Chan Fuk-lee Alias Chan Wing-fat v. The Queen

CACC000437/1976

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Coram: Pickering, J.A., McMullin, Ag. J.A. & Leonard, J.

Date of Judgment: 20th September, 1976.

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JUDGMENT

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McMullin, Ag. J.A.:

1. The appellant was tried before the District Court upon no less than 25 charges - principally charges under s.17(1) of the Theft Ordinance which deals with obtaining property by deception - but the Crown elected to proceed against him upon the 4th to 9th charges inclusive only. These charges arose out of the alleged issuing by the appellant of a number of cheques in November of 1975 and the subsequent dishonour of those cheques which had been, as the Crown alleged, issued in payment for goods which were actually delivered to a provision store of which the appellant is said to have been the proprietor at the relevant dates. Mr. Jerome Chan has trenchantly argued a number of points on behalf of the appellant and has assisted the court considerably by presenting a lucid summary of his argument in written form. One of the points urged upon us touches all the charges in a fundamental way and it will be well therefore to deal with that argument first.

2. It was never denied that the various goods described in the charges were delivered to the store where the appellant was engaged in carrying on business nor was it denied that certain cheques were issued in payment therefor nor that these cheques were subsequently dishonoured. The defendant said however that he was the victim of a swindle in that he had divested himself of the ownership of the store, which bears his name, some time in August of 1975, to three other persons surnamed Ho, Siu and Lau. Thereafter he had continued to work in the store, which had formerly been called the Wing Fat Frozen Meat Company, when it was under his proprietorship. It is the appellant's case that he had specifically transferred the business to one of these three, HO Wong-on, at an agreed price of $50,000 of which $10,000 only was ever paid to him. An application form taken out under the Business Registration Regulations was put in evidence for the defence. It purports to show that HO Wong-on is the proprietor of the business called Wing Fat Compradore, the nature of the business being described simply as "food". The application was dated 6th of November 1975. The appellant said that after the transfer of the business he no longer had anything to do with the accounts, his duty being to receive goods and keep things in order. He admitted that he sometimes would order goods for the store even after the transfer of his business. He was reluctant to admit that he ever used the company's chop on delivery notes or cheques after the transfer or that he had ever handed cheques in payment for goods delivered to the store. He did however admit that one of the cheques (that described in the 4th charge) had been handed over by him to a delivery man but the general purport of his evidence as regards this matter was that what he had done in respect of the accepting of goods, and in payment therefor, had been done under the instructions of the true proprietor of the company and that he, the appellant, did not know the state of the company's bank account but had always assumed that there were sufficient funds to meet such cheques. The importance of this evidence was of course that if believed it would mean that - even assuming that the evidence given by the various delivery men was true - no deception had been practised and no dishonesty displayed by the appellant who could not therefore be convicted of offences either under s.17(1) or s.18(1) of the Theft Ordinance.

3. The learned trial judge was satisfied that there had been no transfer of the business and he disbelieved the appellant upon this matter. The evidence upon which the learned judge relied in coming to his conclusion has been closely and critically analysed by Mr. Chan who also complained that the learned judge was wrong to dismiss as unimportant the evidence constituted by the application for business registration. The latter criticism may conveniently be dealt with first. It is quite true as Mr. Chan points out that by virtue of the provisions of s.19(2) of the Business Registration Ordinance the details set forth in that document constitute prima facie evidence as to the facts stated therein. It cannot be said however, as counsel seeks to say, that this was overlooked by the learned judge because he specifically pointed out that the application form and its contents were not "conclusive" evidence of the truth of the facts set forth therein. He correctly pointed out that such application forms can be had readily for the payment of the appropriate fee and the real weight of his opinion against the appellant on this matter was constituted by the evidence of actual proprietor - ship - principally the evidence of the salesmen and other business men involved - who had dealt with orders placed for goods. While it cannot be said that the many points made in criticism of that evidence by Mr. Chan are without substance we are satisfied nevertheless that the evidence as a whole amply justified the learned trial judge's conclusion that there had not been a genuine transfer of the business. Indeed, the evidence given by the several business people who testified to having had face to face dealings with the appellant conveyed a clear picture of the proprietorial character of the appellant in dealing with them.

