The Queen v. Wong Chor-yau

CACC000349/1983

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 349 OF 1983

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BETWEEN

Coram: Macdougall, J.

Date: 7th June, 1983

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JUDGMENT

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1. The appellant appeals against an order made under section 28 of the Import and Export Ordinance, Cap.60 for the forfeiture of 78 gold ingots weighing 45.6021 kilogrammes that had been seized as unmanifested cargo on board the M. V. Dina by Customs officers on 25th October, 1982.

2. The ingots had been found inside a concealed compartment in the door frame of the cabin of a member of the crew, one Mr. Lam. Enquiries revealed that Lam was in possession of the ingots. On 15th December he pleaded guilty to a charge of imparting unmanifested cargo contrary to section 18(1)(a) of the Ordinance and was fined $6,000 and sentenced to three months imprisonment suspended for eighteen months.

3. On 4th November the Commissioner of Customs and Excise served notice of the seizure upon Lam in accordance with section 27(3) of the Ordinance. It was not until 24th November that the appellant through his solicitors gave notice in writing to the Commissioner claiming that the article was not liable to forfeiture. On 1st February 1983 the Commissioner, in accordance with the mandatory provisions of section 23(1) of the Ordinance, applied to a magistrate for the forfeiture of the ingots.

4. At the hearing of the application the appellant testified that although he is a Hong Kong resident he is a partner in his father in law's business in Bangkok which is concerned with the manufacture of artificial ornaments, jewellery and metal ware, and that since his marriage nine years ago he has been assisting in the running of that business. Because the appellant does not have the right of permanent residence in Bangkok it is necessary for him to return periodically to Hong Kong to obtain an extension of his Thai visa.

5. He further testified that in the first half of 1982 when he was in Bangkok he and his wife decided to buy some gold and that as a consequence the gold ingots that were the subject of the forfeiture proceedings were purchased in two lots from a certain gold shop in Bangkok. In support of this claim he produced two invoices that purported to record two transactions involving the sale to him of a total of 45.5 kilogrammes of 99% gold at a price of 11,560.610 baht. According to the appellant, payment for the gold was made in cash from savings that he and his wife had accumulated. He said that they had purchased the gold both as an investment and as a hedge against inflation.

6. After the purchase of the gold the appellant's wife kept it in a small room in her home in Bangkok. When asked whether it was a common practice to keep gold at home, the appellant replied that it was a matte of personal choice and that although some people preferred to keep gold in a safe in a bank he personally considered that it was safer at home.

7. On returning to Hong Kong in August 1982 to extend his Thai visa, the appellant decided that because property prices had fallen he would purchase a flat for letting and a shop premises for use in his own business. Although he was unable to find a suitable flat, he did, towards the end of October, discover a shop that suited his requirements. The owner however refused to sell and the appellant then decided to rent the premises.

8. When asked whether he had sufficient funds in Hong Kong to purchase a flat and a shop premises the appellant replied that he had brought the gold ingots into Hong Kong for that purpose.

9. He explained that he telephoned his wife in Bangkok from Hong Kong and asked her to arrange for someone to bring the gold in. Later she contact d him and informed him that she had assigned the job to Mr. Lam, that the gold would arrive on the 25th or 26th October and that Lam would then telephone the appellant in Hong Kong.

10. According to the appellant, Lam contacted him on 26th October and informed him that the gold had been seized. He conceded that Lam and he were just acquaintances but claimed that Lam was "familiar" with his wife.

11. When asked by his own counsel whether there was any exchange control in Thailand the appellant stated that the Thai government does not permit people to take large amounts of currency out of the country but added that he and his wife's money had been converted into gold.

12. On being questioned as to whether the Thai government would sanction the exportation of a large amount of gold he replied that permission would not be granted "unless it is an accepted amount". Finally, when asked if 45 kilogrammes of gold would be "accepted', he gave the evasive reply that it was a large amount. In cross-examination the appellant agreed that he ran "quite a risk" both in releasing the gold into the hands of an acquaintance and of having it forfeited by Thai customs if discovered. He explained that he had been prepared to take the risk because he wanted to bring his capital to Hong Kong for development and that it was difficult to do it through any other channel.

13. The appellant called Mr. Lam to rive evidence in support of his application. Lam testified that the appellant's wife had entrusted him with the ingots for delivery to Hong Kong and that on his arrival he was to hand them to the appellant. For his efforts he was to be paid $10,00. He Claimed that although he was an acquaintance of the appellant he was more "familiar" with the appellant's wife.

