HKSAR v. Wong Cho Sum and Others

CACC000043/2001

CACC 43/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 43 OF 2001

(ON APPEAL FROM DCCC 619 OF 2000)

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Coram: Hon Stuart-Moore VP, Mayo VP and Stock JA in Court

Date of Hearing: 7 and 20 June 2001

Date of Judgment: 13 July 2001

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J U D G M E N T

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Hon Stock JA (giving the judgment of the Court):

The Scam

1This case concerns the operation of a model agency scam practised on innocent members of the public in June 1998. What happened, according to the evidence, was that the first applicant (D1) set up a company in May 1998 and rented premises in Sai Yeung Choi Street in Mongkok, from which to run the agency. He then recruited a number of managers and scouts, and opened a bank account. The scam was that the scouts would go out onto the streets, and there they would approach young ladies, flatter them, and tell them that they had potential as models, and that there was, or would be, work available for them and, thus enticed, they would take them back to the company premises for a supposed audition, which was in fact a sham. Photographs were supposedly taken and each victim was told that she had passed the audition and that lucrative work was available. The trial judge described the tactics as exerted with high pressure. The ladies who unfortunately succumbed were persuaded then to part with substantial sums of money. They were told that there was a recruitment fee which had to be paid in advance, or they were told that money was required for a portfolio of photographs. The amounts demanded differed according to the lady's ability to pay, but the amounts in the charges which are the subject of these applications range between $4,000 and $40,000. Sometimes cash was paid; sometimes, if the cash was not to hand, a credit card was used to effect a transfer of funds from the victim's bank account to the company's account; and sometimes the victim was taken to a jeweller store where jewellery would be purchased with a credit card, the jewellery resold immediately to the shop at a discount, and the cash thus obtained would be used in payment of the fees. The scam was highly profitable, for the evidence showed that between 1 June and 19 June 1998, the company took over $1.3 million.

The charges

2This fraud, and it is not denied that such a fraud was practised, led to the arrest of five defendants who were charged, and faced trial before Judge Sweeney in the District Court in December 2000. Each was convicted, some on their own plea; others after trial. Three of them now appear before this Court seeking leave to appeal against conviction and sentence. We shall refer to them by the designations given in the court below.

3Charges 1-3 were levelled against D1 alone. They were forgery charges, asserting various acts of forgery by which D1 sought, in setting up the company and in opening one of the company's bank accounts, to hide behind the identity of others. So, for example, he did not put himself forward to the Companies Registry as a director, but sent in names of others whose consent to act had not been obtained, and whose signatures he had forged. We need not concern ourselves with the details of these charges, because the applicant has abandoned his applications in relation to these convictions. It suffices to say that D1 was, despite his plea to the contrary, convicted on all three charges. His applications for leave to appeal against these convictions are dismissed.

4Charges 4 to 16 were theft charges. D1 was charged on each in combination with one of the other defendants, each of whom was said by the prosecution to have been a manager of the company and to have taken an active part in persuading a victim to part with her money. Some of the charges alleged theft of a chose in action, some alleged theft of a sum of money. A chose in action charge was proferred when there had been a transfer of funds from the victim's account to the company's account, and theft of cash when the victim had handed over cash.

5The charges ran as follows:

Charge 4: D1 and D3, that on 6 June 1998 they stole a thing in action, namely a debt in the sum of $2,000 owed by the Hang Seng Bank to Mak Yuk-yee, the property of Mak Yuk-yee.

Charge 5: D1 and D3, that on the same day, 6 June, they stole a thing in action, namely a debt in the sum of $2,000 owed by that bank to the same Ms Mak, the property of Ms Mak.
These were the only two charges faced by D3. Both D1 and D3 were convicted, and they seek leave to appeal against those convictions.

Charges 6 and 7 were levelled against D1 and D2. The date of the offence was again 6 June 1998; the victim a Ms Fok and in both charges the assertion is a theft of cash: $16,850 and $5,000 respectively. No evidence was offered against D2, because she pleaded guilty to the other charges against her, namely, charges 14, 15 and 16, and gave evidence for the prosecution. D1 pleaded not guilty, but was convicted. He has abandoned his application for leave to appeal against these two convictions, and those applications are, accordingly, dismissed.