4. Liquor was supplied by the Baik Wha International Trading Company (the complainant on the 4th, 5th and 6th charges) on a number of occasions in November 1975. This was by various orders over the telephone made by a person claiming to be CHAN Wing-fat; some of the earlier deliveries were paid for by a post-dated cheque which was honoured and which was seen by the sales representative being signed and chopped by the appellant, the signature being Wing Fat and the description of the store on the chop being Wing Fat Store (or Compradore). CHENG Chi-wai, the sales representative, who went to collect the cheque which is the subject of the 4th charge saw the appellant chop that cheque though he was not sure whether he had also signed it. That witness however had been to the store on several occasions because of phone calls by somebody claiming to be CHAN Wing-fat ordering additional supplies of liquor and he formed the impression that the appellant was the sole person in charge of the store. On his first visit there in September, after an account in favour of the Wing Fat Compradore had been opened by the Baik Wha Company, he found the appellant in apparent control and asked to see the "boss" of the store and the appellant introduced himself as such. It is clear from what the appellant himself said that this would be after the alleged transfer of the store. The cheque Ex. P3 was accepted by CHENG Chi-wai, it would seem in part payment for previous deliveries of liquor as yet unpaid for. He enquired on this occasion why the cheque was post-dated and was assured by the appellant that on the cue date (12th December) it would be honoured. On its own that evidence totally negatived the suggestion that the appellant was a mere employee who knew nothing of the state of the company's accounts. The delivery man, POON Shing, who made deliveries on the 24th and 29th of November which are the subject matter of the 5th and 6th charges said that it was the appellant who personally chopped the delivery notes on those occasions.

5. The proceedings which took place between LAM Kam-tong, the Dodwell representative, and the appellant and which relate to the 7th and 8th charges make it clearer still that the appellant was truly the proprietor. Two cheques given in payment for deliveries of liquor by the Dodwell Co., one of which had been dishonoured and one not presented, were, at the request of the appellant, replaced by another cheque dated 30th of November 1975. Upon its presentation and dishonour the witness Lam returned it and discussed the question with the appellant who said he did not have that much money about him but gave the witness a sum of $1,052 in part payment. A further sum of $200 was given by the appellant to the witness a week later. He told the court that the appellant had informed him that he, the appellant, was in charge of the store.

6. The appellant's story was that Ho, one of the three persons who had cheated him, was the true proprietor of the store and that Ho and the other two had absconded leaving the appellant to face the consequences of their dishonest behaviour. This was found by the learned judge to be a fabrication. He had good grounds for that conclusion which we think was clearly right. That is sufficient to dispose of the appeal insofar as the 5th and 6th charges are concerned. The evidence upon those charges was that the Wing Fat Store had opened an account with the Kwangtung Provincial Bank in Yuen Long on the 22nd of November 1975. Between that date and the 29th of November a total of $8,600 was paid into the account. There were also during that period payments out of that account to honour cheques which were drawn upon it. The bank official who was called to testify about the matter said that between the 22nd of November and the time when the Wing Fat Store finally closed, about mid-December, there never had been sufficient in the account at any one time to honour the cheque for $4,035 which was the subject matter of the 4th charge. The last cheque drawn upon the account was dated 28th of December. Between the opening of the account and the 29th of December a total of 25 cheques in all had been dishonoured. From all of this it is apparent that in receiving, upon the 24th of November brandy to the value of $5,376, and still more in receiving upon the 29th of November brandy to the value of $8,016, the appellant must have been well aware that he was in no position to pay for the same and in chopping the delivery notes was representing falsely that he was engaged in a bona fide transaction which would result in his paying for the goods thus delivered.

7. The matter however stands otherwise in relation to the 4th, 7th and 8th charges and we have been drawn to the conclusion that the convictions upon these charges cannot stand. It may well be that there was a somewhat unfortunate hiatus between the evidence available to the Crown and that actually offered upon this matter, but the fact remains that the evidence before the court showed that the only account owned by the Wing Fat Store had been opened with the Kwangtung Provincial Bank, Yuen Long on the 22nd of November 1975. The evidence of the Baik Wha International Trading Company's employees was to the effect that the cheque Ex. P3 (Charge 4) had been accepted some time before the 20th of November, The court was thus confronted with a conundrum of which the learned trial judge does not seem to have been aware. Mr. Chan pointed out that it is very unlikely that a cheque book would have been issued to the appellant or anybody connected with the store prior to the opening of the account. Since it was never disputed that the cheque Ex. P3 was received by the Baik Wha Company in payment of liquor delivered to the Wing Fat Store the only intelligible resolution of the puzzle would be to assume that the witnesses must be mistaken as to dates and that the cheque must in fact have been received after the 22nd of November. The prosecution case however then finds itself impaled upon the second horn of the dilemma proposed by Mr. Chan. On the authority of R. v. Laverty⁽¹⁾ he points out that the deception laid in the charge must be the effective cause of obtaining the property that the onus of proving that is upon the prosecution. That is not disputed. But the Crown's own case showed clearly that the goods referred to in the 4th charge were delivered early in November. If that be the case then it is clear that no deception arising from the issue of the cheque after the 22nd of November can have had anything to do with the decision of the complainant company to deliver the goods. On the Crown's own evidence the property in those goods had already passed to Wing Fat Compradore upon any date upon which the cheque (said to contain the false representation occasioning the transfer of the property in the goods) could have been received by the seller of the goods.

