Yan Kwong Nam and Others v. The Queen

CACC000398/1968

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 398 OF 1968

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Coram: Hogan, C.J., Rigby, S.P.J. & Morley-John, J.

Date of Judgment: 28 December 1968

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JUDGMENT

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1. The five appellants were convicted upon a multiplicity of counts preferred against them of conspiracy to forge documents, possession of forged bank notes, and kindred offences contrary to the provisions of the Forgery Ordinance. They were each sentenced to a total of 10 years' imprisonment upon the various charges preferred against them and the second to the fifth appellants inclusive now seek to appeal against their convictions and sentences. The first appellant confines his appeal to that against sentence only.

2. Mr. Swaine, who appears for the first four appellants, conceded at the outset of the appeal that he could advance no grounds on behalf of the second and third appellants upon their appeals against conviction and, in so far as the fourth appellant was concerned, he sought to confine his arguments to points of law in relation to some of the counts upon which that appellant was convicted.

3. On the other hand, Mr. Shears, who appears for the fifth appellant, the case against whom was on a somewhat different footing, appeals against both conviction and sentence.

4. Despite the multiplicity of the counts preferred in the indictment the facts providing a basis for those counts are relatively simple. On the evening of the 10th of April a party of police carried out a raid on the Wing Ming Printing Press which is situated on the ground floor of No.4 High Street, Hong Kong. Upon those premises at the time of the raid they found the first, second and third appellants. The first appellant was admittedly a partner in the firm; the second and third appellants were employees. Upon the premises they found 27,098 20-peso notes of the Central Bank of the Philippines which were subsequently proved to be forged notes, 12 plates ostensibly being used for the printing of forged 20-peso bank notes, 5 plates for printing of 50-peso bank notes, 3 photographic negatives, and 2 forged dies for printing Thai Government Excise Stamps and Duty Stamps, and a quantity of machinery suitable for the purpose of printing forged currency notes and documents. It was immediately apparent that all the machinery and paraphernalia required for forging Philippine currency notes and Thai Government Excise Stamps and Duty Stamps on a large scale were readily at hand. The first, second and third appellants were virtually caught red-handed in circumstances which could leave no reasonable doubt that they were active and willing parties to what was undoubtedly being carried on in those premises in forging currency notes and excise stamps and duty stamps of neighbouring friendly territories. It is a matter of no surprise that the first appellant has not appealed against his conviction and that Mr. Swaine, on behalf of the second and third appellants, has conceded that he can advance no grounds against the propriety of their convictions on the several counts preferred against them.

5. On the same evening the police carried out a raid on the premises at No.31A, Bonham Road, second floor, where the fourth appellant was living. Upon a search they found one genuine U.S. $20 note at the head of the fourth appellant's bed and on a shelf near his bed they found a book, interspersing the pages of which were nine genuine foreign bank notes of different countries. Evidence was given at the trial that it is a normal practice for those concerned in forged bank notes to keep the genuine notes, from which forgeries are photographed, in a flattened condition free of any creases which might then become apparent in the photographic process. In the cardboard box underneath the fourth appellant's bed were found a quantity of enlarged photographs of U.S. bank notes. Here again, evidence was given at the trial that during the photographic process of forging counterfeit currency notes it is necessary to enlarge the genuine note in order to see the more readily the principal characteristics and thus assist in correcting any mistakes in photography during the processing of the actual counterfeit currency notes.

6. Various drawing implements were also discovered on the premises, and when the police searched the person of the fourth appellant they found on him drawings of the numeral '20' as appears on U.S.$20 bank notes. That discovery resulted in the 8th count on the indictment, which was against the fourth appellant alone.

7. On the same day the police visited the premises of the third appellant at No.59D, Wanchai Road, where he resided. In a locked drawer in a wardrobe in his cubicle they found an envelope, addressed to him. In the envelope were three negatives of 20-peso Philippine bank notes. Genuine bank notes of various countries were also found in the cubicle of the third appellant.

8. On the following day the first appellant, then under arrest, took the police to his residence at No.31 Bonham Road, Flat 'B', 8th Floor, and there pointed out to them a suitcase and two cardboard boxes. The suitcase and cardboard boxes were found to contain 19,632 forged 50-peso bank notes, 10,689 forged 20-peso bank notes, 2,300 forged U.S.$100 travellers' cheques of the American Express Company, and 546 forged U.S.$20 travellers' cheques of the American Express Company. As a result of that discovery all five accused persons were jointly charged (the second count of the indictment) with the joint possession and custody of all those bank notes and travellers' cheques, but only the first and fourth accused were convicted on that count, the second, third and fifth accused being found not guilty on that count.

9. Almost immediately after the raid on the printing press on the 10th of April a police party visited the premises occupied by the fifth appellant on the 8th floor of No.10 Blue Pool Road. The appellant and his wife were present. The premises were searched but nothing of interest to the police was found. The following day the police again went to these same premises and again searched them. During the course of this search a Bangkok tourist brochure containing 19 bank notes was found in a drawer of the bed-side table. In the same drawer was also found a photograph, taken at the home of the fifth appellant and presumably after a dinner party, of a group of six persons sitting round a table. Those six persons were, in fact, the five appellants and the wife of the fifth appellant. The bank notes found were all genuine bank notes. Two of them were 20-peso Philippine bank notes of which the serial numbers were respectively AJ.179827 and AY.419301. Now, amongst the forged 20-peso bank notes found at the home of the first appellant were notes with the serial numbers AJ.179835, 179874, 179862 and AY.419701, 419501, 419801 and 410301. It was apparent that not only the alphabetical letters but also the first three serial numbers on these notes were identical with the forged banknote found in the possession of the first appellant. That, in itself, was not necessarily a ground for any adverse inference or suspicion. But the matter is taken somewhat further by the fact that it is clear that by juxtaposition or substitution of any two digits of the genuine notes and the forgeries the serial numbers on both notes would become identical. Expert evidence was given at the trial that the process of imposing the serial numbers on to bank notes, whether genuine or forged, was a fairly simple and independent process carried out by a separate machine after the notes themselves have been completed.

