HKSAR v. Wong But Sit Jason and Another
Read the full judgment text of CACC 72/2000 on BabelCite. This Court of Appeal judgment was delivered on 27 June 2002.
1 This is an application for leave to appeal against conviction, following a trial before Lugar-Mawson J and a jury in the Court of First Instance.
Cited by 2 cases · Cites 1 case
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CACC000072/2000 CACC 72/2000 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CRIMINAL APPEAL NO. 72 OF 2000 (ON APPEAL FROM HCCC NO. 364 OF 1998) ____________________________________
_______________________________ Coram: Hon Stuart-Moore VP, Stock JA and Yeung JA in Court Date of Hearing: 12 March 2002 Date of Handing Down Judgment: 27 June 2002 ________________ J U D G M E N T ________________ Hon Stock JA (giving the judgment of the Court): 1This is an application for leave to appeal against conviction, following a trial before Lugar-Mawson J and a jury in the Court of First Instance. Background 2The first applicant (A1) is an experienced business man and financier who, at the times with which this case is concerned, engaged in the daily management of a company called C.A. Pacific Finance Limited ("CAPF"), part of a family group of companies of which A1's father, mother (Edna Wong), elder brother (Alex Wong), and other brothers, were directors; and in which companies they were active. CAPF, a Hong Kong registered company, was owned as to 99% by C.A. Pacific Group Limited ("CAPG") of which latter company a listed company called Capital Asia Company Limited ("Capital Asia") owned 41%. CAPF was the financial arm of a stockbroking company within the group called C.A. Pacific Securities. The first applicant was married to Elizabeth Kong, who is the second applicant (A2). He was alleged to have been a consultant to CAPG, although there was no consultancy agreement. He was not a director of any of the C.A. Pacific Group of companies. The directorships reposed, in part, in other members of the Wong family. 3The persons who, apart from the applicants, featured most prominently in the story which unfolded at the trial to which this appeal relates were Alex Wong, the elder brother, who was chairman of Capital Asia and a director of CAPG; Edna Wong, the mother, who was a director of CAPF; and Stephen Wan, who was general manager of Capital Asia. Other CAPF personalities who featured were Dennis Lo who was a director of CAPF until 18 December 1997, and Vincent Hoe who was a director from 18 December 1997. 4It seems clear enough from the evidence that earlier in the year, that is, in 1997, certainly by September, there was discussion amongst family members about the possible purchase of a building, the purpose of which purchase was to house the family companies and, if an entire building was purchased, to acquire the naming rights to that building, an achievement which would ensure prestige for the C.A. Pacific name. 5In due course, the first applicant alighted upon Century Square as the building which he wanted to purchase: for what true purpose, as far as he was concerned, became an issue at trial. No resolution was passed by any of the group companies to authorise the purchase of the building, or to authorise the expenditure of company funds upon that purchase. Nonetheless, in early October 1997 there was concluded a sale and purchase agreement for the purchase of Century Square and it is common ground that CAPF funds were used to finance that acquisition on behalf of a BVI registered company called China Star Consultants Limited ("CSC"), which company was the purchaser of Century Square. That the first applicant was the person who caused those funds to be withdrawn to that end is common ground and it is his conduct in doing so that became the subject of the criminal proceedings with which we are concerned. He caused a total of $248,918,500 to be debited to CAPF's account with the Liu Chong Hing Bank towards the purchase and insurance of that building and it was said that this appropriation of a credit facility with that Bank was dishonest, and that he thereby stole CAPF's choses in action. 6This conduct formed the basis of eight counts on the indictment, represented by the presentation of eight cheques. On each of these counts, the first applicant was acquitted. The cheques issued by CAPF were as follows:
7The funds were never held by CSC itself. They were paid either directly to their solicitors, Robert Wang & Co. or, in two instances, to the insurance company. The moneys paid to Robert Wang were transmitted in due course to the vendors of Century Square. 8CSC was a BVI company incorporated on 1 September 1997, and the sole bearer share was held by Elizabeth Kong. CSC was, in its ownership and directorship wholly independent of CAPF as well as of CAPG; in other words, it was not a subsidiary or associated company. There was some suggestion in the evidence that the reason the company may have been formed independently of CAPG was to avoid the need for disclosure to the Stock Exchange of the proposed purchase of the property by the Group at a time when there was a planned merger between Capital Asia and CAPG. The loan agreement 9By late 1997 CAP Securities and CAPF were in difficulties, leading in 1998 to winding up orders. Questions were asked, it was said, by Alex Wong, of the first applicant in mid-December 1997 about the purchase of Century Square, and the prosecution case was that there was then produced, in the second part of December 1997, and signed by the first applicant in early January 1998, a loan agreement between, on its face, CAPF as lender, and CSC as borrower. This loan agreement was the subject of two counts of the indictment, Count 8 as against A2, and Count 9 as against A1. The prosecution case was that this loan agreement was false in material aspects. 