HKSAR v. Gary Smith

HCMA 220/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 220 OF 2005

(ON APPEAL FROM KCCC 12224/2004 & KCS 6007/2004)

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BETWEEN

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Before: Deputy High Court Judge Barnes in Court

Date of Hearing: 14.9.2005

Date of Judgment: 6.10.2005

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J U D G M E N T

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1.The Appellant, Garry Smith, was convicted after trial of one count of “Using a Copy of a False Instrument” (False Instrument offence), contrary to section 74 of the Crimes Ordinance, Cap. 200; and an offence of “Using a Vehicle without Third Party Insurance” (TP Insurance offence), contrary to sections 4(1) and 4(2) of the Motor Vehicles Insurance (Third Party Risks) Ordinance, Cap. 272.

2.For the False Instrument offence the Appellant was sentenced to 10 months imprisonment; for the TP Insurance offence, he was fined $10,000 and disqualified from holding or obtaining a driving licence for 12 months for all classes.

3.The Appellant appeals against conviction of the False Instrument offence and the sentences imposed on both offences.

Prosecution case

4.The prosecution case, in a nutshell, was that the Appellant drove a vehicle on 28.12.2003 when the said car was not insured with Third Party insurance. When the Appellant was interviewed by the police on 8.1.2004 regarding a traffic incident on 28.12.2003 involving the said car, the Appellant produced a Cover Note showing that the said car was insured at the material time (i.e. 28.12.2003). It was the Prosecution case that the said Cover Note was a false document.

5.The Appellant’s case was that he was under the impression the said car was insured when he drove it on 28.12.2003. He based his belief on the basis that a Cover Note was faxed to him on 19.12.2003 after he made payment for the quoted premium. He did not give any instructions to cancel the ‘Cover’ and he knew nothing about the refund until he approached the broker again on 30.12.2003. The Cover Note he gave to the police was sent to him by the broker on 30.12.2003 and it was not a false document.

Evidence before the trial magistrate

6.Before dealing with the grounds of appeal, I will set out briefly the evidence before the learned magistrate.

7.It was admitted (under section 65C of the Criminal Procedure Ordinance, Cap. 221) that the Appellant was the driver of a private car with registration number KW4857 (“the said car”) at about 6:05 pm on 28.12.2003; that the Appellant gave a photocopy of a Motor Vehicle Cover Note for Third Party Risk Insurance (“Cover Note”) to PC 34455 and the officer made a copy (Exhibit P. 6); and that the vehicle licence of the said car had expired on 24.12.2003 and was not renewed until 30.12.2003.

8.The evidence disclosed that on 18.12.2003 the Appellant contacted Wong Kwok Fai (“PW4”), owner of Heng Fai Company, with a view to take out an insurance cover for the said car.  The Appellant accepted the quoted premium ($6,650). PW4 sent, by fax, a proposal form to the Appellant for the Appellant to fill in certain information.

9.When PW4 received the completed proposal form dated 19.12.2003 (Exhibit P.10) by fax of the same date, he noted that the said car was a 2-door coupe instead of a 4-door saloon car. PW4 then called the Appellant to inform him that the premium for a 2-door car was higher - the new figure for the premium being $9,900. The Appellant indicated the new figure was relatively expensive, saying he would like to think about it. PW4 at first said the Appellant indicated he (the Appellant) would try to look somewhere else but later agreed that the Appellant had asked him (PW4) to look for cheaper quotes. In any event, PW4 told the Appellant that he would “hold it”, meaning that he did not go through with the transaction.

10.PW4 himself dealt personally with the Appellant regarding the question of refund on the same day (i.e. 19.12.2003). PW4 said he needed to check whether the cheque for refund was to be deposited in the Appellant’s bank account or to be sent to the Appellant’s company. PW4 mentioned having received a fax from the Appellant (Exhibit P.13) containing information of the company address of the Appellant.

11.It should be noted that the note was purported to be from “Mr. Gary Smith” (the Appellant) to “Eddie” concerning ‘…return our payment for $6,650 ..”. the letter head was “compelite”. The date and time were “19.12.2003” at “12:12”.

12.Although a Ms. Shek worked for PW4 and dealt with paper work, PW4 said he was the one who mainly dealt with ‘foreigners’.

13.PW4 refunded $6,650 to the Appellant by means of a cheque made payable to the Appellant. The cheque was cleared on 23.12.2003.

14.On 28.12.2003 a traffic incident occurred at Ha Yeung Road involving the said car. The traffic police located the Appellant’s car, which was unattended at the time. The police left a note on the windscreen, asking the driver/owner to contact the traffic police.