10. The case for the prosecution was that these two 20-peso notes found in the possession of the fifth appellant had at some time or other been used as a guide for the purpose of processing the forged 20-peso notes found in the possession of the first appellant. Further evidence against the fifth appellant consisted of the fact that he was a fairly frequent visitor to the printing press where he would be in the habit of sitting down and talking with the four appellants; that he was in fact present at the printing press some 15 minutes before the police raided the premises; and that he had been sitting in the cubicle when the exposure lamp was on and the process of forging bank notes was actually going on at the time; and, finally, that he had been present when the offset machine - the principal machine used for executing these forgeries - was delivered and actually installed at the printing press at about 9.15 p.m. on the 17th of June, 1966.

11. Turning now to the grounds of appeal put forward by Mr. Swaine on behalf of the fourth appellant. The first ground of appeal is in relation to the second count of the indictment. That count - preferred against all five appellant - related to the very large quantity of forged Philippine-bank notes and American Express Company travellers' cheques of U.S.$20 and U.S.$100 denominations found at the house of the first appellant on the 11th of April. The jury, no doubt acting upon the very proper direction of the learned trial judge, acquitted the second, third and fifth appellant of this charge and convicted only the first appellant he being in admitted possession of the notes - and the fourth appellant, he being an admitted partner in the Wing Ming Printing Press.

12. The point taken by Mr. Swaine, for what it is worth, is that the travellers' cheques were, and are, not "bank notes" within the meaning of S.10(1) of the Forgery Ordinance. We deliberately use the expression "for what it is worth" since it is quite apparent that even if Mr. Swaine's argument that travellers' cheques are not "bank notes" is a valid one, the conviction on this count remains good in respect of the very large quantity of counterfeit Philippine-bank notes found by the jury to have been in the possession of not only the first appellant butalso his partner, the fourth appellant. However, since the point raised is one of some practical interest and importance and has, indeed, been raised in other cases although not yet expressly decided by the Full Court, we propose to deal with the argument put before us by Mr. Swaine.

13. Had the matter fallen to be determined by the ordinary description of banknotes given in the Oxford or other English dictionaries or by the application of the common-law attributes mentioned by Lord Mansfield in Miller v. Race⁽¹⁾. When he spoke of their being esteemed as money and treated as such in the ordinary course of business, Mr. Swaine would have had an easier task, but he frankly recognised that the wide definition given to bank notes in S.2 of the Forgery Ordinance, Cap.209, presented him with a very real problem. It runs as follows:-

"In this Ordinance, unless the context otherwise requires - 'bank note' includes any note or bill of exchange of the Bank of England or Bank of Ireland, or of any other person, body corporate or company carrying on the business of banking in any part of the world. ................".

14. It is common ground that the American Express Company carries on the business of banking. The form of the cheque which is now widely known is as follows:-

U.S. DOLLAR TRAVELLERS CHEQUE

AMERICAN EXPRESS COMPANY

at 65 Broadway, New York, N.Y.

The cheque is signed by the President of the American Express Company who, apparently, gives these orders to the Company of which he is President. It does not appear to require that the person cashing it should be a banker.

15. In opening, Mr. Swaine indicated that such a travellers' cheque might be regarded as a note issued by the customer who purchased it from the issuing bank, or might be regarded as a notes of the issuing bank, in this case the American Express Company. He contended that if the former was correct, his appeal must succeed, but, eventually, during the course of his argument, he expressed the view that these cheques should be regarded as notes of the American Express Company, because, properly construed, they are notes drawn by the President of that Company, who requests the company to pay the amounts specified on certain conditions. He argued, however, that these conditions surround the payment with a number of safeguards which clearly take the cheque outside the description of a bank note given in Halsbury's Laws of England⁽²⁾, where it is said:-

"A bank note is a bill or note for the payment of money to the bearer on demand issued by the bank."

This definition is taken from Section 28 of the English Bank Charter Act 1844⁽³⁾, and, of course, does not necessarily govern the interpretation of the same expression in the Hong Kong Forgery Ordinance.

16. The essence of Mr. Swaine's argument was that a travellers cheque issued by the American Express Company does not promise payment to bearer on demand.

17. He went on to direct our attention to a passage in Paget's Law of Banking⁽⁴⁾, where the auther says:-

18. According to the footnote at p.224 of Halsbury's Laws of England⁽²⁾, the American case of Emerson v. American Express Co.⁽⁵⁾ decided by the Municipal Court of Appeals for the District of Columbia in 1952, to which reference is made in Paget⁽⁴⁾ above, held that,

"when countersigned, travellers' cheques of the defendants' company were fully negotiable; that the lack of a named payee did not render them incomplete as to a subsequent holder for value; and that the beneficiary in countersigning other than in the presence of the paying agents was in breach of his contract with the issuers."

19. Counsel also referred to two American cases on travellers' cheques, where a difference of opinion as to the nature of such cheques prior to the entry of the payee's name, arose between the Texas Courts in the case of the City National Bank of Galveston v. The American Express Company⁽⁶⁾ and the Oklahoma Courts in the later case of the American Express Company v. Anadarko Bank & Trust Company of Anadarko⁽⁷⁾. These cases, which at best would only have persuasive authority, are of less interest for the actual issues decided than for their observations on the nature of travellers' cheques and their significance to-day. The Oklahoma Court drew attention to the desire of the American Express Company to secure wide-spread acceptance of these cheques.

