The Queen v. Fan Wai Kit and Others

CACC000361/1988

BETWEEN

______________

Coram: Hon. Silke, V.-P., Kempster & Penlington, JJ.A.

Dates of hearing: 16 - 17 May1989

Date of delivery of judgment: 6 June 1989

_______________

J U D G M E N T

_______________

Silke, V.-P. :

1. I have had the opportunity of reading in draft the judgment to be delivered by my Lord Kempster JA. I am in agreement with its reasoning and conclusions. There is nothing I can usefully add.

Kempster, J.A. :

2. On 26 July 1988 in the District Court Judge Caird found Fan Wai Kit, Tsai Mei Yung and Lim Cheng Eng guilty of conspiracy to defraud contrary to Common Law. They seek leave to appeal against those convictions.

3. The Particulars of Offence set out in the charge read:

"Fan Wai Kit, Tsai Mei Yung, Lim Cheng Eng and [another] on divers days between the 30th day of September, 1987 and the 27th day of November 1987, in Hong Kong, conspired together dishonestly to obtain property, namely replacement bank drafts and money, from such banks as might he induced to deliver such property to them with the intention of permanently depriving the said banks thereof, by deception, namely by falsely representing that original bank drafts received by them from the said banks had been lost and that they were thereby entitled to receive replacement bank drafts or a refund of the moneys paid to the said banks for the original bank drafts".

4. All the original hank drafts had been bought by the applicants or one or other of them and were bills of exchange expressed in US currency. They were drawn on banks in New York and paid for in cash or by debiting the applicants' accounts with the selling Hong Kong banks. Ostensible entitlement to receive from the drawing banks other bills of the same tenor, giving security as required, derived from claims to be holders of bills lost before they became overdue. Bills of Exchange Ordinance (Cap 19) section 69. The original contracts of purchase and sale were none the less complete; property in the hills and the price having passed to buyers ant sellers respectively. Such incidents as that described in section 69 or the drawer's contingent liability under section 55(1) to the holder or to any endorser compelled to pay a bill after dishonour by, say, a New York drawee arise by way of statutory rights and liabilities from an unqualified signature on the document.

5. Undisputed proof by way of admissions, affirmations and viva voce evidence was forthcoming at trial to demonstrate that, between the dates specified in the Particulars of Offence, each applicant had bought drafts of the nature described from a bank or banks in Hong Kong, had almost immediately claimed to have lost them and sought replacement or reimbursement. No evidence was adduced by or on behalf of any of the applicants. As there are limits to argument based on coincidence it was open to the judge to proceed, as apparently he did, on the footing that the claims to have lost the drafts were false and made with the intention of procuring replacements or refunds. In some instances fresh drafts or replacements were in fact forthcoming. However he had no occasion to make express findings to such effect.

6. The gravamen of the submissions made on behalf of the applicants and which the trial judge accepted was that the Hong Kong banks, being private corporations not involved in the discharge of public duties, were not and could not have been defrauded in the sense of suffering economic loss or even prejudice since it was their common practice to defer the provision of replacements or refunds, for which charges were made, until assured that the duty and authority of the drawee banks to pay had been determined by countermand. The Hong Kong banks could not, it was rightly said, have been required to pay twice over. R v Withers [1975]. AC 842 at p 877. Further, quoting Lord Radcliffe in Welham v DPP [1961] AC 103 at p 227

".... to defraud must involve something more than the mere inducing of a course of action by deceit".

Insofar as the judge found to the contrary and that the words "deceive" and "defraud" are synonymous I am of the opinion that he was wrong. No reliance is placed on the indemnities signed by the applicants.

7. As I read the Reasons for Verdict the applicants were convicted on the basis of explicit and implicit findings that they had agreed together dishonestly to enrich themselves and to defraud, not the drawing banks in Hong Kong but those to whom the original drafts were negotiated, by deceiving the drawing banks into issuing replacement drafts or making reimbursement well knowing that they would first countermand the originals and charge for the cost of replacement or refund. It is not suggested that such a single conspiracy could not have been given effect. Certainly its implementation involved no risk of injury to the Hong Kong banks and was in no way thwarted by their "impregnable defences". R v Bennett & Ors [1979] 68 CAR 168 at p 178 per Browne LJ. On the contrary it was implemented with considerable success.