15.Sometime towards the end of December 2003, the Appellant contacted PW4 and requested PW4 to issue a policy for him, saying that it was difficult to get an insurance policy outside and the prices were the same. The Appellant paid the premium of $9,900. Upon receiving the premium PW4 sent a Cover Note (Exhibit P.11) by fax to the Appellant on 30.12.2003, with the period covered from 30.12.2003.

16.After the said Cover Note was sent, the Appellant requested PW4 to have a Cover Note issued in the name of his company. Another Cover Note (Exhibit P.12) was later faxed to the Appellant, covering the period from 2.1.2004.

17.On 8.1.2004 the Appellant was interviewed by the traffic police. The Appellant admitted to be the driver of the said car on 28.12.2003. During the interview the police asked the Appellant to produce document to prove that the said car was covered by Third Party insurance. The Appellant produced a photocopy of a Cover Note dated 24.12.2003 to the police. The said Cover Note purported to come from Target Insurance Company Limited (“Target”), covering a period of 14 days with effect from 12 noon on 24.12.2003. The police made a photocopy of the said copy Cover Note (Exhibit P.6) and returned the copy to the Appellant.

18.It was the prosecution case that the first Cover Note ever issued in relation to the Appellant’s insurance of the said car was on 30.12.2003. PW4 testified no Cover Note was issued to the Appellant after the transaction fell through on 19.12.2003 and the paid premium was refunded.

19.PW5 (a clerk with Atlantic Ocean Underwriters Company) testified that her company was an agent of Target. She confirmed that she never issued any such Cover Note as Exhibit P.6.

20.PW6 (the manageress of Target) also testified that the only Cover Note in relation to the Appellant (in the Appellant’s personal name) was the one with the effective date on 30.12.2003.

21.The Defendant’s evidence was that he was a director of a company called Compelite. He bought the said car in December 2003 and contacted PW4 on the recommendation of the previous owner. He was sent a proposal form by PW4 and he made payment of the quoted premium. After payment he received a copy of Cover Note on or about 19.12.2003 with the effective date being 24.12.2003.

22.On 19.12.2003, he was informed by PW4 regarding the mix-up of the number of doors. He was not happy with the higher quotation. He did not instruct PW4 to cancel, but merely asked PW4 to look for cheaper alternatives. In the meantime he thought he had a valid insurance covering a “four-door Jaguar” (the said car was a two-door Jaguar). PW4 had never mentioned anything about refunding and he had never seen the faxed copy with his company name and address (Exhibit P.13) before. He had not asked anyone to send that document on his behalf.

23.The Appellant said after the conversation PW4 faxed him another proposal form (Exhibit P.10). He filled in the form and faxed back to PW4. As he was contemplating work to be done on the car to make it road worthy, he elected the effective date for the cover to be 24.12.2003.

24.On 30.12.2003 the Appellant contacted PW4 and was told the premium remained the same. It was when the Appellant told PW4 he would pay the difference that PW4 told him about the refund. The Appellant was not aware of the refund before then. The Appellant checked with his accountant Cindy (DW2) and learned that the amount was indeed credited into his personal account. He then made payment of the full amount of $9,900.

25.The Appellant said as soon as payment was made two Cover Notes arrived by fax, one after another. One of them was the copy from which Exhibit P.6 was made. He did not know why he should be sent two Cover Notes. He simply took both Cover Notes with him to the Transport Department to pay for the “road tax” (Vehicle Licence fees). There was a hiccup at the Transport Department as the car was registered in the name of the Appellant’s company whereas the Cover Note was in the Appellant’s own name. Nevertheless the Appellant was able to purchase the ‘road tax’ on that day.

26.The Appellant then informed PW4 the need to change the insurance to the name of his company and that was done. The Appellant said he received altogether 3 Cover Notes and he believed the Cover Notes had since been thrown away.

27.The Appellant’s accountant Cindy gave evidence for the defence. She confirmed that she received a bank refund in the sum of $6,650 by way of a personal cheque made payable to the Appellant. She deposited the cheque without telling the Appellant as the amount was not large.  She could not recall if she had informed the Appellant about the refund.

Grounds of Appeal against Conviction

28.Mr. James McGowan, counsel for the Appellant, advanced some 7 grounds of appeal. I do not think it necessary to reproduce all of them here. Suffice it to say the attack was mainly on the way the learned magistrate dealt or not dealt with the evidence before him.

29.The main crux of the complaint was that the prosecution failed to call Ms. Shek as a prosecution witness so there was a lacuna in the prosecution case. Mr. McGowan submitted that the prosecution has failed to prove that the relevant copy of Cover Note (from which Exhibit P6 was made) did not come from Ms. Shek. The chaotic way the insurance matter was dealt with by PW4 and the related Insurance Companies meant that there must be a reasonable doubt in favour of the Appellant.

