The Queen v. Lee Man Lung

IN THE SUPREME COURT OF HONG KONG

(Appellate Jurisdiction)

Magistracy Criminal Appeal no. 208 of 1987

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BETWEEN

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Coram : Hon. Garcia, J. in Court

Date of Hearing : 7^th April 1987

Date of delivery of judgment : 7^th April 1987

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J U D G M E N T

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1. The Appellant faced two charges of theft, one for stealing 12 cartons of stationery kits between 7:00 p.m. on 16th November 1986 and 8:30 a.m. on 17th November 1986, and the other for stealing 21 cartons of stationery kits between 7:00 p.m. on 26th November 1986 and 8:30 a.m. on the morning of 27th November 1986, the property in these two charges belonging to the Tak See Industrial Manufacturing Company Limited. He pleaded not guilty to the charges but after trial was convicted by the magistrate at Tsuen Wan of two offences of handling stolen goods and sentenced to 9 months' imprisonment on each of the offences to be served concurrently but suspended for a period of 18 months. He was also ordered to pay $5,000 costs. He now appeals against both convictions.

2. The Tak See Industrial Manufacturing Company Limited is owned by Madam Chu Siu Chun. The goods mentioned in the charges were manufactured by the company following an order placed by the Kwong Chat Company of which Mr Chu Kwong Por was the officer in charge. Mr Chu was also the brother of Madam Chu. The stationery kits were designed by the Kwong Chat Company and the labels which were to be attached to the kits were also designed by them. Delivery of the finished products was to be made in mid-November and the company designated by the Kwong Chat Company to transport these goods was the Po Yuen Transportation Company. The normal procedure adopted for the delivery of the finished products was that the customer would issue a delivery note to the Tak See Company for collection of the goods. The transportation company would then acknowledge receipt of the goods through the person in charge of the delivery vehicle and the registration number of the vehicle conveying the goods would also be noted down by the foreman of the factory. Upon delivery of the goods to the customer the delivery note would then be sent to the customer with an invoice for payment. The foreman of the production section of the factory was a Wong Chi Keung and among his duties in the factory, was to note down the registration number of vehicles making deliveries. He was also one of the 6 or 7 employees of the factory who had a key to the factory premises. The appellant was known to Madam Chu, as 7 to 8 years previously, he was employed by Chi Po Company one of Madam Chu's business associates and at the time of the alleged offences, the Appellant was employed by the Kwong Chat Company. Whilst working in Kwong Chat Company, the Appellant came to know Wong Chi Keung.

3. At about 7:00 a.m. on the morning of 17th November 1986, Mr Ho Han Sum, a driver employed by the Fei Chit Company was approached by the Appellant to deliver some goods to Kwun Tong. He then went to a spot opposite the Texaco Industrial Building in Tsuen Wan where the Tak See company was located on the 11^th floor and at that spot, both he and the Appellant loaded some cartons of goods into his vehicle, and together with the Appellant drove the vehicle to Hiu Ming Court on the latter's instructions and there the goods were unloaded by the Appellant. On 27th November, the Appellant approached Mr Ho once again and he was instructed to follow the Appellant to the l0th floor of the Texaco Industrial Building where with a handcart belonging to him, a total of about 20 cartons of goods which were stacked in the corridor were removed for loading into his vehicle. Mr Ho was then asked to drive his vehicle together with the Appellant and the goods to Hiu Ming Court. On arrival at the destination, the Appellant using the handcart took the goods into Hiu Ming Court and returned about 15 minutes later handing the handcart back to Ho and in addition gave him a sum of $100 at the same time he asked Hr Ho to take him to the Prince Edward MTR, station.  Mr Ho says that when he went up to the 10th floor of the Texaco Industrial Building an the morning of 27th November, he saw no one there as the factories had not yet opened but near the main entrance to the building was a caretaker who saw the goads being taken from the building and loaded, onto his vehicle and the caretaker had even noted down the registration number of his vehicle.

4. The Appellant was arrested on 29th November 1986 and after his arrest took the police to the premises at Hiu Ming Court in Sau Mau Ping, which premises belong to his brother, and there all the cartons of stationery kits referred to in the charges were found.  When questioned about these goods he replied that he had bought them from Mr Wong and had kept them in the said premises.

