George William Huntley v. The Queen

CACC000572/1967

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

CRIMINAL APPEAL NO.572 OF 1967

(On appeal from Central Magistracy Case No.42 of 1967)

-----------------

Coram: Hogan, C.J., Rigby, S.P.J., Blair-Kerr, J.

Date of Judgment: 5 March 1968

-----------------

JUDGMENT

-----------------

1. This is a complicated and difficult case but we have had the benefit of very competent advocacy on both sides advocacy which has been marked by the vigour and thoroughness with which Mr. Ming Huang has argued the matter on behalf of his client. The following is the judgment of the majority of the court.

2. The appellant, an employee of the Hongkong & Shanghai Banking Corporation and at all material times employed as a supervisor in the Savings Bank Department, was convicted upon three out of seven charges preferred against him involving fraudulent acts of some magnitude. The first two charges upon which he was convicted averred that on the 22nd and 26th of March 1966, respectively, he, with intent to defraud, obtained $75,000 and $70,000 from the Hongkong & Shanghai Banking Corporation to the debit of Savings Account No.51588, by falsely pretending that such savings account was a genuine account; the third count upon which he was convicted averred that he, on the 19th May 1966, being a clerk or servant in the Bank, with intent to defraud, made a false entry in the ledger card of Savings Account No.51588, belonging to the Hongkong & Shanghai Bank, against his employer, purporting to show that on the 19th of May 1966 the sum of $14,000 had been withdrawn from the said account.

3. It was the case for the prosecution that Savings Account No.51588 was a fictitious account established in the name of a man YAM Bo-wah. YAM Bo-wah was in fact very much in existence; he was called as a witness for the prosecution. He gave evidence, however, that he had never himself opened this account; that he had never paid any money into it, and had never drawn any money from it. It is said that the account was fictitious in the sense that a former existing Account No.51588 which had been closed by a former client, had been ...(illegible) and had been put in funds by the ingenious but apparently relatively simple process of milking other existing accounts by debiting those accounts, according their ledger card records as retained by the Bank, with fictitious withdrawals on specified dates and crediting the equivalent amount of those withdrawals to the bogus account. It was the case for the prosecution that a fellow-supervisor named Da Luz was the prime mover in this ingenious but apparently simple fraud and that the appellant aided and abetted him with knowledge of the fraud.

4. For the purpose of appreciating the evidence upon which the prosecution relied, it is necessary to refer in some detail to the procedure relating to savings bank accounts and to the function and duties of the supervisors in that department. When a prospective customer wishes to open a savings account with the Hongkong & Shanghai Bank, to which we will hereafter refer as "the Bank", he goes to the Bank. There he is given a blank ledger card for his signature. This is then completed by the Bank with that person's name, and a number is allotted to the account and typed on the ledger card. The Bank also keeps a book entitled "The Register of Opened and Closed Accounts" and when an account is opened or closed this fact is recorded in that register. The ledger card and Register of Opened and Closed Accounts are part of the Bank's books, but the account holder is given a pass-book bearing the same number. When further deposits are made by the customer he is required, first, to produce his pass-book, and, secondly, to make out a credit slip showing the amount he is depositing. The pass-book and the credit slip are handed over the counter and these two documents, together with the customer's ledger card - which is, of course, already with, and permanently retained in, the custody of the Bank - are clipped or placed together in an accounting machine which records the amount of the transaction on both the pass-book and the ledger card. This machine also contains a long roll of paper, known as the Audit Roll, which records on the roll the amount of the transaction - being a debit or credit transaction - at the same time as the transaction is recorded in both the customer's ledger card and his pass-book. This work is done by machinists, who are employees of the Bank. The pass-book, ledger card and credit slip are then passed to a supervisor for checking. It is the duty of the supervisor to check the signature on the credit slip to see that it corresponds with the signature on the pass-book and on the ledger card and also to see that the final credit figure shown in the customer's pass-book corresponds with that shown on the ledger card. He verifies the fact that he has complied with these duties by initialling the ledger card and also initialling the deposit slip in a special "box" on the slip itself marked "Posted". The pass-book is then returned to the customer. The same procedure is followed in the case of withdrawals, although obviously a higher degree of care and responsibility must rest upon the supervisor to ensure that the signature on the withdrawal slip corresponds with that in both the pass-book and the ledger card and the account is in funds, both as shown in the pass-book and on the ledger card, to enable such a withdrawal. Furthermore, in the case of withdrawal slips the supervisor puts his name and not simply his initials in the box marked "Posted".

