R. v. Pak Sek Kin

CACC000414/1993

IN THE COURT OF APPEAL

1993, No. 414
(Criminal)

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Coram: Hon Macdougall, V.-P., Penlington and Liu, JJ.A.

Date of hearing: 21 February 1995

Date of judgment: 21 March 1995

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J U D G M E N T

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Macdougall, V.-P.:

1. The applicant was convicted after trial before Her Honour Judge Chua in the District Court of attempted theft and of attempted obtaining property by deception, and was sentenced to concurrent sentences of 16 months' imprisonment. He now applies for leave to appeal against both conviction and sentence.

2. The evidence on which the prosecution principally relied was that of a Miss Ho Vai-yee ("Miss Ho").

3. Her testimony may be summarised as follows. In April 1992, Miss Ho, who effectively owned a company called Joint-Huge International Development Co. Ltd. and was interested in investing in the hotel industry, was told by a friend, one Mak Tim-chee ("Mak"), that he was able to introduce her to "a funding source". Mak, who was a director of a company called King Unison Co. Ltd., (King Unison), introduced her to three of his co-directors, David Kwok ("Kwok"), Stanley German ("German") and a man surnamed Shum. It was proposed to Miss Ho that King Unison would set up an investment programme for her through Merrill Lynch and, in order to fund the scheme, would arrange finance for her from another source. The investment programme was to be a "rolling programme" involving a number of transactions each of which would require a minimum outlay of US$25m.

4. In early August 1992, Mak introduced Miss Ho to the applicant, telling her that he was the man who would arrange the funding for the investment venture. The applicant told Miss Ho that his company had access to funds from a syndicate composed of numerous banks, that it had lent money in Vietnam and China and that he could lend Miss Ho money provided she met his requirements, which were, first, to provide "a pre-advice letter of credit to be used as a tool for the payment of money to Miss Ho" and, secondly, to arrange a repayment guarantee, on the execution of which "the pre-advice letter of credit would be released". The amount of the loan was to be US$130m repayable within 10 years in the sum of US$200m, comprising principal and interest.

5. Kwok told Miss Ho that German would arrange the pre-advice letter of credit. For this service Miss Ho was to pay German a handling charge of US$10,000. However, despite the payment of this charge, no pre-advice letter of credit was ever issued. When Miss Ho complained to Kwok about this, he told her that he would introduce her to a friend of his who was "a knight and a bishop of Tibetan lamas" and had studied banking in the United States of America.

6. On 12 September 1992 Kwok introduced Miss Ho to this man. His name was Clinton Hsu ("Hsu"). Hsu told Miss Ho that he had a friend who had deposited a large sum of money in a bank in Thailand and was in a position to arrange with that bank to issue promissory notes which would enable her to raise the necessary funds. In a later conversation Hsu requested Miss Ho to pay a US$400,000 issuing fee, a sum of US$7m to King Unison as commission and a further sum of US$27m to the friend for arranging for the issue of the promissory notes by the Thai bank. The promissory notes were to be issued to Miss Ho in the name of a company named Firma De Desenvolvimento "Fok Tat" (Macau) - ("Fok Tat") of which the applicant was the general manager.

7. When Miss Ho told Hsu that she could not raise such a large amount of money for the issuing fee, Hsu undertook to share the fee with her equally. Miss Ho replied that she could only raise US$50,000. Hsu then assured her that he would be able to persuade his friend to do him a favour and postpone payment of the issuing fee for 45 days. However, since the friend did not want anyone to know that he had such a huge sum of money on deposit, it would be necessary for "the funder to confirm the promissory notes with the issuing bank in Thailand".

8. Miss Ho then contacted the applicant and asked him whether he would be prepared to accept promissory notes instead of a pre-advice letter of credit, and "confirm to the issuing bank only". The applicant replied that he would agree to this proposal on condition that the face value of each promissory note be US$25m, that they mature in five years, that Miss Ho pay 7.5% interest per annum and that the notes be retained by "the funder" for five years. It would be on the security of the promissory notes that the proposed US$200m loan from the funder would be guaranteed.

