HKSAR v. Chan Chun Yeung and Another

CACC 45/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 45 OF 2006

(ON APPEAL FROM DCCC NO. 487 OF 2005)

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BETWEEN

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Before:  Hon Stuart-Moore, Tang VPP and Stock JA

Date of Hearing: 2 November 2006

Date of Judgment: 2 November 2006

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J U D G M E N T

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Hon Tang VP (giving the judgment of the Court):

The 1^st Applicant

1.The 1^st applicant, who was D1 at trial, was charged with three offences of conspiracy to defraud, which were charges 4, 5 and 6 on the charge sheet.  The 6^th charge was an alterative to the 5^th charge.  The 1^st applicant was also charged with four offences of using a false instrument.  They were charges 7 to 10 on the charge sheet.

2.In the 4^th charge, the 1^st applicant was charged together with D4 and D5.  In the 5^th charge, he was charged together with D2 to D4.  In the 6^th to 10^th charges, the 1^st applicant was charged alone.

3.D4 pleaded guilty on the first day of trial to charges 1, 2, 4, 5 and 12.  After conviction, he gave evidence for the prosecution, he was PW32 at trial.

4.On 23 January 2006, the 1^st applicant was convicted after trial by Deputy District Court Judge McNair, on the 5^th charge of conspiracy to defraud.  He was acquitted of the 4^th charge upon the prosecuting counsel’s concession that there was insufficient evidence to convict.

5.No verdict was returned on the 6^th charge which was an alternative to the 5^th charge.  The judge dismissed this charge.

6.The Deputy District Court Judge also did not return a verdict on 7^th to 10^th charges because he considered them as substantive counts relating to the 5^th charge.  He dismissed those charges.

7.On 4 February 2006, the Deputy Judge sentenced the 1^st applicant to 44 months’ imprisonment.

8.The 1^st applicant now applies for leave to appeal against conviction as well as sentence.

Conviction

9.This is what he said in his grounds of appeal:

“I was completely ignorant of that matter.  The incident had taken place two years ago already.  From what I had heard from the police and the Court, of course, I would be very clear about the facts.  At the time, I was only working for somebody.  I only earned a daily wage of $250.  I didn’t have any other remuneration.  At the time, I had just finished studying and started to work.  I did not even know what cheques look like.  On top of that, I was only working for other people.  I did not dare to ask any question.  There were also a lot of other doubts.”

10.Particulars of offence in relation to the 5^th charge read as follows:

“Chan Chun-yeung, Lee Wai-chee, Wong Ka-chun and Kong Wai-lung, between the 9^th day of September, 2003 and the 29^th day of December, 2003, in Hong Kong, conspired together and with other persons unknown to defraud companies, firms, or persons, by dishonestly and falsely representing that, upon delivery, the purchase prices of the goods that were ordered and delivered would be paid and that the cheques and/or cashier order so tendered for payment were genuine; and thereby caused the said companies, firms or persons to part with the goods so ordered.”

11.There was evidence against the 1^st applicant from PW9, PW10, PW11 and PW 16.  PW10 was a student; PW9 was a staff from 101 Computer Company; PW11 was the proprietor of Sunrise Technology and Office Equipment (“Sunrise”); and PW16 was a staff of Sun Ki Lok Stationery Company.

12.The method used was the same in each case; someone would call expressing an interest to buy, in the case of PW10 a computer and, in relation to the others, four toner cartridges.

13.In the case of the student, PW10, at about 10 am on 24 September 2003, the 1^st applicant, appeared and gave him a forged Fortis bank cheque bearing the signature of PW32 (D4) drawn in the sum of $12,000.  PW10, however, would not give the 1^st applicant the computer until the cheque was cleared.  The cheque was dishonoured.

14.In the case of Sunrise, the 1^st applicant appeared at about 11:30 am on 24 September 2003, before PW11, and gave him a cheque in the sum of $1,780, pre-signed by PW32 (D4) in payment for four toner cartridges.  PW11 prepared an invoice on which the 1^st applicant, signed, using the name of “Shum Lok-chi”.

