Arthur Leonard Anthony Steele v. The Queen

CACC000391/1977

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Coram: McMullin, J. in Court.

Date of Judgment: 9th July 1977.

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JUDGMENT

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1. The appellant holds the post of Principal Assistant Secretary (Management) in the Administrative Service of the Hong Kong Government. He is employed upon contract at a basic monthly salary of $10,850 to which is added a rent or housing allowance of $7,200. On 6th August 1976 he opened an account with the Banque Nationale de Paris. He was desirous at that time of getting a loan to deal with a pressing tax demand and he wished also to have money for the furnishing of a flat. A senior bank official with whom he was acquainted advised him to present a document of some kind which would satisfy the bank that the defendant would have the means of paying off the loan in the stipulated period. This was referred to as a letter of guarantee in the lower court but, as the learned magistrate found, it was not and was not intended to be - a promise to answer for the default of the defendant. It was rather to be a warranty of his financial capacity. Such documents are, it appears, from time to time issued at the request of Government servants under the hand of the Departmental Administrative Officer who does so upon the submitting of a government form requesting the Administrative Officer to direct a letter to the bank concerned setting forth the required information. In the present case the defendant himself composed such a letter, signed it with a bogus signature purporting to be that of someone acting on behalf of the Departmental Administrative Officer and sent it to the bank. The letter was dated 6th August 1976, and shortly thereafter the defendant was given financial accommodation either in the form of a loan for $30,000 or facilities to draw up to that amount - the money to be repaid within one year. This forgery came to light only after the letter containing it was returned to the Government Secretariat with a covering letter of 14th March 1977. In the interim the defendant had borrowed a sum of about $27,000 all of which had been repaid to the Banque Nationale de Paris by the end of February 1977. An inquiry into the matter followed the return of the forged letter and ultimately the defendant was charged with obtaining a pecuniary advantage by deception contrary to section 18 of the Theft Ordinance. To this charge he pleaded guilty and a sentence of 4 months' imprisonment was imposed on 7th April 1977. Strenuous attempts were then made to have the proceedings re-opened on review on the basis of a mistaken plea and upon these being refused the defendant appealed against both conviction and sentence. The case was set down for hearing before me some months ago and was by consent adjourned on my being apprised that further charges of a similar character were to be preferred. This was subsequently done and I understand that the defendant pleaded guilty before a different magistrate to 2 charges - one of uttering a forged document on the 24th February 1977 and one of obtaining property by virtue of the same forged instrument on 25th February 1977. The learned magistrate imposed fines of $2,000 in respect of each count. So far as I am aware there has been no appeal in that case. The appeal against conviction in the present case has been abandoned.

2. An unfortunate result of what seems to have been a rather piecemeal investigation has been the prosecution of the defendant for several apparently closely similar offences at widely different times before two different magistrates so that the background to the merits of the appeal relating to the charge which is before me would not have been apparent if I had not inquired into the circumstances and history of the subsequent charges. It was necessary to do so as otherwise the picture of the present offence, in the light of the defence submissions thereon, would have been distinctly unrealistic. Moreover on an appeal against sentence it would be quite wrong to leave the appellate court in the position of dealing with the man before it on the footing that nothing save the offence at issue stood against his record. For, basically Mr. Bunting's point on the appeal was that this offence should be regarded as a solitary instance of reckless impatience and folly on the part of an honourable, trusted and valuable senior official whose sole wish was to cut an unnecessary corner to obtain what he could legitimately have had even without the warranting letter. The need for his taking this course was said to consist in the following facts: (a) that he was under severe pressure of work; (b) that he was due shortly to go to Bangkok to attend a conference and (c) that the bank official who would have approved the loan and who had requested the letter was himself shortly due to go on leave. To this was added the suggestion that the cumbrous departmental procedures would have taken anything up to 6 weeks to put the required letter in the hands of the bank. This was not conceded by Mr. Reid who maintains that the application for and obtaining of the letter of warranty with its instructions to the bank could be done in a very short time. What might have been delayed he says was the commencement of the payment in of the salary to the bank account. I have no evidence on the matter but it seems to me that this is very much more likely. A man such as the defendant, at his level in Government Service, would surely have little difficulty in obtaining such a letter expeditiously had the thing been quite such a formality as it is now suggested to be. As I shall point out, however, there is a more obvious reason for the failure to obtain such a letter. Overall, the impression which it was thus sought to convey was that the defendant had merely, though misguidedly, short-circuited a tedious and only marginally necessary procedure to suit his personal convenience. It must be said that even upon that basis the defendant's act was a flagrant abuse of propriety since forgery of any kind is always inherently a serious matter. But it is clear that upon the facts agreed before this court the matter went a great deal further than that. The letter was evidently a necessary part of the procedure for obtaining the loan. Had it not been the defendant, as Mr. Bunting conceded, could simply have informed his contact at the bank in question of the extent of his emoluments and could have assured him that a confirmatory notification was on its way. If that did not suffice no doubt he would have been told so. The fact that he did what he did is patent proof that the defendant himself regarded the letter as a necessary prerequisite to obtaining the money. As to the forged letter itself Mr. Bunting disputes the magistrate's findings on its contents but to my mind the terms of it are, as the magistrate found, distinctly misleading and could well convey the impression that a sum of $18,000 was to be paid into the account monthly commencing forthwith - whereas the fact was that some $9,500 only would be available after deduction of allowances including the substantial housing allowance at source.