5. The daily auditing system was of a three-fold nature. First, all credit and withdrawal slips of the day or previous day are collected and totalled in what is called "The Control Journal". Secondly, at the same time and as a separate procedure, the record of withdrawals and deposits printed on the Audit Roll are totalled. Thirdly, the day's alterations made on the individual ledger cards - whether they were debit or credit alterations - are totalled. Although such balance would indicate any discrepancy in the day's total figures, whether plus or minus, they would not, of course, show the individual position of each Ledger Card Account, nor would they show any transfer of credit from one savings account to another where such transfer is effected simply by a book entry. However, periodical Sectional Balances were carried out. The method adopted for this purpose was to divide the ledger cards into batches of one thousand in strict numerical order. The credit balance of each account was then checked against the total amount of the deposits less the amount of the withdrawals shown in the Control Journal. The result would show the aggregate position of the savings accounts as revealed on the ledger cards, in the light of any deposits or withdrawals, at the end of the relevant period.

6. A further factor of significance was that if the entries on the Audit Roll and the Control Journal and on the ledger cards taken into account did not balance at the and of each day's work, attention would necessarily and inevitably, if everybody did their duty, be called to the error and steps taken to trace its origin.

7. According to the ledger card, Account No.51588 was opened with a cash deposit of $350,000 on the 16th March 1966 in the name of YAM Bo-wah. Evidence was adduced, in the form of the production of the Register of Opened and Closed Accounts, that the original Account No.51588 in the name of a totally different person had been closed on the 15th March, and there was nothing to show that it has ever been reopened. Of further significance was the fact that the records of the Bank contain no supporting deposit slip for any such payment on that day, and the Audit Roll for that day was missing. The ledger card shows that the next deposit was made on the 12th April with a further payment of ...(illegible) Here again no supporting deposit slip was available for production from the Bank's records, nor was there any record of any such payment on the Audit Roll for that day. A further factor of vital signif cance was that in respect of both the initial and later deposits the Audit Roll and the Control Journal balanced at the end of the day's work. If genuine deposits had been made the day's work could not have balanced and the total of balances reflected by the three-fold check of the Audit Roll, Control Journal, and daily alterations of the individual ledger card accounts would not have tallied. The inference would seem irresistible that the newly constituted Account No.51588 was made up of credit transfers from some other existing savings account ledger card or cards. The case for the prosecution was that that account was constituted from credit transfers made from two genuine existing accounts No.51800 and 51998, belonging respectively to a Mr. Tang and a Mrs. Lee. During March and April, Mr. Tang had $198,614.75 in his card. In March Mrs. Lee had $216,333.65 in her account, but on the 1st April she withdrew $25,000 leaving a balance of $191,333.65. On the 12th April the combined total in the two accounts of Mr. Tang and Mrs. Lee was $389,948.40; that was the exact figure of the total of $350,000 and $39,948.40 purportedly debited into Account No.51588 by the initial deposit made on the 16th March and the further deposit on the 12th April. Furthermore, the 2 ledger cards for Accounts Nos.51500 and 51998 were found to be missing from the Bank's records. Finally, by reference to the entries on the monthly balance for this section which was held on 12th April, the balances for these two accounts had completely disappeared whereas the balance for Account No.51588 was included. In the absence of any other explanation the inference would appear to be irresistible that the fictitious Account No.51588 was in fact made up of the transfers from Accounts No.51800 and No.51998. Furthermore, as the learned judge pointed out in his judgment, "It is because the balances were transferred within the same section, that (a) the day's work was balanced on 16th March and 12th April and (b) the sectional balance was achieved on 12th April". Both Mr. Tang and Mrs. Lee gave evidence that they did not authorise these transfers from their accounts. There was, undoubtedly, evidence to show that this fictitious account had been constituted for the purpose of enabling a series of frauds to be carried out against the Bank. Subsequent to the 12th of April Mrs. Lee did in fact make four withdrawals from her savings bank account, to wit, on the 25th April, 5th May, 18th May and 7th June, for sums of $17,000, $15,000, $14,000 and $14,000 respectively. These instalments were recorded in her pass-book - which, of course, would remain in her possession - and on the relevant Audit Rolls for those days. They were not found in her ledger card because that ledger card was missing. But effect had to be given to these withdrawals and if they were recorded on the Audit Rolls they would have to be shown and debited against some existing ledger card. By circumstances which must surely go beyond mere coincidence the corresponding amounts for these withdrawals - $17,000, $15,000, $14,000 and $14,000 - are shown in Account No.51588. The first two withdrawals bear corresponding dates, i.e. the 25th April and the 5th May; the third withdrawal was posted (or reposted) one day later, the 17th May. But the fourth withdrawal was not posted contemporaneously and appears to have been overlooked. Accordingly when the next monthly sectional balance was conducted on the 25th June, the total of the balance on the ledger cards did not agree with the total withdrawals, and was $14,000 too high. In order to achieve a balance there had to be an adjustment, and this was effected by an endorsement on the monthly balance, in the hand-writing of the accused, "Off $14,000 - 51588". In addition, a withdrawal entry of $14,000 was made in the ledger card for 51588 and was back-dated to the 19th May. This was initialled by the accused and was the subject of Charge No.10, the charge of fraudulent false accounting, which was the third of the charges upon which the accused was convicted.

