The Queen v. Sunny Omozokpia and Another

Case No.DCCC 278/1978

Court

District Court

Date01 Nov 1978

Judge—

Case Document

100%Judiciary

DCCC000278/1978

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT KOWLOON

CRIMINAL JURISDICTION

CASE NO.278 OF 1978

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	The Queen
	against
	1. Sunny Omozokpia
	2. Paul Akpan Udoh

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Coram: Judge Bewley, D.J.

Date of Judgment: 1 November 1978

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EXTRACTS FROM JUDGMENT

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1. The question now arises as to whether the Crown is entitled to pray in aid S.29(6) of the Theft Ordinance, which provides inter alia: "In any proceedings for obtaining property of pecuniary advantage by deception under S. 17 or 18:-

	(a)	any person who obtains property or pecuniary advantage by means wholly or in part of a cheque or other bill of exchange which is refused payment upon presentation on or after becoming due shall, until the contrary is proved, be deemed to have obtained the property or pecuniary advantage with knowledge that such cheque or other bill of exchange would not be honoured;
	(b)	where -

	(i)	any cheque or other bill of exchange bears any writing purporting to be written by or on behalf of the bank or other person on whom the cheque or bill of exchange was drawn and indicating that payment of the cheque or bill of exchange was refused upon presentation on or after becoming due; or
	(ii)	any document purporting to be made by or on behalf of the bank or other person on whom any cheque or bill of exchange was drawn bears any writing indicating that payment of the cheque or bill of exchange was refused upon presentation on or after becoming due,

then payment of the cheque or bill of exchange shall, until the contrary is proved, be deemed to have been so refused;

	(c)	the provisions of this subsection shall apply whether or not the bank or other person on whom the cheque or bill of exchange was drawn carries on business in Hong Kong and whether the writing was written on the cheque or bill of exchange or the document within or outside Hong Kong;
	(d)	any document purporting to be a document of the kind specified in paragraph (b) or purporting to be a copy or reproduction of any such document shall be admitted in evidence on its production by the prosecution without further proof.

2. Mr. Jenkins, who appears for both defendants, concedes that the money orders in 1st and 2nd charges (Exhibit P1) are caught by para. (b)(1), by virtue of the 'writing' indicating that payment was refused. He submits however that para. (a) does not apply to the remaining forty-five money orders in 3rd and 4th charges, on the grounds that they were refused payment only on presentation to the Hong Kong branch of the Bank of America and not in San Francisco - the only venue mentioned in the orders. He argues that the Hong Kong branch had no authority to refuse payment; that, although the local branch might refuse to pay for the time being, the power of ultimate refusal lay with head office in San Francisco. He also submitted that a junior officer such as Mr. SHUM - a cashier - had no authority to refuse payment. By implication he also concedes that para. (a) applies to 1st and 2nd charges.

3. Sub-sections 1-5 of S.29 deal with evidence and procedure in cases of theft and handling stolen goods and are lifted verbatim from the 1968 Theft Act. Sub-section 6 is not in the English Act and appears to be peculiar to Hong Kong. Para. (a) appears first as Section 50(5) of the old Larceny Ordinance, as amended by Ordinance 20/64. The whole sub-section was then included in the 1970 Theft Ordinance. Counsel did not see fit to argue the matter in depth or to produce authorities, but my own research has failed to find any cases on the sub-section and it is possible that none exist. However, while considering this matter, my attention was drawn to something else. Mr. Shum said these money orders were bills of exchange and he was not challenged on the point. Nor has Mr. Jenkins sought to argue that they are not bills of exchange. I note, however, that they are orders to a department of the Bank of America (International Services Department) from the president of that bank.

4. A bill of exchange is defined by section 3 of the Bills of Exchange Ordinance Cap. 19 as, "an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to, or to the order of, a specified person or to bearer". A cheque is defined by section 73 of that Ordinance as, "a bill of exchange drawn on a banker payable on demand".

5. The Bills of Exchange Act (1882) Amendment Act, 1932, provides: "Section 76 to 82 of the Bills of Exchange (crossed cheques) Act 1906, shall apply to a bankers' draft as if the draft were a cheque. For the purposes of this section, the expression 'bankers' draft' means a draft payable on demand drawn by or on behalf of a bank upon itself, whether payable at the head office or some other office of the bank". The effect of that provision was to give the banker the same protection, when crediting bankers' drafts as cash, as he had in respect of crossed cheques. The Cheques Act, 1957, repealed the 1932 Act and section 4 embraces bankers' drafts in England today.

6. The equivalent provision in Hong Kong is section 86 of the Bills of Exchange Ordinance. Section 83 also protects bankers paying unindorsed, or irregularly indorsed, bankers' drafts. Section 5(2) provides, inter alia, 'where in a bill drawer or drawer are the same persons.......... the holder may treat the instrument at his option, either as a bill of exchange or as a promissory note'.

7. In London City and Midland Bank v. Gordon⁽¹⁾, the House of Lords held that bankers' drafts were not per se bills of exchange. Lord Lindley said: ........... four small drafts drawn by a country branch of the appellant bank on its head office and not crossed. The first question which has to be considered is whether these instruments are bills of exchange as defined in section 3 of the Bills of Exchange Act ............. I agree with the Court of Appeal in thinking that the bank, which is both drawer and drawer of these instruments, is not entitled to treat them as bills of exchange .........., although a holder may sue the bank upon them, and treat them either as bills of exchange or as promissory notes: see section 5, sub-section 2. An instrument on which no action can be brought by the drawer can hardly be a bill of exchange within section 3 of the Act, whatever it may be called in ordinary talk."

8. This case was followed by Slingsby v. Westminster Bank Ltd.⁽²⁾, in which Finlay J. said at p. 187: "But it was said that it was not a cheque because the drawer was himself an official of the bank on which the cheque was drawn. It would seem to follow from the decision of the House of Lords in London City and Midland Bank v. Gordon that a draft drawn by one branch of a bank on its head office or by an official of a bank upon his own bank, cannot be regarded as a cheque."

9. In the latter case the court held that the instrument was in fact a cheque, because the official who signed it was acting as an agent for the government and the transaction ceased to be an interdepartmental one, as where a branch of a bank draws on its head office. The government was drawing out moneys in the hands of the bank.

10. How does all this affect section 29(b) of the Theft Ordinance? These orders are bankers' drafts. The question is whether an instrument, which may be treated as a bill of exchange, is ipso facto a bill of exchange. I would hold, in the criminal context that the answer is no. There must be certainty as to the meaning of the sub-section. We are not here concerned with the rights and duties of a holder; we are dealing with the burden of proof on a person charged with an offence, which is a very different matter.

11. It is true that an instrument of this kind is susceptible of fraud where, for example, it is stolen. Presumably, since it is payable to the order of the payee, it is also negotiable. There is therefore a case for including bankers' drafts in section 29(b). The reality, however, is that the Ordinance uses the words "cheque or other bill of exchange". By implication it excludes promissory notes and other negotiable instruments. Where one is dealing with the liberty of the subject, the words of an ordinance must be strictly construed and, although reluctant to take a point that has not been argued, I rule that sub-section 6 does not assist the prosecution in this case.

	(Sgd.) E. de B. Bewley
	District Judge
	1.11.78.

Representation:

Mr. Stanbury, Crown Counsel, for Crown.

Mr. M Jenkins of Michael Jenkins & Co. for both accused.

(1) 1903 AC 240

(2) 1973 IKB 173