of twenty-one months' imprisonment on each of these three charges.

2. Originally, the case came before another Full Court on an application for leave to appeal against sentence only, there being upon the record a notice of abandonment of appeal against conviction dated 18th April, 1972. Upon due enquiry it appeared advisable to the court to permit the appellant to withdraw his notice of abandonment and the case was accordingly put back in order to enable him to submit his grounds of appeal against conviction as well as sentence.

3. Before considering the grounds of appeal now advanced, it will be helpful to outline the Crown's case on the surviving charges. There was uncontested evidence that the appellant and a person called SIT Cho-ning were partners in a business concern known as the Ka Fung Jewellery Company with a registered place of business at No. 88, Kowloon City Road, and that that firm was registered on the 25th of September 1970. An account in the name of that firm was opened with the Hong Kong Industrial and Commercial Bank on the 17th of September 1970 with the appellant as its sole authorised signatory. There was no evidence that any person dealt with the appellant or his partner at those premises, and we have no information concerning the nature of the premises or of the volume of business, if any, transacted there. It is clear, however, that some time in 1971 the appellant was to be found taking part in business transactions carried on at a premises in No. 51, Chung King Arcade, Tsim Sha Tsui under a name identical with that of his own partnership i.e. Ka Fung Jewellery Company. The registered sole proprietor of this latter establishment was WONG Chow. In his judgment the learned District Judge referred to these two firms as K.F.J. Co. (1) and K.F.J. Co. (2). He came to the conclusion that the appellant, the co-proprietor of K.F.J. Co. (1), had changed his business address to 51, Chung King Arcade, but apart from some hearsay evidence contributed by one of the bank witnesses, the only evidence upon which he was entitled to come to that conclusion was a letter dated 15th of April, 1971 (exhibit P 39) in which the appellant, writing to the bank concerning the account of K.F.J. Co.(1) under the letter head of the K.F.J. Co. (2), asked the bank to stop payment on a certain cheque issued by "our company". Mr. Leong asked us to say that the learned District Judge was not entitled to assume that the K.F.J. Co. (1) had shifted its business to the K.F.J. Co. (2) premises merely on the strength of that letter coupled with the fact that the appellant's bank upon receipt of it had altered the address of the appellant's account on the specimen signature card. In his contention, the furthest the evidence could take the matter was that the appellant after April was working in WONG Chow's Ka Fung Jewellery Company in some capacity while still remaining a partner of the Ka Fung Jewellery Company at 88, Kowloon City Road. He does not deny that such a manner of trading might be confusing or possibly even suspicious, but he askes us to say that there is on the face of it nothing wrong in the proprietor of one jewellery company taking employment in another jewellery company of the same name at different premises.

4. It was after this change in his manner of working, i.e. after April, 1971, that the appellant first had business transactions with certain of the complainants on the charges before the District Court. A number of cheques drawn upon K.F.J. Co. (1)'s account in favour of the complainants on the first, second, sixth and seventh charges related to dealings with those firms which were brought to a successful conclusion, and the cheques were in every case honoured. The Crown, of course, would have it that these earlier transactions were simply a matter of building up business confidence for what the Crown regards as his fraudulent behaviour in respect of the very much larger deals which subsequently were entered into between the complainants and the Ka Fung Company through the mediacy of the appellant - and which, it is alleged on behalf of the appellant, were deals not with the appellant's Ka Fung Company but with that of WONG Chow.