5. In his defence, the Appellant stated that at the relevant period he was employed by the Kwong Chat Company but he had at the same time set up a company of his own - the Good Dealer Trading Company - and that he had received an order for all the goods in question from an Italian buyer who was in Hong Kong when such order was placed with him. He had no separate office premises of his own but used his friend's office in Hart Avenue, Kowloon. His friend was a shareholder of the Agency International Ltd. He says that his own company had no bank account but was able to utilise his friend's company's bank account with the Hang Seng Bank for the purpose of receiving payments from his customer. As to why he had bought the goods from Wong Chi Keung instead of directly from the Tak See Co., he explains that he did not dare to do so because if his employer knew about his having established a company of his own, he would be dismissed. Up to the date when the goods were delivered to Hiu Ming Court, he had not yet paid Mr Wong but he stated that he would do so upon an account being opened by his company with the Hang Seng Bank and this could not be done because he had not yet received a certified copy of the Business Registration Certificate relating to his company, such registration having been completed only on 18th November 1986. As the goods were destined for export overseas, he had to obtain a certificate of origin from the Tak See Company and the required application form was provided for him by Wong Chi Keung. This application form was submitted and it bore the signature of Madam Chu and the chop of the Tak See Company. This certificate of origin was for 12 cartons of stationery kits only. The Appellant also stated that he had received a letter of credit from his customer to pay for the goods and when asked whether he was given any document by his customer, his reply was that there was no document but he had a proforma invoice for him. The proforma invoice was produced by the Appellant as an exhibit and it is written on a form on which is printed at the head, the name "Agency International Limited" and dated 20th October 1986 and it shows as follows:-

"INVOICE

This invoice was signed on behalf of the Agency International Ltd. Together with the chop of that company. This invoice was given little. attention by the magistrate. I do not know how he would have dealt with this invoice, but clearly, it shows that the goods had either been transferred to the Agency International Ltd. for, export overseas or had been sold by the appellant to that company. I think the date on the invoice pre-dates firstly, the delivery of the goods to Hiu Ming Court and also pre-dates registration of the company which the Appellant said he had established.

6. In summary, the Appellant's defence is that he had bought the goods from Wong Chi Keung and when asked whether he was suspicious that Wong sold him the goods without Madam Chu's knowledge replied: "I was not suspicious, he was not collecting money. He gave me a certificate of origin bearing the company's chop. I had mentioned to Madam Chu that I was going to operate my own company, I told Mr Wong to inform Madam Chu and told her that we needed such lots of goods. The procedure could change if I informed. through Madam Chu if she doesn’t agree such transaction matter dropped. I had reason to believe he would do that". The Appellant also said that he took delivery of the goods at 7:00 a.m. on both occasions because he had to work between 9:00 a.m. and 5:00 p.m. each day.

7. In the preface to his statement of findings, the magistrate stated that the prosecution case fortunately was not in substantial dispute and after summarising the evidence led on behalf of the prosecution and the appellant stated: "The court had considered the evidence and Mr Iu's submission carefully. The court was not impressed by the evidence of the defendant at all. The court had no hesitation whatsoever in rejecting his suggestion that he had obtained the goods in question under a genuine business transaction and that he was acting honestly. There was not even one signal (sic) document to show there was such a transaction. He knew Wong Chi Keung was just an employee why should he purchase from Mr Wong without the owner of goods, PW2 knowing about it? Why should he pay Mr Wong? Would he got fear Mr Wong would pocket the money himself. If he was not going to pay Mr Wong but pay to the victim company, how could be avoid the matter being brought to the attention of both Madam Chu and his boss Mr Chu, that very thing that he wanted to avoid in order to maintain his job with Mr Chu? If it was a genuine business transaction, why should the goods be put outside the factory premises at 7:00 a.m. on the first occasion and on the second occasion the goods were put on floor which should be one floor down without even Mr Wong's presence. There were so many question marks to the Defendant's story which made his evidence totally unacceptable to the court. The court having considered the evidence carefully, was satisfied beyond reasonable doubt that the 12 cartons of stationery boxes and 21 cartons of stationery purses were in fact stolen from the victim company. On the other hand the court on the evidence could not be sure that the defendant actually took part in the theft of such goods as even on the prosecution's case, the goods were actually put outside the victim company's premises when the defendant received them on 27th November 1986. On the evidence it was opened to the suggestion that the defendant only received them after they had been stolen from the victim company. The court therefore acquitted the defendant on the original theft charges. But on the evidence before the court, the court was satisfied beyond all reasonable doubt that when the defendant received and/or retained the cartons of stationery kits in question, he knew or believed that they were in fact stolen goods. The court was also satisfied on the totality of the evidence when the defendant was receiving the goods and/or retaining them in Hiu Ming Court, he was acting dishonestly." No answers to the questions which were propounded by the magistrate were made and there is no indication in the statement of findings of the magistrate that he had considered those matters which were essential to a finding that the Appellant had handled stolen goods.