30.Regarding the findings of facts by the learned magistrate, Mr. McGowan took me through various part of the transcript to demonstrate how PW4 shifted his stance under cross-examination. Mr. McGowan submitted that since such shifting affected the credibility of PW4, the learned magistrate erred in accepting PW4’s evidence and rejecting the evidence of the Appellant.

Respondent’s response

31.I would add here that Mr. Thomas LAW, Senior Assistant Director of Public Prosecution, has provided detailed written submission with regard to the evidence adduced and the learned magistrate’s findings. I do not think it necessary to reproduce them either.

Judgment

32.An appeal under section 113 of the Magistrates Ordinance, Cap. 227 is by way of rehearing on the evidence before the trial court supplemented by such further evidence as the intermediate appellate court may admit under its statutory power to do so: see CHOU SHIH BIN v HKSAR, FACC No. 11 of 2004.

33.The evidence before the learned magistrate showed that there was indeed every intention on the part of the Appellant to have the said car insured and that he has taken steps to do so - he filled in the proposal form and he made payment. However, the big however, was that something drastic happened on 19.12.2003.

34.PW4 told the Appellant the premium quoted was incorrect, the new premium needed to be much higher - $9,900. It was common ground that the Appellant was not happy with this news. It matters not, in my view, whether the Appellant asked PW4 to look for cheaper alternatives. It also matters not what PW4 meant when he said to the Appellant “hold it for the time being”. The main question was whether PW4 has told the Appellant the premium paid would be refunded and the Appellant was aware of that.

35.PW4’s evidence in this respect was in direct conflict with that of the Appellant. PW4 said he informed the Appellant about the refund. PW4, who dealt with foreigners, said he himself dealt personally with the Appellant (who is a ‘foreigner”) regarding the question of refund on the same day (i.e. 19.12.2003). PW4 produced a faxed document (Exhibit P.13) containing information of the company name and address of Compelite, the Appellant’s company.

36.On the face of it, this document was faxed from the Appellant’s company on 19.12.2003, the very date PW4 said he had informed the Appellant of the refund. The words “…return our payment for $6,650 ….” was in the body of the context.

37.PW4 explained that he needed to check whether the cheque was to be deposited in the Appellant’s bank account or to be sent to the Appellant’s company. The Appellant denied that PW4 had said anything about refund to him. He said he had never seen Exhibit P.13 before and had not instructed anyone to send it.

38.There was never any suggestion that PW4 fabricated such a document. At the time (i.e. 19.12.2003) no one (including both PW4 and the Appellant) would have expected that they have to attend court to give evidence regarding the insurance matter. Exhibit P13 was an excellent piece of contemporaneous evidence to support PW4’s version of the event.

39.Granted that the Insurance Companies involved might have got things mixed up, and that the left hand might not know what the right hand was doing, if the evidence clearly shows that the Appellant was aware on 19.12.2003 that his payment was to be refunded, it would certainly defy common sense to say that the Appellant somehow still believed that he had insurance cover. As a business man, even one not familiar with insurance, it is not reasonable nor possible for the Appellant to believe that an insurance company doing business would assume the risk to cover his car when the premium paid had been refunded.

40.On the evidence before the learned magistrate, he was fully entitled to reject the evidence of the Appellant and his accountant. The learned magistrate was fully entitled to accept the evidence of PW4.

41.On the basis that the Appellant was informed of the refund on 19.12.2003, even if he had indeed been issued a Cover Note as he claimed, he must have realised that that Cover Note would have no effect since PW4 was making arrangements for refund.

42.Furthermore, the date shown on Exhibit P.6 was 24.12.2003 (one day after the cheque for refund had been cleared). The effective date was also 24.12.2003. Even assuming for one moment that somehow the Insurance Company made such a terrible mistake as to issue a Cover Note after the refund was effected, and compounded such a mistake by faxing it to the Appellant on 30.12.2003 after the Appellant had just taken on an insurance with the premium at $9.900, as the Appellant was told earlier (on 19.12.2003) that the amount paid would be refunded, and the sum was indeed refunded and cleared on 23.12.2003, it was totally inconceivable that the Appellant could have believed, when he drove the said car on 28.12.2003, he had valid insurance cover on that day.

43.On the evidence before the learned magistrate, he was fully entitled to find as a fact that the Cover Note from which P.6 was made was a false document.

44.The Appellant used the false document knowing full well it was a false document, with the intention of inducing the police constable who interviewed him to accept it as a copy of a genuine copy of a Cover Note, and by reason of so accepting it to do or not to so some act to his own or any other person’s prejudice. All the elements of the offence have been proved beyond all reasonable doubt and the conviction was neither unsafe nor unsatisfactory. The appeal against conviction is therefore dismissed.

Appeal against sentence

45.Mr. McGowan advanced 4 grounds of appeal regarding the 10 months imprisonment imposed by the learned magistrate on the False Instrument offence.