5. The learned District Judge confronted a situation of some difficulty in dealing with the evidence placed before him. Since the appellant himself did not give evidence, and since WONG Chow was never called as a witness either by the prosecution or the defence, and, further, since there was no evidence led by the Crown as to why WONG Chow was not available, the relationship between these two identically named companies has necessarily remained somewhat mysterious. Mr. Leong points out that it cannot be suggested that WONG Chow was a non-existent person or that the appellant was in truth the owner and proprietor of the Ka Fung Jewellery Company No. 2. Even Mr. Bell, the witness who gave evidence for the complainant on the first charge said that he regarded the appellant as being one of the proprietors of the business with which he was dealing. The sixth prosecution witness, Mr. YU Kam, who gave evidence on behalf of the complainant company referred to in the third charge (the charge which was dismissed on the submission of "no case") positively stated that he knew that WONG Chow was the sole proprietor of the Ka Fung Jewellery Company, and that on the 14th of September, he had gone to the Ka Fung premises in Chung King Mansion to press the appellant for payment for the gems taken by him on account, and that he there found the proprietor WONG Chow, who told him that the defendant was then in Taiwan. Likewise the tenth prosecution witness, Mr. LI Lung-chuen, who gave evidence on hehalf of the complainant company referred to in the seventh charge, said that, although his dealings were with the appellant, and although it was the appellant who gave him various cheques which were dishonoured and later substituted other cheques which were also dishonoured he too went to look for him at the Ka Fung Company premises and there met WONG Chow, who permitted him by way of settlement to take certain property from the Ka Fung premises at a discount of about 40% of the value of the goods so taken.

6. All the complainant companies under the various charges dealt with the appellant at the Chung King Mansion address of the Ka Fung Jewellery Company, and apart from the ten cheques drawn on the appellant's own account which were honoured, all the cheques given in payment for the gems which are the subject matter of the charges were drawn upon the account of WONG Chow with the Union Bank. It is clear that the learned District Judge himself accepted that there was such an account and that it was operated by a person called WONG Chow, and further, that the appellant was not privy to the state of that account. It was this finding which compelled the Judge to dismiss all save three of the charges. The basis of this finding was that, when he gave cheques signed with the name WONG Chow to pay for jewellery, the appellant neither represented that they were valid and good orders which would be met on due date nor had it been shown that he knew the state of the account of WONG Chow at the time he gave the cheques. It is fair to assume, in respect of the surviving charges, that had the evidence shown that the gems which are the subject matter of those charges had been obtained as a result of the giving of post-dated cheques by the appellant, similarly signed by WONG Chow, the fourth and the fifth charges would have fallen with the rest. The learned Judge, however, found that there was a material difference between those charges and the remainder, and further that the first charge stood upon a different footing from any of the rest.

7. The evidence against the appellant on the first charge was principally that of Mr. Michael Bell, P.W. 4. He told the court that his firm, Fantana Limited, had had successful dealings on a few occasions with the Ka Fung Jewellery Company and eventually on the 29th of July the appellant took five lots of diamonds amounting in value to $133,000 on approval. He signed the approval note which appears as exhibit 31 on the record. It is stated on the face of that form that the goods are consigned on approval on the strict understanding that they will remain the property of Fantana Limited and must be returned to that company immediately on demand or, in lieu thereof, that the full amount set out against each item must be paid in cash to the company. No specific time was fixed for the return of these gems but after some time, Mr. Boll said, finding that they had not been returned, he phoned the appellant a number of times and went to see him on a few occasions, and was eventually told by him that the diamonds had left the country. The witness said that he had never received the diamonds back and the company had never been paid for them. In cross-examination he said that he regarded the appellant as one of the owners of the Ka Fung Jewellery Company. It will be noted that the approval note states that the goods are consigned to the care of "Messrs. Ka Fung Jewellery Company".