"The essential facts are not in serious dispute. The Plaintiff does a world-wide business in certain instruments which they denominate travellers cheques. These instruments are similar in size and shape to the national currency and are designed to take the place of currency and to pass current as money. In order to promote and facilitate such business, the plaintiff maintains and operates offices and agencies in principal cities and towns through the civilized world. It furnishes such offices and agencies with supplies of said travellers cheques; these vary only in the denomination and the identifying numbers placed thereon but are of the same general pattern and form, ................".

20. The desire of the Company to make these cheques look like United States currency and pass as money would not, of course, make them such, but it is notorious that the Company has had much success in establishing their cheques as the virtual equivalent of money, though with certain safeguards or limitations attached; the exact scope of which remains open to argument. It is these safeguards, which, Mr. Swaine contends, add conditions that prevent the cheque from being treated as a Bill of Exchange or other negotiable instrument.

21. Before examining further the American decisions it is desirable to note the relevant evidence in the case before us, which was given by Mr. Grainger, the Manager of the Far East Travellers Cheques Division, American Express Company who, in answer to prosecuting counsel, described the purchasing and cashing of travellers cheques as follows: On completion of an application form containing the genuine signature and home address of the applicant, cheques, in the required denomination, are handed to the customer who enters his genuine signature on the upper left-hand line in front of the vendor. In seeking to cash a travellers' cheque the only identification required by the American Express Company is the counter-signature in the lower left-hand corner which, according to Mr. Grainger, has to be entered in the lower left-hand corner in the presence of the person receiving the cheque. When questioned as to the position when a signature had already been entered in the lower left-hand corner, he said:-

"This then becomes like a third party cheque. We must know the individual - the individual must be known to us because in this particular case we receive ......... a cheque in the same manner as we would from depositors or from stores who are known to us..................".

22. The examination proceeded.

23. Later Mr. Grainger answered further questions from the judge.

24. Both the Oklahoma Courts and the Texas Courts were primarily concerned with the question whether the travellers' cheques were "complete" instruments within the meaning of local legislation at a time when they were stolen, but the reasons on which the courts relied in reaching their decisions have some relevance to the issue before us. In differing from the Texas decision that such travellers' cheques were incomplete until the purchaser's signature had been affixed, the Oklahoma court said:-

"With all due deference to the Texas courts, we find ourselves unable to agree with the conclusion reached by them, with respect to the nature of travellers cheques while in the hands of a selling agency. It will be noted from examination of the form of the travellers cheque above shown that when the cheques are delivered to the selling agency that while it has there on four blank spaces which are to be filled out by the person using the cheques that there remains nothing to be done by either the company or its issuing agent. At the time it is delivered to the purchaser he is ordinarily required to write his signature in the space provided for that purpose in the upper left-hand corner. Should he omit to do so, however, there is nothing on the face of the instrument which would prevent his completing it later. On the contrary, the instrument provides that the signature appearing in the space left for that purpose in the upper left-hand corner shall be the sign manual of the rightful holder and that the same signature in the space provided for that purpose in the lower left-hand corner shall constitute the countersign whereby all doubts are dispelled and any payee of said instrument is assured that he can accept the same with the same freedom that he would the tender of actual money or currency. The instrument provides further that the name of the city where and the date on which the cheque is cashed together with the name of the payee are to be inserted by the original holder at the time of cashing. Plaintiff in effect concedes that when the signature constituting the sign manual is affixed in the presence of the issuing agent that all other blanks in the instrument may therefore be completed away from the issuing office and without in any way affecting the validity of the instrument. If the signature appearing as the sign manual must be placed on the instrument in the presence of the issuing agent before such instrument can be deemed complete, then the issuing agent should be required to attest to such fact, otherwise a party tendered such cheque can have no way of telling whether the signature thereon is that of a purchaser or that of a thief. Otherwise lacking such, a person would be very foolish indeed to accept any travellers cheque which might be tendered to him. This would be contrary to the intent and purpose of the plaintiff since the plaintiff in every way possible seeks to have its cheques take the place of money and to pass current as money. In order to accomplish this it has deliberately prepared these travellers cheques in such manner as to assure the person accepting them that if the countersignature in the lower left-hand corner of the instrument is the same as that of the signature in the upper left-hand corner that he may accept the instrument without hesitation and without fear of any latent defect or imperfection. When the person cashing such cheque has met the requirements imposed upon him by the instrument itself, he should not be required to go back thereon at his peril. Likewise if the cheques are to take the place of money and pass current as money they should be subjected to the same rules and immunities which rest upon money under like circumstances."

25. This passage reflects the facts as known to the Oklahoma Court, where the form of the cheque seems to have been slightly though not materially different from that before us in that it made reference to the customer having deposited money with the company.

26. The Texas Commission of Appeals on the other hand held that:

"... while the blank spaces for the date and name of the payee did not render the instruments 'incomplete' under the provision of the Negotiable Instruments Law to the effect that where an incomplete instrument has not been delivered, it will not, if completed and negotiated without authority, be a valid contract in the hands of any holder as against any person whose signature was placed there on before delivery, the fact that the blank spaces for the signature of the purchaser were unfilled at the time the checks were stolen did make them 'incomplete' within such statute, for without a signature there, each instrument lacked the sign, required by the context, that liability of the maker had arisen and that negotiability had been imparted to the instrument."