8. At all material times there were two supervisors in the Savings Account Department, the appellant and a man named Da Luz, who was both older and senior to the appellant. The head of their particular department was a Mr. Ribeiro and both supervisors were responsible to him. To complete the background of the case leading to the circumstances in which these charges were preferred it is convenient to refer to and to quote, the following passage in the judgment of the learned judge:-

9. It is of vital importance in this case to consider the evidence of YAM Bo-wah, the man in whose name Account No.51588 was undeniably opened. The judge found him to be a man of sixty, with a flourishing printing business of his own and obviously a very rich man. He was apparently an intimate friend of Da Luz and frequently in his company at the races in Hong Kong, and the dog races in Macao. He was also fairly well acquainted with the appellan to the extent that he had entrusted him with the management of his current and savings account at the Bank and with the purchase of stocks and shares for hi Furthermore, there was a joint account in the Savings Bank operated in the name of "YAM Bo-wah and/or Carlos Da Luz and/or George Huntley" (i.e. the appellant), which account was opened in 1961 and remained open throughout the relevant period until August 1966. It is clear, therefore, that there was a close connection between YAM Bo-wah, Da Luz and the appellant. YAM Bo-wah gave evidence that the appellant had asked him to open a savings account for him as he had some money which he did not want the European staff to know about. He further said that the appellant asked him to sign a blank ledger card and from time to time gave him blank withdrawal slips which he asked him to sign. He identified the ledger card for Account No.51588 as the card he was asked by the appellant to sign and he also identified five withdrawal slips relating to that account - which were the subject matter of the five charges against the appellant and upon two of which he was convicted (Counts 1 and 4) - as being the kind of slips the appellant had from time to time aske him to sign in blank. He said, however, that he himself never received any sums of money in relation to these five withdrawal slips nor, indeed, in respect of any sums in this account. Such evidence, in so far as it sought to identify the appellant ith the initial opening and manipulation of Account 51588 was, of course, strongly adverse to the accused. But the learned judge said that he found YAM Bo-wah to be an unsatisfactory witness and that he was not prepared to tell the truth about Da Luz. The judge said that he could not possibly believe hat the witness said unless there was the strongest corroboration. But what was, and is, of importance to the appellant was that the learned judge accepted the submission and suggestion of the defence that probably the ledger card which YAM Bo-wah said had been produced to him for his signature, related not to Account No.51588 but to the earlier joint account opened in the name of all three persons in 1961. Furthermore, the learned judge not only rejected the contention of the prosecution that Account No.51588 had been opened by the appellant but expressly found that it had been opened by Da Luz, and the judge went on to say, in express terms, that "...(illegible) from YAM Bo-wah's evidence there is nothing to connect the accuse with these opening deposits and there is no evidence to show that he helped or procured Da Luz to open the account and make these fictitious deposits".