Charges 8 and 9 name D1 and D5 as defendants. They are the only charges against D5. The victim was Ms Lee Wai Kwan. Charge 8 alleged theft on 6 June of a thing in action, namely, a debt of $40,000 owed by HSBC to Ms Lee, the property of Ms Lee; and charge 9 the theft, on the same day, of $9,900 cash from Ms Lee. D5 pleaded guilty to charge 8 and no evidence was offered against her in relation to charge 9. She too gave evidence for the prosecution. D1 was convicted of both charges. He seeks leave to appeal against the conviction on charge 8, and has abandoned his application in relation to charge 9, so that the latter application is dismissed.

Charges 10, 11, 12 and 13 are charges against D1 and D4, whom D1 said in his evidence was his girlfriend. Both pleaded not guilty to all four charges. They were convicted on all four, and seek leave to appeal against each conviction. Charge 10 alleges theft on 11 June of a chose in action (a debt of $24,500) from a Ms Lee Lai Ying; and charge 12 theft on 16 June, of a chose in action (a debt of $12,000) from a Ms Lam Pui Yee. Charges 11 and 13 were allegations of theft on 16 June of cash from a Ms Sum and Ms Lam respectively.

Charges 14 to 16 inclusive are against D1 and D2. These are the three charges to which D2 pleaded guilty. There is an outstanding application for leave by D1 to appeal against his conviction on charge 14, but he has abandoned his applications in respect of charges 15 and 16 and those applications are therefore dismissed. Charge 14 alleges theft, on 16 June, of a chose in action, a debt of $36,000 owing to Ms Poon; the other two charges theft of money in the sums of $29,280 from Ms Ng and $10,000 from a Ms Leung, respectively.

6Summarising the extent of the applications therefore, the position is as follows:

(1) Only D1, D3 and D4 seek leave to appeal against convictions. D2 and D5 pleaded guilty to certain of the charges, and gave evidence for the prosecution.

(2) D1 seeks leave to appeal against his convictions in respect of charges 4, 5, 8, 10, 11, 12, 13 and 14.

(3) D3 seeks leave to appeal against her convictions in respect of charges 4 and 5, the only two charges against her.

(4) D4 seeks leave in relation to charges 10 to 13 inclusive. She faced no other charges.

Grounds 1 and 1A: Choses in action

7Mr Ross appears for the applicants upon these applications. The first ground of application is drawn as follows:

"In relation to charges 4, 5, 8, 10, 12 and 14 the learned judge erred in convicting [the applicants] when the conduct found to constitute theft, the electronic transfer of funds from one bank account to another, could not amount to an appropriation of property belonging to another."

8There is then a ground 1A which emerged in the course of the hearing of the applications and which runs as follows:

"In relation to charges 4, 5, 8, 10, 12 and 14 the learned judge erred in convicting [the applicants] when the conduct found to constitute theft, the electronic transfer of funds from one bank account to another, could not amount to an appropriation of property belonging to another if done by the alleged victims or by the applicant as their agent."

The facts

9The charges which are the subject of this ground are those which alleged the theft of a chose in action. What happened in this case, as far as is relevant to these two grounds, is that, in relation to charges 4, 5, 8, 12 and 14, the victims were induced to hand over their credit cards and to divulge their PIN numbers on some false pretext, and the particular defendant with whom each victim was dealing would then take the card and herself effect a transfer from the victim's account to the company's account using an automatic teller machine. The victim would then be presented with a fait accompli. The reasons for verdict do not spell out how each girl reacted, but we see an example in the case of Ms Mak Muk-yee (charges 4 and 5) who felt cheated, because she thought that in handing over her card all that was happening was that arrangements for future payments were being put into place, and yet sums had been transferred from her accounts without her permission. She nonetheless continued to participate in the proposed arrangements for modelling by going for photographs. There is no evidence that she protested about what happened, and no evidence that she did not. Mr Ross is prepared to proceed on the assumption that there was silence by the victims of these episodes. It is clear from the judge's findings that the victims were all subject to swift and high pressure tactics, so that one can safely assume that the victims did not feel themselves in a position to say much at the time. That is why we find some of them returning to the agency with misgivings after the first visit; in other words, after the high pressure was relaxed.