27. There was however a strong dissent by Lane, J. who, like the Oklahoma Court, thought that the Express Company in seeking to put such cheques in circulation as money should suffer any consequent loss.

28. In the notes to these two cases which appear in the American Law Reports Annotated reference is also made, at p.979, to a passage from the case of Sullivan v. Knauth⁽⁸⁾ where apparently it was said:-

"In my opinion, a relation cognate to that of depositor and banker should be considered to have been established between the plaintiff and these defendants. If that is not the effect of the transaction, the traveller obtains little advantage from these so-called travellers' checks, and might as well carry bills or gold. The basis of his purchase is protection by reason of the double signature ... The paper is not effective as a draft or check or order for the payment of money until the purchaser, who, in the presence of the agent of the defendant, has signed his signature in the space 'holder's signature', has countersigned it. ........ It seems to me, therefore, it must be held that it is the second signature which gives the paper final currency."

29. Mr. Sandor for the Crown argued that basically a "note" is a piece of paper on which there is writing but that the context of the word in the Forgery Ordinance suggested some limitation and, for the purpose of the present case, we should be concerned only with media of exchange used in the course of commerce.

30. For the broad proposition that words in a statute "ought prima facie to be construed in their primary and natural sense", he relied on a judgment of the Judicial Committee in Attorney General of Ontario v. Mercer⁽⁹⁾, quoted in Craies Statutes^(9a) and in a passage at p.164 of the same edition for the exercise of caution in using a definition prescribed in one statute when construing another. He drew attention to the different definitions of a bill of exchange in Section 3 of the Bills of Exchange Ordinance, Cap.19 and in Section 3 of the Stamp Ordinance, Cap.117, but stressed that the interpretation section of the Forgery Ordinance gave an "extended" (see Craies, 6th Edition, page 212) meaning to the word bank note by using the word "includes" instead of "means". He placed much reliance on the decision of the Full Court in Caparas v. The Queen⁽¹⁰⁾, and also referred us to the observations of the trial judge in the case of The Queen v. Yee Pak Wun⁽¹¹⁾, where the case involved travellers' cheques and the judge dealt very fully with the definition of "bank note" in the Forgery Crdinance. In summing up to the jury he said:-

31. Mr. Sandor went on to argue that travellers' cheques are derived from promissory notes and directed attention to the passage in Halsbury's Laws of England⁽¹²⁾ which says:-

"........ while negotiability was an admitted attribute of a bill of exchange, it was denied to a promissory note by Lord Holt C.J. The difficulty thus created was, however, overcome by statute.......".

See now the Bills of Exchange Act 1882 Sections 83-89 paragraphs 1 & 2. He also directed attention to Chorley's Law of Banking⁽¹³⁾, where it is said:-

"Circular notes and travellers' cheques, which are practically synonymous terms, may be negotiable instruments if drawn in the form of cheques. Normally, however, they are drawn subject to a condition, such as the completion of a second signature or the production of a letter of indication, and are not therefore negotiable."

32. In concurring with Mr. Swaine's final conclusion that in form these travellers' cheques are notes of a bank because they are orders to the bank by its president to pay a person named, Mr. Sandor mentioned a passage in Crossley Vaines on Personal Property⁽¹⁴⁾, where in a footnote to the expression "circular notes", which the auther includes under types of negotiable instruments, he said:-

"These are now virtually replaced by travellers' cheques ......... A traveller's cheque is simply a banker's draft generally drawn on the bank itself."

33. From this counsel went on to a passage in Byles on Bills of Exchange⁽¹⁵⁾, which, in the absence of a statutory definition of "negotiable" or 'negotiability", quoted a statement from Smith's Leading Cases⁽¹⁶⁾ that because the terms "bill" and "note" connoted negotiability;

"It may therefore be laid down as a safe rule that when an instrument is by the custom of the trade transferable, like cash, by delivery, and is also capable of being sued upon by the person holding it pro tempore, then it is entitled to the name of a negotiable instrument, and the property in it passes to a bona fide transferee for value, though the transfer may not have taken place in market overt.".

34. Finally Mr. Sandor contended that even if travellers' cheques are at an earlier stage no more than inchoate instruments, they are fully negotiable when signed by the customer for the second time and, at the earlier stage, are certainly brought within Section 10 of the Forgery Ordinance by Section 3(3)(b) which reads as follows :-

"(b) forgery of a document may be complete even if the document when forged is incomplete, or is not or does not purport to be such a document as would be binding or sufficient in law;".

35. Mr. Swaine sought to meet these arguments, and particularly the reliance on the Full Court decision, by contending that Mr. Sandor's suggested restriction of "notes" in the Forgery Ordinance to media of exchange necessarily detracted from the value of that decision. He argued that the decision, in any event, went too far in discarding altogether the need for negotiability or, in view of Section 3(3)(b) of the Forgery Ordinance, even potential negotiability, an attribute which he would deny to a travellers' cheque because of the condition requiring the counter-signature to be affixed in the presence of the person cashing it. "Note", he said, in financial circles necessarily implies negotiability and a bank note is the ultimate in negotiability, therefore, travellers' cheques are excluded from that term as ordinarily understood. He criticized particularly the reliance by the Full Court on the omission of the words "commonly called a bank note from the English Forgery Act of 1913, upon which the Hong Kong Forgery Ordinance is based. The effect of this omission, he said, was merely to remove the necessity that the document should be payable on demand but did not remove the need for negotiability. This, he said, the money order, the subject matter of the Full Court decision, was clearly an inchoate instrument within the meaning of Section 20 of the Bills of Exchange Ordinance which, in accordance with the conditions of that Section, could be lawfully completed so as to make it negotiable. This, he said, was very different from dispensing altogether with any need for negotiability, which has been defined as the term used colloquially (and in law) to deseribe an instrument that is transferable by more delivery, or by endersement and delivery, free from the equities, so as to give an absolute title to a transferee who takes in good faith and for value; such transferee having the right to sue on the instrument in his own name⁽¹⁵⁾. Prior to the entry of the counter-signature, a travellers' cheque does not, Mr. Swaine argued, satisfy these requirements and is, therefore, not a note because that word, standing alone in the definition "bank note", must be understood to mean want it ordinarily means in the context of banking. The counter-signature in the presence of the person paying was, he said, something very different from a mere endorsement and introduced a condition which, if broken by the customer, might well relieve the company of liability or give it a claim against the customer.