10The loan agreement dated 23 September 1997 between CAPF and CSC purportedly evidenced a loan for the purchase of Century Square. By this agreement made in writing CAPF agreed, on its face, to lend to CSC the sum of $373m, the maturity date of which loan was stated to be 22 September 1998. The agreement was not in fact drawn until late December 1997, and in early January 1998 it was signed for CAPF by the first applicant, having earlier been signed on behalf of CSC by a lady named Choi Bik Hing who was the personal assistant or secretary to Elizabeth Kong, the second applicant. 11The agreement provided for the issue of notices of drawdown by the borrower upon the lender, and there were produced nine notices of drawdown, requesting the issue of cheques, in two instances to the insurance company, and in the remainder of cases to Robert W H Wang & Co, the solicitors who acted for CSC in the purchase of the building. Each notice was signed by Ms Choi. Also signed by Ms Choi, and also dated 23 September 1997, was an agreement entitled "Option to Purchase" by which CSC gave to CAP Finance Limited, in consideration of the loan, an option to purchase nine floors of Century Square for the sum of $374m. The option was exercisable, according to this document, upon notice given by CAPF by 22 September 1998, upon the exercise of which option, such amounts owing under the loan agreement would be offset. 12The dates on the drawdown notices corresponded closely with the dates of the cheques issued by CAPF in favour of Robert Wang and, in two instances, in favour of the insurers. 13It is common ground that the person who caused the cheques to issue was A1. The prosecution case was that A1 had, by the instrument of these cheques, diminished CAPF's credit facility with the bank and that he had done so dishonestly knowing that he had no authority to cause those cheques to be drawn. The power to borrow or lend money lay, by virtue of the Articles of Association, with the directors of CAPF, that is, by both directors and not only by one, and the delegation of such powers lay with the directors jointly, not separately. It is clear that there were no resolutions authorising A1 to exercise the director's powers either generally, or specifically in relation to the provision of finance for the purchase of Century Square. The only issue in relation to the eight counts which he faced was whether it was shown that this applicant, who did not give evidence at trial, had been dishonest. The prosecution accepted that he was responsible for the daily running of the company. However, he was not a director, and although the directors were not as active or involved as was he in the decision making of CAPF, the prosecution nonetheless pointed to a number of instances in which authorisations were given to make loans. The essence of A1's defence, as it emerged from statements given by him to police investigators, was that the other family members and the directors knew full well about the proposed purchase of the building and that, albeit not in writing, had delegated their powers to him; that he had authority to do as he did; and, if he did not, then at least he believed he had such authority. In other words, the essence of his defence was that he had not acted dishonestly. In the event, he was acquitted by the jury on each theft count. The false accounting charges 14This application for leave is concerned with the remaining counts on the indictment, Count 8 as against A2, and Count 9 as against A1. Each alleged false accounting contrary to section 19(1)(a) of the Theft Ordinance, Cap. 210, and the alleged falsification is of the loan agreement. The particulars of the offences were stipulated thus:
The evidence 15The offer to purchase Century Square was issued by Robert Wang & Co on 26 September 1997. The sale and purchase agreement was concluded on 8 October 1997. There was a meeting of the executive committee of Capital Asia on 25 September 1997, at which A1 was present, and the purpose of which meeting, according to the prosecution, was to review new and important developments. The minutes of that meeting do not record any discussion or mention of the purchase of the building. The evidence of Dennis Lo was that the first that he heard of the purchase of Century Square was on 13 October 1997 at a weekly management meeting of senior officers in the CAP Group of companies. 