10. What, then, was the case against the appellant on the two charges of obtaining money by false pretences (Charges 1 and 4) and the third charge of fraudulent false accounting (Charge 10), and upon what evidence was it based? The two charges of obtaining money by false pretences are in respect of $75,000 and $70,000 undoubtedly paid out to someone on the 22nd and 26th March respectively on the strength of the withdrawal slips undoubtedly signed by YAM Bo-wah. YAM Bo-wah said that he himself did not receive these moneys nor does he know who did. However, evidence was given, which the learned judge accepted, that YAM Bo-wah came to see Da Luz at the Bank almost every day at lunch time, that he signed many blank withdrawal slips for Da Luz, which Da Luz himself filled in, and that YAM Bo-wah did occasionally receive large amounts of money at Da Luz's table. It seems to this court that the only reasonable inference from these accepted findings of fact was that YAM Bo-wah, if not a conscious and a willing party to the continued fraud that was being perpetrated against the Bank, must at least have been aware that something irregular was going on and was prepared to shut his eyes to that fact and to ask no questions.

11. Evidence was given by prosecution witnesses that the normal - and, indeed, the prescribed - bank practice was that the same supervisor should sign the withdrawal slip and initial the ledger card at the same time. There was evidence given by a defence witness, a clerk named Rego also employed in the Savings Bank Department, that Da Luz himself handled the ledger card of YAM Bo-wah and that during rush periods it was not unusual for one supervisor to deal with a customer's withdrawal or credit slip when produced, and for another supervisor to initial the corresponding ledger card entry. It is true to say, however, that the learned judge found Rego was an unreliable witness and rejected his evidence on these two matters - although he accepted it on other aspects of the case. We would, however, interpose the comment here that the evidence established that Da Luz had initialled practically every entry on the ledger card. Further, the learned judge accepted the defence contention that it was Da Luz who manipulated the account and that his object in so doing was to make fraudulent withdrawals from it.

12. In regard to both of these withdrawal slips the evidence was that the slips were signed by the appellant whereas the corresponding entries on the ledger card had been initialled by Da Luz. That the withdrawals were fraudulent there was no doubt. In considering this aspect of this matter the learned judge stated "In addition the two slips purport to have been posted by the sccused, whereas the entries on the ledger card were in fact initialled by Da Luz and not by the accused. So there is an additional false pretence ...(illegible) in the slips, and the accused must have known that it was false. It is, of course, true to say that by signing the withdrawal slips in the box marked on each slip "posted" the appellant was in fact representing that the withdrawal had been "posted" or entered on the customer's ledger card, and that it was a false representation in the sense that it was ...(illegible) But the crucial question is: was it done with an intent to defraud or was it done as a result of mere negligence - perhaps gross negligence - in failing to comply with bank practice? In dealing with the question of intent to defraud the learned judge stated "The fact that he signed these two false withdrawal slips at the start of this fictitious account suggests that he was taking part in the fraud, otherwise Da Luz would have made sure that he had nothing to do with the account. By signing these false slips, the accused authorised payment to be made by the cashier, but the accused has provided no explanation how he got the slips or why he signed them. I have already concluded that he knew they were not genuine, so he should not have signed them. As it is, he must have got them from YAM Bo-wah, signed them and passed them to Da Luz for posting. I draw the adverse inference that he knew Da Luz was operating this account to make fraudulent withdrawals and that he intended to participate in the fraud, when he signed these slips."

13. Two comments may fairly and properly be made on that passage at this stage. Firstly, the reasons stated for the conclusion that the appellant was a participant in the fraud are not altogether convincing Secondly, the statement that the appellant must have got the withdrawal slips from YAM Bo-wah appears to be based upon an assumption not supported by any evidence. Undoubtedly the withdrawal slips would come to his hand, but if the correct procedure was followed they would come to him not direct from the customer but from a bank employee, together with the ledger card and the pass-book. Again, the vital question is: was the failure to initial the ledger card before or after signing the withdrawal slip consistent only with fraud or was it equally consistent with gross negligence? The learned judge has perfectly fairly and properly commented upon the fact that the appellant did not himself go into the witness box to give evidence in his own defence and has drawn an adverse inference from his failure so to do. The issue for consideration was, and is was the sum total of the evidence adduced on behalf of the prosecution, coupled with the failure of the appellant himself to give evidence, consisten-only with the irresistible inference that he was guilty of fraud in the sense that he was consciously and knowingly aiding and abetting Da Luz to draw money by the false pretence that this was a genuine account, or was that evidence equally consistent with the reasonable possibility that his conduct was simply gross negligence in his dealings with the Bank's affairs?