10In one case, charge 10, the victim herself effected the transfer. It is a factual scenario which requires particular attention, and to which we shall later return.

The case law

11The argument as to ground 1 was an argument based upon Mr Ross' reading of a number of cases and in particular R v Preddy [1996] AC 815; R v Graham [1997] 1 Cr App R 302; and HKSAR v Goh [2000] 2 HKC 711. He sought in his written submissions to cull from those cases the proposition that where there is a transfer of funds from one bank account to another, the fraudster who effects the transfer could not be guilty of theft of the chose in action which is represented by the victim's bank account. His contention was that the cases established that the Preddy rationale, applying to charges of obtaining choses in action by deception, applied also to charges of theft.

12In due course, Mr Ross abandoned this particular line of argument, and we think that that abandonment was justified.

13Preddy put an end to charges of obtaining by deception where the subject of the charge was the receipt of sums obtained by the transfer of monies from a victim's bank account to that of the fraudster by whom a deception had been practised. Preddy was a mortgage fraud in which borrowers had, by misrepresentation, deceived lending institutions such as building societies to advance monies, and the advances had been made by electronic transfer or by cheque. To put the matter shortly, the analysis by the House of Lords demonstrated that the mortgagors in those cases had not obtained property belonging to another, namely, in that case, property of the lending institutions. That is because the mortgagors obtained credit to their own bank accounts, or those of their solicitors. Those credits constituted a chose in action, namely, the right in the mortgagor to demand from the bank in which the mortgagor held the credited account, payment of the sum credited. That was not a thing in action which belonged to another. It belonged to the mortgagor, the defendant. Such a defendant had not obtained the lending institution's right in action as against its bank for sums which had been in its account with that bank. That had always remained the exclusive right of the lender. There was no assignment of that right. Indeed, the right in the lender had, upon transfer, been extinguished or reduced pro tanto. So, too, with a cheque. If a victim creates a cheque and hands it to the fraudster, there is a thing in action represented by the cheque, but it is not a thing in action which belongs to the drawer of the cheque, nor has it ever represented a thing in action in favour of the drawer. In such circumstances, too, there can be no obtaining by the fraudster of property belonging to another, if it be alleged that what is obtained is the thing in action.

14As a result of Preddy, a series of convictions were quashed by the Court of Appeal later the same year. The decisions are reported in Graham and Others [1997] 1 Cr App R 302. Those cases included cases of mortgage fraud, but there were other types of fraud as well. There, the court considered what alternative offences might have been committed by the appellants, and one such alternative considered was theft under section 1(1) of the Theft Act, which is in the same terms as section 2(1) of the Theft Ordinance. Lord Bingham CJ said, at page 313F, that:

"The words 'property belonging to another' appear both in section 15 and in section 1. If in any case the reasoning in Preddy is fatal to a conviction under section 15, it is likely to be fatal to a conviction under section 1 also unless, in the case of a chose in action, it can be shown that the chose in action appropriated was at the time of appropriation the property of another. For reasons given in Preddy, this will not ordinarily be so where the result of the defendant's dishonesty is the creation of a new chose in action which the victim did not at the time of appropriation own and had never owned. It is also, plainly, necessary to identify an act which in law amounts to appropriation."

15The decision seems to have caused some difficulty with practitioners for we see in the report an Addendum which runs as follows:

"On December 6, 1996, the Court reconvened, to consider, inter alia, an application by the Crown for the Court to certify a point of law of general public importance under section 33(2) of the Criminal Appeal Act 1968, in the case of Hemamali Graham. The application was refused, but in the course of giving judgment, Lord Bingham C.J. said: Mr Houlder on behalf of the Crown has very properly informed the Court that the judgment which we delivered on October 25 has in professional circles caused some doubt as to whether the Court was intending to cast doubt on the decision of Lane L.J. (as he then was) in Kohn (1979) 69 Cr.App.R.395, at 404-405. We would wish to make it as clear as we can that we did not intend to cast doubt on that decision and nothing in our judgment should be understood as doing so. We wish to make it clear that nothing we said was intended to cast doubt on the principle that theft of a chose in action may be committed when a chose in action belonging to another is destroyed by the defendant's act of appropriation as defined by section 3(1) of the Act. We hope in that way the scope for misunderstanding will be eliminated. We would add by way of footnote that on October 25 we were endeavouring to give judgment on the cases argued before us and not to write a new text book."