16The story is then taken up on or about 15 December 1997. The evidence of Alex Wong was that at that time he had a meeting with A1 and A2, and that he wanted to find out details of the payments made to CSC, and asked to see all the documentation relating to the loan. Also present at that meeting was Stephen Wan, the general manager of Capital Asia. It was suggested by Alex Wong that at that meeting A1 promised not to take any more money. It seems clear that the jury could not have accepted that aspect of Alex Wong's evidence, for the acquittal on Count 10, which embraces the cheque dated 30 December 1997, was inconsistent with acceptance of that evidence. The prosecution case, which was entirely uncontradicted by the evidence, was that at the date of the meeting there was no loan agreement in existence. Vincent Hoe's testimony was that he prepared the loan agreement on or about 16 December at the request of A1 and that he was asked to prepare its terms on the footing of payments required by the sale and purchase agreement. The details of the option to purchase, which he also drafted, were provided by A1. He then sent the draft to A1's secretary. He, Vincent Hoe, chose the date 23 September after looking at the sale and purchase agreement. Having sent it to A1's secretary, he received it again in early January, this time signed by Choi Bik Hing on behalf of CSC, but not yet signed for CAPF. A1 signed the agreement on about 5 January. There are no minutes authorising him to sign, and the prosecution pointed to a practice, which emerged from the documentation, by which CAPF directors passed resolutions authorising others, including A1, on other occasions, to sign documents on the company's behalf. There was also no resolution authorising the loan, despite the existence of resolutions approving other transactions. It was significant, said the prosecution, that when in January the loan agreement was placed before A1 by Vincent Hoe, A1 asked who should sign the document, paused for some fifteen seconds, and, instead of suggesting that there should be a resolution or an authorisation, went ahead and himself signed the document, purportedly on the company's behalf. 17The prosecution relied also, as evidence that A1 knew well that the loan had never been authorised, on the circumstances of the creation of CAPG minutes dated 23 January 1998. These minutes were produced by A1 in January and purport to evidence a resolution of the board of directors of CAPG approving a plan allegedly put by A1 to that Board on 15 September 1997, for the acquisition of Century Square through a BVI company. The minutes say that A1 has been authorised to coordinate and take all necessary action for the implementation of the plan. However, the evidence of three directors of the company, A1's father, a Mr Chan and Stephen Wan, was that they would not sign the minutes because no such meeting on 15 September had taken place. To aid the suggestion of this prior authorisation A1 had prepared a letter dated 15 September signed by himself which referred to a plan to purchase Century Square through a BVI company. According to the evidence of one of the financial controllers of CAPG, he and A1 had been to see a solicitor who had suggested that CAPG be asked to ratify the purchase of the building. 18As to the circumstances in which the loan agreement was signed on behalf, or purportedly on behalf, of CSC, there is a conflict of evidence as between the testimony of Ms Choi, on the one hand and, on the other, A2's statement to the police. It is clear that the jury accepted the evidence of Ms Choi. Ms Choi said that she signed the document in November or December 1997 but it is obvious that, as to the date, she was mistaken, since it could only have been in the latter half of December or the first few days of January. Her evidence was that she was working late one night when A2 asked her into a room to sign some documents on which there were yellow stickers, marking pages upon which she was asked by A2 to sign. What she signed was the loan agreement and the drawdown notices and the option to purchase. She said that had she known the nature of the documents, she would not have signed them. 19A2's case to the police was that Ms Choi had authority to sign on behalf of CSC. Ms Choi was authorised to sign all documents for the company, she asserted, save for sale and purchase agreements. There was, however, no document which came into existence before the signing which evidenced that authority. Ms Choi was not a company director; indeed, neither was A2. The sole director was a company called Gleneast Limited, appointed in early December 1997. There was a power of attorney authorising Ms Choi to execute contracts on behalf of CSC, the efficacy of which was doubted in the summing up, but was in any event only executed in early February 1998. A2's account to the police was that she, A2, was not in the office when Ms Choi signed the document and she suggested to Ms Choi that she sign it; the direction not relating to this specific document, the loan agreement, but rather to a pile of documents which Ms Choi had told her were in the office. The prosecution case was that this evidence was false. 20Neither applicant gave evidence, but the essence of their defences, as they emerged in statements made and in cross-examination of witnesses, was, in the case of A1, that he had indeed signed the agreement in September 1997, - as to which there were some question as to possible ambiguity of his answers to the police - and had authority to do so, or believed he had; and, the case of A2, that she had given authority to Ms Choi to sign all documents, and had no idea when the document in question had been signed: if it was backdated, that was not of her making and, in any event, was not dishonest. The trial result 21A1 was convicted upon Count 9 by a majority of 6:2, and A2 was convicted upon Count 8 unanimously. Each applicant was sentenced to a term of two years' imprisonment, suspended in each case for three years. Each applicant now seeks leave to appeal against conviction. Gain and loss (1) Statutory provisions 22The first ground of appeal which is advanced on behalf of both applicants contends that the trial judge erred in his directions to the jury on the question of gain and loss. To understand the argument, we must set out the statutory provisions pertinent to the offence, and then the directions which are attacked. 23Section 19(1) of the Theft Ordinance provides that:
