Ting Lam-biu Alias Lam Ting and Others v. The Queen
Read the full judgment text of CACC 39/1972 on BabelCite. This Court of Appeal judgment was delivered on 27 September 1972.
1. The applicants TING Lam-biu, HO To, HO Pan and SUNG Tit-hop were jointly tried together with WONG Tung (then the first accused) on a single charge of conspiracy before the District Court. They were each convicted and sentenced to thirty months' imprisonment and they now apply for leave to appeal against these convictions and sentences. For convenience they will be referred to hereafter as the appellants. The particulars of offence disclosed in the charge are as follows :
|
CACC000039/1972 IN THE SUPREME COURT OF HONG KONG (APPELLATE JURISDICTION) CRIMINAL APPEAL NO. 39 OF 1972 -----------------
----------------- Coram: Full Court (Rigby, C.J., McMullin & Leonard JJ.) Date of Judgment: 27 September 1972 ----------------- JUDGMENT ----------------- McMullin J. : 1. The applicants TING Lam-biu, HO To, HO Pan and SUNG Tit-hop were jointly tried together with WONG Tung (then the first accused) on a single charge of conspiracy before the District Court. They were each convicted and sentenced to thirty months' imprisonment and they now apply for leave to appeal against these convictions and sentences. For convenience they will be referred to hereafter as the appellants. The particulars of offence disclosed in the charge are as follows :
Of the ten grounds of appeal filed on behalf of the appellants the majority are concerned with what effectively is the only substantial ground argued before us. Mr. Henry Hu for all the appellants submits that the Crown failed to prove as against anyone of the appellants that he was a knowing participant in any scheme to defraud by means of forged letters of credit. He admits that each of his clients has participated in one or more transactions which an honest businessman would regard at least as suspicious and possibly fraudulent to some degree. It is worth stressing this point at the outset since Mr. Hu has not argued, and we think rightly, that the learned judge was wrong in coming to the conclusion that a conspiracy of some sort did exist. He has contented himself with urging the view that whether or not a conspiracy was proved to have existed it was not proved that any of his clients had knowingly associated himself with the conspiracy alleged in the charge. 2. This court is of the opinion that there was an abundance of evidence to show the existence of a conspiracy to defraud banks in Hong Kong. The kernel of the scheme consisted of twelve letters of credit issued by the Krung Thai Bank in Bangkok which uncontroverted evidence showed to have been forged. The Assistant General Manager of the Krung Thai Bank, Mr. Srivichit and the Accounts Manager, Mr. Setasuwarna were called to give evidence as to the bank's practice in respect of letters of credit. When the Bangkok Bank, on behalf of one of its customers, opens letters of credit in favour of a beneficiary in Hong Kong it deals, as a matter of custom, with one of three different banks viz. The Commercial Bank of Hong Kong Ltd., the Overseas Union Bank Ltd. and the First National City Bank Ltd. These are its "advising banks" whose duty it is to notify the beneficiary in Hong Kong of the fact that a letter of credit in his favour has been received from Thailand and, if the beneficiary is not a customer of the advising bank, to send the letter of credit with a covering letter to the beneficiary. Each of the advising banks keeps a specimen signature of each of the officials in the Krung Thai Bank who are authorised signatories for the purpose of issuing letters of credit. The twelve letters of credit and the covering letter accompanying each of them were made out under the usual letter head of the Krung Thai Bank Ltd. and both the letters of credit and the accompanying letter in each case purported to be signed by Mr. Setasuwarna and also by a Mr. Kamphol who, we are informed, has since died. A handwriting expert supported the testimony of Mr. Setasuwarna and Mr. Srivichit and the finding of the learned judge that these letters were neither issued by the Krung Thai Bank nor signed by the officials whose signatures purported to be on them has not been controverted upon this appeal and we are satisfied that he was justified in coming to that conclusion. 3. These letters of credit involved credits of substantial size varying in quantity from U.S. $80,000 to U.S. $165,000 odd. Each of the three advising banks received four of them and in every case the date of receipt was either the 31st of August or the 1st of September 1972. In every case the letter of credit purports to be drawn upon the named company or firm in Bangkok and purports to cover the purchase of specified goods in specified quantities. The existence of a concluded contract for such goods thus implied is attested by the appearance on each letter of a note to the effect that details of such goods are to be found in a pro-forma invoice which is, in each case, given a specific reference number. The named beneficiary in each letter of credit was one of eight different Hong Kong companies, one of these being the beneficiary under three of the letters and two others being beneficiaries in respect of two each. Of these eight companies no less than six were first set up and registered between the 10th of August 1971 and the 31st of August 1971. Of the remaining two one was established on the 15th September 1970 and the other on the 6th of May 1971. 4. Of the three advising banks only the First National City Bank negotiated any of the letters advised through them. The First National City Bank negotiated one only of the four letters received by it and the remaining three were sent to the beneficiaries named and were negotiated through banks in which those beneficiaries had opened accounts. The other two advising banks sent all four of their letters to the beneficiaries in this way. 5. Of the eight companies named as beneficiaries under the twelve letters of credit six caused bank accounts to be opened in the company name and in every case the evidence shows that the account was specifically opened for the purpose of negotiating one or more of these several letters. All of these accounts were opened on dates between the 9th and 13th of September 1971. Apart from the First National City Bank four negotiating banks were involved : the International Bank of Commerce Ltd., the Bank of America Ltd., the Union Bank Hong Kong Ltd., and the Banque Belge Pour L'Etranger Ltd. Of the twelve letters of credit seven only were presented for negotiation to these five banks. Two were presented by one of the six beneficiary companies and the remaining five of the six beneficiary companies presented one letter each. Five of the twelve letters were therefore never presented for negotiation and two of the eight companies named as beneficiaries under them never approached any bank for the purpose of negotiating any of them. 6. Of the seven letters thus produced to various banks all were the subject of negotiation to the extent at least that they were received by those banks for the purpose of considering whether the credits named in