15.At about 2 pm on the same day, the 1^st applicant presented a forged cheque pre-signed by PW32 (D4) in the sum of $3,680 to PW9, a salesman of 101 Computer Company, in payment for four toner cartridges.  PW9 prepared an invoice on which the 1^st applicant signed “Chow Po-lam”. Needless to say, this cheque was also dishonoured.

16.At 9 am on 26 September 2003, the 1^st applicant together with another man gave a forged Fortis bank cheque, pre-signed by PW32 (D4) in the sum of $3,320 to PW16, the proprietor of Sun Ki Lok Stationery Company, for four toner cartridges.  PW16 copied the 1^st applicant’s Hong Kong Identity Card details.  After PW16 had deposited the cheque, a man telephoned PW16 and told him he would pay cash instead for the goods, and asked PW16 to return the cheque.  On the following day, after the cheque was dishonoured, a woman collected the cheque from PW16 and paid him $3,320.

17.The 1^st applicant did not testify at trial or call any evidence.  His case as put in cross-examination was that he was not part of a conspiracy, he was a mere courier with no knowledge of any false or forged instrument, and that he had a clear record.  But the evidence show quite clearly that the 1^st applicant had signed on an invoice prepared by PW11 with a false name “Shum Lok-chi” and that in relation to the invoice prepared by PW9, he used another false name “Chow Po-lam”.  On the occasion where he had to give his correct identity details to a seller of goods, that seller, PW16, was advised by an unknown man subsequently that cash would be paid for the goods in lieu of the cheque presented by the 1^st applicant.

18.Also on the evidence of PW32, as summarized by the prosecution, it is clear that there was a conspiracy to defraud as alleged.  Such evidence came from PW32, a self-confessed conspirator.  We quote from the summary:

“15.   In about January 2003, D3 told PW32 (D4) to set up Datasmart Marketing Company (Datasmart).  D3 paid PW32 (D4) HK$10,000 per month for establishing and working at Datasmart.

16.    On 7 July 2003, PW32 (D4) opened a current account at Liu Chong Hing Bank for Datasmart by a deposit of HK$500.  D3 asked PW32 (D4) to open the account. After PW32 (D4) was put on police bail after his arrest on 9 July 2003, D3 asked him to go to the mainland to stay in one of D3’s residences situated at Cheung Muk Tau.  PW32 (D4) did so and remained in mainland for 20 odd months.

17.    In August 2003, there was a discussion amongst D2, D3 and PW32 (D4) in the mainland.  During the discussion, PW32 (D4) authorised D2 to collect the cheque books of Datasmart for D3 to use.  As PW32 (D4) was in mainland, he would not be responsible if the cheques used were not honoured.

18.    Sometime after August 2003, D3 and D2 visited PW32 (D4) in the mainland.  D3 asked PW32 (D4) to insert particulars on the Liu Chong Hing bank cheques in the name of Datasmart.  D3 said the purpose of so doing was ‘to cheat someone with D2 and D3’.

19.    At a subsequent meeting between D2, D3 and PW32 (D4) at one of D3’s residences in the mainland, on an unknown date, both D2 and D3 mentioned the name Shum Lok-chi.

20.   D3 also had another residence in the mainland situated at Huang Gong.  On occasions in 2003, PW32 (D4) also stayed at that residence.

21.    Sometime during PW32’s (D4) stay at D3’s Huang Gong residence, he saw a quantity of blank cheques purportedly issued by the Fortis Bank.

22.    D3 told PW32 (D4) that they had drawn out too many Liu Chong Hing bank cheques in the name of Datasmart which could not be honoured.  They should refrain from using those Liu Chong Hing bank cheques in the name of Datasmart.

23.    D3 told D2 and PW32 (D4) that the Fortis bank cheques were to be used ‘to cheat someone’ by obtaining goods with them.  D3 signed one of those cheques as an example for PW32 who was then asked by D3 to do the same on the remaining Fortis bank cheques, including exhibits 122,130,135, and 139.