24Section 8(2) defines "gain" and "loss":
25By section 5(1):
(2) Directions 26At an early stage of the summing up the judge defined false accounting and referred to its various constituent parts. He told the jury then that "a gain or loss refers to money or to other property, and that a gain includes a gain by getting what one has not, and loss is defined to include a loss by parting with what one has." (tr. p.15N-P) He then added:
We pause to note that this example is attacked by the applicants on the footing that it offends the finding in R v Thompson (1984) 79 Cr App R 191, that an apparent credit on a customer's account with a bank, which credit had been achieved by fraud, cannot properly be described as a chose in action. Mr Turnbull, for the respondent, invites the court to say that the principle in Thompson is erroneous, but there is no need for us to delve into that question because in the context of this case, and for reasons which will become apparent, the example used by the judge - and it was only an example - matters not. 27The judge then returned, late in the summing up, to deal in detail with the question of false accounting in this particular case, to summarise the evidence, the prosecution contentions, the nature of the defence, in so far as that defence had been made clear in the case of each applicant, and the law. The entire emphasis of the summing up was an emphasis on the issue of dishonesty. There was little said on the issue which has occupied this application for leave, namely, the question of loss and gain. 28In the course of describing the case in relation to A1 on false accounting, what the judge said on the question of gain was this:
29Much the same formula as to gain was used when the judge dealt with the case against A2:
30As to the loss, the judge said, when dealing with the case against A1:
Similarly, in the case of A2, the judge said:
(3) 'Gain': the attack 31The attack on the directions as to gain is an attack which takes each sentence of the direction separately, and then attributes error to the sentence. The attack starts with the sentence that the prosecution's case was that CSC received the benefit of the proceeds of the loan. Mr Marash, SC who has appeared for the 2nd applicant and who has argued this point - and his argument has been adopted by Mr Macrae, SC on behalf of the first applicant - contends that the benefit of proceeds of a loan is neither a gain of money nor of property within the meaning of section 8(2) of the Ordinance. There is, he says, no concept within the Ordinance of a "benefit of proceeds". In any event, he continues, there was no benefit accruing to CSC by reason of the loan agreement. All that CSC acquired was a debt, a liability to repay the moneys lent. He goes on then to attack the phrase "gain in money or in other property", together with the suggestion in the passage relating to A1's case that the loan agreement was with a view to "keeping" the loan funds, by pointing out that CSC never possessed the loan funds. Those funds, and this is common ground, did not find their way into the hands, as it were, of CSC, but only, for a time, into the hands of their solicitors and that, by the time the loan agreement was prepared in December 1997, the funds were with the vendors. There were, in short, no funds to keep. In so far as the judge has mentioned "other property", in these passages, as the gain, the judge has not defined what that other property might be. Mr Marash adds that where the judge has dealt with choses in action, he has explained that concept incorrectly: this is the Thompson point to which we have alluded at [26] above. All in all, there was, he argues, no precise or clear direction telling the jury for what it was they should look in deciding whether there was loss or gain. If either the direction as to loss or gain was materially flawed, the argument goes, then the appeal must succeed, for one cannot know whether the jury decided by the requisite majority that it was a gain or a loss that was viewed or intended by the making of the loan agreement. (4) Loss 32The attack on the direction as to loss falls within a short compass. Mr Marash has first relied on the decision in R v Golecha and Choraria (1990) 90 Cr App R 241, which decided that a forbearance to sue could not amount to a gain of property within the meaning of section 17(1) of the Theft Act 1968, the section equivalent to our section 19(1). The correctness of that decision has been doubted by academic writers (see: Commentary at [1990] Crim L R 867; "The Law of Theft" Professor Sir John Smith, 8th Ed., para 6-08; and "Property Offences" Professor ATH Smith, 1994, para 24-12), but it is unnecessary for us to determine that issue, for, as Mr Marash recognised, what the judge did was to address forbearance to sue not in the context of gain, but of loss; and it is established that "it is clearly a loss to a person not to be able to sue for money to which he is entitled". (see: R v Siu Yin King (1994) 1 HKCLR 58, 65). In the event, there is nothing of merit in this particular point. 