14. Lam went on to testify that after the seizure of the gold he telephoned the appellant's wife to ascertain the appellant's telephone number in Hong Kong. Having obtained this information he then phoned the appellant and informed him of the forfeiture.

15. In cross-examination Lam admitted that when he had been questioned by Customs officers on 26th October and asked to disclose the identity of the owner of the gold he did hot reveal to them that it belonged to the appellant. He further admitted that he had told the officers that the gold was his, but that he had done so because he did not want to get the appellant into trouble.

16. In re-examination the witness was referred to a written statement which he made to a Customs officer and in particular to the following question and answer -

17. When counsel disclosed to me the contents of this question and answer I gained the impression at first reading that Lam's reply meant that the friend was the owner of the gold and that Lam was merely a courier. On closer examination of the answer, however, it seems clear that it means that the friend had bought the gold for Lam and that the arrangement was that Lam would bring it to Hong Kong where he would sell it at a profit out of which he would repay the friend the original price of the old and pay him interest thereon. The balance of the profit would go to Lam.

18. The Magistrate was not satisfied that Lam had told the truth in court and he treated his evidence with suspicion. He specifically found that Lam had lied in his statement to the Customs officer.

19. Having considered all of the evidence the magistrate found that the appellant had not proved on the balance of probabilities that the gold belonged to him. Accordingly in pursuance of section 28(6) of the Ordinance he was obliged to order that the gold be forfeited to the Crown. This he did.

20. Although the appellant concedes that the burden of proving that he was the owner of gold rested on him and that he was required to discharge that burden on the balance of probabilities, he contends that the magistrate erred in finding that he had failed to discharge that onus. The appellant argues that there was no conflict of evidence on the issue of ownership and that the magistrate wrongly engaged in surmise in drawing inferences which contradicted the unchallenged evidence.

21. In this connexion Mr. Litton seeks to draw support from the words of Lord Wright in Caswell v. Powell Duffryn Associated Collieries Ltd. [1940] A.C. 152 at 169 -

"Inference must be carefully distinguished from conjecture or speculation. There can be no inference unless there are objective facts from which to infer the other facts which it is sought to establish. In some cases the other facts can be inferred with as much practical certainty as if they had been actually observed. In other cases the inference does not go beyond reasonable probability. But if there are no positive proved facts from which the inference can be made, the method of inference fails and what is left is mere speculation or conjecture."

22. Although the Commissioner was statutorily obliged to apply to e magistrate for the forfeiture of the gold, he was under no obligation to make enquiries with a view to obtaining evidence relevant to the issue of whether the appellant was the owner. In applications of this kind the Commissioner would no doubt place before the court such evidence as he was in his possession end which may be of assistance to the court. However the likelihod that he would be in possession of any evidence pertaining to the appellant's transactions in Thailand is extremely remote. Since he did not adduce any such evidence I can only conclude that he had none. The fact therefore that that Crown did not positively challenge the appellant's claim does not help the appellant. It merely does not hinder him. In the final analysis it was for, him to satisfy the magistrate that he was the owner of gold. If he failed to adduce sufficient credible evidence to establish ownership it is not open to him to challenge the magistrate's finding on the basis that the Crown did not call any evidence to contradict his claim.

23. Mr. Litton argues that in an application of this kin, if no one asserts a contrary claim the matter should normally be resolved in favour of the claimant. I understand Mr. Litton to mean by a contrary claim one made by another claimant an distinct from a positive challenge by the Commissioner to a claim made by a single claimant. I do not think that this contention is correct. Although it may well be that in such circumstances no additional obstacle stands in the path of the claimant, the standard of proof remains the same.

24. Mr. Litton also argues that the magistrate fell into error by imposing on the appellant A wider burden of proof than the nature of the case admitted.

25. He cites Joseph Constantine Steamship Line Ltd. v. Imperial Smelting Corporation Ltd. [1942] A.C. 154. This was a case in which shipowners, in response to a claim brought by charterers for damages for failure to load a cargo, pleaded that an explosion on the ship had frustrated the chartered voyage. The House of Lords held that the shipowners, having established that the explosion glad frustrated the commercial object of the adventure, were not bound to prove further that the explosion was not due to their neglect or default, and the defence of frustration succeeded.

26. Mr. Litton submits that his contention is supported by a passage from the judgment of Lord Wright at pages 192-4 where His Lordship stated that frustration involves as one of its elements absence of fault and that although the defence may be rebutted by proof of fault, the onus of proving fault rests with the plaintiff. Reference was also made to a passage in the judgment of Viscount Simon L.C. at pages 161-2 where a similar view was expressed.