24.    All the forged Fortis bank cheques bore the same cheque number.

25.    On an unknown date at an unknown location in the mainland, discussions ensued between D2, D3 and PW32 (D4).  PW32 (D4) came to know that D2’s schoolmate named Shum Lok-chi, introduced the 1^st applicant to D2.  The 1^st applicant was to help D2 and D3 to present forged Fortis bank cheques in Hong Kong. They were to be used to buy goods.  D3 said the 1^st applicant was given HK$250 per day to present the cheques to buy goods.

26.    From those discussions PW32 (D4) came to know what each defendant would do in the agreement. ‘D1’s role in this agreement as one of helping us to do things, whilst D2 was to assist D3’.  D3 was the prime mover responsible for co-ordinating and arranging other people to do jobs and his own, D4’s, was to sign cheques’.

27.    On one occasion, D3 asked PW32 (D4) to meet him at a restaurant in mainland.  Thereat PW32 (D4) saw D2 alone.  The 1^st applicant then arrived.  D2 gave some cash and cheques to the 1^st applicant.  The 1^st applicant also gave a paper bag to D2.  Then the 1^st applicant left.  Soon after, D3 arrived.”

19.On such evidence, the Deputy Judge concluded:

“I find it proven that D1, 2, 3 and 4 did meet and discuss and plan to obtain goods using forged instruments.  D1 took the cheques to Hong Kong, picked up goods, paid for them with the said forged instruments.  There is only one inference that can be drawn from the exchange at the restaurant between D1 and D3 and the handing over of forged instruments to D1 for their common purpose and the reciprocal handing over of the ill-gotten goods to D2.

……

I find that there is only one inference that can be taken and that is that the defendants D1 (1^st applicant), 2 and 3 along with D4 (PW32) did conspire together during the dates alleged with others unknown to defraud the companies, firms or persons by dishonestly and falsely representing that upon delivery the purchase price of the goods ordered and delivered would be paid and the cheques or cashier’s orders so tendered for payment were genuine, thereby causing the said companies, firms, or persons to part with the goods so ordered.

……

Each of the transactions described were clearly a part of a larger plan agreed between these defendants.  There is no reasonable doubt capable of existence on this evidence …”

20.Apart from the evidence of D4 (PW32) which directly implicated the 1^st applicant and which is undoubtedly admissible, we are of the view that acts and declarations of the D2, D3 and D4 summarized above in furtherance of the common design are admissible against the 1^st applicant.  There was ample independent evidence outlined in paras. 13 to 15 above, which linked the 1^st applicant to the conspiracy charged.

21.We are satisfied that on such evidence, the 1^st applicant was correctly convicted.  We refuse leave to appeal against conviction.

22.We note that the judge had dismissed the 6^th charge, which was an alternative to the 5^th charge, as well as charges 7 to 10.  This makes no difference, as it happens, to the result of this appeal but, what the judge should have done was to have left these charges on the file.  In the event that some fault had been found with the conviction on charge 5, this court, by virtue of the dismissal of charges 6 to 10 inclusive, would have been unable to substitute convictions on the alternative charges had it wished to do so.  It is important, for this reason, that as a general rule alternative charges are left on the file following conviction on other charges.

Sentence

23.We turn to deal with sentence.

24.The 1^st applicant was not yet 17 years old in September 2003.  He was born on 5 October 1986.  He was sentenced to 44 months’ imprisonment, the judge adopting 48 months as the starting point.

25.He has a clear record.

26.In sentencing, the judge made it clear that he regarded D3, who has absconded, as the prime mover.  D2, a girl, whom the judge said was 19 at the time of the offence, and described as the youngest of the defendants, was initially sentenced by the judge to 44 months’ imprisonment suspended for 3 years.  When the judge was informed that under section 109B of Criminal Procedure Ordinance, Cap. 221, that was not permissible, the sentence was then changed to a term of imprisonment for 2 years, suspended for a period of 3 years.