9. Initially, Miss Ho was unwilling to agree. She was concerned that if the promissory notes were cashed or pledged before the maturity date she might be called on to pay not only the US$200m on the guarantee but a further US$200 on the promissory notes so disposed of. However, the applicant told her that he would give a written undertaking in the "disbursement commitment" that no promissory note would be cashed or pledged within the five year period. The understanding was that whenever Miss Ho repaid US$25m of the US$200m loan a promissory note would be returned to her. In the meantime, the notes would be held by the lender as security for the loan.

10. Miss Ho returned to Hsu and asked him whether he would accept these terms. Hsu replied that, on such a written undertaking being given, it would not be possible to "cash or pledge" the promissory notes during the currency of the guarantee provided by Miss Ho through him, and that he, Hsu, would be able to forward the "disbursement commitment" to financial centres in Switzerland and New York that specialised in buying and selling promissory notes.

11. On 16 September 1992, Miss Ho paid Hsu US$50,000. In return he handed her eight promissory notes, each in the sum of US$25m, together with three letters. Two of the letters, both of which purported to come from the Thai Farmers Bank, stated that the application to issue the promissory notes had been approved and certified their validity. The third letter, which purported to have been issued by the Bank of Thailand, certified the signatories to the notes.

12. On the same day Miss Ho handed the eight promissory notes to the applicant on the execution of a document called "Supplementary Agreement" between Fok Tat and Miss Ho's company in which, inter alia, Fok Tat acknowledged receipt of the eight notes from Miss Ho's company, set out their particulars and "guaranteed" that the notes would only be used as security for the loans and that Fok Tat "will not present them to Thai Farmers Bank for payment when the P/Ns mature but return them to [Miss Ho's company]". This document was signed by the applicant on behalf of Fok Tat.

13. However, on the very next day, and contrary to what had been agreed, the applicant telephoned Mr Au, the manager of the Standard Chartered Bank in Macau, and asked him whether the bank would accept the pledge of promissory notes issued by the Thai Farmers Bank as security for a loan. Mr Au replied that the bank did not normally accept collateral of that type but that it would be able to find a buyer who would purchase the notes at a discount. He arranged a meeting with the applicant at his office at the bank in Macau for the following day so that the matter could be discussed in more detail.

14. At that meeting, which was also attended by a Miss Wong Kuo, who was "the proprietor" of Fok Tat, the applicant showed Mr Au a photocopy of one of the eight promissory notes and told him that his company had investments on the mainland and that he wanted to discount the note. Mr Au told the applicant that he could arrange a meeting with a representative of Standard Chartered Asia Limited with a view to seeing whether that institution would handle the transaction. He added that the applicant would be required to verify the source of the notes and prove that the money was "clean". The applicant replied that the note, the copy of which he had shown Mr Au, emanated from his company in Thailand. The applicant repeatedly assured Mr Au that the note was genuine and that Mr Au could obtain confirmation of this through the executive vice president of the Thai Farmers Bank. Apart from the usual introductory pleasantries at the beginning of the meeting, the entire conversation was carried out between Mr Au and the applicant.

15. Mr Au then faxed a copy of the promissory note to Standard Chartered Merchant Bank (Asia) Limited ("the merchant bank") in Hong Kong. Later, Mr Au received a letter from Fok Tat enclosing a photocopy of what purported to be a letter from the Thai Farmers Bank which certified that the eight promissory notes had been issued by the bank and that the signatures that appeared on each note were those of the authorized signatories for the bank.

16. Mr Au then arranged a meeting between Mr Chan of the merchant bank and the applicant. Following this, the applicant and Miss Wong Kuo again went to see Mr Au. At that meeting the applicant produced the original of the promissory note of which he had earlier shown Mr Au a photocopy. The applicant showed Mr Au photocopies of seven more promissory notes. These were photocopied by Mr Au and were later found to be photocopies of the remaining seven promissory notes which Hsu had given to Miss Ho and which she in turn had handed to the applicant.

17. On 28 September the applicant attended at Mr Chan's office in Hong Kong and told him that he had eight promissory notes of a total value of US$200m, that they had been issued by the Thai Farmers' Bank and represented payment for a project in which Fok Tat was involved in Thailand, and that, because Fok Tat needed funding for another project, he wished to sell the notes at a discount. The applicant then produced to Mr Chan the same original promissory note. This was the note which later formed the subject of the two charges on which the applicant was convicted. After some discussion as to the discount rate, the applicant told Mr Chan that the matter was very urgent and that he wanted a written agreement from the merchant bank as soon as possible.