the letters should be made available in the account of the named company. In only two instances, however, were funds actually placed to the credit of the named beneficiary in the newly opened account. Both of these cases involved the International Bank of Commerce Ltd. to which bank three of the seven letters had been presented. One of these was presented on behalf of the Hang Lee Co. and it concerned the purchase of 4,800 rolls of vinyl wallpaper; the other was presented on behalf of the Chiu Cheung Co. and it concerned the purchase of 3,250 carpets. Funds were credited to the accounts of these two companies in the International Bank of Commerce and the newly opened account was, in each case, drawn upon by means of ten cheques, amounting in all to a sum in the region of HK$1 1/4 million. All of these seven letters of credit when deposited with their respective banks, were accompanied by the usual documents viz. bills of lading, packing lists, invoices, export licences, insurance policies and certificates of origin etc. necessary to effect the release of funds held to the credit of the given company under that particular account. The letters were numbered one to twelve for the purposes of the trial. Nos. 1, 3 and 11 relate to vinyl wallpaper; Nos. 2, 6 and 7 to dye stuffs; No. 4 to 2,000 dozen shirts; Nos. 5 and 9 to carpets; No. 8 to fishing nets; No. 10 to something called Fragrance Oil and No. 12 to automobile vacuum cleaners. In each case the letter quotes the stipulated quantities and the total price. As has been noted above, all of these letters bear specific pro-forma invoice numbers. 7. None of the pro-forma invoices was produced in court and in view of the fact that contracts for the purchase of the stipulated goods were in no case entered into until after the stated date of issue of the relevant letter, it is a fair assumption that they were fictitious. Nevertheless in every case when letters of credit were presented for negotiation they were accompanied by invoices showing the nature of the goods purchased and the price paid and on the invoice in each case appears the statement over the company "chop": - "we hereby certify that the merchandise is as per pro-forma invoice No. ___" and the number given is the same as that shown on the letter of credit. The overall picture of the commercial activities arising from the receipt by the eight beneficiaries of these seven letters is somewhat complicated because in the case of the five letters which were never presented to the bank for negotiation (Nos. 6, 9, 10, 11 and 12) two (Nos. 9 and 10) have not been related by evidence to any commercial transaction whatsoever while the remaining three (Nos. 6, 11 and 12) refer to quantities of fishing net, vinyl wallpaper and car vacuum cleaners which actually were purchased and evidence concerning this was given by three of the five merchants called by the Crown to show the purchase of goods in relation to the letter generally. By contrast, as regards the seven letters presented for negotiation, Nos. 1, 2, 3, 4, 5, 7 & 8, the Crown was able to call the merchants who sold the goods covered by four of them only. These were P.W. 20 and 21 (shirts : L/C No. 4); P.W. 22 (wallpaper L/C 1); P.W. 24 (fishing nets : L/C No. 8) and P.W. 25 (Carpets L/C No. 5). The transporter, Chik Lee could only give very general evidence to the effect that one LEUNG Kung-wai, an employee of the first defendant's office had given him instructions about the preparation of documents concerning the transportation aboard a certain ship of a quantity of shirts, carpets, fish nets and that, consequent upon this conversation, he had transported about 68 cartons and 109 wooden cases on the 9th of September and later handed over the shipping documents to the first defendant's company. There was no evidence from either of the shipping companies concerned. The proof, therefore, that the goods referred to in three of the seven letters of credit which were negotiated were in fact purchased, is derived principally from those shipping documents which were attached to the letters at the time that they were submitted for negotiation to the respective banks. The proof that any of the goods were trnasported and shipped rests, in all seven cases, on those documents coupled with the evidence of Inspector Becker, P.W. 32, that using certain of the shipping documents received from various banks he actually found, in godowns in Bangkok, goods corresponding to some of the goods described in those documents (wallpaper, dyestuffs, vacuum cleaners, carpets and shirts were mentioned by him.) It has, however, never been in dispute that goods of the general description referred to in each of the seven letters were purchased and consigned to the companies named therein. The evidence is clear also that the companies to which the goods ostensibly covered by the seven letters of credit were consigned are fictitious. Moreover, in each of the four cases in which it proved possible to produce the actual merchant who sold the goods, the goods were purchased at a cost to the purchaser of a fraction of the sum made available to him in the relevant letter of credit. 8. Thus, the value of the shirts ordered under L/C No. 4 was about 1/8th of the value of the letter of credit; the value of the carpets ordered under No. 5 was about 1/20th of the value of the letter; the fishing nets ordered under letter No. 7 was about 1/48th of the value of the letter; and the wallpaper order was 1/18th of the value stated in the first letter. 9. Between the 11th and the 14th of September 1971 a sum in the region of one and a quarter million dollars was drawn from the Chiu Cheung and Hang Lee accounts with the International Bank of Commerce by way of cheques. It should be noted that all the letters of credit bear either the date 23rd or 25th of August and in every case where a merchant witness has given evidence his evidence has been to the effect that the transactions purporting to be conducted under the credit so advanced took place on dates subsequent to those dates. The first accused, who is not an appellant, was the person who made the arrangements to purchase all the goods which were purchased in connection with these letters of credit. The first appellant, (originally second accused), is the manager of the Hang Lee Co. allegedly owned by one CHAN Sung-ng and that company was the beneficiary under the first letter of credit; the second appellant (originally third accused), is the registered proprietor of two of the beneficiary companies, the Wing Lung Hong and the Shinto Textiles (H.K.) Corporation; the third appellant (originally fourth accused), is the registered proprietor of the Chiu Cheung Co. which is the beneficiary under the fifth letter of credit which was one of the letters negotiated with the Commercial Bank and which was drawn upon heavily by cheques in the two days following the opening of the account and the fourth appellant (originally fifth accused), was the registered proprietor of the Chip Tai Cheung Trading Company which is the beneficiary under the third letter of credit which was negotiated with the Bank of America and the tenth letter of credit which was one of those not negotiated. All the letters of credit, Exhibit PLA - D, were typed upon a single typewriter. 