8. In dealing with the evidence on this charge, the learned Judge said that in his view it did not matter whether the appellant had taken the diamonds on behalf of K.F.J. Co. (1) or on behalf of K.F.J. Co. (2). He found that the appellant had received the diamonds from Fantana Limited and had dealt with them as his own property by sending them out of the Colony, and that in doing so he had acted dishonestly, by virtue of the fact that at the time of taking them he had neither the means nor intention of paying for them nor the intention of returning them to the owners. In so finding, he relied upon the subjective test of dishonesty stated by Lord Parker C.J. in Reg. v. Waterfall (1970) 1 QB 148. He came to the conclusion, on the facts, that the appellant did not have a belief in any legal right so to deal with the gems nor any belief that the owner would have consented to his so dealing with them. It is at this point, however, that his findings run into a difficulty which stems from what he had already found in relation to the charges which he dismissed. Having accepted that there were two Ka Fung firms then, however ambiguous the appellant's behaviour may have been in operating from the premises of one of them while continuing to trade under the same name in his own right, the question still remained as to which of the two firms Fantana Limited were dealing with when the gems were taken by the appellant back to the Chung King Mansion premises. The common sense of the matter is that Mr. Bell was dealing with Mr. CHENG To-kin whom he knew simply as a person associated with the Ka Fung Company in the Chung King Mansion premises, and there is no evidence to support the idea that Mr. Bell was ever aware of the appellant's double persona. The fact that he had received cheques drawn by the appellant on K.F.J. Co. No. 1's account is insufficient to force one to the conclusion that he knew of the separate existence of that firm. Since the Judge had found that K.F.J. Co. (2) was a reality, as also was its proprietor WONG Chow, it should have occurred to him that anybody who dealt with the appellant as Mr. Bell did might in fact, although unaware of the alternatives, have been dealing with him either in his own right or else as a person entitled to act on behalf of WONG Chow for the purposes of the latter's company. He had found in respect of the charges which he dismissed, that a reasonable doubt existed as to whether or not the appellant was aware that, when he gave the cheques signed by WONG Chow, the account of WONG Chow would be unable to meet those cheques. Equally, it might be said that a reasonable doubt in his favour arose on the first charge inasmuch as nothing in the evidence tended to negative the possibility that he had taken the gems on behalf of WONG Chow and that thereafter it was either WONG Chow who had sent the gems out of the country or else the appellant who had done so at WONG Chow's direction. Mr. Bell's evidence on this aspect of the case was brief and uninformative. The Judge was not told how or by whom the gems had actually been sent nor did Mr. Bell appear to inquire with any particularity into the circumstances of the sending. It must be said at once that this was not the basis of the appeal against conviction on this charge. Mr. Leong asked that additional evidence be permitted to be introduced at this stage in order to show that the diamonds allegedly placed with the appellant on approval had in fact been sold to the Ka Fung Company (No. 2). Had that been the case it would of course have put an entirely different complexion on the matter. In the event, however, Mr. Leong did not strongly press for the admission of this evidence since the invoice which constituted that evidence was alleged to have come to light subsequent to the proceedings and patently did not refer to the same lot of gems as those described in the approval note although dated with the same date. Quite apart from the fact that there was no evidence before us as to the precise circumstances under which this document came to light, it appeared to the court that its value must in the circumstances be slight, and we accordingly dismissed the application to introduce this additional evidence. It would appear therefore that, having, in effect, withdrawn his application to have this evidence admitted, Mr. Leong must have been relying solely upon the possible objection to this charge which has been outlined above, although that was not specifically made a ground of appeal. It was his contention that, throughout, Mr. Bell of Fantana Limited had been dealing with the Ka Fung Jewellery Company of which WONG Chow was the sole proprietor and we must assume that he intended thereby to maintain that anything done by that Ka Fung Company to the gems referred to in that charge was the responsibility not of the appellant but of the proprietor, WONG Chow.