18. Mr Chan replied that his bank was very interested in the proposal but added that it would first be necessary to conduct some inquiries. The applicant said that there was political sensitivity not only with regard to matters concerning the issuing branch of the Thai Farmers Bank and its head office but also with regard to matters involving China and Thailand. This struck Mr Chan as being rather vague. However, since his bank intended to carry out its own inquiries with a view to finding out whether the notes were genuine and had been obtained "honestly", he did not pursue that matter with the applicant.

19. According to Mr Chan, if the notes were found to be genuine and if their owners confirmed that the applicant had authority to be in possession of them, the merchant bank would then have negotiated the precise terms of the discounting transaction with the applicant and, on agreement being reached as to those terms, a written agreement would then have been prepared by the merchant bank's solicitors for the parties to sign.

20. On 30 September the applicant sent a fax to the merchant bank, and marked for the attention of Mr Chan, in which he stated that, because of the impending election in Thailand and the complicated political situation, both the holder of the deposit in the Thai Farmers Bank and the bank did not want to let the general public know that "we" had such a huge of money on deposit or of its location. He also stated that Fok Tat was a foreign investor and that, as the funds were to be used "outside the country", Fok Tat did "not want to intensify the impact". Because of these factors the applicant expressed the hope that when the merchant bank made its inquiries to confirm "the source of the specimen signature and chop" on the promissory note it would direct those inquiries to the issuing branch of the Thai Farmers Bank.

21. In this fax the applicant further requested the merchant bank, once it had verified the specimen signature and chop, to issue, before 5.00pm on 2 October, a formal confirmation letter stating that (1) Fok Tat had in its possession eight Thai Farmers Bank promissory notes each with a face value of US$25m and setting out the numbers of the notes, the rate of interest and the time of their maturity, (2) the merchant bank had confirmed and accepted the notes, (3) the first payment would be paid into the bank account specified by Fok Tat before 8 October, (4) the balance would be transferred to Fok Tat by instalments in accordance with the agreement reached between the parties and (5) all sums would be transferred before 30 November.

22. The fax then went on to state that "major investment items" in which Fok Tat was involved had commenced and that Fok Tat was in "urgent need of financing". It repeated a request to expedite the verification of the promissory notes and to sign the agreement and contract as soon as possible. Then followed a threat that "if we do not receive your definite reply by 5.00 pm on 3rd October 1992, we will not reserve this 'order' for you but will seek co-operation from other partners".

23. Finally, the fax stated that "now we are negotiating with customers about the P/N transaction. They offer a better price and a speedier transfer. If you are not able to complete the 8 P/N transactions in one-go, we hope that you will play the role as our corresponding bank. We will pay the handling fee if you will assist me in completing the transaction".

24. However, investigations revealed that in fact the promissory notes were forgeries. As a result, the applicant, Hsu and Miss Ho were arrested. Subsequently, both the applicant and Hsu were jointly charged with the two offences on which the applicant was ultimately tried and convicted. Hsu, however, failed to answer to his bail to appear at the trial. The trial therefore proceeded against the applicant alone. He elected not to testify or to call any witness to give evidence on his behalf.

25. Mr Sedgwick, who appeared for the applicant in this court but not in the court below, advanced several grounds of appeal. First, he submitted that the conviction on the attempted theft charge was wrong in law. This, he contended was because the prosecution had failed to prove:

"(1) that Fok Tat had authorized the applicant to deal with and to sell the note to [the merchant bank] on 28 September 1992, and had authorized him to send the fax on 30 September 1992 to [the merchant bank].

(2) that the applicant's representations to [the merchant bank] amounted to an assumption by Fok Tat of the rights of an owner of the note and constituted a dishonest appropriation of that note by Fok Tat with the intention, on the part of Fok Tat, of permanently depriving the true owner of the note.

(3) that, the applicant was, by virtue of the provisions of section 89 of the Criminal Procedure Ordinance (Cap. 221), guilty of the [charge of attempted theft] by reason of the fact that he had aided, abetted, counselled or procured the commission of the offence of theft or attempted theft by Fok Tat.

(4) that Fok Tat (whether it was a body corporate or the alter ego of Madam Wong Kuo) knew that it was not legally entitled to sell the note to [the Merchant bank]."