10. One does not need to look further to conclude that there was, in all this, abundant evidence of a conspiracy to defraud several banks in Hong Kong by means of forged documents. It is also clear that the conspirators must have included persons in Thailand and that the most important confederates may well have been persons employed in the Krung Thai Bank itself. The first point made on behalf of all appellants, however, is that there was no compelling evidence to show an agreement between them to accomplish a fraud geared upon the existence and the manipulation of these forged documents. We must first of all therefore, examine the specific evidence upon which the Crown relies as implicating each of the accused in the conspiracy. It must be borne in mind that the evidence adduced by the Crown was of a circumstantial character and there is no specific evidence that the accused or any of them ever came together for the purpose of hatching the plot which the Crown alleges they all adhered to. 11. In broadest outline the Crown case of conspiracy against them was that every one of them was associated either as proprietor or in some other way with the eight firms six of which had been set up a matter of two of three weeks only before the receipt by the advising bank of the letters of credit; that the first accused (not now an appellant) was the person who purchased all the goods necessary to equip him with the documents needed to release credits; that three of those companies i.e. Shinto Textiles, Hang Lee Co., and Fuh Chuen Co. had acquired their premises between May and August 1971; that the first accused and the second and third appellants knew each other and had had commercial dealings with each other involving letters of credit during the month of August 1971 which transactions took place in the first accused's office at Room 202, Wing On Mansion; that the first and fourth appellants were respectively manager and registered proprietor of one of the beneficiary companies (Chip Tai Cheung Trading Company); that the first appellant secured the premises from which the Chip Tai Cheung Company operated and was named the principal tenant thereof; that both the first and fourth appellants were admittedly concerned in the negotiation of the third letter of credit through the Bank of America; further, that all the appellants were concerned in some way with the negotiation of the several letters of credit sant by the advising banks to the companies with which each of the accused were in some capacity connected; that the contracts relating to the goods allegedly covered by each letter of credit were not made until after the letters of credit had been dispatched to those companies; that in every case where it could be shown that goods had been purchased the price paid was enormously less than the sum stated in the relevant letter of credit; and finally, that in the four instances in which evidence was given as to the price paid for these goods, the invoice presented to the negotiating bank with the letter of credit relating to those goods nevertheless stated the original price mentioned in the letter of credit and not the actual price paid. 12. It would seem that the presentation and negotiation of all twelve letters of credit was only prevented by reason of the fact that from the outset the Bank of America, being apparently somewhat suspicious in relation to the third letter of credit, instituted between the 11th and 14th of September an inquiry in Thailand from the Krung Thai Bank as to its validity. There followed the curious exchange of cables which may well lend additional support to the idea that a prime conspirator must have been some person in the employment of the Krung Thai Bank. In answer to the cable of the 11th the Krung Thai Bank cabled back on the 13th of September to say that the letter of credit was not issued by that bank. This cable, however, was followed on the 14th by another cable saying that the letter of credit was good and that the first cable should be ignored. Later, on the 14th a further cable was received from the Krung Thai Bank stating that the letter of credit was in fact false. Thereafter, the matter was put in the hands of the police. The first appellant, the first of the accused persons to be arrested, was arrested on the 17th of September in the Bank of America where he had gone apparently in a last desperate effort to raise money under that letter of credit. All the other appellants, apart from the fourth appellant, were subsequently arrested and the fourth appellant went voluntarily for interview to the police on the 25th of September. 13. In outline the evidence tending to associate each of the appellants with the conspiracy is as follows : the first accused (not an appellant) is the proprietor of a firm called Goodtex and in that firm he employs a person called LEUNG Kung-wai (P.W. 19) as a clerk. This man told the court that in late August and early September he had seen the second and third appellants in his employer's room at 202, Wing On Mansion and that they had requested him to make out supporting documents to be attached to certain letters of credit and that after consulting his employer, the first accused, he did so. It would appear that this occurred on several occasions and he dealt with several letters of credit in this way though none of them appears to be any of the letters we are now concerned with. At the beginning of September, however, at his employer's direction, he did prepare export documents in relation to the 3,000 automobile vacuum cleaners covered by the twelfth letter of credit drawn in favour of the Wing Lung Hong of whom the registered proprietor is a person called TSE Fai, a person not now in custody. According to the manager of the Foundation Company, P.W. 23, these vacuum cleaners were bought by the first defendant and his employee Leung and the cheque in payment therefor was given to him either by Mr. Leung or the first defendant, and it was later dishonoured. The letter of credit covering the vacuum cleaners (No. 12) was one of those which had never got to the actual point of negotiation before the Bank of America's suspicion drew down the police investigation into the whole affair. The price paid for these instruments was about 1/30th of the sum in the letter of credit. Again, it was the first accused who bought the wallpaper from the proprietor of the Sin Wah Kowloon Wallpaper Company, (P.W. 22), which is apparently covered by the contract documents attached to the first of the letters of credit drawn in favour of the Hang Lee Co. The Hang Lee Co. is the property of a person called CHAN Sung-ng who is not now in custody. The manager of that company was the first appellant. The first accused also bought the 2,000 dozen shirts from Mr. LEUNG So, the proprietor of the Kuen Hing Garment Factory (P.W. 21), on August 31st 1971 paying therefor a sum of money about 1/8th of the value of the letter of credit. LEUNG Kung-wai also gave evidence that, at the first accused's direction, he had prepared the invoices, packing list, and other necessary documents for the negotiation of