14. Turning now to the third and last charge (the 10th charge) upon which the accused was convicted, namely, that of fraudulent false accounting. The case for the prosecution in relation to this charge was that the appellant made a false entry in the ledger card of Account No.51588 purporting to show that the sum of $14,000 had been withdrawn from that account on the 19th May. That the withdrawal entry on the ledger for that amount of $14,000 on the 19th May bears the initials of the appellant is beyond doubt. The prosecution contended that no such money was withdrawn from that account on that day. It will be recalled that on the 17th June Mrs. Lee, according to her evidence - verified by her pass-book which was produced in evidence - had made a withdrawal of $14,000 from her account. Her account having been absorbed or transferred into the bogus Account No.51588 which Da Luz was manipulating for his own fraudulent purposes, that actual cash withdrawal had to be accounted for somewhere. Mrs. Lee's withdrawals had been debited to the bogus Account No.51588. It was the case for the prosecution that in respect of this withdrawal those concerned in the continuing perpetration of this fraud - and of course, in particular Da Luz - had inadvertently overlooked making any entry in any ledger card. That omission would not be revealed in any of the three-fold checks taken at the end of the working day, but it would become apparent when the next periodical sectional balance was taken because that balance would record the position of each individual ledger card. There would be a deficit of $14,000 and, Mrs. Lee's ledger card having been withdrawn when - as the prosecution alleged - her account had been transferred to the bogus Account No.51588, Da Luz having failed to debit this withdrawal of $14,000 to the bogus Account No.51588, there would be a deficit of $14,000 not accounted for and not in the record of any card. It was the case for the prosecution that the failure to debit this withdrawal of that $14,000 by Mrs. Lee to Account No.51588 was not discovered until the sectional balance was taken on the 20th June and that on that day, the deficit being disclosed, the appellant, with intent to cover up the fraud, entered the debit on the ledger card for Account No.51588, caused it to be back-dated to the 19th May, and then initialled the entry made on the ledger card itself. If in fact $14,000 had been withdrawn on the 19th May the Audit Roll for that day would have proved that fact. But like so many other vitally important documents the Audit Roll for that day was missing. But the prosecution sought to establish by a number of other factors that the withdrawal could not in fact have been made on the 19th May. First, all withdrawal slips for that day were produced in evidence. They amounted to $1,400 and both by necessary implication, and in actual fact, included no slip for $14,000 and, indeed, no withdrawal slip in respect of Account No.51588 at all. Secondly, the Control Journal for that day was also produced and its figures tallied with the total of $1,400 in respect of withdrawals for that day. Thirdly, there was evidence that the Bank's books and accounts for that day balanced which, of course, would not have been the position if there had in fact been a withdrawal of the $14,000 on the 19th May. There was really abundant evidence that the withdrawal could not have been made on the 19th May and that the entry in that respect was not correct Para. //The prosecution then sought to establish that the entry was in fact made on the 20th June at the time the sectional balance was taken, and that it was done in order to account for the ...(illegible) of $14,000 that became apparent as a result of the removal of Mrs. Lee's ledger card and the failure to post - or repost - the last withdrawal to Account No.51588. We are satisfied that there was ample evidence to support the contention that the entry was in fact initialled and approved by the appellant not on the 19th May but at the time of the sectional balance on the 20th June. Indeed, the sectional balance, dated the 21st June, at its final reconciliation - bears an entry "Off $14,000 - 51588" in the accused's own writing. The appellant himself did not choose to give evidence. But the man Rego, to whom we have already referred and who was called as a witness for the defence, said that at the time of the taking of the sectional balance on the 29th June the discrepancy of $14,000 was discovered. Whilst they were trying to find out where this discrepancy lay Da Luz came up, produced a withdrawal slip for $14,000 in respect of Account No.51588 dated the 19th of May, told Rego to back-date the entry on the ledger card for Account No.51588 to the 19th May, and then to get the appellant as supervisor, to initial the ledger card. As we have already said the learned judge considered Rego an unsatisfactory and unreliable witness and disbelieved his evidence on this matter. It is, however, relevant to observe that Da Luz was himself the more senior supervisor. Ribeiro, the officer in charge of this department and a witness for the prosecution said that Da Luz had "rather a vile temper", that his juniors were frightened of him and that when sectional balances were taken it was Da Luz's practice to dictate to them (i.e. the clerks) "This account is wrongly credited, this wrongly debited" and his subordinates would carry out his orders. Ribeiro himself endorsed the final sectional balance and he said before he signed it he must have been satisfied with the alterations made. No withdrawal slip for $14,000 was found in the bundle of slips for the 19th May; it was the case for the prosecution that no such withdrawal slip was ever in existence and Rego's evidence on this matter was quite untrue. It was contended by the defence, however, that the fact that no such slip was in the bundle of slips in the possession of the Bank finally filed for that day was in no way conclusive since the evidence established that Da Luz had in his possession a number of blank withdrawal slips signed by YAM Bo-wah and that nothing could have been easier than for him to fill in such a slip with the date of 19th May and the amount for $14,000 show it to Rego in conjunction with the bundle of slips for that day and thereafter extract and destroy it. The learned judge disbelieved Rego and said "I am sure that the accused knew the full facts and that the entry was false. He himself has given no explanati why he initialled the entry, and I can only draw the unfavourable inference that he knew it was false and that he did it fraudulently in order to account for the $14,000 discrepancy in the section and to achieve a balance, which would also be false." The issue again resolves itself into this single but vitally important question, namely, whether it was established beyond reasonable doubt that the conduct of the appellant in initialling that entry was consistent only with guilty knowledge that Da Luz was perpetrating a fraud on the Bank and by initialling that entry the appellant was aiding and abetting him in so doing, to the exclusion of any reasonable possibility that the conduct of the appellant was simply that of gross negligence in dealing with the Bank's affairs.