26. In essence, Mr Sedgwick's submission was that a person cannot be convicted of an offence as an aider, abetter, counsellor or procurer unless it is proved that the offence was committed by a principal offender. Thus, unless the prosecution could prove that Fok Tat was the principal offender, the applicant could not be convicted of attempted theft. This the prosecution had failed to do. Therefore the conviction on the charge of attempted theft could not stand.

27. It is necessary at this juncture to refer to sections 2, 3 and 4 of the Theft Ordinance (Cap. 210).

"2. "Basic definition of theft"

(1) A person commits theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it; and "thief" and "steal" shall be construed accordingly.

(2) It is immaterial whether the appropriation is made with a view to gain, or is made for the thief's own benefit.

(3) ...

3. "Dishonestly"

(1) A person's appropriation of property belonging to another is not to be regarded as dishonest -

(a) if he appropriates the property in the belief that he has in law the right to deprive the other of it, on behalf of himself or of a third person; or

(b) if he appropriates the property in the belief that he would have the other's consent if the other knew of the appropriation and the circumstances of it; or

(c) (except where the property came to him as trustee or personal representative) if he appropriates the property in the belief that the person to whom the property belongs cannot be discovered by taking reasonable steps.

(2) A person's appropriation of property belonging to another may be dishonest notwithstanding that he is willing to pay for the property.

4. "Appropriates"

(1) Any assumption by a person of the rights of an owner amounts to an appropriation, and this includes, where he has come by the property (innocently or not) without stealing it, any later assumption of a right to it by keeping or dealing with it as owner.

(2) Where property or a right or interest in property is or purports to be transferred for value to a person acting in good faith, no later assumptions by him of rights which he believed himself to be acquiring shall, by reason of any defect in the transferor's title, amount to theft of the property."

28. Mr Sedgwick sought to draw comfort from the last sentence in the following passage in the judgment of the Court of Appeal in England delivered by Lord Lane CJ (as he then was) in R. v. Morris [1983] 2 WLR 768 at 774:

"Much of the difficulty which is highlighted by the decisions to which we have made reference arises from the words of section 3(1) of the Act. That section is only a partial definition of the word 'appropriation'. It is to be noted that any assumption by a person of the rights of an owner is sufficient. It should also not be overlooked that the second half of section 3(1) makes any assumption of a right to the article by keeping or dealing with it as owner also an appropriation. Thus one has first of all the ordinary meaning of 'appropriates', then the meaning of 'any assumption of the rights of an owner', then 'any keeping of the article as owner,' and finally 'any dealing with the article as owner.'

We approach the task of determining the meaning of 'appropriates' ion a number of different ways. First of all there is the dictionary meaning - the Shorter Oxford English Dictionary defines it as 'to take for one's own or to oneself'. That seems to connote some sort of claim being staked to the article."

29. It was Mr Sedgwick's contention that since the applicant had told Mr Chan that the promissory note was to be discounted in favour of Fok Tat, it could not be said that he was taking it for his own or to himself. Had it been proved that Fok Tat, with the necessary criminal intent, had authorized the applicant to discount the note and, had the applicant, with the requisite knowledge and criminal intent, attempted to discount the note on such authorisation, it could then be said that he had appropriated it. However, it had not been proved that Fok Tat had authorized the applicant to deal with and sell the note.

30. I reject this submission. "To take to oneself" is not the same as "to take for one's own". If it were the same, the dictionary definition would be tautological. It is possible to take something to oneself with the intention of giving it to someone else. This is not the same as taking something for one's own.

31. In my opinion the facts in the present case are in many ways analogous to these in Morris. In that case Morris was convicted of theft. He had fraudulently switched labels on articles which he was about to purchase in a self-service store, substituting on each article a label which displayed a lower price for one that displayed a higher price. After he had passed through the check-out counter, having paid the lower incorrect prices for the article, he was arrested.

32. On appeal, the Court of Appeal, in the judgment delivered by Lord Lane, considered that the appropriation of the articles occurred when the defendant removed them from the shelves with intent to take them through the check-out counter without paying the proper price for them, notwithstanding that the store owner impliedly consented to his removing them from the shelves. The court was of the view that the switching of the labels was, in effect, a second appropriation or, as Lord Lane expressed it, "a later assumption of a right."