27.Mr Turnbull, who appeared for the prosecution, has referred us to the case of Attorney General v Wong shu-kan [1994] 1 HKCLR 148, where on similar facts, a defendant was sentenced to 18 months on review of sentence.  The total amount involved in that case was about $685,000 and the defendant was 21 years old.  The fraud in question involved using dishonoured cheques to obtain goods.  The defendant was initially sentenced to 6 months’ imprisonment on the four charges, each to be served concurrently.  On review of sentence, he was sentenced to a total term of imprisonment of 18 months.

28.Here, the amounts involved are substantially less.  Yet, they involved not just cheques which subsequently were dishonoured on presentation, but forged cheques.  Having regard to the 1^st applicant’s youth and clear record, we believe that a sentence of 18 months would be appropriate.  We, therefore, grant leave to appeal against sentence and treating the hearing as the appeal, we allow the appeal and substitute a sentence of 18 months’ imprisonment.  The sentence of 44 months is quashed.

The 2^nd Applicant

29.The 2^nd applicant, who was D5 at trial.  He was convicted after trial of the charge of conspiracy to defraud and sentenced to 32 months’ imprisonment.  That was the 2^nd charge on the charge sheet.  The 2^nd applicant was acquitted of the 4^th charge.  In relation to the 2^nd charge, he was charged together with D3 and D4.  As for the 4^th charge, he was charged with D1 and D4.

30.The 2^nd applicant applies for leave to appeal against conviction and sentence.

31.Mr Turnbull has conceded that the prosecution has failed to prove the conspiratorial agreement, the subject of the 2^nd charge.  He concedes the 2^nd applicant was wrongly convicted.

32.Mr Turnbull, however, submitted that we should amend the charge.  Under section 79(1) and (4) of the District Court Ordinance, Cap. 336, read together with section 23(1) of the Criminal Procedure Ordinance, Cap. 221, the District Court has power to amend the charge.  This court, by virtue of section 13(4) of the High Court Ordinance, Cap. 4, has similar power.  Section 23(1) of the Criminal Procedure Ordinance, provides that the court:

“Where, before trial or at any stage of a trial, it appears to the court that the indictment is defective, … shall make such order for the amendment of the indictment as the court thinks necessary to meet the circumstances of the case unless, having regard to the merits of the case, the required amendments cannot be made without injustice.”

33.The leading authority is the case of HKSAR v Tang Hoi On Barry & Anor [2003] 3 HKC 123 where the judgment of the court was given by Stock JA.  In para. 40 of his judgment, he said:

“… [the same] protection [provided by] of section 27 of the Magistrates Ordinance, Cap 227 which requires the magistrate to provide leave, upon an amendment, to call or recall or further examine witnesses … should … govern amendments on appeals from other levels.”

34.So, if there was a possibility that the defence might have approached the task differently, the court will not permit an amendment without at the same time ordering a retrial.

35.It is necessary to consider in some detail both the original 2^nd charge and the proposed amended charge.

36.The original 2^nd charge reads as follows:

“2^nd Charge (against 3^rd to 5^th accused)

Statement of Offence

Conspiracy to defraud, contrary to Common Law and punishable under section 159C(6) of the Crimes Ordinance, Cap. 200.

Particulars of Offence

Wong Ka-chun, Kong Wai-lung and Wong Ho-fai, between the 14^th day of June, 2003 and the 10^th day of July 2003, in Hong Kong, conspired together to defraud Fuji Xerox (Hong Kong) Limited by dishonestly and falsely representing that, upon delivery, the purchase price of four photocopy machines and two fax machines (‘the goods’) that were ordered and delivered would be settled; and thereby causing the said Fuji Xerox (Hong Kong) Limited to part with the goods so ordered.”