15. It is clear law that in order to sustain a conviction where a person is charged with aiding and abetting the commission of a crime - or being an accessory before the fact to the commission of that crime - it must be established that he knew the essential matters constituting the offence in the sense that he knew the type of offence that is being committed or is going to be committed (see for example, R. v. Payne⁽¹⁾). Mere negligence, however gross, is no substitute for guilty knowledge and constructive knowledge is not to be imputed to the person charged with aiding and abetting the commission of an offence simply because of his negligence in not acquainting himself with the facts, or unless it can be shown, as an irresistible inference, that the person realised the possibility of the crime taking place and - as Glanville Williams puts it at Page 395 in his treatise on Criminal Law - "deliberately" "closed his eyes" to it, i.e. refrained from acquiring certain knowledge in the hope of thereby evading culpability.

16. The whole question in respect of these three charges is can it be said that the inference to be inferred from the facts is irresistible that the appellant knew what was going on, that is to say, that Da Luz was fraudulently manipulating this account for his own purposes - or, alternatively that the appellant must have noticed that a fraud was being perpetrated by Da Luz and, to repeat the expression used by Glanville Williams, "deliberately shut his eyes to it"? Or is there a reasonable possibility, on the facts adduced, that his conduct was the result only of gross negligence?

17. In respect of the first two charges, the case for the prosecution to a very considerable extent depended upon the fact that, in his capacity as supervisor, the appellant had failed to comply with the rules and practice of the Bank in that he certified the relevant entries without production of a pass-book and failed to "post" the ledger card for Account No.51588 by initialling it at the same time as he signed the withdrawal slips. The ledger card, it will be remembered, in respect of these two slips was signed by Da Luz whereas the withdrawal slips were signed by the appellant. It was contended that this was done for the purpose of facilitating the fraud, and the learned judge drew an inference unfavourable to the appellant from the failure of the appellant himself to give evidence as to why he "falsely pretended that he had posted them (i.e. the withdrawal slips) himself". From that adverse inference the judge concluded that there was an intent to defraud.