36. But for the fact that the document under consideration was a money order issued by the American Express Company, whilst we, in this case, are concerned with travellers' cheques, the question raised by this ground of appeal would appear to have been decided by the Full Court in the Caparas Case⁽¹⁰⁾ where the Full Court, having traced the history of the English legislation which formed the pattern for the Hong Kong Ordinance, said:-

Mr. Swaine, however, questioned the application of "stare decisis" in a criminal appeal such as this and the difference in the subject matter would in any event leave room for argument.

37. Whilst we see no occasion to differ from the reasons adopted by the Full Court when it rejected, in interpreting the definition of 'bank note' in the Forgery Ordinance, any need for negotiability at the time of the appeal and took a view of the law similar to that adopted by Blair-Kerr, J. in his direction to the jury in YEE Pak Wan's Case⁽¹¹⁾. we think it unnecessary to explore further the question of "stare decisis" or to question whether the Full Court went too far in excluding the element of negotiability from the definition of "bank note" in the Forgery Ordinance and thereby opened the door to an unduly wide range of instruments. For the purposes of this case we have only to decide whether the travellers' cheques in question lacked whatever element of negotiability or potential negotiability, if any, is required by Section 10 of the Forgery Ordinance when read with both Section 3(3)(b) and the definition section.

38. We have, in fact, had a very full and able argument on the question whether the word "note" in the definition of "bank note" in the Forgery Ordinance implies that the document must be a negotiable instrument and whether a travellers' cheques falls into that category but in our view, it is unnecessary for the purposes of this case, to decide what measure of negotiability, if any, attaches to a travellers' cheque prior to affixing the counter-signature or to decide whether, because of the option mentioned in Section 5(2) of the Bills of Exchange Ordinance, a travellers' cheque is included in the expression "Bill of Exchange" used in the definition of "bank note" in the Forgery Ordinance.

39. Even if one were to prefer the view of the Texas Court to the later decision in Oklahoma when the former said that, for the purposes of the local legislation, a cheque without the counter-signature "lacked the sign, required by the context, that liability of the maker had arisen", it would seem that, nevertheless, these cheques must fall within the very wide protection given by section 10 of the Forgery Ordinance, when read with Section 3(3). The cheque will, when the counter-signature is added in the prescribed manner, be complete and will impose on the company a liability to pay the amount mentioned. This will follow without any further action by the company itself and merely as a result of the authority already conferred on the purchaser by the instrument. At the earlier stage, even if only potentially negotiable they are, we think, after signature by the President, caught by the wide ambit of Section 10 which, for the reasons that commended themselves to the Full Court and Blair-Kerr J., seems to us to have been deliberately drawn in terms wide enough to catch instruments such as this, prepared and accepted in a common form and in substantial numbers for the purpose of creating a liability by a Bank to pay a fixed sum of money. We do not think the requirement of a counter-signature is sufficient to take them out of the broad categories which these provisions of the Forgery Ordinance are designed to protect.

40. Mr. Swaine's first ground of appeal therefore fails.

41. Mr. Swaine's next ground of appeal is that there was not sufficient evidence to support the conviction of the fourth appellant on the second count of joint possession with the first appellant in respect of those bank notes and travellers' cheques found in the possession of the first appellant at his home on the 11th of April 1968. The evidence against the fourth appellant in respect of this charge consisted mainly of the cautioned statement (Exhibit 43A) made by him on the evening of the 10th of April after the raid on the printing press had taken place, and the subsequent cautioned statement (Exhibit 43D) made by him on the 11th of April after the forged Philippine-bank notes and the American Express Company travellers' cheques had been found at the home of the first appellant. In his first statement, the fourth appellant admitted that he was a partner in the Wing Ming Printing Press and he said that the counterfeit Philippine currency bank notes found by the police at the printing press had been printed on behalf of the fifth appellant. That statement, as the learned judge was at pains to point out to the jury, was not evidence against the fifth appellant, but it does explain why the police repaired later that evening to the premises of the fifth appellant and searched those premises and, indeed, again searched his premises the following day. In his second statement, made on the 11th of April, the fourth appellant said: "It was CHAN Ming who asked me to make drawings of these two kinds of American travellers' cheques of $100 and $20 denominations. After the drawings had been made they were handed to CHAN Ming who handed to ...(illegible) Nam for printing, These two kinds of cheques are forged". It is pertinent to observe that prior to that statement being made by the fourth appellant the police officer, according to the written statement itself, had just shown to the fourth appellant 7 packages of forged American travellers' cheques in $20 and $100 denominations which the police officer told him had been seized that very morning in the first appellant's bedroom at Bonham Road, 8th Floor. Having shown those travellers' cheques to the fourth appellant the police officer then cautioned him and it was subsequent to that caution that the statement we have quoted above was made by the fourth appellant. It is a matter of comment that it would not appear that the forged Philippine currency bank notes found at the name of the first appellant were then shown to the fourth appellant, but it is clear from the evidence that these travellers' cheques and the Philippine currency notes were found in the suitcase and the two cardboard boxes at one and the same time in the bedroom of the first appellant earlier that morning. There is, furthermore, the additional evidence, to which we have already referred, that when the fourth appellant was himself searched on the evening of the 10th of April, a quantity of enlarged photographs of U.S. bank notes were found in his cubicle, together with various drawing implements, and, upon his person, the drawing of the numeral "20" in a manner identical with that appearing on U.S. $20 bank notes. Bearing in mind that he was an admitted partner with the first appellant of the Wing Ming Printing Press, there was in our view, abundant evidence that he was deeply involved in a joint venture to print forged bank notes and we are fully satisfied that there was ample evidence upon which the jury could properly convict the fourth appellant of joint possession with the first appellant, his partner, of the bank notes found at the home of the first appellant on the 11th of April.