the letters of credit relating to the purchase of wallpaper from the Fuh Chuen Co. (letter No. 12) and for the purchase of shirts, (letter No. 4), from the Kuen Hing Garment Factory; these having been brought to him by the second and third appellants respectively. Subsequently, he performed the same service for the second appellant in respect of the contract documents relating to the purchase of fishing nets under letter No. 8. These were purchased from the Triwoods Fishnet and Twine Co. Ltd. on the 31st of August. The first defendant paid a sum of $17,000 in cash for them. As in the case of all the other purchases by the first defendant the invoice accompanying the letter of credit (letter No. 8) was said to be the full contract price referred to in the letter of credit i.e. US$134,400, whereas the actual price paid was enormously less than that and amounted to about 1/48th of the value of the letter of credit. The wallpaper covered by the first letter of credit was purchased by the first accused for the Hang Lee Company, as were the carpets to which the fifth letter relates and for these goods prices were paid which were respectively 1/18th and 1/20th of the sums stated in the letters. The first accused also arranged for the transportation of all these goods by the Chik Lee Transportation Company. 14. It will be seen, therefore, that the first accused was active in all the dealings which resulted in the purchase of goods under letters of credit which were either negotiated or presented for negotiation at the various banks, and that these various purchases referred to a number of companies other than the company which the first accused himself was said to have established in conjunction with the witness HO Shu-kwan. Further, his employee, LEUNG Kung-wai, confirms what the documentary evidence already makes plain, namely, that in relation to the purchases in which he and the first accused were concerned, the letter of credit arrived in their hands before any contract had been made with any other party. The learned judge, however, accepted that the witness Leung was merely a clerk in the employment of the first defendant and should therefore not necessarily be regarded as an accomplice a view from which, in the circumstances, we would not dissent. The same cannot, however, be said about the other witness relied upon by the Crown, HO Shu-kwan, P.W. 12. He told the court that it was at the instance of the first defendant that he had set up the firm known as Hong Keung Trading Co. (beneficiary under letter of credit No. 4) on the 15th of August 1971 for the purpose of carrying on some unspecified form of import export trade. Subseqnently, apparently without prior negotiation of any sort with anyone, the letter of credit (No. 4) purporting to cover the 2,000 dozen shirts arrived at the office of that company and he then told the first defendant to make arrangements to purchase the goods referred to in the letter adding, ingenuously, that until the letter arrived he did not know what goods were required. Subseqnetly, he and the first defendant went to the garment factory of Mr. Fung and gave $19,000 by way of cheque. The shirts were boys' shirts of the poorest quality and the amount stated in the letter of credit supposedly issued to cover this purchase is US$18,000. The witness Fung, P.W. 20, in giving evidence about this matter said that when the first accused came to the factory to pay, he was accompanied by the fourth accused (third appellant here). For what it is worth, it may be added that HO Shu-kwan also said that on the day following the payment for the shirts, which was the 10th of September, he went to Room 202, in the Wing On Euilding where he found documents relating to the shipment of various goods already prepared and that on this occasion he saw the fourth appellant there but that nothing was said in his presence by that person. Thereafter, it was HO Shu-kwan who took the letter of credit (No. 4 relating to the shirts) to the Union Bank with the accompanying documents for negotiation. HO Shu-kwan also gave evidence as to the receipt of the fifth letter of credit i.e. the letter relating to carpets drawn in favour of Chiu Cheung Co. of which the third appellant is the proprietor. 15. Thus far, it will be seen that there is a fairly substantial body of evidence, including the evidence of the accomplice HO Shu-kwan, to show a considerable degree of friendship and mutual co-operation between the first accused and the second and third appellants and an acquaintanceship at least between the first accused and Leung, his employee, and the fourth appellant who was, of course, the employer of the first appellant. The other evidence concerning the part played by each of the appellants is as follows : The first appellant is the manager of the Hang Lee Co. of which the registered proprietor is a man called CHAN Sung-ng (a person not now in custody) and the first appellant took the initiative in opening an account with the International Bank of Commerce for the Hang Lee Company. The proprietor CHAN Sung-ng accompanied him to the bank on that occasion. According to the pro-manager of that bank, Mr. TING Kwok-leung (P.W. 9) on the same occasion the appellant produced the letter of credit No. 1 relating to wallpaper drawn in favour of the Hang Lee Co. and which was accompanied by the usual documents necessary to effect the negotiation of the credit. Prior to this, upon the same day, he and the third appellant had opened an account at the same bank in favour of the Chiu Cheung Co., of which the third appellant is the registered proprietor. Later upon the same day, the first appellant returned to the bank with the letter of credit No. 5 relating to the contract for purchase of carpets drawn in favour of the Chiu Cheung Co. together with the supporting documents for negotiation. This letter together with the first letter in favour of Hang Lee Company are the only letters out of the whole twelve which were put eventually to the credit of any of the companies and from which large sums of money were drawn as has been said above. The first appellant on the same day also took the pro-manager to lunch and represented to him that he had very good relations with the importers in Bangkok and would have in future similar transactions for large amounts of merchandise. He also represented the third appellant as being a man of considerable wealth who had given him, the first appellant, capital to carry on his business. On the 14th of September the first and third appellants presented themselves to the bank and by means of a cheque drew out $400,000 in $500 notes. 