33. The House of Lords, however, while upholding the decision of the Court of Appeal to dismiss Morris' appeal against his conviction for theft, gave a narrower meaning to appropriation. In a speech in which all their lordships concurred, Lord Roskill said (see (1983)77 Cr App R 309 at 316):

"In the context of [section 4(1)], the concept of appropriation in my view involves not an act expressly or impliedly authorized by the owner but an act by way of adverse interference with or usurpation of those rights. When the honest shopper acts as I have described, he or she is acting with the implied authority of the owner of the supermarket to take the goods from the shelf, put them in the trolley, take them to the checkpoint and there to pay the correct price, at which moment the property in the goods will pass to the shopper for the first time. It is with the consent of the owners of the supermarket, be that consent express or implied, that the shopper does these acts and thus obtains at least control if not actual possession of the goods preparatory, at a later stage, to obtaining the property in them upon payment of the proper amount at the checkpoint. I do think that [section 4(1)] envisages any such act as an 'appropriation,' whatever may be the meaning of that word in other fields such as contract or sale of goods law."

34. The appeal of Morris was consolidated with that of one Anderton, who had been convicted of theft, having switched labels on a joint of meat in a supermarket and taken it to the cashier with a view to paying the incorrect lower price for it. Unlike Morris, Anderton failed to deceive the cashier and was apprehended before passing through the check-out counter. Their Lordships upheld his conviction.

35. I see no difference in principle between the label switching type of case and that which is presently before us. In the instant case the applicant was entrusted with the custody of the promissory notes. So long as he dealt with those notes in accordance with the agreement which he had reached with Miss Ho he could not be said to have appropriated them within the meaning section 4 of the Theft Ordinance. In such circumstances his position was the same as the supermarket customer who merely removes articles from the shelves and places them in a trolley.

36. When, however, contrary to his agreement with Miss Ho, he presented one of notes to Mr Chan and requested him to discount it, he appropriated it. It was irrelevant that, had the merchant bank been deceived by him and discounted the bill, the proceeds would have been paid to Fok Tat. I can find nothing in Morris to suggest that if Morris had not intended to retain the articles for his own use but had intended to give them to some innocent third party, there would have been no appropriation and therefore no theft.

37. In the instant case the charge related to the promissory note, not the money which the merchant bank would have paid out had the applicant succeeded in deceiving it. Not only had the applicant appropriated the note but he had plainly done so dishonestly with the intention of permanently depriving Miss Ho of it.

38. I do not accept Mr Sedgwick's submission that the words "by keeping or dealing with it as owner" in section 4(1) are of assistance to him. In my opinion these words mean keeping or dealing with property by exercising the right or rights of the owner.

39. It follows from the above analysis that I am of the view that by requesting the merchant bank to discount the note the applicant appropriated it, and that by dishonestly intending to deprive Miss Ho permanently of it, he committed the completed offence of theft, not merely attempted theft. That, however, does not assist him. The greater includes the less. Moreover, even if I were to accept Mr Sedgwick's basic submission, it would have been of no avail to the applicant, for it is plain that Madam Wong Kuo, "the proprietor" of Fok Tat, having attended the meeting with Mr Au at the Chartered Bank in Macau at which the applicant was seeking to discount the promissory note, was fully aware that the applicant was attempting to discount that note. It is therefore futile to suggest that the applicant, by coming to Hong Kong as a consequence of the discussion with Mr Au to discount the note, had acted other than with the full knowledge and approval of Madam Wong Kuo.

40. The second ground of appeal was a complaint that the judge failed to weigh or evaluate the evidence of Miss Ho in a proper manner before finding that she was a truthful witness and that her testimony was credible, acceptable, true and accurate.

41. I need to say little about this ground of appeal for, as Mr Sedgwick frankly conceded, once it was accepted, as it was, that the promissory notes were the property of Miss Ho and that the applicant had signed an agreement on behalf of Fok Tat in which Fok Tat guaranteed that the eight promissory notes were to be held only as security for the loans, and that Fok Tat would not present them to the Thai Farmers Bank for payment when they matured but would return them to Miss Ho, the credibility of Miss Ho as to other matters assumed little relevance. Having said that, however, I am satisfied from an examination of the record that the judge dealt adequately with the testimony of Miss Ho.