42. Mr. Swaine next submitted that the 8th count of the indictment, to wit, possession of implements for forgery, did not disclose an offence; alternatively, that the facts proved against the fourth appellant that he had in his possession certain tracings of a U.S.$20 bank note did not constitute an offence under Section 11(e) of the Forgery Ordinance, because this section envisages possession of paper upon which a print has been made by the use of a plate or similar material.

43. Sub-paragraph (e) of Section 11 reads as follows:-

44. The presence of the words "such" and "as aforesaid" throws one back, for the purpose of interpreting this sub-paragraph, to the earlier provisions of the Section. The relevant part appears to be in sub-paragraph (c) which reads as follows:-

45. It appears clear from this that, whilst the words, figures etc. must be such as to resemble those peculiar to and used in or on any bank note etc., these words may be put on the paper either by printing or anywise through the medium of any plate, wood, stone or other material.

46. The word "or" is normally construed disjunctively and, whilst the words appearing on the paper must fall into the category already specified in sub-section (c), the words "as aforesaid" would appear to control only the word "made" immediately preceding them and not to apply to the word "printed" separated from them by the disjunctive "or". Consequently, there would appear to be no need for the printed words to be such as have been engraved on and by a plate, wood, stone or similar material. They can be printed by any effective method and words "traced" on to paper from a genuine bank note can properly be described as printed. Even if the words "as aforesaid" mean that the words must owe their presence to a plate, wood, stone or other material a tracing from a genuine bank note would appear to fall within that classification. Apart from other reasons the words reproduced from the original note would have that quality.

47. Finally, Mr. Swaine submitted that on the 12th count - a count against all five appellants - there was not sufficient evidence that the two dies in question were forged because the witness called by the prosecution, Mr. Somchit Insingha (Thai Consul in Hong Kong), was not qualified to speak on this subject. He made the same contention in respect of the 14th count, again a count against all five appellants of conspiring together to forge Thai Government Excise Stamps and Duty Stamps.

48. In respect of both these counts the learned trial judge directed the jury that they could "at the most convict only the first and fourth accused on these two counts". Upon that direction, the jury acquitted the second, third and fifth accused on both these counts, returning a verdict of guilty only as against the first and fourth accused.

49. The 12th count was a charge - against all the accused - of unlawful possession of two forged dies purporting to be the dies used by the Thai Government for printing Excise Stamps and Duty Stamps, knowing the same to be forged. The 14th count was a charge - again, against all the accused - of conspiracy to forge Thai Government Excise Stamps and Duty Stamps. Both charges arose out of the fact that at the time the police raided the printing press premises on the 10th of April they found upon these premises two dies for printing Thai Government Excise Stamps and Duty Stamps.

50. There was evidence that the drawing for the making of one of those dies had been handed by the fourth appellant to a young apprentice at the Wing Ming Printing Press with instructions to take it to a particular engraving shop or factory in Kowloon for a die or block to be made therefrom, and there was the evidence of the engraver who received that drawing that he made a die or block therefrom and that in due course he delivered it to the first appellant. The engraver identified one of the two dies found by the police on the premises as the die made by him. The Thai Government Consul in Hong Kong was called as a witness to say that these two dies were forgeries, and it is his evidence, as a so-called expert, that is the subject of the criticism made by Mr. Swaine. Mr. Swaine contended that the witness was not an expert witness, that his testimony did not raise a more question of credibility, that his evidence that the two dies were forgeries should never have been admitted and left to the jury for their consideration, and that it was in fact inadmissible and unacceptable evidence. The point is by no means an easy one. It is apparent from his direction to the jury that the learned judge himself had some considerable doubt as to the value of this evidence because he said to the jury - and we quote from his summing up:-

"Mr. Lawrence Leong for the defence did ake a good point, I think, when he questioned the ability or capacity of the Thai Consul to say that these were not genuine. The Thai Consul was simply a member of the consulate here in Hong Kong. He is not a revenue official. He was not someone representing the Thai Treasury who would be in a position to know where genuine dies and blocks are prepared; and as it appears to me his ability to speak on this matter was at least doubtful. However, I leave the count to you.".