37.The proposed amended 2^nd charge is:

“Amended 2^nd Charge (against 3^rd to 5^th accused)

Statement of Offence

Theft, contrary to section 9 of the Theft Ordinance, Cap. 210

Particulars of Offence

Wong Ka-chun, Kong Wai-lung and Wong Ho-fai, on the 20^th day of June 2003, at Flat B2, 4/f, Great Wall Factory Building, No. 11, Cheung Shun Street, Cheung Sha Wan, in Hong Kong, stole four photocopy machines and two fax machines belonging to the Fuji Xerox (Hong Kong) Limited.”

38.It is obvious that the two charges are substantially different.  The original charge required the prosecution to prove that the 2^nd applicant had agreed with the others named in the charge to dishonestly make a false representation that upon delivery, the purchase price of the four photocopy machines and two fax machines would be settled.  In the case of the proposed amended charge, the prosecution must prove a dishonest appropriation of property belonging to another with intent to permanently deprive the other of that property.

39.It is said that the amendment can be made without injustice, and more importantly, that:

“… if made during the original trial could not have changed the course of that trial because:

(i)      the amendment does not alter the evidence that would be called in order to prove a theft charge;

(ii)     the amendment would not affect the 2^nd applicant’s defence case which was:

‘It was D5’s case that his cautioned statement was a complete answer to the charge and should be given full weight.  He had explained he was an employee of Kwok in the matter of charge 2 and there was no direct evidence that he had conspired with other.  There is no evidence of dishonesty or deception on his part, nor any direct or indirect evidence of complicity.’”

40.Even proceeding on the basis that so far as the prosecution case is concerned, they would have relied on identical evidence, we are not persuaded that if the amendment had been made at trial, it would not have affected the course of the trial.

41.The 2^nd applicant did not give evidence at trial.

42.The decision whether or not to give evidence is very often a difficult one, and usually involves a careful assessment of the strength of the prosecution’s case.  Although, after the defendant had elected not to give evidence, a forensic point was made on his behalf that he saw no need to do so because his entire defence case could be found in his witness statement, it should not necessarily be taken, however, that if leave had been given at trial to amend, the applicant would not have reconsidered his position.

43.The prosecution’s case is relatively simple.  It involved the hiring of certain photocopy machines from Fuji Xerox under a fixed price rental agreement dated 18 June 2003 under which an initial payment of $16,000 was required upon signing of the agreement and then monthly rent of HK$4,000 for a total of 60 months.  The rental agreement was signed by the 2^nd applicant on behalf of a company called HK Link Network Data Analysis Centre.  However, the salesman, who was PW1, was persuaded to deliver the equipment even before the receipt of the initial payment and he was persuaded to do so by the 2^nd applicant because according to the 2^nd applicant, there was “a lot of photocopying to do” and “his boss will be back in Hong Kong on 23 [June 2003]”.

44.On 20 June 2003, the equipment was delivered to the company’s premises.  On the same day, PW1 spoke to the 2^nd applicant at the company’s premises and he was told by the 2^nd applicant that “his boss” would return on 23 June 2003 at which time he would give the cheque to PW1.

45.However, on the same day in the evening, PW32, and the 2^nd applicant, moved all the equipment to D3’s home at Kwu Tong, New Territories.

46.On 23 June 2003, PW1 went to the company’s premises to collect the payment.  He saw that the equipments were no longer there and the 2^nd applicant told him that they have been moved to the warehouse because the premises required renovation.  However, there was no sign of any renovation work.

47.PW1 asked the 2^nd applicant for the location for the warehouse, the 2^nd applicant told him that he did not know.

48.However, the 2^nd applicant told PW1 that his boss would return a little later and would pay.

49.On 9 July 2003, PW1 went to the company’s premises with a colleague from the company’s finance department, hoping to collect payment.  The 2^nd applicant told them that his boss had not returned to Hong Kong and payment could not be made and PW1 reported to the police that day.

50.On the same day, in the 2^nd interview with the police, the applicant told the police that he had been employed by a Mr Kwok at a salary of $5,000 per month, for less than two months.  There was no written contract.  He was paid cash.