16A study of the decision in Kohn highlights, we suggest, the following important distinction, a distinction relevant to the present case: that whereas the fraudster who himself causes the transfer of money from the victim's bank account does not thereby obtain a chose in action belonging to another, because what he obtains is a fresh chose in action belonging to himself, he may nonetheless be guilty of theft of the victim's chose in action if it be shown that by his act he has appropriated it. "Appropriation" is not to be equated with "obtaining". And where there is an act of appropriation, in other words an act by which the fraudster assumes the rights of the owner of the chose in action, and the thing recoverable by action is diminished or extinguished by the act of appropriation, then the fraudster is guilty of theft. That is because each element of the offence as defined by section 2(1) of the Ordinance is then made out. There has been an appropriation (the interference with the owner's rights); of property belonging to another (the credit balance belonging to the victim); with the intention permanently to deprive the owner of that property (it is not intended that the proceeds will be utilised to restore the balance); and, assuming dishonesty is shown, the offence is complete.

17In R v Roy Williams [2001] 1 Cr.App.R. 362, the argument was that "in causing the cheque to be drawn and presenting it so that the credit balance was diminished, the appellant dishonestly took the credit balance for his own use." (page 364). The Court of Appeal thought this argument to be correct saying, at pages 368-369[17] that:

"In the situation as exemplified in the present case, the appropriation took place, it was said, by the presentation of the drawer's cheque by, or on behalf of, the defendant. In making this submission, the prosecution relied on Kohn (1979) 69 Cr.App.R. 395 and Hallam [1995] Crim.L.R. 323. In the first of these two cases, Lord Lane C.J. had stated in robust terms that, in a situation such as the present, the act of effecting the reduction of the credit balance in the loser's account, and the transfer of a like sum to the defendant's account, amounted to an 'appropriation' within the meaning of section 1 of the Act. In the latter case, the Court reached a similar conclusion. Of it, Professor Smith wrote ([1995] Crim.L.R. 324):

'The property belonging to the victims ... consisted ... in ... credit balances in bank ... accounts. When one of the defendants presented [the victim's] cheque he caused [that] credit balance to be diminished. He thus exercised [the victim's] right as the owner of the credit balance to dispose of it; and ... this was an appropriation of [the victim's] property.'"

18There is, so it seems to us, no difference, whether in principle or logic between that situation and the situation posed in the present instances, where the diminution in the victim's account is effected electronically by the hand of the fraudster. He has destroyed, if only in part, the credit balance, and the exercise of that power "is the clearest possible assumption of the rights of an owner with intent permanently to deprive...." (see the commentary by Professor Sir John Smith to Williams in [2001] Crim.L.R. 254).

19The case of Hilton [1997] 2 Cr.App.R. 455 illustrates the same point in another factual setting, namely, where the transfer was effected pursuant, not to the drawing and presentation of a cheque by a fraudster, but to the issue of instructions by him by fax, and where the transfer of those instructions was effected electronically. It is evident from a reading of that judgment that it matters not what the mode of appropriation is, what mode is adopted whereby the fraudster assumes the rights of the owner of the balance of the bank account of the victim thereby causing a transfer of funds. What is central is that there is an act of appropriation by the fraudster or his agent. The essence of the matter appears in the judgment at p.456B:

"In our judgment, the answer ... is that the offence of theft is committed when there is a dishonest appropriation of the property in question ... and when the property consists of a credit balance, in the accepted meaning of that term, then the defendant appropriates it by assuming the rights of the owner of the balance and so causing the transfer to be made out of the account."

20Thus far, applying the principles to the present case, it seems beyond argument that the defendant who himself operates an ATM machine to effect a withdrawal from another's account, as clearly happened here in the case of charges 3, 4, 8, 12 and 14, and does so dishonestly, utilising the pin number, assumes the right of the owner, and is guilty of theft.