18. Again, the case for the prosecution essentially depended upon the fact that Account No.51588 was a false account in the sense that it was constituted by transfers of credit from Accounts Nos. 51800 and 51998 and, indeed, totally absorbed these two accounts. If Account No.51588 was a false account in the name of YAM Bo-wah, then it would follow that no pass-book could properly have been issued in the name of YAM Bo-wah. Indeed, YAM Bo-wah himself said that no pass-book had ever been issued to him. The evidence was that every time a deposit or withdrawal was made with, or from, a customer's account the pass-book had to be produced by the customer and was processed by the machinist simultaneously with the ledger card and the withdraw or deposit form, thereby showing the position of the account on all the relevan documents. However, there were exceptional occasions when, for one reason or another, a withdrawal or deposit slip would be accepted without the production of the pass-book. But on any such occasion it would be the express duty of the machinist processing the documents to record the relevant entry on the ledger card with the mark "NB", indicating "no book (i.e. pass-book) produced". Mr. Bray a senior bank official called by the prosecution, upon the testimony of whom the prosecution - and, indeed, the learned judge - strongly relied, went so far as to say that looking at the face itself of the ledger card of Account No.51588 the appellant should have been able to detect that it was nat a genuine account. So far as we can see, there is nothing upon that card, at any rate prior to entries Nos.14 and 15, which could indicate that it was anything other than a genuine account. This is a matter of particular relevan having regard to the fact that the first two charges upon which the appellant was convicted relate to the withdrawals of $75,000 and $70,000 on the 22nd and 26th March, being entries Nos. 2 and 4 on the account itself. It is also significant that, in respect of the first six transactions recorded on the card, the entries were all made by the machinist - or machinists - in a manner which, if the rules and the practice of the Bank had been complied with, would indicate that the pass-book was in fact produced at the time each and every transaction was independently recorded. It is only in respect of the 7th entry recorded - a withdrawal of $17,000 on the 25th April (and this entry is initialled by Da Luz) that one sees for the first time on the ledger card the letters "NB", indicating that no pass-book was produced at the time of the withdrawal of that account. The position was, therefore, that on the face of the ledger card itself, in respect of withdrawals entered by the appellant on March the 22nd and March the 26th - to which the first two convictions relate - the entries on the card by the machinist - or machinists purported to show that the pass-book was on each and every occasion produced at the tine those withdrawals were processed. The suggestion put forward by the Crown - and, indeed, bearing in mind that the Crown case was that there was no such pass-book in existence in respect of that account, it was the only suggestion that could be put forward - was that the machinist, or machinists, who made those entries must have failed, guiltily or otherwise, to comply with the rules and practice of the Bank in that he, or they, failed to mark these entries with the initials "NB". Such failure might or might not be due to the instructions of Da Luz or someone else concerned in this fraud. The true explanation may fall within this conjunction of possibilities but precisely where remains a matter of conjecture and was not established by evidence. It is, however, plain that any explanation, consistent with the prosecution case, reveals a failure to comply with the rules and practice of the Bank and it is a source of weakness in the prosecution case that their contentions, depend, at some points, on presumed compliance with rules and practice, e.g. in the support for YAM Bo-wah's evidence to be found in the absence of the account from the Open & Closed Account Register, whilst at others they have to put forward contentions such as that advanced to explain the absence of the letters "NB".

19. However that is not necessarily fatal to the prosecution. Each contention had to be weighed on its merits and it was open to the judge to make separate and distinct findings on each, even if at one point he found or deduced that the rules were followed and at another that they were not. In the end it came back to a question whether the evidence established anything more than gross negligence and it was vigorously argued before us that, on the facts proved and found in the lower court, the actions of the accused might equally well be ascribed to gross negligence as to making a false pretence or a false entry with intent to defraud.

20. In support of this contention, it was urged that, when he signed his name in the "box" and thereby authorised the withdrawal of the $75,000 on the 22nd of March and $70,000 on the 26th of March, he was not necessarily aware of the fictitious nature of the account and, in making his certification in the face of such irregularities as were shown to have been brought to his notice or of which notice could rightly be inferred, nothing more might be invclved than the day-to-day negligence which could be found in any office. The argument was supplemented by the suggestion, based on the evidence of Rego, that the accused might have been impelled to authenticate these transactions, by the overriding influence of the senior and more experienced supervisor, Da Luz, who could have had a guilty intention that was not shared by the accused.