51.He said he was responsible for supervising the 28 telemarketing salespersons, and that Mr. Kwok told him to order photocopy machines from Fuji Xerox (Hong Kong) Limited.

52.In the morning of 11 July 2003, the 2^nd applicant and PW32 provided the police with information concerning the whereabouts of the photocopy machines.  On the same morning, the 2^nd applicant led the police to D3’s house and the four photocopy machines and the two facsimile machines were found.

53.That was the essence of the prosecution’s case as summarized by Mr Turnbull.

54.Insofar as the photocopy machines were delivered to the company’s premises on 20 June 2003, and at least as late as 9 July 2003, the 2^nd applicant could still be found at the company’s premises (there was no evidence how long the company had been operating at those premises), and the photocopy machines had not been sold and could be found at D3’s home, we are not satisfied that on such evidence, a conviction on the amended charge which required proof of an intention to permanently deprive Fuji Xerox of the photocopy machines by the 2^nd applicant, is a forgone conclusion.

55.Leave to amend may be given even on appeal.  But, as we have said in Tang Hoi On Barry & Anor, if there was a possibility that the defence might have approached the task differently, the court will not permit an amendment without at the same time ordering a retrial.

56.However, the overriding consideration is that the amendment can be made without injustice.  Here, we are concerned with the substitution of a new and different charge.  As the commentary in Blackstone’s Criminal Practice 2006, D 10.37 shows “the timing of the amendment is a major factor in determining whether there will be injustice”.  It went on to refer to Reg v Johal [1973] QB 475, a decision of the English Court of Appeal, where Ashworth J, giving the judgment of the court, said at 480H:

“… In the headnote to the report of [Reg v Harden] in the Criminal Appeal Reports it is stated, 46 Cr.App.R. 90, 91:

‘An amendment of a count of an indictment may not be made after arraignment if the result is to substitute another offence for that originally charged;’

As a statement of principle, to be applied generally, this is in the judgment of this court too wide.  No doubt in many cases in which, after arraignment, an amendment is sought for the purpose of substituting another offence for that originally charged, or for the purpose of adding a further charge, injustice would be caused to the accused by granting the amendment.  But in some cases (of which the present case is an example) no such injustice would be caused and the amendment may properly be allowed.

Reference was also made to the decision in Reg. v. Hall [1968] 2 Q.B. 788 but there is no need to consider it in detail; it is an example of an amendment being properly allowed before arraignment when there was no injustice to the person accused.

In the judgment of this court there is no rule of law which precludes amendment of an indictment after arraignment, either by addition of a new count or otherwise.  The words in section 5 (1) of the Indictments Act 1915 ‘at any stage of the trial’ themselves suggest that there is no such rule; if the suggested rule had been intended as a limitation of the power to amend, it would have been a simple matter to include it in the subsection.

On the other hand this court shares the view expressed in some of the earlier cases that amendment of an indictment during the course of a trial is likely to prejudice an accused person.  The longer the interval between arraignment and amendment, the more likely is it that injustice will be caused, and in every case in which amendment is sought, this essential to consider with great care whether the accused person will be prejudiced thereby.”

57.Here, we are faced with an application for leave to amend on appeal.  On the facts of this case, we are not satisfied that “the amendment can be made without injustice”.  We would therefore not give leave to amend even though a retrial may be possible.  In considering whether “the required amendments cannot be made without injustice”, we are entitled to consider whether it is just to require the applicant to undergo a second trial on a different charge when the fault was entirely the prosecution’s.

58.We grant leave to appeal and allow the appeal.

Mr R G Turnbull, Ag. DDPP, and Mr Hayson Tse, SGC, of the Department of Justice, for the Respondent.

The 1^st applicant (D1), in person, present.

Mr Gary Plowman, SC, and Ms Ivy Y Y Chui, instructed by Messrs Oldham, Li & Nie, for the 2^nd applicant (D5).