HKSAR v. Goh Swee Yan

21There was, at one stage in this case, a suggestion that the position in Hong Kong might not be the same as that in the UK by reason of the decision of the Court of Appeal in HKSAR v Goh Swee Yan Angelina [2000] 2 HKC 711; a case which applied the thinking in Preddy to the offence of theft.

22The facts of that case were rather complex. They involved three persons, the defendant (D), her friend Amy (A), and a fellow co-director Mr Cheung (C). To put the matter as broadly as possible, C gave D two cheques totalling $3.3 million in repayment of a loan which, unbeknown to C, had been financed by A through a payment by A into D's bank account. A did not know of the two cheques from C to D, because D had presented her with two cheques of her own, the return of which she managed to secure by deception. Repayment of the loan of monies advanced by A was postponed, again by subterfuge, and D presented the two cheques drawn by C, and the amounts they represented were then credited to D's bank account, and thereafter she withdrew a substantial part of that sum. D was charged with theft of cash, the property of A, that is the original sum represented by the cheques which A had credited to D's bank account. There had been no theft of cash and, on appeal, the prosecution sought to substitute a charge of theft of choses in action represented by the two cheques drawn by C and paid into D's account.

23The Court held that once the property alleged to have been stolen was categorised as a chose in action, the decision of the House of Lords in Preddy prevented the chose in action from being capable of belonging to another (see p.728D); and that, applying the principles of Preddy to the Goh case, when the defendant had presented cheques drawn by C "a new chose in action came into existence. That chose in action was the increased balance in [the defendant's] account which amounted to a debt which [the defendant's] bank owed to [the defendant] and which it had undertaken to repay on demand. That chose in action belonged to [the defendant] and there could therefore have been no question of her stealing that chose in action because it did not belong to anyone other than her". (p.729D)

24The issues in Goh were complicated by the fact that there appears to have been no deception between the defendant and C, the drawer of the cheque or cheques in question. He intended at all times, without any deception practised upon him, that the cheques which he drew should be used to diminish the credit in his account. This was a case in which the rights allegedly flouted were those, not of the drawer of the cheque, but of a third party, A; and it was the deception practised upon her that was the object of the prosecution. There was no question in that case of appropriation of a cheque drawn by A, or on her behalf, nor of D directly effecting a diminution of A's bank account. It was a case in which the true offence was that of evading a liability by deception, namely, evading D's liability to A in respect of A's loan to D, by making false representations as to cheques which D had given A as security for her loan. The court substituted a conviction accordingly.

25The court did however say, at page 729F, that:

"Preddy, of course, was a case in which the defendants were charged with obtaining property by deception. An ingredient of that offence is that the property which the defendant obtained by deception has to have belonged to another. It follows that the reasoning in Preddy should apply to a case in which the defendant is charged with stealing a chose in action, provided, of course, that the chose of action is of a kind which could not have belonged to another. This is in line with what Lord Bingham of Cornhill CJ said in R v Graham [1997] 1 Cr.App.R. 302 at 313F:

If in any case the reasoning in Preddy is fatal to a conviction [for an offence of obtaining property by deception], it is likely to be fatal to a conviction [for an offence of theft] also unless, in the case of a chose of action, it can be shown that the chose in action appropriated was at the time of appropriation the property of another." (Emphasis added)

26One must, we suggest, take care when applying these comments, have regard to the phrase emphasised, and recognise precisely which chose in action the Court in Goh was addressing. One cannot steal a chose in action belonging to oneself, in other words one's own credit balance. But one can steal a chose in action by the presentation of a cheque where the presentation amounts to an assumption of the rights of the owner of the credit balance which, by the presentation, is diminished. It is to be noted that the Court appears to have concentrated on the chose in action created in favour of D by the crediting of her account with C's cheques. It did not address the chose in action which was C's credit balance and the diminution of that balance by the presentation of the cheques, although in the absence of any deception practised on C, no offence could in any event be shown. One notes also that there was not cited to the Court the judgment in Kohn, nor the decision of the Privy Council in Chan Man-sin [1988] 1 WLR 196, in which Kohn is mentioned, and which applied the principle that a defendant who presents and negotiates a cheque thereby assumes the drawer's rights as owner of credit in its account or of the right to draw to a certain limit. Nor was Hilton cited to the Court of Appeal in Goh, and that Court did not have the benefit of the judgment in Williams, which is not surprising since it postdated Goh. Furthermore, there is no reference in Goh to the postscript or addendum to Graham to which we have made earlier reference.