9. Mr. Stapp asks us to look at the whole background of the case and to say that it demonstrates a pattern of dishonesty, in that the appellant is seen to have engaged in "pump-priming" by building up confidence in the traders whom he had chosen to cheat by establishing his credit through a series of comparatively small but honestly concluded transactions preparatory to a series of large scale raids upon their credit with the intention of procuring from them goods for which he had neither the intention nor capacity to pay. There is also the fact that he did not choose to give any explanation of these suspicious circumstances to the court. Although we are compelled to look at the circumstances as a whole, however, we are not entitled to convict solely upon deficiencies in the defence. Moreover, looking at the matter the other way round, there are undoubtedly doors of escape open to this appellant which could and should have been shut by the prosecution. In particular the evidence of WONG Chow would have been of the greatest assistance in the case. If he was not obtainable as a witness there should have been evidence explaining his absence. There was, in addition, some evidence that there were other employees in the shop and these or other witnesses could surely have been found who could have assisted the court to determine who, effectively, was in charge of the business carried on at that premises and who could moreover have given some account as to what precisely was done with the gems confided to the appellant's care by Fantana Limited and at whose order they had been dealt with. We think the learned Judge was wrong to say that it did not matter whether the appellant had taken the diamonds on behalf of K.F.J. Co. (1) or on behalf of K.F.J. Co. (2). If it was possible that he had taken them for the latter, then equally it was possible that the disposal of them was at the order of the latter. With that possibility in the picture, and notwithstanding that it was the appellant who actually received the gems, it was necessary to show beyond reasonable doubt that he was acting wholly upon his own initiative and for his own purposes. The Judge did not deal with this possibility and on the evidence it is difficult to see how it could have been satisfactorily resolved. For these reasons we think the conviction upon the first count must be set aside.

10. So far as the third and fourth counts are concerned, quite different considerations apply. The basis of the convictions on each of these charges was, in each case, an alleged act of blatant forgery on the part of the appellant. On these charges Mr. MERCHANT, P.W. 7, and Mr. RELWANI, P.W. 8, gave positive evidence, which was strongly tested on cross-examination, that the gems referred to in those charges were given to the Ka Fung Jewellery Company in return for cheques signed by the appellant in their presence. These cheques (exhibits P. 22 and P. 28 respectively) bear a signature which in each case is closely similar to the signature on the specimen card allegedly made out by WONG Chow. This is the clearest demonstration if it be true that the appellant signed them, of a dishonest intention of some sort, since even apart from the question of forgery, the plain fact is that at no time during the currency of the accounts of either the appellant or WONG Chow had there been in any of these accounts sufficient funds to meet either of these cheques. Mr. Leong has not sought to challenge the propriety of the conviction for obtaining by deception on these two counts on any ground connected with the contention that the accused was entitled to do as he did. The only ground he raises in respect of those convictions is that the evidence of the two witnesses is contradicted by what is said by the bank official who spoke about the cheques, including these two cheques, which were brought to their notice. It is true that Mr. LEUNG Kai-lung, P.W. 2, the official from the Union Bank, said in answer to questions put to him in cross-examination, that six cheques, including exhibit P. 22, the cheque which Mr. RELWANI said he saw the appellant sign, were signed by WONG Chow, and that Mr. NORONHA, P.W. 3, the official from Hong Kong Bank, said the same of four cheques shown to him including the cheque which Mr. MERCHANT said he saw the appellant sign. Neither of them was asked to consider whether the cheque drawn on his bank might have been a forgery. However, the evidence does not show that these two witnesses had ever met WONG Chow or were doing more than identifying signatures on the cheques as being similar to the signature of WONG Chow upon the specimen cards held by their banks. It is true that the Judge does not specifically refer to this apparent contradiction but we must not assume that he did not consider it. On the evidence he clearly remained unshaken in his belief that the two eye-witnesses of the event had told him the entire truth. It was a matter which might well have been cleared up by re-examination, but of itself we do not think that it bears sufficient substance to occasion any real uneasiness in relation to this positive finding of fact. In view of that finding the result inevitably followed that the appellant had by a most patent deception dishonestly obtained the property of the complainants with the intention of permanently depriving them of it, whether that intention embraced his own advantage or that of WONG Chow. For these reasons the appeal against conviction on these counts must be dismissed.

11. Notwithstanding the great attenuation of the charges resulting from proceedings both in the lower court and in this court for the reasons stated, we take the view that the surviving charges disclose a most reprehensible fraud for which the sentences imposed, even had those charges stood alone before the court of trial, cannot in any way be said to be excessive. The appeal against sentence on those charges is therefore dismissed.

Representation:

Lawrence Leong instructed by Sousae & Co. (on legal aid assignment) for appellant.

M.J. Stapp C.C. for respondent.