3. But to my mind the crucially significant fact which shows the dishonesty of the defendant's behaviour is that at the time he prepared and sent this letter the defendant was well aware that the letter contained a wholly empty promise. Sometime before that date - in fact in May 1976 - he had opened an account with Barclay's Bank and had obtained, in the proper manner, a similar letter of warranty as a result of which he had been given a loan of $10,000 and at the date of the forged document his available salary was regularly being paid into the Barclay's account. That fact is significant in another way. It demonstrates not only that the defendant was well aware of the necessity for following the proper procedure in obtaining such a loan but, more importantly, that a similar application for a letter of warranty in respect of the Banque Nationale de Paris loan could not have succeeded since his salary was already disposed away to Barclay's and that fact would be known to the Departmental Administrative Officer. In the light of these circumstances the reason for the deception is plain and it indicates a far more serious dishonesty than a mere reckless disregard for technical propriety. I still do not know the full extent of the defendant's resources or his commitments, but here he is shown as obtaining two substantial loans within a space of three or four months, the second, and greatly the more substantial of the two, being the loan obtained by this dishonesty. It is true that the loan from the Banque Nationale de Paris was repaid within 7 months but that was certainly not from salary for none was ever paid into that account. In the absence of any evidence of agreed facts as to how this was done and as to what was the state of the Barclay's account and the loan from that bank, I think Mr. Reid rightly does not concede that the early repayment of the Banque Nationale de Paris loan shows that that bank was, throughout, wholly satisfied with the manner in which the defendant was discharging his obligations to it. Mr. Bunting makes the point that there had been nothing in the nature of an outright assignment of the defendant's emoluments to Barclay's and he says that it was open to the defendant to cause the arrangement covered by the letter of warranty to that bank to be revoked at will. In theory therefore, having sent his forged letter to the Banque Nationale de Paris he could simply have cancelled the arrangement with Barclay's. That may be true but in fact he never did so and it is not difficult to see why since he was paying off the Barclay's loan of $10,000 by monthly instalments of $1,000 from May 1976 onwards. In August a substantial sum remained outstanding and a wholesale removal of his funds from that account would no doubt have been ill-received by his creditor in view of his warranty to it.

4. The plea that this case is not in the run of similar cases of deception because no one has suffered and all the money has been repaid would have more substance if the full extent of the appellant's borrowings and repayments were now clear. All I know is that there was a loan from Barclay's which was in process of repayment at the time of the forgery and that shortly before the detection of the forgery there was a loan from another source of a very much larger sum still than either of the earlier loans. I mention this only to deal with the suggestion that repayment of the loan from the Banque Nationale de Paris is to be regarded as removing all consideration of the tariff for such offences. I am aware that the offences arising out of the latest loan were substantively forgery offences and were visited with punishment by way of fine and not imprisonment. The circumstances which moved the learned magistrate to take this view are not in detail before me although I have had the advantage of reading his reasons for sentence. He regarded the matter as "marginally criminal" and added that there was no element of theft involved with the forgery. This may have been because the representations there involved the permission of the Governor to accept a loan. The notification of this was a forgery but the fact it notified - i.e. the Governor's permission - was conceded to be the truth. The purpose of that forgery remains obscure. In the present case there is an element of theft in the diluted sense of the obtaining of a pecuniary advantage. The mechanism of that obtaining was a forgery which involved a double deception: firstly, a deception by representation aimed at the bank wrongly-stating the defendant's intention of paying his salary into the account and reciting facts which were misleading as to his bankable resources; secondly, a deception by concealment since a resort to the proper quarter for obtaining a letter of warranty for this second loan would certainly have caused, at the very least, a query on the part of the Departmental Administrative Officer and of this the defendant must have been aware. Whatever may have been the necessity which drove him to this course the degree of dishonesty was considerable.

5. I agree however that this is not a case of official corruption although the magistrate twice linked the adjective "corrupt" with the word "dishonest", a fact which Mr. Bunting did not seize upon - correctly I believe for the judgment clearly states the facts which the magistrate regarded as showing dishonesty and the use of the word "corrupt" as a fortifying adjective must be regarded as a careless use of language. Mr. Bunting rightly stresses that this is not the abuse by a public official of his powers or duties as a public official for his own ends - in other words it is not in the nature of official corruption. The gravity of the offence lies elsewhere: it lies in the deliberate choice of deception and forgery to gain an advantage and it is aggravated by the fact that the defendant occupies a senior and important post in the administration. From such as he much is expected, and rightly, even in matters of mere official punctilio as to regulations and procedures. The public are entitled to expect probity in the conduct of its public officials at every level and of the highest probity in that of a man at the defendant's level. A deliberate deception of this kind is the more reprehensible because of his status and his generally well advantaged background. Notwithstanding his good service and clear past record I cannot say that this sentence was excessive or that it was imposed upon a wrong principle.

6. The passages from Thomas on Sentence on which the learned magistrate relied are I think generally in point and I indorse, in addition, what is said on page 145 as to retribution being the major factor in the chosen sentence where the offence is committed by high grade employee. In this connection the fact that the money was not taken from the defendant's employer is merely a mitigating factor which I take to be already sufficiently acknowledged in the sentence imposed.

7. The appeal is dismissed.

Representation:

M. Bunting (Gunston & Chow) for Appellant.

C.W. Reid for Crown.