27It is important in this type of case to bear in mind the distinction between an act of appropriation, on the one hand and, on the other, the property that is obtained as a result of the appropriation. What is obtained by a fraudster, the crediting of his own account, is clearly not property belonging to another; since what is obtained is his own newly created chose in action. The act of appropriation, however, is an act directed at a chose in action belonging to another. That is what the cases show, and Goh should not be read as suggesting that by the presentation of a cheque by which the drawer's account is diminished, there can, when dishonesty is also proved, be no offence of theft.

28Mr Ross no longer seeks to overturn the present convictions on the basis of Preddy or Goh. He accepts that the proposition originally framed in his argument cannot hold water; in other words the fact on its own that the transfer was effected by electronic means is neither here nor there. So he contends that the question to be addressed in this case is whether there has or has not been an appropriation in each instance by the applicant whose case we are considering.

Electronic transfer: Conclusion

29It follows that in those cases, namely, charges 4, 5, 8, 12 and 14, where it is proved that a defendant herself went to an ATM machine and drew funds, there is no defence and no assistance provided by the decisions in Preddy or Goh. By her act in causing funds to be transferred, using the card of a victim at an ATM machine, there has been, by that defendant, an appropriation of the victim's property, namely, the credit balance in the victim's account. That that appropriation was dishonest is beyond question, and that it was with intent permanently to deprive the victim of the thing in action is also beyond doubt.

The agency point

30However, Mr Ross does not leave the argument there. What he says is this: that no appropriation takes place where the act is with the consent of the victim, or where the victim has herself effected the transfer, and that since the victims were told after the event what had, without their consent been done, the lack of overt protest must be taken as acquiescence, and that the victims have therefore ratified the acts of the defendants in effecting the transfer, so that the defendants have thereby become their agents in making the transfer.

31The less said about this argument the better. The answer to it is simple. There was at the time of each act of transfer an appropriation by the relevant defendant. That appropriation was at that time dishonest. The appropriation was made with an intent permanently to deprive the owner of the thing in action. That is theft.

Charge 10

32In relation to charge 10, the facts differ from those which apply to the other choses in action charges, in that the electronic transfer was actually effected by the victim, in other words, by herself pressing the relevant keys. The victim was a lady named Li Lai Ying. The facts can be found in the reasons for verdict as follows:

"PW4, Madam Li Lai-ying, was dealt with in the usual manner. Her manager's name was Rosemary who promised her 18 hours work at $2,960 per hour, less 15 per cent commission. She accepted that job offer. Rosemary then told her that the company had to be paid $24,500 in advance for a portfolio of photographs. She was brought to an ATM machine by a scout, where she had second thoughts and returned to the company. There, Rosemary worked on her to try to persuade her once more. She returned to the ATM machine with Rosemary and there transferred $24,500 to an account number that Rosemary had given her. She soon felt cheated however, and tried to contact Rosemary but was unsuccessful." (Tr. pp. 39-40).

33The argument is that there has in this case been no act of appropriation by D4. The act of appropriation, the act of diminution of the credit balance was, it is said, the act of the account holder who pressed the keys, and it was on her part a voluntary and consensual act.

34The fact that such diminution in the credit balance was effected with the consent of the holder of the account does not preclude the act by which that diminution has been effected from being an appropriation: see R v Gomez [1993] AC 442. As Lord Browne Wilkinson observed in Gomez at p. 495H:

"... the word 'appropriation' in isolation [is] an objective description of the act done irrespective of the mental state of either the owner or the accused",

an approach endorsed in the recent decision of the House of Lords in R v Hinks [2001] 1 Cr.App.R. 252.