8. I am satisfied that the judge was entitled if not bound to make such findings on the evidence. As to agreement he relied upon the compelling inference to be drawn from the similarity of the means by which, on the eight occasions proved, the several applicants sought replacement drafts or reimbursement and upon the naming of the same beneficiaries in many instances. Also relevant, in my opinion, as showing association was the occupation of the same flat by the second and the third defendants and the presence in the folder containing the second defendant's passport, there found on 27 November 1987, of a photocopy of a draft which the first defendant had bought from Banque Indosuez on 7 October. Due to the absence of certain endorsements appearing on another copy it is apparent that the photocopy in question must have been made before 10 October.

9. The judge's findings did not support convictions on the charge as framed which, if contrary to my view, the Statement and Particulars of Offence can be reconciled, alleged a conspiracy to defraud the Hong Kong banks. Different considerations may apply, for example, to charges of forgery under the Forgery Act 1913 and the Crimes Ordinance (Cap 200). Welham v DPP [1961] AC 103. It may be observed that reliance on prejudice as constituting a basis for fraud in the context of forgery has been limited in England by section 10(1) of the Forgery and Counterfeiting Act 1981. I would allow the applications for leave to appeal against conviction accordingly and treat this hearing as that of the appeals.

10. Foreseeing some difficulty in sustaining the convictions as they stand the Crown came to this Court prepared with two fallback propositions. The first was that since, on the basis of his findings of fact, the trial judge could have invoked section 51(2) of the Criminal Procedure Ordinance (Cap 221) and convicted the applicants of conspiracy to obtain property by deception contrary to section 17(1) of the Theft Ordinance (Cap 210) we should enter convictions in such terms in substitution for those charged. Certainly we have jurisdiction so to do by reason of section 83A of the Criminal Procedure Ordinance and of section 83 of the District Court Ordinance (Cap 336). The second proposition was that we should apply the proviso to section 83(1) of the Criminal Procedure Ordinance. I would decline these invitations.

11. The applicability of a charge of conspiring to commit the statutory offence was canvassed at the close both of the prosecution case and of the trial. The Crown none the less persevered with the charge as flamed and the defences were developed and the judge directed himself accordingly. Issues critical to the statutory offence were not fully explored. As in R v Ayres [1984] AC 447, where the House of Lords applied the proviso to section 2(1) of the Criminal Appeal Act 1968, the statement of offence as a "conspiracy to defraud contrary to Common law" was a mis-description constituting a material irregularity but in the instant case the effect was not only to lengthen the trial and to afford good grounds for the applications made to us by reference to the interesting considerations already canvassed but also to lead the judge to omit important express findings of fact.

12. Adopting a passage from the speech of Lord Bridge in R v Ayres, at p 461 :

"... the question whether a conviction on that indictment can properly be affirmed under the proviso must depend on whether, in all the circumstances, it can be said with confidence that the particular error in the pleading cannot in any way have prejudiced or embarrassed the defendant".

13. In R v Alexander Grant [1986] 82 CAR 324, where the proviso was also exercised, the judge gave (himself) no express direction and made no finding upon the element of "intention of permanently depriving the said banks" of the replacement drafts or money, certainly their property. Nor did Judge Caird and, as in relation to the falsity of the claims of loss and intent to deceive the Hong Kong banks, his conclusions as to guilt only implicitly involved such findings.

14. I do not think that implicit findings which, in the circumstances outlined, were incidental to the main argument warrant the conclusion that the defendant were in no way prejudiced or embarrassed by and that no miscarriage of Justice resulted from the mis-description of the offence.

15. I would allow these appeals, quash the convictions and set aside the sentences passed on the appellants.

Penlington, JA :

16. I agree.

Representation:

Barry Sceats (DLA) for D1 & D3

Paul K N Wu (Lawrence Ong & Chung) for D2

Darryh Saw for Crown/Respondent