27. I do not find that this decision on concerning the doctrine on which the defence of frustration depends is of any assistance in the instant case. The appellant was not required to prove a negative. He was required to prove affirmatively that he was the owner of the gold. If he failed to call sufficient evidence to establish that claim to the required standard of proof he cannot be heard to complain that the court did not find in his favour.

28. In connexion with his submission that the magistrate engaged in surmise, Mr. Litton contends that he made a series of assumptions that were fundamentally wrong. He refers to several matters.

29. The magistrate found that the two invoices were no more sophisticated than a receipt issued by a China Products Store to the purchaser of a cotton singlet, and that he would have expected that where a transaction involved gold valued at approximately four million Hong Kong dollars the appellant would have produced documentation of a more formal J nature, such as a certificate of purity of the gold, or have adduced other evidence in s support of his claim. I confess that I fail to understand how a certificate of purity of the gold would in itself have advanced the appellant's claim.  It is possible that the magistrate may have had in mind that had there been a certificate of purity it would have been possible to verify its contents by having an assay of the gold performed in Hong Kong. The results of the assay might have lent a measure of support to his claim. Whether this is what was in the magistrate's mind i cannot be sure for he did not explain what he meant.

30. Be that as it may, it seems to me that the magistrate's scepticism as to the authenticity of the two invoices was entirely reasonable. Anyone who has lived in the Orient for even a short period of time soon leans that false invoices are readily obtainable from traders anxious to please their customers. The issue of two invoices in respect of the same goods, one for the customer with the true price stated and one for Customs use with a much lower price specified is commonplace. Indeed Mr. Litton himself concedes that the magistrate's finding that the invoices did not carry much weight was understandable and fair.

31. Being dissatisfied with the invoices it was not unnatural that the magistrate expressed the view that other and more cogent evidence of the purchase of the gold should have been given, or that a bank statement or bank statements revealing the withdrawal of the sums involved at or around the time of the alleged purchases of the gold should have been produced in. evidence. In view of the value of the gold, it seems to me that it would not have been unreasonable for the appellant to have called a bank official or some other witness from Thailand to lend support, directly or indirectly, to his claim that he purchased the gold on the dates alleged.

32. Mr. Litton argues that perhaps the appellant has no bank account but carries out his business dealings with cases kept elsewhere. This, he contends, would be consistent with the appellant's evidence that he kept the gold in a room in his wife's home in Bangkok. The magistrate found it difficult to accept the appellant's testimony that he considered that the gold would be safer at home. He was entitled to be sceptical of this claim. It was a factor that he could properly take into account in deciding whether the appellant had proved his case.

33. Furthermore, in answer to a question whether it was common in Thailand for such large sums to be paid in cash, the appellant stated that cheques could be used in other business dealings but that it was necessary to pay cash for gold. If this is so, it would not be unreasonable to assume that the appellant being a businessman would operate a bank account. Any cash withdrawal that might have been made to effect or to contribute to the gold purchase could therefore readily be verified.

34. The magistrate also had difficulty in accepting that such a large quantity of gold would have been entrusted to a mere acquaintance of the appellant. He also commented that there had been no urgent need for the gold in Hong Kong. Since the appellant had been unable to find a suitable flat for letting and apparently had abandoned his intention to purchase a shop because the premises that he had found desirable were not available for sale and he had decided to rent them instead, I am unable to say that the magistrate's comment was un-justified.

35. The absence of urgency in having the gold delivered to Hong with the undesirable risk involved in doing which the magistrate properly took into account in determining the credibility of the appellant.

36. The magistrate further observed that since the appellant's wife had made all the arrangements to send the gold to Hong Kong he would have expected the appellant to have called her to rive evidence to support his claim. It is of some relevance that the appellant had testified that the and his wife had bought it from their savings. It appears therefore that his wife had a proprietary interest in the gold.  Since there had been no confirmatory evidence from a bank official or other person in a position to verify or lend Some measure of support to the appellant's claim that he had purchased the gold, it doe net strike we as surprising that the magistrate had expected the appellant to call his wife to give testimony.

37. Mr. Litton also complains that the magistrate was not justified in commenting that the cash involved in the two gold transactions was a very large sum, for a man of the appellant's age to have. I pause to observe that the magistrate made this comment in there had been relation to the fact that there had been no evidence that the money for the gold purchase had been withdrawn from a bank account or other verifiable source. Whilst it is true that it is not altogether uncommon for a young man to be extremely wealthy, it seems to me that in the light of the evidence before the magistrate the fact that the appellant appears to be a young man cannot be said to be an irrelevant factor.