33Secondly, as to loss, criticism is made of the judge's use of the phrase "with a view to cause loss to another" in the passage in which he addressed loss when dealing with the issue in A1's case. The point is made that that does not follow the words of the section in that section 17(1) criminalizes falsification of accounts made with a view to gain, but with an intent to cause loss. 34We shall not engage in an analysis of the difference between the two expressions because, in this case, it is not necessary to do so. In our judgment, the use of the word "view" instead of "intent" on the one occasion upon which it was used is of no consequence in this case. The indictment to which the jury was taken used, in both Counts 8 and 9, the correct word; the judge told the jury specifically what the phrase was (tr. p 15); when later in the summing up he reminded them of the constituent elements of the offence as they related to A1 he talked of "intent to cause loss" (tr. p 228); he returned to the elements of the offence when he spoke of the case against and for A2 and, when doing so, he used the phrase "intent to cause loss" (tr. p 252); and, finally, in the very passage relating to A2 about which complaints are made concerning the direction as to "gain", the judge twice refers to an intent to cause loss and, specifically, told the jury that the prosecution "... say that the loss was the intention to frustrate C.A. Pacific Finance in recovering money that had been paid on China Star Consultants' behalf in order to fund the purchase of Century Square." (Tr. p 267). To take a solitary articulation of the wrong word in a lengthy summing up when the correct word is time and again used, not least when the question of "view" or "intent" was never an issue in this case, is to take a point of no substance. 35As a parting shot at the directions on loss, it is said that, in the event, the judge was wrong when he told the jury that "C.A. Pacific Finance did not get what they might have got - the right to recover those moneys" for C.A. Pacific always had the right to recover the moneys. All that the production of the loan agreement could do was to cause CAPF to delay its recovery by the term of the loan. This, too, is a highly selective, non-contextual and, with respect, entirely artificial way of approaching a summing up. In the context of the facts of the case which had been put to this jury very comprehensively indeed by the judge, this jury knew full well that there was a suggested loan agreement which matured a year from its stated date and that the idea, according to the prosecution case, of the production of the loan agreement was to lend authenticity to an agreement for which there was, in truth, no authorisation, and that the judge was saying, in the criticized passage, that the whole idea was to put off action by CAPF which, but for the production of the loan agreement, they would take, or would take sooner. (5) 'Gain': Analysis 36So we turn to the issue of "gain". We are satisfied that the complaints are without substance and are, again, complaints which take little account of the realities of, and the true issues in, the case. 37The prosecution had put the matter this way. They say that it was perfectly acceptable for the judge to describe the gain in view as retention of the "benefits of the proceeds of the loan". This was a simple way of putting to this jury an objective which was not a live issue in the case and certainly far simpler than some intricate exposé required by the applicant's contentions. What the applicants sought to do by the creation of the loan agreement and its presentation in January 1998, says the respondent, was to give colour of legality and authority to an unauthorised payment made by CAPF on behalf of CSC, so that there would be no recourse to, or undermining of, the interests which CSC had accrued, and which they hoped yet to cement. The benefit to which the respondent points is the equitable interest acquired by CSC in Century Square (by reason of the sale and purchase agreement and the payments made) and to the interest which they had in the insurance policies to which two of the payments related. Although not stated in terms by the respondent, discovery of the truth and consequential action by CAPF would no doubt effectively preclude the making of further payments to enable CSC to complete the purchase. This equitable interest was, says the respondent, a chose in action and therefore property as defined by section 5(1) of the Theft Ordinance. 38It is true that the judge did not spell this out, but merely used the phrase "the benefit of the proceeds of the loan", and that he also referred to keeping funds when there was no question of CSC keeping any "funds". Mr Turnbull says that none of this matters in this case, because all the judge was doing was outlining to the jury in broad-brush terms what the prosecution was saying and that, in the circumstances of this case, that was all that was required. It was all that was required because the question of gain and loss was not a live issue in the case and no one suggested, despite ample opportunity to do so, that if falsification of the loan agreement and dishonesty were proved - and they were the issues in this case on Counts 8 and 9 - the falsification could have been effected otherwise than for gain or loss and otherwise than to the ends which the respondent suggests. Mr Marash says that the respondent has shifted its case, in that it never relied at trial on equitable interests in the hands of CSC. The respondents says that it was perfectly clear that that was its case and that the clarification expressly sought in the course of submissions brought no contrary suggestion by the defence either at the stage when submissions were made (on other bases) of no case to answer, or in counsel's speeches, or after the summing up when counsel were invited to, and did, comment on the summing up. 39Lengthy submissions of no case to answer were made by counsel for both applicants. Mr Lok SC, who then appeared for A1, advanced argument that there was no evidence upon which an inference of dishonesty in relation to all the counts could be drawn. The question of the gain in view, if dishonesty were proved, was not touched upon. It was touched upon in Mr Harris' submission on behalf of A2, but very much in passing and only to the extent that he said:
40In his response, Mr Turnbull did not mention equitable interests, but mentioned money. The loan agreement, he said, provided legality for the taking of the funds from CAPF: "So, it gave justification for those funds going, and that enabled them ... to keep ... the money." (Tr. p 819) 41In his closing address, Mr Turnbull said to the jury:
42And then, again, at p 931:
43We think that there may well have been a shifting on ground by the respondent in that in argument before the judge and in the summing up the emphasis was on the keeping of money and on "funds". Now, it appears, the emphasis before us is wholly upon equitable interests. In the sense of avoiding an immediate liability to repay moneys, there was indeed involved in the suggested falsification, if it was proved, and if it was dishonest, a keeping of money. The gain was for CSC: that is how it is put. CAPF had used funds which it ought not to have used, for there was no director's authority for its use. If so, CSC was party to the unauthorised use of those funds and was therefore liable to repay CAPF immediately. The making of the loan agreement, if accepted by CAPF directors and the group, would mean delay of repayment for a year. To that extent, CAPF was "keeping funds" which otherwise it would have to refund. Furthermore, if CAPF was forced by the directors to seek the immediate return of funds and to make no further payments to CSC there was a further consequence, which was that CSC would not be able to complete the purchase of Century Square. Its equitable interests in the property would be extinguished and it would lose its deposit. By falsifying the loan agreement, however, it had the prospect of retaining its interests in the building and in the insurance policies and in not losing its deposit. 44Be all this as it may, says Mr Marash, it was incumbent on the trial judge to identify with precision to the jury how the loan agreement could have been intended by the applicants to cause gain, and that was not done. In failing to specify what the gain was, especially in not specifying what he meant by "other property" the judge fell foul, it is argued, of a principle which is said to be articulated in R v Masterson [1996] EWCA Crim 266, 30 April 1996. In that case, the appellant produced two bogus invoices to show substantial sales by subsidiaries of a group of companies of which the appellant was a director and after that group had acquired another group of companies. The question what gain the appellant could have had in view was one of the two issues in the case; the other was whether he had acted dishonestly. The prosecution argument was that the co-directors were displaying antagonism against the appellant about the performance of the group after the acquisition, and that the appellant thought that if he could show an improved financial status of the group (by suggesting, with the invoices, augmented sales) the co-directors would be mollified and would remove "any chance of the appellant having to use his own financial resources in order to placate his co-directors, whether or not there was any legal obligation to do so." (para [16]). It is to be noted that it was argued for the appellant in that case at trial that the appellant owed nothing to the company and that the most that could be milked from the situation in which the appellant found himself was "some moral obligation to the main parent company" (para [22]). Against that background, the judge directed the jury that: "It does not matter whether [the routing of monies on the invoices] was done because the [appellant] felt he had a moral obligation or a legal obligation. If he caused false invoices to be raised with a view to gain in money terms, or with intent to cause loss in money terms that is sufficient." The Court of Appeal in England was not satisfied with such a direction saying that: "In our opinion... the judge did not define thus far with sufficient precision the way in which the appellant could have gained for himself as now contended for by the Crown." Later the judge in his summing up said:
To which the Court of Appeal said:
45That case was entirely different from the present. In that case, the question of gain was a key issue, by which we mean a key contested issue, a fact which was hardly surprising given that the appellant could not be liable at law, as the judgment made clear, to forfeit any of his own resources. The suggested path to financial risk or loss was circuitous and artificial, namely, that in order to improve his relationship with his co-directors he might have to use his own resources. In a case where the falsification, if proved, is effected for one of several realistic alternatives, one of which is not for gain in money or property; or where it is an issue in the case whether the falsification, if proved, and if dishonest, was nonetheless for gain in money or property terms, then, clearly, it is incumbent upon the judge to spell out with precision the culpable gain which is said to be in view, and which is said to satisfy the section, and to spell out what suggested gains or advantages do not, conversely, satisfy the section. 46Directions to a jury are always case specific, and what is needed and what is adequate depends on the case. In the case now before this Court the issue was not gain, though of course that is an ingredient of the offence which must be stated and proved. The issue was falsification and dishonesty. No one suggested that if falsification of the loan agreement, and if dishonesty, were proved against the applicants, CSC was otherwise then liable in law to recompense CAPF or that CSC would not lose its deposit and the interest it had, and hoped to further to gain, in the building, or the interest in the insurance policy. That being so, if there was falsification and dishonesty, gain was not an issue. There was no contention raised in argument before the trial judge, or before this court, that such falsification and dishonesty, if proved, could be founded on some other intention, or with some other view. Respondent counsel's suggestion before this Court that there was never such a contention, and that gain was never a live issue in the event that dishonest falsification were proved, led to a request by counsel for the applicants, at the close of argument on this appeal, for a transcript of closing speeches, and an opportunity to present further written argument in their light. With some hesitation - given Mr Turnbull's assurance, and the copious papers we had already studied - we granted the request, and we have since received the further brief written representations. It suffices to say that we are wholly satisfied that Mr Turnbull's assertion as to what was and what was not the key issue is correct. It is perfectly clear that closing submissions did not make 'view to gain' a live issue at all. The live issue was falsification and dishonesty. 47A reading of the summing up, a 279 page summing up, of which about 55 pages were devoted to the issue of false accounting, reveals the depth to which the judge went in examining the issue of dishonesty which was the issue on these two counts. The judge said at the outset of his discourse (tr. p 223) that the prosecution's case was that A1 was not authorised to sign the loan agreement, and that A1's case was that there was no dishonesty, and that the loan agreement was not false in a material particular. There was no dispute that A1 had signed the loan agreement and his case was that he had authority to sign. Indeed he said that he was told by a director to sign it. The summing up then went on in detail to address the issue of authority, and what evidence there was to assist on that issue; and then there was a lengthy discussion on the issue of dishonesty. The judge reminded the jury of the suggested lie by the applicant to the police that he signed the agreement on 23 September, although the judge did say that he wondered whether or not the answers relied upon were ambiguous. In relation to A2's case, the judge made clear what the issues were, namely, that it was A2's case that Ms Choi had authority to sign all documents and that the date was on the agreement when the document eventually reached A2's hands. Her defence was summarised by the judge thus:
48We accept that the judge might have spelt out with precision the intended or suggested gain and loss, and that to say that there was an intention to "keep the loan funds" was a loose way to describe the matter and, strictly speaking, inaccurate because CSC never had those funds. But in the circumstances which we have described, we do not think that this case required the specificity demanded by a Masterson type situation, and we are satisfied that in this case the directions were, for the reasons we have given, adequate. The manner in which the judge directed the jury on this question of gain and loss was certainly not a matter which caused counsel concern at trial. If it had been an issue of any significance, one would have expected it to have caused concern. We note that at the end of the summing up, the judge asked counsel if there were any points they wished to raise, and points were raised. This was not one of them. The Kevin Brown issue 49The next ground pursued (for some have been abandoned) is the failure of the judge to give what is called a Kevin Brown direction, so called because of the decision in R v Kevin Brown [1984] 79 Cr App R 115. The principle there enunciated was that "where a number of matters are specified in the charge as together constituting one ingredient in the offence and any one of them is capable of doing so then it is enough to establish the ingredient that any one of them is proved; but ... any such matter must be proved to the satisfaction of the whole jury. The jury should be directed accordingly, ...." 50In this case, the judge gave such a direction in relation to the two aspects of dishonesty asserted by the counts, namely, dishonesty as to the dating of the loan agreement, and dishonesty as to the representation that the signatories had authority to sign on behalf of the respective companies. So too did he give a Kevin Brown direction on the question of materiality: in other words, he told the jury that the materiality ingredient of the charge could only be proved if a majority of the jury were agreed as to which of the particulars was material, if indeed either was. Yet he did not give such a direction as to loss or gain. He did not tell them that they had to be agreed either that there was a view to gain or that there was an intent to cause loss, or, of course both, but that there could not be a mixture, as it were, with half (there were eight jurors) agreeing on one, and the other half on the other. 