16. The first appellant was also the manager of the Chip Tai Cheung Co. of which the registered proprietor is the fourth appellant. It would seem clear, however, that the first appellant took very much more initiative in relation to the business both of the Chip Tai Cheung Co. and of the Hang Lee Co. than one would expect in the case of somebody who was merely a manager. Thus, the tenancy of the premises in Nathan Road in which the Hang Lee Co. was to carry on its business was negotiated by him, and the manager of the premises, Mr. LEE Hok-yuen, P.W. 29, told the court that the first appellant had told him that he would use the premises for trading in the company name of Hang Lee Co., although CHAN Sung-ng was nominally the proprietor of that company. Two female typists were called to give evidence concerning the business carried on at these two establishments. They indicated that they were working principally under the direction of the first appellant. These two companies in fact were functioning in the same office on the second floor, No, 753, Nathan Road and the typists were therefore working in the same room. Miss CHAN Chor-heung, P.W. 27, was working for the Chip Tai Cheung under the first appellant for less than a month yet she, on the 14th of September, was paid a bonus of $1,600, the first appellant telling her that his company had made a considerable profit. Miss WU Oi-ling, P.W. 28, told the court that after only 9 days working for the Hang Lee Co. she had received a bonus of $1,500 on the 14th of September from the first appellant. Finally, as against this appellant, there is the fact that two of the letters of credit, Nos. 2 and 7, drawn in favour of the Hing Fat Hong of which the alleged registered proprietor is a man called TSE Fai (a person not in custody), were both negotiated by the appellant, the second being negotiated with the International Bank of Commerce and the seventh with the Banque Belge Pour L'Etranger. 17. As regards the second appellant, he is the proprietor of Shinto Textiles (H.K.) Corporation which functions in the Room 202, Wing On Mansion and which is the beneficiary under the eighth letter of credit relating to the purchase of fishing nets, and he is also the registered proprietor of the Wing Lung Hong which is the stated beneficiary under the twelfth letter of credit relating to the purchase of vacuum cleaners. The first of these companies was established on the 15th of September, 1970, but the second was established only on the 15th of August, 1971. The second appellant opened an account in favour of the Shinto Textiles Co. on the 13th of September 1971, and on the following day deposited $5,000 in that account. On the 16th he presented himself at the bank with the eigth letter of credit relating to the purchase of fishing nets on behalf of Shinto Textiles (H.K) Corporation, and on this occasion, according to the clerk, Mr. CHAN Shu-keung, P.W. 11, he was accompanied by the first accused (not an appellant). It would appear that the goods actually purchased in relation to this letter of credit had been shipped prior to the opening of the account in favour of the Shinto Textiles. With regard to the twelfth letter of credit drawn in favour of the Wing Lung Hong, which is a company registered in the name of the second appellant, this letter of credit was never actually presented or negotiated but was discovered afterwards in Room 202, Wing On Mansion, the address of the second appellant's company, and was seized there by Inspector Norcott. There is evidence to show that although the first accused had actually bought those goods, the contract for them had been signed by the second appellant. 18. The third appellant was the proprietor of the Chiu Cheung Co., which was established on the 10th of August 1971, and was beneficiary under the fifth letter of credit relating to the purchase of 3,250 carpets. This was the letter negotiated by the first and third appellants through the International Bank of Commerce, backed up by the usual shipping documents obtained as a result of the purchase of those carpets by the first accused in the manner already described. The actual address of the third appellant's premises, the Chiu Cheung Co., is third floor, Peninsula Apartments, D Block, 16, Mody Road, and this is also the address of the Fuh Chuen Co., which is the named beneficiary under the eleventh letter of credit relating to the purchase of 4,750 rolls of wallpaper. The proprietor of this company is said to be a LEUNG Man, but no person of that name has been arrested or brought to trial. It will be remembered that the first letter of credit also related to the purchase of wallpaper - in that case 4,800 rolls on behalf of the Hang Lee Co. - and that that letter was actually negotiated and was drawn on by cheque from the Hang Lee account. In the case of the Hang Lee Co. - as in the case of the Fuh Chuen Co. - the person said to be the proprietor is CHAN Sung-ng and he has never been arrested. It will be remembered also that the first and third appellants together negotiated withdrawals from both the accounts of Hang Lee and the Chiu Cheung Co. amounting to something in the region of one and a quarter million dollars. This letter of credit (the fifth letter) is dated 25th of August 1971 and the contract for the goods allegedly purchased under it is dated 4th of September 1971. The bank account, which was opened by the third appellant in company with the first appellant, was opened on the 10th of September 1971. After it had been opened, the third appellant signed ten cheques and by means of them withdrew a sum in the region of $700,000. Included in this sum was a sum of $400,000 which the third appellant withdrew from his account in company with the first appellant and which was paid to them in cash. Throughout these proceedings it would be seen that the second and third appellants were in close co-operation in relation to the opening of these accounts and withdrawals of money therefrom. It will be remembered also that the second and third appellants were in frequent attendance at the office of the first accused No. 202, Wing On Building. In fact all three were present on the 16th of September when Inspector Norcott arrived at the premises with a party of police to carry out a search. Another item of evidence concerning this appellant is to be found in the evidence of P.W. 32, Mr. CHAN Kin-wang, who sublet a desk to the appellant in Room 1601, International Building at the end of April 1971. That room is the registered place of business of the Wing Lung Hong (beneficiary company under the twelfth letter of credit), a company of which the second appellant is the registered proprietor. 19. The fourth appellant is the registered proprietor of the Chip Tai Cheung Co. which was established on the 14th of August 1971 at the address on the 2nd floor, 753, Nathan Road. This company was the named beneficiary under the third and the tenth letters of credit. Its registered place of business is identical with that of the Hang Lee Company of which the unapprehended CHAN Sung-ng is said to be the proprietor and of which the first appellant is the manager. The first appellant was also the manager of the fourth appellant's firm. This account in the name of Chip Tai Cheung Co. was actually opened by the first appellant on behalf of the fourth appellant on 6th of September 1971, and on that date the first appellant paid in a sum of $10,000 to the account. Subsequently, cheques signed by the fourth appellant were drawn from that account and a further deposit of $10,000 was made on a later date. On the day of the opening of the account the first appellant also showed a letter of credit but it would not appear that it was deposited with the bank on that date. He had discussions with one