38. The only witness called to lend support to the appellant's claim was the seaman Lam. The magistrate was not satisfied that he told the truth and he treated his evidence with suspicion. I have already mentioned that he specifically found that Lam had lied in his statement to the Customs officer.

39. Lam's testimony in court that the gold was not his but that it had been handed to him by Mrs. Wong to deliver to Mr. Wong in Hong Kong for a reward of $10,000, was a clear contradiction of what he had asserted in his statement.

40. Moreover his testimony that he telephoned Mrs. Wong in order to obtain Mr. Wong's telephone number in Hong Kong so that he could inform him of the forfeiture, does not lie easily with the appellant's evidence that his wife had telephoned him to inform him that after the gold arrived on 25th or 26th October Lam would telephone him about it here were ether aspects of Lam's evidence that I have already mentioned that would have justified the magistrate in entertaining serious doubts as to his credibility. I am satisfied that the magistrate had ample reason for finding that Lam had lied and for viewing his evidence with suspicion.

41. As for the appellant, the magistrate found that he was an unconvincing witness whew evidence he aid not accept. Mr. Litton submits that the evidence was such that the most the magistrate could say was that he was left with an uncomfortable feeling as to the story given by the appellant. Even if the magistrate had reason to find that the appellant had told a lie he should not, Mr. Litton contends, have drawn every inference against him.

42. The magistrate did not draw every inference against the appellant. There was a great deal of his evidence as to which, although he made no specific findings, he certainly did not make any adverse findings. He found that the evidence adduced by the appellant was not sufficiently persuasive for him to conclude that the appellant had discharged the burden of proof cast on him. On the evidence before him I cannot say that the magistrate was in error in coming to the conclusion which he did.

43. Mr. Litton cited a number of authorities relative to the. matter of credibility of witnesses. I feel that in deference to him I should refer to at least some of them.

44. He prefaced his argument with an extract from "The Judge" by Lord Devlin.

"The great virtue of the English trial is usually said to be the opportunity it gives to the judge to tell from the demeanour of the witness whether or not he is telling the truth. I think that this is overrated. It is the tableau that constitutes the big advantage, the text with illustrations, rather than the demeanour of a particular witness. On that I would adopt in their entirety (this being the highest form of judicial concurrence) the words of Mr. Justice NacKenna:

I question whether the respect given to our findings of fact based on the demeanour of the witnesses is always deserved. I doubt my own ability, and sometimes that of other judges, to discern from a witness's demeanour, or the tone of his voice, whether he is telling the truth. He speaks hesitantly. Is that the mark of a cautious man, whose statements are for that reason to be respected, or is he taking time to fabricate? Is the emphatic witness putting on an act to deceive me, or is he speaking from the fullness of his heart, knowing that he is right? Is he likely to be more truthful if he looks me straight in the fare than if he casts his eyes on the ground perhaps from shyness or a natural timidity? For my part I rely on these considerations as little as I can help.

This is how I go about the business of finding facts.  I start from the undisputed facts which both sides accept. I add to them such other facts as seem very likely to be true, as, for example, those recorded in contemporary documents or spoken to by independent witness like the policeman giving evidence in a running down case about the marks oh the road. I judge a witness to be unreliable if his evidence is, in any serious respect, inconsistent with these undisputed or indisputable facts, or of course if he contradicts himself oh important points. I rely as little as possible on such deceptive matters as his demeanour. When I have done my best to separate the true from the false by these more or less objective tests, I say which story seems to me the more probable, the Plaintiff or the Defendant's."

45. He then cited Rex v. Covert [1916] 25 C.C.C. 25 at 37 where Branca J.A. said -

46. Branca J.A. makes it plain that a judge may refuse to accept the evidence of an accused on the basis of his demeanour. His only qualification, if such it is, is that if demeanour is the sole ground in which the trial judge has rejected the witness's evidence, it is reasonable to expect that at least some indication of the fact of that rejection will appear in his reasons for decision.

47. In the instant case however, apart from indicating that he did not accept the appellant's evidence, the magistrate did not rely on demeanour as the sole ground of his rejection of that evidence. He was at pains to explain why he found various aspects of the evidence of both the appellant and Lam to be less than persuasive.