Mr. Swaine complained that if the judge had any doubt about the admissibility of this witness as a so-called expert then he should not have permitted his evidence to go before the jury. Two dies or blocks were produced in evidence - a larger one used for printing revenue stamps and the smaller one for printing liquor stamps. The witness himself said that he had examined the blocks and that, in his opinion, they were forgeries. He testified that Thai Government revenue stamps are printed only in England and Thai liquor stamps in Thailand, England, Germany and Japan. Section 7(4) of the Forgery Ordinance makes it an offence to forge, if committed with intent to deceive or defraud, any seal or die made or used by or under the authority of the government of any foreign country. We would repeat that the point taken by Mr. Swaine was a fine one. The competency of this witness as an expert was a preliminary question for the decision of the trial judge (see Phipson on Evidence, 10th Ed. para.1286). Phipson indicates that judges have exercised this power in a liberal manner and the cases to which reference is made in that text-book would appear to support this conclusion. On balance we think that the evidence of this witness, as the accredited representative of the Thai Government, that the two dies or blocks were forgeries, was, at any rate prima facie evidence admissible as tending to prove that fact. Once the trial judge had admitted the evidence as expert evidence, the weight and value to be attached to it was entirely a question of fact for the jury. We think it is implicit from the summing up of the trial judge that he had, as a matter of law, admitted the testimony of the Thai Consul as an expert in relation to the matter upon which he was called to give his evidence, but at the same time conveyed to the jury his own expression of doubt as to the weight and value to be placed upon the quality of that evidence. The issue as to whether or not they were in fact forgeries was, of course, one for the final determination of the jury; and the circumstances pointed strongly in the direction that they were forgeries whereas there was nothing to suggest the contrary. We are accordingly of the opinion that these two grounds of appeal must fail.

51. The fifth appellant was charged with 13 of the total number of 15 counts of the indictment, but in fact he was only convicted upon three counts, being counts Nos.3. 9 and 11. Count No.3 was a charge - against all five appellants - of forgery of the bank notes - 27,098 20-peso Philippine bank notes-found on the printing press premises at the time of the raid. Count 9 was a general charge - against all the five appellants of conspiracy to forge bank notes of the Central Bank of the Philippines. The charge itself is founded upon the 20-peso and 50-peso bank notes found at the home of the first appellant on the 11th of April, but it is a general charge of a conspiracy to forge Philippine bank notes without specifying any particular denomination of notes. The count itself alleges that the conspiracy was formulated and entered into at some time between the 17th of June 1966, being the date upon which the offset machine was delivered to the printing press premises, and the 10th of June 1968, being the date upon which the police raid took place. The 11th count is, again, a count of conspiracy - against all five appellants - to forge bank notes of the Central bank of the Philippines. This count relates to the Philippine (20-peso) bank notes found at the printing press premises on the day of the raid.

52. On the evidence it would seem manifest that there was a conspiracy between the appellants - at any rate, between the first four appellants - to forge Philippine bank notes, and the bank notes found at the printing press premises and at the house of the first appellant were all part and parcel of that conspiracy. There is no reason to believe, and certainly no evidence to support any such belief, that there were two separate and distinct conspiracies, and we think there is much force in the argument of Mr. Shears that if and when the jury convicted the appellants on either the 9th or the 11th count (the latter count being the count of conspiracy to forge in respect of the bank notes found at the printing press) they should have been relieved from returning a verdict on the other count. Mr. Shears further took the point that the 9th count was defective in that it omitted the words "with intent to defraud", which constitute an essential ingredient of the charge of forgery.

53. In support of this contention Mr. Shears referred to the specimen indictment for forgery which appears in Archbold's Criminal Pleading Evidence and Practice⁽¹⁷⁾, where the words "with intent to defraud" appear in the particulars of the offence. It is, however, important to observe that these are indictments for a statutory offence under a section which, like the section in our Forgery Ordinance, defines "Forgery" and then goes on to say that "forgery with intent to defraud or deceive" (as the case may be) is "punishable". No doubt, if one were drafting an indictment under such a provision of the statute - or our own Forgery Ordinance - it would be appropriate to include the words "with intent to defraud", but in charges for conspiracy the same particularity is not required in stating the object of the conspiracy (see Archbold's Criminal Pleading Evidence and Practice, 36th Edition, Para.4067, citing R. v. Blake⁽¹⁸⁾ and Sydserff v. R.⁽¹⁹⁾. Whilst an accused person is certainly entitled to reasonable particulars of the charge he has to meet, it would, we think, be idle to suggest that the omission of the words "with intent to defraud" could have left the appellant in any doubt as to the nature and quality of the offence preferred against him in this case. However, no argument has been advanced before us as to whether this count could be sustained as charging a conspiracy to commit the common law of offence of forgery as distinct from the statutory offence provided under the Forgery Ordinance and the 11th count, which was also a charge of conspiracy contrary to the common law, included in the particulars of offence the words "with intent to defraud". On that account the validity of this count has not been questioned by Mr. Shears. In the circumstances of this case, since we are not proposing to let both counts of conspiracy contained in the indictment stand, we think it unnecessary, in view of the sentence of 10 years' imprisonment imposed on the substantive count, to pursue this matter further. It is immaterial which count is quashed; we think, however, that the more practical course is to quash the conviction on the 9th count, whilst leaving open the question as to whether the charge as framed was good.

54. Mr. Shears next complained of the evidence given by a Mr. Emeliano Tanchiko, the Assistant Chief of the Currency Issue and Retirement Office of the Central Bank of the Philippines. This witness gave evidence as an expert that the Philippine bank notes found both at the printing press and at the home of the first appellant were counterfeit notes. He also gave evidence that he had examined the Philippine bank notes found in the suitcase at the home of the first appellant and that all the notes found therein had as their prefix the letters AJ and AY. His attention was then drawn to the two Philippine-peso bank notes included among the 19 bank notes found at the home of the fifth appellant, and bearing the same prefixes AJ and AY, and he was asked the following question:-

"Now, first of all, in all of the notes pertaining to the 20-peso denomination of the Central Bank of the Philippines, the notes that you inspected at the General Investigation Office, what were the prefixes - the letter prefixes - on those notes?"

to which he replied:-

"Particularly those that were in the suitcase, my Lord, the prefix letters of the serial numbers were 'AJ' and 'AY'. I was pretty curious when I examined these notes and I could see that the serial numbers on these two genuine notes were nearly close to those - to some of the notes that were in that suitcase. As a matter of fact, my Lord, we have already discovered in circulation in the Philippines a number of counterfeit 20-peso notes that have the same characteristics as those that are in this suitcase and whose serial numbers begin with the prefixes 'AJ' and 'AY', and at least three of the first digits, and this gives me the ground to believe and to form the opinion that these two counterfeits - these two genuine notes which are in this - which are found in this exhibit P.38 - were used as reference for the serial numbers of the counterfeit notes that were found in the suitcase.".