35We have been taken in some detail to commentaries by Professor Smith, proferred on a number of occasions and in response to various decisions, the effect of which have been to suggest that it is difficult "to discern an appropriation by the defendant where 'the only act that has been done has been done by the [holder of the credit balance] himself and he has not done it as agent of D'" (see Hilton, supra, page 453, citing Professor Smith in [1996] Crim.L.R. at 669). We do not think that the case now before us poses that problem; a problem predicated on a self-contained act by a credit holder who is induced by a deception to effect a transfer. The charge with which we are presently concerned is not a case where the defendants have merely accepted a transfer of funds as a result of some act instigated by their misrepresentation. D4 has in the present case actively assisted in the very act of transfer itself; in the act of appropriation itself. It is clear from the evidence that she influenced and coerced Ms Li to make the transfer, went with her to ensure that it was done, stood by her to ensure that it was done, providing the account number without which the transfer could not be effected. It matters not whether one concludes that the act was done at her direct command, or by Ms Li as D4's agent. It suffices to conclude, as one safely can, that she directly participated in the very act of transfer itself, thereby engaging in an appropriation. Her conduct was no different from that of the appellant in Hinks, as described in that judgment at p. 256, who influenced and coerced the victim to withdraw his money and who accompanied him to the bank to make sure that the moneys were withdrawn. We are satisfied that there has in the case of charge 10 been a dishonest appropriation by D4, for which D1 is jointly liable, and that that appropriation was with the intent that Ms Li should permanently be deprived of the chose in action which was thus appropriated.

The prosecution's failure to charge conspiracy

36None of the arguments which have been addressed thus far would have arisen had the prosecution followed a sensible course and charged conspiracy to defraud. The judge's understandable frustration at the prosecution's inability to put their house in order was expressed at the conclusion of his reasons for verdict, where he said:

"It only remains for me now to remind the prosecution that there was every indication on their own opening that this was a criminal conspiracy. They were told that back in September at the first pre-trial review and again in October. There would have been plenty of time to prefer the appropriate charge. I repeated that request at the start of this trial but for reasons best known to themselves, the Legal Department insisted on going the long and cumbersome way whereby each and every one of 13 similar theft charges had to be proved. I hope this does not happen again."

37The prosecution's failure to charge conspiracy not only contributed legal complexities to a straightforward case, and thereby also added to its length, but also made the judge's task of sentencing, with which we are not concerned in this judgment, more difficult.

D1 and D4: Further grounds

38This disposes of the applications by D1, D3 and D4 against convictions, save as follows, that D1 and D4 apply for leave against their convictions in relation to charges 10 to 13 inclusive on further grounds. It is said that D1's convictions on these charges depend upon the validity of the convictions of D4. For reasons we shall provide, the one does not depend on the other, but it nonetheless makes sense first to examine the grounds for D4 in relation to those charges.

(1) Identification

39It is said that there was not sufficient evidence to identify D4 as the person with whom the victim of charge 10 dealt. The evidence about the deception upon Ms Li Lai Ying was that she was spoken to at the agency by a person called Rosemary who promised her work and spoke to her about photographs and about the money Ms Li had to pay. Ms Li was taken to an ATM machine by a scout, but had second thoughts and returned to the agency, and there again Rosemary spoke to her, and this time Rosemary went with her to the ATM machine, and money was transferred to an account number provided by Rosemary. The judge then said this in his reasons for verdict:

"This witness attended a very informal and haphazard ID parade at the company premises on 22 June (following the police raid) in which 19 women lined up for inspection. Not surprisingly, she failed to pick out Rosemary if indeed Rosemary was present on the premises that day. She subsequently picked out D4 as Rosemary at a formal ID parade on 23 March 2000. However, this ID evidence was tainted insofar as the witness readily admitted in cross-examination that she had spoken to a former staff member at Sino Act the day before who had described Rosemary to her.

I do bear in mind, however, that there has been ample evidence before me that D4 worked as a model manager at Sino Act at the relevant time and it has never been suggested, nor have I heard evidence, that any other manager at Sino Act called herself Rosemary. So, although the formal identification by this witness was tainted, there has been an abundance of independent evidence to support it." (Tr. p.40)

40D4 also gave evidence. She is called Rosemary. She worked at the premises in question at the material time, although she denied ever meeting any of the victims who said that they had met her (they number four), and who identified her at identification parades. She said that all she did at those premises was to sell health care products.