of the clerks at the bank, Mr. Leung, P.W. 10, as to whether the letter could be negotiated and he was told that it could be. It would appear that the letter of credit with its accompanying contract documents was submitted to the bank by the first appellant on the 11th of September and that on that date he pressed the bank on several occasions to have the sum named therein placed to the credit of the account. It was, however, on that day that the Bank of America, out of caution, sought to ascertain from the Krung Thai Bank in Thailand whether the letter of credit was genuine or not. According to the Assistant Manager of the Bank of America, Mr. Chow, P.W. 8, the first and fourth appellants came back on the morning of the 13th - prior to the receipt of the first cable from the Krung Thai Bank saying that the letter was genuine - and on that same morning he discussed the letter with them. It was then that the first appellant said that he was manager of the fourth appellant's firm and when the witness queried the price stated on the letter of credit relating to the rolls of wallpaper which were being ordered, the first and the fourth appellants reassured him as to the price, told him that the letter of credit was in order, and asked when the proceeds would be made available. The witness also said that they both engaged him in conversation concerning military uniforms saying that they expected shortly to have a transaction with Bangkok for the sale of such uniforms amounting to about one million U.S. dollars, and adding that if the service was satisfactory they would be pleased to deal with his bank in the future. It was after this conversation that the first of the cables arrived on the 13th September saying that the letter of credit was not genuine. On the following day, the 14th, two more cables arrived, one saying the letter was genuine and the final one contradicting that and affirming that the letter was not genuine. On that day, after the receipt of these cables, the first appellant returned to the bank and pressed to have the money made available. Presumably, because the matter was under investigation, the witness told him merely that the money was not yet ready and then the first appellant became very angry and said that he wanted to take back the relevant documents. The witness told him that it would not be possible to get them back and the appellant then left. The matter was then reported to the police and on the 17th the first appellant turned up at the bank again and was then told that the letter of credit was not in order. When he asked what was wrong he was led to the conference room of the bank where there was a police party, and he was there arrested. 20. All the appellants made unsworn statements at the trial. The statement of the second and third appellants amount to little more than denials that they had engaged in any dishonest conduct in relation to the transactions which have been described. In effect, they said simply that they received certain letters of credit and did not know that they were forged and they each denied cheating anybody. They also denied knowing the first and fourth appellants. The unsworn statements of the first and fourth appellants were very much more elaborate. The burden of the defence of the first appellant was that he had no knowledge about the case and was merely obeying orders given to him by his boss, a man called CHAN Yee-ying, and he said that this man and the fourth appellant had gone to Thailand in May or June 1971, and that it was thereafter he was given various instructions to deal with various letters of credit and to open bank accounts. This he said was all he had done during his one month's employment with the fourth appellant and CHAN Yee-ying. 21. The fourth appellant said that he had come to know CHAN Yee-ying in 1954 and he admitted that he had been to Thailand in 1970 looking up business prospects generally. He said that there was a possibility of doing good business in live cattle, frozen shrimps, teak wood and sweet corn. After his return from Thailand he was playing Mahjong with CHAN Yee-ying at the latter's home when he met the first appellant, and he was advised by Chan and the first appellant to set up the Chip Tai Cheung on the understanding that the first appellant would be able to obtain business dealings to be financed by way of letter of credit. Thereafter, he set up that firm and at the request of Chan he opened a bank account. Later, he was shown the letter of credit (letter No. 3) by the first appellant who told him that he received this from the First National City Bank. He said that he could not read the document but he was informed that is was for the purchase of the wallpaper for a sum of about $160,000. He queried whether it could be forged and was told by a Mr. Lee who was present that since it was passed by a bank it could not be forged. After this he gave it to the first appellant who made preparations for purchase of the goods specified in the letter. Subsequently, at the request of Mr. Chan and the first appellant, he opened an account in his own name in the Hang Seng Bank, it being represented to him that unless he did so he would not be entitled to receive payment by way of share in any future transaction. Thus, he went to the Bank of America with the first appellant where he signed the signature card. He told the manager that he had received that letter of credit from the first appellant adding that, although he was the boss, the business itself was being handled by the first appellant and that he had no knowledge about it. In his presence the manager then questioned the first appellant as to how he received the letter of credit and was told that the first appellant had a friend in Thailand who knew a lot of people in the military forces and that business had been introduced to the first appellant in that way. According to the fourth appellant, he then protested that he had not actually come to get the letter of credit cashed and that he went on to say that the letter should not be cashed until the manager had ascertained whether or not the goods had arrived in Thailand. 