42. Grounds 3 and 4 really constituted only one ground of appeal. They relate exclusively to the conviction on the charge of attempting to obtain property by deception. The particulars of that charge were as follows:

"PAK Sek-kin, between the 28th day of September and the 4th day of October 1992, in Hong Kong, dishonestly attempted to obtain from Standard Chartered Asia Limited the proceeds upon the discounting of a document which purported to be a promissory note of Thai Farmers Bank, Thailand, serial number TFB 2006/92 drawn in the sum of US$25,000,000 with the intention of depriving Standard Chartered Asia Limited permanently thereof by deception, namely by falsely representing that he was the unconditional beneficiary of the said purported promissory note and that he had full authority and lawful entitlement to discount the said purported promissory note."

43. Mr Sedgwick contended that the Crown had failed to prove the particular that the applicant had falsely represented that he was the unconditional beneficiary of the promissory note. We readily accept, as did Miss Hartstein for the Crown, that the applicant represented that Fok Tat, not himself personally, was the unconditional beneficiary. However, the Crown clearly proved that he had falsely represented that he had full authority and lawful entitlement to discount the note. Once the Crown had proved the other elements of the charge, proof of that particular was sufficient to ground a conviction.

44. Ground 5 was a complaint that the judge erred in law and fact in finding that the steps taken by the defendant at the meeting on 28 September and the letter dated 30 September constituted an attempt in law to obtain property by deception.

45. The gist of this ground is that the acts of the applicant were not sufficiently proximate to constitute an offence in law. Mr Sedgwick submitted that the evidence of Mr Chan disclosed that a number of steps remained to be taken before the full offence could have been committed. The following steps in particular would have been taken or probably have been taken. First, the merchant bank would have to verify that the note had been validly issued and represented a full and unconditional obligation. On being satisfied as to this, Mr Chan would probably have had to meet the applicant again, (a) to enquire as to the circumstances in which he came to buy the note in order to find out whether his version tallied with that of the Thai Farmers Bank, (b) to obtain further information about the project in Thailand for which the applicant had told Mr Chan that the eight promissory notes had been given in payment, and (c) to satisfy himself that the applicant and Fok Tat were honest.

46. Once satisfied as to these matters, Mr Chan would then have continued the negotiations that had begun on 28 September as to the terms on which the note would be discounted. Lastly, the merchant bank would have instructed its solicitors to draw up a document embodying the agreed terms.

47. There is undoubtedly a distinction between an intention to commit a crime and an attempt to commit it. For conduct to amount to an attempt there must, in addition to the requisite intention, or mens rea, be an overt act of such a kind that is intended to form and does form part of a series of acts which would constitute the actual commission of the offence if it were not interrupted. The act must not be an act which is merely preparatory to the commission of the completed offence, but must be proximate to it in the sense that it is immediately and not merely remotely connected with the completed offence (see Haughton v. Smith [1975] AC 476 at 492).

48. In my view the judge was perfectly entitled to come to the conclusion that the applicant's conduct constituted an attempt to obtain property, namely the proceeds upon the discounting of the document, which purported to be a promissory note of the Thai Farmers Bank, by deception. The applicant had requested the merchant bank to discount the note. Had the merchant bank agreed to do so at that meeting, the complete offence would have been committed. The applicant had done all that he could do to set up the intended fraud. All that remained was for him to wait and hope that the merchant bank would become ensnared in his web of deception. I wholly reject Mr Sedgwick's submission that no attempt had been committed because the applicant, still having time within which to repent and withdraw from the intended fraud, had not crossed the Rubicon.

49. If the Rubicon or last act test were to be applied, the law of attempt, as Professor Glanville Williams has correctly observed, would be left practically without operation. A person who seeks to perpetrate a fraud by conduct such as that in the present case sets in train a course of action on the part of the intended victim which the would be fraudster fervently hopes will not frustrate his fraudulent venture. It would be wholly irrational to treat the would be fraudster's conduct as something which is merely remotely connected with the completed offence simply because the intended victim delays the fulfilment of the fraudster's expectations by making prudent inquiries before committing himself to an agreement with him. An attempt, once begun, may continue over a period of time, long or short, and does not cease to be an attempt because it is frustrated earlier rather than later.

50. Ground 6 is a criticism of the judge's finding that "on the evidence it is abundantly clear that had the promissory notes been genuine [the merchant bank] would have discounted them or acted as intermediary in their sale". Mr Sedgwick contended that this finding was so utterly without foundation and so contrary to the testimony of Mr Chan as to amount to a perverse finding of fact and, as such, rendered the conviction on the attempt to obtain property by deception charge unsafe and unsatisfactory.