41Mr Ross says that the evidence on count 10 is weak, and he asks how the judge could be sure that Ms Li dealt with D4.

42There was nothing wrong with the judge's approach or with his conclusion. He found support for the identification in a multitude of evidence, and it would have been odd had his finding been different. The fact that the identification parade was tainted did not of itself mean that the identification was to be rejected. The lady had ample opportunity of observing D4. There was support for the identification from the fact that three others suffered at the hands of D4 playing the same role as suggested by Ms Li, on the very same day. The judge heard evidence from others, and there was no suggestion that there was another manager called Rosemary there on that day or, for that matter, on any other day. The judge pointed specifically to the fact that the lady's dealings with Rosemary were lengthy. D1 gave evidence. He knew the premises and the staff well. D4 was his girlfriend. He did not suggest that there was someone else who looked like D4, or who was called Rosemary. The evidence of D2 was that when the meeting to establish the agency was held in May, D4 was present and that, in D4's presence, D1 said that D4 and he had this model agency already going. When D2 arrived for work on the first day, D4, named Rosemary, was there working as a manager; and there were further references in her evidence about the active role played in the fake model agency by D4. D4 was similarly identified by D5.

(2) D4's good character

43The judge failed to mention D4's previous good character, and this fact is the next ground of application. There was, in the circumstances no need for the judge to mention this in his reasons for verdict. In R v Fok Tin Yau [1995] 2 HKC 450, 456 the court said:

"... Where a judge is sitting alone and evidence of good character has been given, this court will, even if he makes no mention of it, unless there be some express or implied indication otherwise, act upon the basis that he was aware of the character evidence and that he gave it the weight which he thought it deserved."

44This was a careful statement of reasons by the trial judge. There is no reason to suppose that the judge did not have D4's evidence about character in mind. There is every reason to support the judge's conclusion that her evidence was entirely fanciful despite everything she said. This ground fails.

(3) The evidence

45The next ground is even weaker. It runs as follows:

"The learned judge convicted the applicant [D4] of all charges by rejecting the applicant's evidence

(a) without reason or adequate reasons

(b) by simply comparing the applicant's evidence with the evidence about the witnesses."

The judge gave very full reasons for rejecting her evidence. It is not to be found alone in the passages which mention her evidence. It is to be found in the judge's analysis of the premises, what was there to be found, how totally inconsistent that was with any suggestion that the premises were being used for any business other than that of a model agency. The fact is that he believed the prosecution witnesses. Their evidence was, as against D4, damning. If he believed their evidence, as he did, that was reason enough. Mr Ross says that he rejected her evidence by simply comparing it with that of others, and that that will not do. Comparisons of this kind are a feature of a system by which issues are determined by evidence. That is what judges do. It is what they must do. In any event, Mr Ross' premise is incorrect, because the judge rejected her evidence on the basis of matters additional to the testimony of the victims.

46There is, therefore, nothing in these additional grounds advanced by D4. Since D1's additional grounds in relation to these charges are said to depend on the validity of the grounds raised in relation to the conviction of D4, his application in relation to those grounds also fails. But we pause to say that his convictions did not depend on hers. He was charged as party to a joint enterprise with whomsoever it was who cheated the complainants who gave evidence in support of these four charges. It would have mattered not had it not been proved that that person was D4.

Conclusion

47The grounds of complaint of each applicant in respect of the convictions which they now seek to challenge have, in the event, no substance; and it follows that the applications by D1, D3 and D4 for leave to appeal against their convictions in this case are all dismissed.

48There are in the case of these three applicants outstanding applications for leave to appeal against their sentences. D1's applications will be dealt with in conjunction with his application for leave to appeal against conviction and sentence in a similar case to be heard later this year. We shall hear the applications of D3 and D4 for leave to appeal against sentence on 20 July 2001.

Representation:

Mr Phillip Ross assigned by DLA for D1 (Charges 4, 5, 8, 10, 11-14), D3 and D4

D1 Wong Cho Sum in person (charges 1-3, 6-7, 9, 15&16)

Mr M C Blanchflower, SC, SADPP leading Mr G D Goodman, SGC of  Department of Justice for Respondent