48. Mr. Litton also referred me to two extracts the judgment delivered by Lord Fraser in David Ng Pak Shing and others v. Lee Ing Chee and others, Privy Counsel Appeal No. 20 of 1980 -

"In stating his reasons the judge began with a finding that Ng and Ives were untruthful witnesses. His finding to that effect of course tends to show that their version of the events is not true, but it does not establish that the respondents' version is true. Nevertheless their Lordships fully recognise that the judge's finding on credibility constitutes a substantial obstacle to the appellants' success in the appeal."

and

"         Apart from the specific matters mentioned by the judge as reasons for disbelieving Ng and Ives he did of course have the great advantage of seeing each of them in the witness box for several days, an advantage which is necessarily denied to an appellate court. Their Lordships have fully in view the warnings repeatedly given to appellate courts against reversing the findings of a trial judge on credibility (see Thomas v. Thomas 1947 S.C. (H.L.) 45; sub nomine Watt or Thomas v. Thomas [1947] A C. 484 and Onassis and Calogeropoulos v. Vergottis [1968] 2 Lloyd's Rep, 403). In the present case the importance of this point is somewhat diminished because it appears that the learned judge's opinion on credibility was probably affected by the demeanour of these witnesses under a cross-examination which, their Lordships regret to notice, strayed Well beyond the proper limits. For example, Ives Was cross-examined at great length on the construction of an agreement drafted by him whereby the syndicate sold the shares in San Imperial to James Coe's nominee company and he was eventually induced to say that the construction he had put upon the agreement at the beginning of his evidence was wrong. It was strongly suggested to him that he had known all along that his construction was wrong and that he had deliberately persisted in it. In fact, as the Court of Appeal rightly held, his original construction of the agreement was correct, but the significance of the matter is that he was made to appear deceitful by being cross-examined on a question of law, in spite of protest by his Counsel, on which his opinion ought never to have been asked. In the case of Ng he was subjected to abuse (one "question" consisted of the statement Mr. Ng, you are the most dreadful and most awful liar") which in spite of another protest by his counsel was riot withdrawn by the cross-examined nor checked by the Court.

In all the circumstances their Lordships feel at liberty to differ from the learned judge's findings on credibility and to rely, as the learned judge himself said that he would do, mainly on documentary or undisputed evidence."

49. I can find nothing in either of these passages that is of assistance to the appellant. Their Lordships plainly recognised that a judge's opinion on credibility constitutes a substantial obstacle for an appellant to surmount. It was only because they had come to the conclusion that the trial judge's opinion had probably been affected by the demeanour of witnesses under a cross-examination which strayed well beyond proper limits in that it had been abusive and had consisted of questions of law wrongly asked of the witness and which made him appear deceitful, that they felt free to disregard the trial judge's findings on credibility. None of these considerations exist in this case so as to cause me to call into question the magistrate's opinion on credibility.

50. Notwithstanding the view expressed by Lord Devin and is pertinent to emphasise that he merely said that he thought that the value attributed to the demeanour of a witness was overrated - there can be little doubt that the highest courts do acknowledge the significance of a witness's demeanour.

51. In Valarshak v. Standard Coal Co. [1943] All India Reporter (PC) 159 Lord Russell said -

"They [the High Court on appeal] treated the plaintiff as a witness whose testimony should not believed, and accepted as accurate the evidence of Fiarhurst and wills. In their Lordship's opinion, the High Court on appeal was not justified in this case in taking a different view of the plaintiff's credibility from that adopted by the trial Judge. McNair J., [one of the judges on the appeal], enumerates a series of points upon which he bases his view that the plaintiff's evidence is such that reliance cannot be placed upon it, but they are just the sort of points as to which the only person who can effectively form an opinion and draw, conclusions is the trial Judge who has the witness before him. He alone knows the demeanour of the witness; he alone can appreciate the manner in which the questions are answered, whether with honest candour or with doubtful plausibility, and whether after careful thought, or with reckless glibness. He alone could form a reliable opinion as to whether the plaintiff had emerged with credit from a cross-examination, lasting the greater part of two days, which was to a great extent repetitious, and sometimes offensive."

52. Whilst therefore a finding based on the demeanour of a witness may be reversed on appeal, an appellate court will be very slow to interfere with such a finding unless cogent reasons exist for so doing.

53. Mr. Duckett that the magistrate adopt the proper approach by dealing with each of the contentious aspects of the evidence separately before coming to his final conclusion and that it was only after an evaluation of all of these matters separately and collectively that the court could have arrived at a proper decision

54. For the reasons that I have already given I have come to the conclusion that I would not be justified in disturbing the magistrate's decision. Accordingly this appeal is dismissed.

Representation:

Mr. Henry Litton, Q.C., assisted by Peter V.T. Nguyen instructed by Raymond Tang & Co. for the Appellant.

Mr. A.P. Duckett, Deputy Crown Prosecutor, for Crown/Respondent.