Tong Sze-ming v. The Queen

CACC000302/1982

(Obtaining pecuniary advantage by deception - meaning of 'deception' - dishonest inducement exists where cheque is not given in good faith and recipient expects it to be honoured.)

BETWEEN

Coram: Bewley, J. in Court

Date: 14 May 1982

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JUDGMENT

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1. The appellant was convicted on five charges of obtaining a pecuniary advantage by deception, contrary to Section 18B(1)(b) of the Theft Ordiance. Having dismissed his appeal against conviction, I said I would give my reasons in writing. I now do so.

2. Each charge concerned a different cheque, but otherwise the particulars were identical. It was alleged that the appellant, on or about 23rd April, 1981, with intent to make default in part on an existing liability to make payment to CHENG Kam-tao of $81,521, in respect of an outstanding debt to CHENG Kam-tao, dishonestly induced CHENG Kam-tao to wait for payment by deception, namely by representing that each cheque was a good and valid order. The five cheques totalled $81,521, the amount of the alleged debt.

3. The learned magistrate found the following facts:

1.	That the complainant, CHENG Kam-tao, had paid $25,000 to the appellant as down-payment of his share in a taxi partnership.
2.	That in October and November, 1981, he paid a half share of the monthly instalments, amounting in total to $5,317.
3.	That subsequent to the purchase of the taxi, the appellant borrowed $15,000 from Cheng.
4.	That the appellant sold the taxi without Cheng's consent.
5.	That Cheng and the appellant reached agreement that $20,000 of the sale proceeds would be Cheng's share of the profit from the sale.
6.	An agreed sum of $10,000 was payable to Cheng by the appellant as compensation for what had occurred.
7.	That the balance of the total of the five cheques was made up of interest, namely $6,204.
8.	That the appellant agreed to repay $81,521 by way of five monthly payments and subsequently signed these five post-dated cheques.
9.	That at the time he signed these cheques he knew he had no money in his account to meet them and that he never intended that they should be met.
l0.	That the first cheque was presented after the due date and was returned through lack of funds.

4. The appellant admitted that he owed Cheng $60,000 plus interest. The only sums he disputed are the $10,000 compensation and the two instalments. He admitted signing the cheques and also that he did not intend that they should be honoured. His defence was that he was threatened by Cheng and had no alternative but to sign. The learned magistrate rejected this evidence and accepted that of Cheng.

5. On the appeal no point was taken concerning the allegation of duress. The main thrust of Mr. Bharwaney's argument was that there was no proof of an existing liability in the sum of $81,521. I should have thought that, in the absence of duress, the fact that cheques in this amount were signed by the appellant was in itself strong evidence that this was the existing liability.

6. $60,000 is admitted. There is a statement exhibited, signed by the appellant, dated 5th January, in which he admitted a debt to Cheng of $75,117. It concludes, "I would pay all the money to CHENG Kam-tao not later than 5th April, 1981." It is true that there was no evidence as to what rate of interest was agreed, but the appellant admitted that he expected to pay interest. The difference between the two sums, namely $6,404, is not far off 16% per annum, which was only slightly less than the then current rate. I see no substance in this ground.

7. In his statement of findings the learned magistrate says he now feels he misdirected himself on two matters. The first concerns a statement to the police made by the appellant. What happened was that the appellant, in answer to the court, said he had no objection to its admission, but, after further questioning, went on to say that he made this statement after the police told him that, since he had a clear record, he would be treated leniently, but he had better engage a lawyer because he would be sure to be convicted. In anticipation, expecting to lose the case, the appellant wrote a statement in mitigation.

8. The magistrate again asked the appellant if he wished to object to its admission. Rather curiously, he asked him: "Do you agree to its admission in the knowledge that you can tell me the circumstances in which it was made later, so that I can then decide what weight I should attach to it?" To this the appellant again replied that he did not object. The statement was then admitted.

9. It is not very clear what the magistrate meant. In his statement of findings he said that he decided that the issue was one essentially of weight to be attached to the contents of the statement, rather than admissibility. But this begs the question. If the statement was not admissible, he was not entitled to give it weight. If he thought there was any real possibility of an inducement, he should have held a trial within a trial, as he now realizes.

10. However, there are two matters that satisfied me that no damage was done. The first is that the statement itself is innocuous. The appellant says he did not owe Cheng so much money, he then alleges a conspiracy between Cheng and the solicitor to balckmail him. He admits failing to deposit money in his account, presumably to meet the cheques. He concludes, I know I have committed an offence, hope that the judge can give me a lenient punishment and not to keep my criminal record." It is only the last sentence that could be considered damaging. However, this is an offence of some complexity. It would be perfectly reasonable for a person in the appellant's position to think he had committed an offence merely because the cheque had bounced. I am sure no court would consider such an admission damaging to the appellant's case. In fact, the magistrate states that he attached no weight to the statement. This does not surprise me.

11. The magistrate went on to say, ''I consider that the non-presentation of the other four cheques is a vital factor in considering their respective charges. I am now of the view it is an essential ingredient of an offence of this type that not only must it be proved that a defendant had no reasonable expectation of the cheques being met but it must also be proved that the cheques were presented and not met.'' This, with respect, is not a correct statement of the law. He seems to have overlooked section 17(4) of the Theft Ordinance which provides:

"For the purposes of this section - 'deception' means any deception (whether deliberate or reckless) by words or conduct 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."

Thus, when the appellant gave Cheng the five cheques, intending that none of them should be met, that is a sufficient deception. There is no need for all the cheques to be presented.

12. On the question of dishonesty, Mr. Bharwaney relied on CHAN Chi-wo v. The Queen⁽¹⁾. But in that case the creditor was aware from the outset that the appellant was proposing to pay him only when he, in due course, was paid by another party and the appellant kept him informed of his disappointments in that regard. The parties were, therefore, at arm's length, in the sense that, upon each occasion when he received a cheque from the appellant, the creditor was aware that the post-dating of each cheque was due to the non-existence of funds at the date upon which the cheque was given and that he was content, like the appellant himself, to rest in hope of payment. The court held that the several cheques were given and accepted in good faith and that the element of dishonesty was lacking.

13. That is not the case here. While Cheng may have suspected that the appellant was in financial difficulties, there was no evidence that he did not expect the cheques to be met. He was asked this question: ''He had not paid you up to that time, did you have any reason to believe he could pay at later dates?" His answer was: "In solicitors firm he had mentioned that he had a flat in Wai King Gardens and said if he sold it he would have money to pay me back."

14. Mr. Bharwaney also submitted that the appellant could only have been dishonest if he accepted that this was the amount due, or if it is clear that this was the amount due. As I have indicated, the magistrate found as a fact that this was the amount due.

15. Finally, it is alleged that there was no inducement. Counsel submits that Cheng wanted the cheques as security, in order to found a simple action on a cheque, rather than having to base his action on an account. No doubt Mr. Cheng would have preferred cash, or a cheque that was not post-dated, but it was better to have a post-dated cheque than nothing at all. This is not to say that there was no inducement. There was the evidence about the flat, as well as the appellant's prior promise to pay. The handing over of the cheques was clearly, in these circumstances, a sufficient inducement to satisfy the section.

16. For these reasons I dismissed the appeal.

(1)    C.A. No. 311 of 1981

Representation:

Mr. M. Bharwaney (D.L.A.) for appellant

Mr. M. Poll, C.C., for respondent