8. The same considerations exactly apply in respect of charges seven and eight. The Dodwell delivery boy, CHIU Hon-chung, gave evidence that the gin referred to in those charges was delivered by him on the dates laid in the charges, that is to say the 13th and 20th of November respectively. It was his evidence that a cheque in respect of each delivery was received from the company at the time of delivery. One of those cheques, the cheque for $2,427 (7th charge) was later presented and dishonoured and it was thereafter that the sales representative of Dodwell discussed the matter with the appellant and received a substitute cheque to cover both of the original cheques. It is clear that those two cheques cannot have been given on any date earlier than the 22nd of November and so the property in the goods had already passed prior to their being given. Once again the Crown has failed to prove that the company was deprived of the goods described in either of the charges by anything in the nature of false representations deriving from the issue of the cheques.

9. Different considerations arise in respect of the 9th charge in which it is averred that, contrary to the provisions of s.18(1) of the Theft Ordinance, the appellant, by giving the substitute cheque for $4,052 in exchange for the two cheques referred to in charges seven and eight, obtained a pecuniary advantage by deception, that is to say the deferment of the payment of that debt upon the false representation that it would be met upon presentation to the bank. The corner-stone of Mr. Chan's argument here is that it is "settled law" that the giving of a cheque is a conditional discharge of a debt. While, therefore, he says, the giving of a worthless cheque may amount to the evasion of a debt it cannot amount to the deferment of the debt since the debt is already discharged by the giving of the cheque, subject only to a condition that the debt will subsequently revive should the cheque be dishonoured. The argument raises questions of practical concern as well as of considerable theoretical interest. Mr. Chan would have it that the giving of a worthless cheque can never amount to deferment but only to evasion of a pre-existing debt and he appears to apply the principle equally to the case of a post-dated as to a present-dated cheque. It is a view to which we might have found it necessary to demur if it had been necessary to decide the matter on that point. It might be argued that the very giving of a post-dated cheque in payment for an existing debt must, in most cases, on its own, and if not otherwise explained, amount to sufficient proof of an agreement to defer payment. Counsel has relied on Reg. v. Locker⁽²⁾ and Reg. v. Fazackerly⁽³⁾ for the proposition that there must be an agreement by the creditor to defer. No doubt that is so. In the first of those cases, however, Widgery, L.J. (as he then was) appears to reject the defence argument that such an agreement can only be shown by evidence that the parties have "put their heads together; have reached a new and enforceable agreement whereby the terms of the original contract of loan have been altered ..." It is however unnecessary in the present case to pursue further either that question or the related question as to whether the notions of evasion and deferment may overlap each other in the context of s.16(c) of The English Theft Act (s.18(1) of the Theft Ordinance). The recent English decisions including those already referred to and also the House of Lords decision in Reg. v. Turner⁽⁴⁾ on which counsel also relies would seem to leave the latter problem unresolved. We think it preferable to leave undecided the question whether the cheque dated 30th of November given by the appellant to Mr. Lam resulted in his obtaining a deferment of his debt for in any event there is a different and unequivocal reason for coming to the conclusion that the 9th charge must go. The debt, or rather debts, to which the 9th charge refers were debts owed by the appellant to Messrs. Dodwell & Company. The evidence was that Mr. LEUNG Shui-yung, the office manager of the wines and spirits department of the company, instructed Mr. Lam to go to the Wing Fat Store and recover cash for the cheque which had been dishonoured i.e. one of the two cheques which in total make up the substitute cheque named in the 9th charge. He think Mr. Chan is right when he says there was no evidence to show that anybody with the authority of the company had given consent to accept the substitute cheque for $4,000 odd in lieu of cash. That being so it was not proved that the company, merely because its employee accepted the subsitute cheque, was agreeing to deferment of the payment of the debt. The scope of his agency remained unexplored. Crown counsel, in any event, conceded ultimately that the charge should properly have been laid as one of evasion and not of deferment. For these reasons the convictions upon charges four, seven, eight and nine must be quashed and the sentences thereon set aside. Counsel was content to leave the question of sentence in the hands of the court. Sentences of two and a half years were imposed upon each of these counts all sentences to run concurrently. In the light of all the circumstances disclosed by the evidence we do not think we would be justified in interfering with the sentences upon the charges which have been sustained notwithstanding that the appellant has succeeded upon the other charges. The appeal against sentence is dismissed.

Representation:

Jerome Chan(Yung, Yu, Yuen & Co.) for Appellant.

Gall, counsel for the Crown/Respondent.

(1) (1970) Cr. App. R. 432

(2) (1971) 2 Q.B. 321.

(3) (1973) Cr. App. R. 589.

(4) (1973) 52 Cr. App. R. 932.