8. The first ground of appeal was that the magistrate having found at the end of the prosecution case that there was insufficinet evidence on the theft charges failed to acquit the Appellant on those charges; secondly, if he was satisfied at that stage that there was evidence sufficient to answer the charges of handling stolen goods to so inform the appellant and thirdly, to amend the charges and otherwise comply with the provisions of section 27 of the Magistrates Ordinance. In arguing this ground, Mr Sceats says that the words used by the magistrate in his statement of findings: "as even on the prosecution's case, the goods were actually put outside the victim company's premises when the defendant received them on 27th November 1986. On the evidence it was opened to the suggestion that the defendant only, received them after they had been stolen from the victim company" indicated that at the end of the case for the prosecution, the magistrate had already come to the conclusion that the Appellant was not the actual thief and that at that point he should have invoked the provisions of Section 27 of the Magistrates Ordinance and amended the charges to those of handling stolen goods and specified in the amended charges, the manner in which the Appellant had committed the alleged offence, since according to Mr Sceats, the offence may be committed in 18 different ways. As I noted earlier, the magistrate prefaced his statement of findings with the sentence, "the prosecution case fortunately was not in substantial dispute", and whilst it might have been desirable for him at that stage to have considered amending the charges of theft to those of handling stolen property, nevertheless it was not necessary for him to do so since there was statutory authority for him to find the appellant guilty of the lesser offence if he was not satisfied that the evidence supported the charges of theft, and his failure to do so, that is to amend at that stage, that is, at the end of the prosecution case, does not necessarily vitiate the convictions this ground alone.

9. The magistrate was entitled to proceed as he did at the end of the trial to convict the Appellant, once he had found sufficient evidence to do so of the alternative offences set out in the Schedule to the Theft Ordinance without resorting to Section 27 of the Magistrates Ordinance. I derive support for this proposition by what was said by McMullin, J.A. (as he then was) in Reg. v. Kwok Hung, the passage reads "I think, Mr Aiken is right to maintain that Section 27 of the Magistrates Ordinance is intended to deal with the quite different situation which arises when in the course of a trial, some formal defect in an information, summons or complaint is detected or some turn in the evidence shows a substantial variation from the particulars charged which if not attended to, might result in the dismissal of the case notwithstanding that it disclosed an offence of the kind charged. In these circumstances, it is just and the law so provides that the magistrates should see to it that a justified complaint should not fail by careless omission or technical default. The Section is directed to the amendment of the charge and consequential requirement designed to safeguard the prisoner's rights. It is to be noted that sub-section (1) of Section 27 directs the magistrate - subject to proof of the charge as amended - to convict the defendant of the offence with which he was charged (my emphasis) not, that is to say of some other offence which had not been charged."

10. It was submitted on the second ground that the magistrate had failed to remind himself of the correct burden of proof and that in fact he convicted the Appellant because he rejected the Appellant's evidence rather than on the basis that on the totality of the evidence, the prosecution had proved the offences beyond reasonable doubt. While the magistrate did not expressly say so, nevertheless he had considered the evidence adduced on behalf of the prosecution as not being in substantial dispute and I think he was entitled at that stage to consider whether he could accept the appellant's explanation for his being in possession of the goods, which he found to have been stolen, was or was not true. Ha did so and he came to the conclusion that he could not believe the Appellant's explanation. I do not find in the magistrate's statement of findings that he convicted the appellant because of his lies nor do I find the argument that he misdirected himself on the burden of proof in anyway convincing since he had reached his verdict after considering all the evidence adduced in the case.

11. The 3rd ground states that the magistrate erred in law in finding that- the defendant either knew or believed the goods was stolen whereas he should have made a specific finding of knowledge or belief and .given reasons for such finding.

12. I think that this criticism is valid - the magistrate made no findings as to how he came to the conclusion that the appellant knew or believed that the goods in his possession were stolen goods. The test of knowledge or belief of the handler that the goods had been stolen is a crucial and decisive element in the offence, and is a subjective one. The magistrate does not say what inferences he drew from the evidence, and from what evidence, although there was ample opportunity for him to do so, nor does he say whether he had drawn such inferences, and whether such inferences if drawn were the only reasonable ones which could have been drawn in the circumstances as revealed by the evidence. It was for example, open to him to draw an inference of guilt from his non-acceptance of the explanation advanced by the Appellant of his recent possession of goods found by the magistrate to have been stolen, but no reference is made in any part of the statement of findings that he did consider this when finding that the Appellant knew or believed that on receiving and/or retaining the goods, they were stolen.

13. It was submitted for the Crown that he would have drawn this inference but since this matter is absolutely crucial to the case in question as to the guilt or innocence of the Appellant, I cannot make such an assumption. What evidence did he refer to when he made that finding and was that the only reasonable inference he could have drawn from whatever facts he found in this evidence? There is no indication of these in the statement of findings and in all the circumstances, I feel that the conviction is unsafe and unsatisfactory and on this ground, the appeal must be allowed. The convictions are quashed and the sentences set aside and the costs are to be returned to the Appellant. I have already considered the matter and I de not think a re-trial is fair to the Appellant.

Miss I. Cheung for Crown

Mr Barry Sceats (K.M. Lai & Co.) for Appellant