51The point only survives, as Mr Macrae recognised, if the argument as to gain, which we have now rehearsed and rejected, were valid. In such an event, Counts 8 and 9 could still run as against the applicants if an intent to cause loss were proved but, in that scenario, one would have first to be sure that the jury were, by the requisite majority, sure of the element requiring proof of intent to cause loss and, in the absence of a Brown direction, one could not be sure of that. Since we have rejected the argument that the direction as to gain was inadequate, the point does not arise. It is not the law that a Brown direction is required in every case in which an ingredient can be proved by one or several asserted matters. The point was made in R v Mitchell [1994] Cr L R 66, 67 that "such a direction will only be necessary in comparatively rare cases. In the great majority of cases, particular cases alleging dishonesty and cases where the allegations stand or fall together such a direction will not be necessary. It is of first importance that directions to the jury should not be overburdened with unnecessary warnings and directions which serve only to confuse them." In Mitchell, as the court in that case recognised, the acts relied upon by the prosecution were disparate acts of harassment in a charge of unlawful harassment. It could not be said that they stood or fell together. In this case, the gain and the loss alleged were two sides of the one coin. If CSC was able to secure the benefits of the funds by a false agreement such that it ran no risk of CAPF recovering the funds, at least for one year, it was, by the same token, ensuring that CAPF was not seeking the remedy which might have been its due when it could have done so: that was the concomitant loss. Newspapers and posters 52That exhausts the arguments advanced upon appeal on behalf of A1. In relation to A2, there is a further ground advanced. It is that A2 did not receive a fair trial. The ground is framed as follows:
53We do not intend to particularize the newspaper articles, or the details of the posters about A2. We are surprised that this ground is put forward at all. All these matters were drawn to the attention of the judge at trial by counsel who now seeks to argue the point before us; and there was never a suggestion that the jury should, as a result of the matters raised, be discharged. Counsel at trial is in a very good position to assess what damage, if any, newspaper articles and posters might have on the jury and the risk that those documents may have come to its attention. Counsel gauge the atmosphere; they gauge the jury; they have a feel for the case as it progresses; and they take informed decisions about the risk of prejudice, and whether they should or should not ask the judge to discharge the jury. Counsel for A2 is a highly experienced member of the Bar and it is self-evident from a reading of the transcript that there was no question of suggesting that the trial should be brought to some premature end. Counsel was not backward in coming forward when he thought such an application was warranted. On 13 December 1999 he made an application for the proceedings to be stayed, but on grounds quite different from those now suggested. Earlier, on 22 October, he raised with the judge a potential problem about creditors of A2's father coming to court, and he was worried about a possible disturbance. On 17 January 2000, he raised with the judge the question of posters in Queen's Road, not far from the court building, about A2, and counsel, far from suggesting that the jury should be discharged, said: "I'm minded to leave it alone on the basis that least said soonest mended." This was an invitation which the judge accepted, save that in his summing up he told the jury to ignore anything which they may have heard outside the court about the case. Finally, on 24 January, Mr Harris drew the judge's attention to newspaper publicity about which he was concerned as to which he asked the judge to remind the jury how important it was to concentrate on the evidence alone. The judge did so. In the full circumstances we have described and examined, there is nothing in the point whatsoever. Conclusion 54There follows in the case of each applicant the ground that the convictions were unsafe and unsatisfactory. It is not suggested that the convictions are impeachable on the basis of any possible inconsistency with the acquittals in respect of the theft counts. The final ground depends upon the impact of the other grounds, and we do not see any proper basis for concluding, on the arguments advanced, that the convictions were, either of them, unsafe or unsatisfactory. 55Accordingly, the application of each applicant for leave to appeal against the convictions in relation to Counts 8 and 9, respectively, is dismissed.
Representation: Mr Andrew Macrae, SC instructed by Messrs Ivan Tang & Co for the 1st Applicant (A1) Mr Daniel Marash, SC leading Mr Graham Harris instructed by Messrs Bough & Co for the 2nd Applicant (A2) Mr R G Turnbull, SADPP and Ms Winnie Ho, SGC of the Department of Justice for the Respondent |
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