22. Mr. Hu, who had a difficult case to present, endeavoured to draw a distinction between the case of the fourth appellant and the other appellants. While he was prepared to admit that in the case of the others it might be that they had knowledge that some degree of dishonesty affected the transactions with which they were concerned, he said that the evidence in relation to the fourth appellant could be interpreted as showing that the fourth appellant was merely the dupe of the second and possibly of the other appellants. However, on a full survey of the evidence already referred to it does not appear to this court that any valid distinction can be drawn between the cases of any of the appellants. The salient feature which broods over the activities of all of them was concerned in one way or another with the negotiation of one or more letters of credit which were received by them prior to the making of any contract for the supply of the goods ostensibly covered by those letters. As Mr. Marshall rightly observed, letters of credit do not suddenly materialise out of thin air and no businessman of any calibre would ever be under a misapprehension as to the possibility of their doing so yet not one of them ever saw fit to inquire how this had come about. In the case of the fourth appellant there was one further significant piece of evidence which, although it was not made the subject of any representations before us, can readily be discerned upon documents debated in our presence. Mr. Hu said on behalf of the fourth appellant that it should be held in his favour that, upon discovering that suspicion attached to the letters of credit, he wrote to the Bank of America (exhibit p 29 H at page 683 of the record) telling the bank that he had been fooled by other people and asking the bank to stop certain post-dated cheques drawn upon the Chip Tai Cheung account for the purchase of goods. There are two features concerning this letter which should be noted. Firstly, although the letter is dated 16th September it was actually received by the bank on the 28th of September, the appellant having gone to the police station voluntarily on the 25th. The other appellants were all arrested at Room 202, on the 15th as had been described above. We do not know why the fourth appellant was not taken into custody consequent upon the initial investigations by the police which led to the arrest of the other appellants, but at all events he was left at liberty for some ten days prior to his going to the police station. Mr. Hu asks us to say that his act in stopping the cheques when he know that something was wrong is a demonstration of his honesty in the whole matter. It would appear to tell the other way, however, since after the arrest of the other appellants he must have become aware that a fraud had been discovered and if he was minded to stop payments from the Chip Tai Cheung account one would expect that he would have moved promptly to do so. The fact that the letter was not received in the bank until the day after his detention is a fair indication that he made no such immediate move and that his writing this letter was a belated attempt to establish his bona fides. This impression is reinforced by the fact that the letter bears a date some 9 days prior to its receipt by the bank, and it is difficult to avoid the conclusion that it was deliberately pre-dated. Secondly, the reason given in this letter for stopping the cheques is that the writer had discovered that something was wrong with a batch of goods. The appellant's own story has been, however, that throughout the proceedings his only worry was whether or not the letter of credit shown to him was genuine. There is no indication from what he told the court that he ever interested himself in the goods purchased or made any inquiry as to their quantity or quality or, indeed, as to their nature or existence. Furthermore, there is no evidence on the record to show that the wallpaper, which was the subject matter purportedly covered by the only letter of credit drawn in favour of the Chip Tai Cheung Trading Co., was ever purchased although the packing list companying that letter of credit when it was submitted to the bank refers to shipping marks which were found by Inspector Becker on certain cartons in the custody of the Port Authority in Bangkok, which cartons, on being opened, were discovered to contain not wallpaper but corrugated paper. 23. It seems very unlikely that any sensible businessmen would, as the fourth appellant did, deposit a sum of $20,000 in a bank account opened at the behest of a person whom he did not know very well, for the purpose of letting that person trade in the name of the company set up by the appellant himself, without inquiring fully into the details of every transaction carried on in his name. Yet this appellant sought to persuade the court that he had entered into this affair on the understanding, to which he was persuaded by his friend, CHAN Yee-ying, that the first appellant would look after all business affairs and that, to use his own words "all I need do was to go and collect money." He never sought to explain why he was prevailed upon to open a personal bank account with the Hang Seng Bank or what his understanding was of the necessity for doing so in relation to the carrying on of the import export business by means of letters of credit. He contented himself with saying that he was prevailed on to do so by CHAN Yee-ying on the basis that if he did not do so he would not receive any share in the profits. He never explained why it was that the sum of $400,000 was paid into that personal account from the Hang Lee Co. account on the 14th of September, the day after his personal account had been opened. Moreover, between the 13th and the 17th of September there was movement of cash out of that account amounting to some $410,000 none of which has been explained by the fourth appellant. It may also be noted that when he presented himself at the Hang Seng Bank at the beginning of October he asked the Assistant Manager, Mr. Lee, P.W. 16, to stop five cheques, giving as his reason the explanation that several of his signed cheques had been stolen from him. This story was never given to the court or to the police and, in reference presumably to these cheques, his story was that he had given five blank signed cheques to the first appellant for the purpose of enabling the latter to further the mysterious business transaction from which he expected so much with so little personal involvement. 24. For all these reasons this court takes the view that the learned judge was justified in coming to the conclusion not merely that it could be inferred against each of the appellants that he was engaged in a fraudulent transaction but that that was the only reasonable inference in all the circumstances. We have gone into the evidence as it relates to each of the appellants in very considerable detail in order that the reasons for coming to this primary conclusion should be made clear. But everything that has been said serves only as a lengthy preamble to our consideration of the one substantial issue of law which has been raised on behalf of all appellants. Mr. HU contends that, since the Crown has chosen in the particulars of its charge to allege that this particular fraud was brought about by the knowing participation by each appellant in a plot to obtain money from several banks on forged letters of credit, it was necessary for the Crown to prove knowledge on the part of each of the appellants that the letter of credit with which he was concerned was, indeed, a forgery. In other words he said that it is not sufficient for the Crown to show that each had lent himself to a common scheme to defraud but that it must go further and show that the common scheme involved the use of letters of credit which, to their knowledge, were forged. The real culprit in the matter, he maintains, was the person who did forge the letters of credit and while he is willing to admit that his clients may have been somewhat greedy and unscrupulous in lending themselves to a scheme which involved at least the purchase of goods which were far below the value of the letters of credit it has not been proved that any of them realised that the letters themselves were false. He points out, correctly, that the learned judge did not specifically find that any of the appellants were aware of the forgery. The learned judge summarised his conclusion in the following terms :