55. Mr. Shears complained, first, that the reference of the witness to what had been discovered in the Philippines was both irrelevant and inadmissible and, secondly, that the expression of the opinion of the witness that the two notes, AJ.179827 and AY.419301, was an expression of opinion the purpose and effect of which was to usurp the function of the jury as to the very matter which they had to decide, namely, whether or not they were satisfied on the evidence that these two genuine notes had, as the prosecution contended, been used as guides for the forgery of the counterfeit notes. Upon both these points raised it is pertinent to observe that no objection was taken at any time to the giving of this evidence. The witness was from the Philippines, an employee of the Central Bank of the Philippines, and clearly was a competent and experienced witness in regard to the matters upon which he was giving evidence. The expression "we have already discovered in circulation in the Philippines" may have been a matter upon which he was speaking as to his personal knowledge, and in the absence of any objection being taken at the time to that evidence, or any cross-examination upon it, it is clearly too late to say that that was purely hearsay evidence.

56. Again, we think that the witness, testifying as an expert, was entitled to express the view - which he did - as to why, in his opinion, the two bank notes AJ.179827 and AY.419301, were used as guides for the forgery of counterfeit notes. Whether the jury accepted that opinion, or was satisfied as to the adequacy of the grounds upon which the witness based his belief, was an entirely different matter. But we think that the evidence, as such, was admissible.

57. But the main contention of Mr. Shears, in this appeal, was that the evidence against the fifth appellant was wholly insufficient to support a conviction. The evidence was undoubtedly thin - very thin - and the learned judge himself recognised this fact. Indeed, he told the jury at one stage that "the only significant piece of evidence" against the fifth appellant "is the bank notes with the prefix 'AY' and 'AJ' coupled with the evidence that they appear to form the basis for the numbering of the forgeries". In making that statement he was, of course, referring to, and relying upon, the evidence given by the expert witness. At an earlier stage, in so far as the fifth appellant was concerned, the learned judge had referred to his association with the other four appellants, his frequent visits to these persons and, in particular, the occasion when he had been inside the cubicle when the exposure lamp was being used (in the course of processing forged notes) and the group-photograph of the fifth appellant and his wife taken in company with the other four appellants. The learned judge, however, was careful to warn the jury that one cannot prove guilt by association.

58. Quite clearly, the casual possession of two genuine bank notes which bear marked similarity in their prefixes and serial numbers to counterfeit notes of the same description, cannot by itself form any basis or nexus upon which one could connect the holder of the two genuine notes with the possession of similar forged currency notes for the purpose of successfully forming a criminal charge.

59. Similarly, were association with forgers in the course of frequent visits to the promises upon which such forgeries were being carried out, could by itself form no valid basis for a joint criminal charge against both the forgers and the visitor to these premises upon which the forgeries were being perpetrated. But a combination of these two factors, possession of genuine bank notes the alphabetical prefix and sorial numbers of which so closely tallied with the alphabetical prefix and serial numbers upon notes proved to be counterfeit that it was open to the inference that the genuine notes had been used as "guides" for the composition and preparation of the letters and numerals on the counterfeit notes, coupled with the evidence of close association with the forgers of those counterfeit notes, constituted evidence fit to be placed before a jury for their consideration as to whether they were satisfied upon that evidence that there was a guilty combination between all those parties in the perpetration of those forged bank notes. We are of the opinion that there was evidence against the fifth appellant - thin though that evidence undoubtedly was - upon which they could properly convict the fifth appellant of the charges of conspiracy and possession of forged bank notes preferred against him.

Representation:

J. Swaine (S. F. Sun & Co.) assigned for 1st-4th Appellants.

G. G. Shears (S. Soo & Co.) for the 5th Appellant.

M.R. Sandor, c.c., for Respondent.

Judgment read.

(1) 1 Burr 452.

(2) 3rd Edition Vol.2 p.152

(2) 3rd Edition. Vol.2

(3) 7 & 8 Vict. c.32

(4) 7th Edition at p.267.

(5) (1952), 90 Atlantic Reporter, 2nd Series, 236.

(6) (Tex. Com. App.) 16 S.W. (2d) 278

(7) 110 American Law Reports, Annotated 972.

(8) (...(illegible)) 161 App. Div. 148; 146 N.Y.S. 583.

(9) 8 A.C. 767

(10) 1968 H.K.L.R. 256

(11) Case No.1 of June 1967 Criminal Sessions.

(12) 3rd Edition, Vol.3, p.142.

(13) 5th Edition, p.136

(14) 3rd Edition, p.176.

(15) 22nd Edition, p.85.

(16) 13th Edition, p.533.

(15) Byles on Bills of Exchange 22nd Edition p.86.

(10) (1968) H.K.L.R. 256 at 260.

(17) 36th Edition at para.2182 et seq.

(18) 6 Q.B. 126.

(19) 11 Q.B. 245.