46.Mr. McGowan submitted the learned magistrate erred in describing the said offence as being akin to an Attempt to Pervert the Course of Justice when the Appellant had not been charged with that offence, nor was such allegation part of the prosecution case.

47.Mr. McGowan also submitted that 10 months was manifestly excessive and/or wrong in principle given the Appellant’s antecedent and the circumstances of the offence. The learned magistrate failed to properly consider the favourable background report, the character references, and matters meriting the imposition of a penalty other than immediate imprisonment.

48.In respect of TP Insurance offence, Mr. McGowan’s argument mainly centred on the submission that Appellant has an ‘honest and reasonable belief’ that there was a valid Third Party insurance in place.

49.Mr. McGowan also submitted that the learned magistrate erred in imposing the maximum fine allowed under the law and failed to take into account the fact that the Appellant did take steps to seek insurance cover and did pay the premium on or about 19.12.2003.

Respondent’s Response

50.Regarding the False Instrument offence, Mr. Lam submitted that the circumstances of the case was serious and the learned magistrate was correct in saying that the Appellant did not act on the ‘spur of the moment’, and that it was a deliberate act on his part.

51.Mr. Law submitted that the learned magistrate was not sentencing the Appellant for the offence of “Perverting the Course of Justice”, but merely saying that in the circumstances the Appellant’s act tantamount to such perverting.

52.Regarding the 10 months imprisonment, however, Mr. Law compared the present case with some traffic cases involving perverting the course of justice (e.g. making false statement to the police in relation to the driver’s identity) and submitted that those cases suggest 6 months imprisonment to be appropriate. He conceded that in the present case, since the Appellant was not charged with perverting the course of justice, 10 months imprisonment appeared to be on the high side and a starting point of 6 months is appropriate here.

Judgment

53.Using a false instrument in the circumstances of this case does tantamount to perverting the course of justice as the Appellant tendered the false Cover Note to a police officer when asked to produce evidence of valid Third Party Insurance. Of course one must bear in mind that the Appellant was not charged with an offence of “Perverting the Course of Public Justice”.

54.When considering the appropriate sentence, the fact that the Appellant did try to get valid Third Party insurance and even paid the requisite premium cannot be totally ignored. This is not a case in which someone has never even attempted to get insurance cover. The deal went through without any fault on the part of the Appellant- save may be his initial reluctance to pay the much higher premium.

55.The Appellant has clearly taken a chance when he drove the said on 28.12.2003 when it was not insured. Realizing that he was under investigation by the police in relation to that driving he foolishly used the false Cover Note to mislead the police. Clearly this is a case in which an otherwise decent, hard-working and law-abiding person panicked and did something really stupid. What the Appellant did, however, could not be described as a  ‘spur of the moment’ offence. The Appellant needed to get hold of a false Cover Note to present to the police. There was a certain degree of planning involved.

56.I am of the view that the appropriate starting point for the ‘False Instrument” offence is one of 6 months.

57.The Appellant was found guilty after trial. He is not entitled to the usual discount given on plea. I do however take into account the personal background of the Appellant. Not only was he a man of previous clear record, he is also a man of positive good character: he was involved in charity work performed through the Association of Round Tables in Hong Kong. I think it proper to give him some further discount and the appropriate sentence is one of 5 months.

58.In view of the rather unusual circumstances of how the Appellant came to commit the present offence, the Appellant’s personal background, and the fact that he was in custody for 3 weeks pending sentence - thus having experienced the clanging of the prison gate, I am satisfied that this is a proper case to suspend the said sentence.

59.Regarding the TP Insurance offence, in view of my judgment on conviction, clearly the argument of “honest and reasonable belief” advanced by Mr. McGowan is not sustainable; that being the case, there is no ‘special reason’ not to impose the disqualification order.

60.Coming to the fine imposed, bearing in mind the fact that the Appellant did try to obtain insurance cover and the lack of insurance was for a comparatively short period, imposing the maximum fine permitted by law is not warranted here. The fine is manifestly excessive. I am of the view that a fine of $3,000 is appropriate.

Conclusion

61.The appeal against conviction is dismissed.

62.The appeals against sentence in respect of both offences are allowed. The sentence of 10 months imposed on the False Instrument offence is set aside; substituted by “5 months imprisonment, to be suspended for 18 months”. The fine of $10,000 imposed on the TP Insurance offence is set aside, substituted by “a fine of $3,000”. The disqualification order remains, that is to say, the Appellant is “disqualified from holding or obtaining a driving licence for 12 months for all classes”.

Mr. LAW Kwan Wai, Thomas, Senior Assistant Director of Public Prosecutions of the Department of Justice for the Respondent

Mr. James H.M. McGOWAN, instructed by M/s Vidler & Co. for the Appellant