21. The factors weighing against the possibility of mere negligence was the evidence from YAM Bo-wah that he never had a pass-book; evidence which was supported not only by the available records of the Bank indicating that no pass-book was issued because, according to their Register of Opened and Closed Accounts, this fictitious account was never opened but also by the fictitious nature of the entries in the account itself. True the absence of the initials "NB" on the ledger card suggests that there was a pass-book but that would not necessarily rebut the positive evidence of YAM Bo-wah, confirmed by the Accounts Register, because their absence could be due to negligence or instructions from Da Luz or the accused, instructions which might be accepted by a machinist, either innocently or otherwise. Although much less likely to have been due to mere oversight, the absence of an entry in the Open and Closed Accounts Register might not differ in kind from the absence of the letters "NB" - omissions of this kind can occur through oversight or negligence - but the other evidence showing the absence of a pass-book was in a very different category.

22. In support of the inference that the authentication of the withdrawals, despite the absence of a pass-book, was not due to mere negligence, the trial judge referred to the close association between the accused and YAM Bo-wah. It was certainly an association very much closer than that which would normally result merely from their relative positions as customer and official of the Bank, but in itself it could do little to advance the prosecution case. However, in considering the earlier entries, the judge also took account of, and drew inferences from, the later entry, dated the 19th of May, of $14,000 in the ledger card. The evidence pointing to the falsity of this entry was very strong and if this entry was a false entry, there was no reason why the judge, from the accused's share in it, should not have drawn inferences as to what was the state of mind of the accused when he authenticated the earlier entries. It is quite common in criminal cases to infer from subsequent actions of an accused what was or what was not his state of mind at an earlier stage and this was, we think, an appropriate course in seeking to determine whether at the earlier stage in this case the accused was merely negligent or had a criminal intent.

23. As against the inferences of intent to deceive and defraud, the trial judge had little to support a conflicting inference of mere negligence, apart form the dubious testimony of Rego, to which he was not disposed to give much oredence. There was no evidence from the accused to support it but Rego's evidence would have shown a measure of casual inattention and disregard of their duties by the Bank's officers in the discharge of their responsibilitie. This evidence was, in some respects, confirmed by other officers like Mr. Ribeiro, but the instances of occasional departure from the accepted rules and practice, which they admitted, would not cover with a cloak of innocence the combination of the two factors, i.e., authenticating the earlier entries without a pass-book and making the later entry of $14,000 in circumstances where it could not be justified.

24. Apparently, in exceptional circumstances entries were sometimes made without production of a pass-book but, in the light of YAM Bo-wah's evidence, these exceptional circumstances were not such as to cover the entries on 22nd or 26th March and, even without that evidence, went no where near justifying the entry on the 14th May.

25. The evidence showed that the accused took responsibility as supervisor - and it was a supervisor's responsibility - for satisfying Mr. Ribeiro that that entry of the 14th May should be made and that the figure in the sectional balance should be altered on the strength of it. Even if Rego's evidence as to this incident was to be accepted it could hardly displace the inference that the accused knew what he was doing and replace that inference by a doubt as to whether he was merely negligent. As Rego was not believed on this by the judge the question is little more than academic but the basis and hierarchy of responsibility on which banking and commerce operate would be seriously eroded if a man is not to be, at least prima facie answerable for wrongly verifying a transaction which it was his duty to check and supervise and which he held out as having been supervised and checked by him. It may be that the appellant could have offered an explanation which would show, or raise doubt as to, whether it was mere negligence but, in the absence of any such explanation, the judge was, we think, justified in inferring that the appellant knew what he was doing, that he did it deliberately and that he knew he was doing wrong, when the effect was to deceive his immediate superior and, through him, the Bank, the employer of both. Once these facts were established an intent to defraud would appear to be the only natural inference from the circumstances of the account and the three entries with which the accused was shown to have a direct connection. The accused profferred no explanation and Rego could proffer none for him. In such circumstances it was, we think, open to the judge to find that the accused made the false entry of the 14th May and did so with intent to defraud and to reach a similar finding in respect of the withdrawals on the 22nd and 26th March.

26. The application for leave to appeal is dismissed.

5th March 1968.

Representation:

Ming Huang (Peter Mark and Co.) for Appellant.

Duckett C.C. for Respondent.

Judgment read on 5.3.68.

(1) (1965) Cr. L.R. 543.