51. While it is true to say that Mr Chan testified that inquiries were to be conducted that would range beyond ascertaining whether the notes, and in particular the note presented to him by the applicant, were genuine, he asserted that "the crucial concern" was whether the notes were genuine.

52. I do not think that the imprecision in the passage complained of renders the conviction on the attempt to obtain property by deception charge unsafe or unsatisfactory.

53. For the reasons I have given I would refuse the application for leave to appeal against conviction.

54. I now turn to the application concerning sentence. Mr Sedgwick contended that, having regard to the enormous amount of money that the merchant bank would have paid out had it discounted the promissory notes, it was inevitable that the most rigorous checks which it was to perform to determine the genuineness of the notes would result in the discovery that they were false.

55. That the forgeries were detected goes without saying. But the applicant, by stealing the promissory note bearing a fare value of US$25m and attempting to deceive the merchant bank into discounting it, clearly thought that he had every chance of bringing his fraud to fruition. This was a planned and persistent course of conduct which merited a heavy sentence.

56. In my view the overall sentence of 16 months' imprisonment for an offence of this nature was extremely lenient. Indeed, it is significant that Mr Sedgwick did not suggest that the sentences were either manifestly excessive or wrong in principle. He frankly conceded that his submission was a plea ad misericordiam.

57. We were told, and I accept, that in June 1994 the applicant was admitted to hospital suffering from jaundice and thyrotoxicosis and that, after treatment, he slowly returned to normal. However, he still requires regular follow-up treatment for his thyroid gland until his condition is completely stable. He also requires follow-up out-patient treatment for his liver condition which, if not properly supervised, could result in a recurrence of the jaundice.

58. I note that in her Reasons for Sentence the judge stated that, since "no harm was in fact done" to anyone and in view of the fact of the applicant's ill health, she thought fit to "temper justice with mercy".

59. What we are now being asked to do is to order that the applicant's sentences be reduced to the length of time which he has already been in custody.

60. I see no justification for further discounting the sentences on account of the applicant's medical condition. I would therefore refuse the application.

Penlington, J.A.:

61. I agree with my Lord that for the reasons he has given the applications for leave to appeal against conviction and sentence should be refused.

Liu, J.A.:

62. For the purpose of this appeal, "the concept of appropriation ..... involves not an act expressly or impliedly authorised by the owner but an act by way of adverse interference with ..... those rights". R. v. Morris, (1983)77 Cr. App. R 309, 316 per Lord Roskill. When Morris was before the Court of Appeal, Lord Lane CJ made reference to the meaning of "appropriation" in the Shorter Oxford English Dictionary in these terms: "The Shorter Oxford English Dictionary defines it as 'to take for one own or to oneself'. That seems to connote some sort of claim being staked to the article". See R. v. Morris, [1983]2 WLR 268, 774F. The applicant had clearly appropriated the promissory note in the charge. In whatever capacity he acted or purported to act, the applicant himself fraudulently represented to Mr Chan of Standard Chartered that the promissory note could be discounted or sold and that his company had come by it together with another seven promissory notes as payment for a project in Thailand. The appellant well knew these misrepresentations to be untrue. They were meant to be acted upon and the production of the said promissory note by the appellant to Mr Chan was part of his deception. The mandate under which he held the said promissory note was or must have been wholly displaced by the applicant's attempt to induce the banker to accept the misrepresentations he made on the force of the said promissory note. The applicant tendered the said promissory note to give credence to his falsity. For the purpose of inducing the banker to act on his misrepresentations, the applicant's custody and control of the said promissory note assumed a new dimension. In order to advance that deception, some claim was or must have been staked to the said promissory note, thus giving rise to an adverse interference with the owner's rights to it. By the way in which the applicant parted possession with the said promissory note to Mr Chan on these misrepresentations, he had clearly appropriated it. I agree otherwise with everything that has been said in the judgment delivered by my Lord, the Vice President.

Macdougall, V.-P.:

63. The applications are therefore refused.

Representation:

Ms Hartstein SCC for Crown Prosecutor

Mr Anthony Sedgwick, Q.C. & Mr Dane K.H. Lo instructed by M.K. Lam & Co. for Applicant