He then went on to cite the old cases of Regina v. Murphy & Douglas 8 C. & P. at P. 297 and Regina v. Parnell & Others 14 Cox 508 on the point that it was not necessary for the Crown to prove that there was an actual coming together by the conspirators and an expressed agreement to carry out their common purpose, and he stated the law, in our view correctly, by saying that it was not necessary to prove that the conspirators had even seen each other so long as it is clear upon the evidence as a whole that they were parties to the same common criminal agreement. 25. Mr. Hu referred us to the decisions in Churchill v. Walton 51 C.A.R. 213 and Reg. v. Griffiths and Others 49 C.A.R. 279. Both of these cases were concerned with alleged conspiracy either to defraud the Crown of revenue or else to exact payments from the Crown in respect of subsidies. The facts in both these cases are somewhat complicated; they are also considerably different from the facts before us; and it is not necessary, nor would it be helpful, to refer to them in detail. The principles for which Mr. Hu has resorted to these decisions are admirably set forth in the headnotes to the cases. In Griffiths case it is said :
In the headnote to Churchill v. Walton it is said :
In the House of Lords, where the appeal had gone upon the certificate of the Court of Criminal Appeal that a point of law of general public importance arose, Lord Dilhorne, adopting a dictum of Lord Goddard, C.J. to the same general effect as the above in Johnson v. Youden (1950) 1 KB at page 546-7, went on to say :
26. Unimpeachable as these expressions of principle undoubtedly are they are only marginally relevant to the circumstances in the case now under consideration before us. It is not in doubt that the Crown must show, as against each of the appellants, that he joined in an agreement to do something which was in fact unlawful, whether or not he realised that it was so. Although he did not explicitly put the matter in that way, it would appear that what Mr. Hu is really contending in this case is that it was an equally reasonable inference from the facts that each of the appellants may have been unaware that the letters were forged and may have lent himself only to a scheme to gain an unconscionable enrichment at the expense of certain existing merchants in Bangkok and not at the expense of any bank in Hong Kong. He put his contention, however, in the form that, in order to convict any one of the appellants, it must be shown that the appellant realised that the document with which he was concerned was a forgery, in that it bore a signature which was to his knowledge not genuine. At one point in the course of the argument Mr. Marshall for the Crown actually appeared to concede this proposition but later, upon questioning by the court, he shifted ground slightly and contended that it was immaterial whether the evidence showed that the appellants knew that the letters actually bore forged signatures or whether they merely knew that the letters of which they made use had been fraudulently obtained from the Krung Thai Bank. It was an advisable adjustment for it can scarcely be said that the evidence was sufficient to show beyond reasonable doubt that any one of the accused persons knew that the signatures of the Thai bank officials on each of the letters of credit, without which such letters could not have been negotiated, were false signatures. But the substance of the Crown's charge is the allegation that the appellants concerted in an intention of permanently depriving certain Hong Kong banks of money by deception and that deception is said to consist in false representations : "that forged letters of credit purporting to have been issued by the Krung Thai Bank Ltd. of Bangkok, Thailand were in fact genuine letters of credit" issued by that bank. What the Crown's evidence purported in fact to show was that each of the appellants, in dealing with any one of the letters, was aware that that letter was not a genuine letter of credit not for the reason that he knew that certain signatures upon it were false and forged, but because he knew that it did not correspond to any genuine business transaction whatsoever. To that extent it may be said that actual knowledge of the fact of the forgery of any signature was irrelevant. If it were a reasonable inference from the evidence that any one of the appellants genuinely believed that the firm mentioned in the letter of credit with which he was concerned was an existing firm in Bangkok which had ordered goods and which had made available credit for the purchase of those goods by letters opened with the Krung Thai Bank, such appellant could not be convicted upon this charge merely because he lent himself to a scheme to cheat such merchants by supplying goods of such inferior quality that he would thereby gain a wholly dis-proportionate and unconscionable profit for himself. 27. We have given this latter possibility serious consideration, but, apart from the patent fact that not one of the appellants has chosen to put his case in that way, it appears certain that each one of them was well aware that the letter or letters with which he was concerned was not, or were not, genuine since the facts inescapably point to the conclusion that not one of the appellants can have had a genuine belief in the existence of any commercial transaction relative to any such letter. Furthermore, if it were a reasonable inference from the evidence that any one of the appellants was concerned with one only of the letters and was aware of its fraudulent nature as regards the single transaction with which he was concerned and only with that transaction we would, in accordance with the principles already touched upon in the cases cited, be compelled to say that he should not be convicted on that evidence alone of conspiracy with the rest. But the evidence on the record shows a web of circumstances closely intricating every one of the appellants in the whole framework of the fraud. Having regard to the very considerable body of evidence already referred to, including the numerous documents put before us in relation thereto, we have no doubt that all of the appellants were well aware that there was on foot a scheme involving them and possibly other persons as well, whereby banks in Hong Kong were to be induced to make available to them very large sums of money on the footing of letters of credit relating to transactions which none of them, believed to be genuine. For these reasons the applications of all appellants to appeal against their convictions are refused. 28. This conspiracy involved a well planned fraud on a very considerable scale. We have considered the appeals against sentence but take the view that in the circumstances the sentences imposed were not excessive. The applications for leave to appeal against sentence are also dismissed. Representation: Henry Hu assigned by Director of Legal Aid for all appellants. Marshall C.C. for respondent. |