HKSAR v. Choi Wing Man and Another

CACC000734/1997

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

1997, No.734
(Criminal)

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Coram: Power, V.-P., Rogers and Stuart-Moore, JJ.A.

Date of Hearing: 26 June 1998

Date of Delivery of Judgment: 16 July 1998

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J U D G M E N T

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Stuart-Moore, J.A. (giving the judgment of the Court):

1. On 3rd December 1997, these Applicants were convicted, following a trial before Judge Wilson in the District Court, on joint charges of forgery and possession of a false instrument contrary to sections 71 and 75(1) of the Crimes Ordinance, Cap.200, respectively. Both Applicants were sentenced to concurrent terms of five years' imprisonment for each of the offences.

2. The Applicants, who were D1 and D2 at trial, now apply for leave to appeal against conviction and sentence.

3. The Particulars of the first charge were that they:

"in or about September 1996, at Ground Floor, No.2 Kau U Fong, Central, Hong Kong, made false instruments, namely 53 sets of provisional Sale and Purchase Agreements with the intention that they or another should use them to induce somebody to accept them as genuine, and by reason of so accepting them, to do or not to do some act to his own or any other person's prejudice."

4. The second charge against both Applicants is particularized in these terms:

"on or about the 17th day of September 1996, at Edinburgh Place, outside Queen's Pier, Central, in Hong Kong, had in their custody or under their control a reassignment for Shop No.6, Sun Kong House, Sai Yeung Choi Street, Kowloon, which they knew or believed to be false with the intention that they or another should use it to induce somebody to accept it as genuine, and by reason of so accepting it, to do or not to do some act to his own or any other person's prejudice."

5. The general nature of the prosecution case, so far as count 2 is concerned, is a little complicated. It is however convenient to start with the evidence concerning this charge. On 17th September 1996, at 3:36 p.m., a surveillance officer (PW1) watched D1 and D2 enter Mario's Restaurant in Central. D2 was holding a distinctive envelope which bore a cartoon on the outside. They sat at a table. At 3:55 p.m. an unknown male joined them at the table. D1 handed the envelope, which D2 had carried into the restaurant, to the unknown male. D1 and this person unknown then went up to the first floor of the restaurant. Both men went out of the view of PW1 for a period of about 10 seconds before they returned to the ground floor. At 4:16 p.m. the unknown male left the restaurant, and 2 minutes later D1 and D2 also left. At this stage, D2 was once again carrying the envelope.

6. The two men walked to Queen's Pier where they got into a car belonging to D2. Approximately an hour later, they were joined by two other men who got into the back of the vehicle. It was noticed that these men were not carrying anything with them. As the car drove away, police stopped it. D2 was driving and D1 was in the front passenger seat. The envelope which had been carried from Mario's Restaurant was found on the seat between the two passengers who were sitting in the back. It contained the forged reassignment for a shop at 6 Sun Kong House, Sai Yeung Choi Street, the subject of count 2. This document was accompanied by a copy of the signature page of the genuine reassignment document. Also in the envelope was an unsigned receipt for a list of title documents in respect of the shop at Sun Kong House. Elsewhere in the car were found a copy of a floor plan of the shop, a copy of a Hong Kong Law Society circular about property fraud with the use of forged identity cards and copies of company records for Kingdom Development Company Limited. This company, as it turned out, had a three-year lease on the shop premises at 6, Sun Kong House.

7. The shop owner, Chan Yiu-sum, had repaid in full the mortgage taken out on this property and had no knowledge of D1 or D2. However, the evidence revealed that his own name and identity card particulars had been used to open two accounts at the Overseas Trust Bank on 16th September 1996. Two further accounts were opened at the same bank about two weeks earlier using the same method in respect of someone calling himself Ip Kin-kau. In each case, the residential address given to the bank by these bogus customers related to the premises of a secretarial service at 655 Nathan Road which traded under the name World Trade Group.

8. The evidence revealed that on 29th August 1996, two males approached a member of the staff at World Trade Group. One of the men completed an application form for secretarial services and produced an identity card in the name of Ip Kin-kau which was photocopied. The other man gave the name Chan Yiu-sum. The man gave their address, for correspondence purposes, as Chung Shing Company at premises in Shanghai Street, Kowloon. When the police, during the course of this inquiry, went to the address given, they found that a resident had lived there for many years. That resident had never heard of the "Chung Shing Company" which purported to operate from his address. Later, six letters from banks arrived for "Chan Yiu-sum" and "Ip Kin-kau" via the secretarial service. These were intercepted by the police.

9. At their trial, neither D1 nor D2 gave evidence. The criticisms of the prosecution case which were made by defence counsel at trial, neither of whom represents the Applicants at this stage, are to a large extent the same criticisms which were made in this application.

10. Mr. Macrae, on behalf of D1, has submitted in his grounds of appeal relating to the second charge that there was insufficient evidence to establish D1's possession and knowledge of the false reassignment for the shop at No.6 Sun Kong House which came from the envelope which D1 had been seen to handle in Mario's Restaurant. He further submits that the judge failed to deal sufficiently with the issue of D1's intention which required, in addition to knowledge or belief that the instrument was forged, the double specific intent set out in the charge, and that he erred in law in finding that D1's actions established the necessary intent as required under this section.

11. Mr. Kynoch, for D2, adopts the arguments put forward by Mr. Macrae and further submits that the trial judge did not identify sufficiently who would be prejudiced and how that person would be prejudiced.

12. In finding both Applicants guilty on count 2, the trial judge had this to say in his Reasons for Verdict at p.15I:

"There is no dispute that the reassignment of the shop document recovered from the envelope in the car was false. There is no direct evidence that it was inside the distinctive envelope seen at Mario's Restaurant, but I note that this big envelope had an open-ended flap which has never been sealed and is not capable of being sealed, unless one adds an adhesive. It was carried about by hand, not in a bag or briefcase. Although it was not seen to be opened it was carried about as if it was some sort of focus for the Mario's meeting between the defendants and the third man who came and left. It was with the defendants interchangeably and it left the restaurant in D2's hand. When the police seized it from the car occupied by the two defendants an hour later, it contained the three documents I have enumerated. All three documents in the envelope, including the forged reassignment, related to the specific shop of the unsuspecting owner.

Neither defendant had any apparent connection with the shop or its owner and had no business with his documents. That owner had repaid his mortgage years earlier thus freeholding his shop and just weeks earlier he had leased his shop for three years to a tenant.

Neither defendant had any apparent connection with that tenant. Nevertheless elsewhere in the car were copies of that tenant's company records and a copy of a floor plan of its shop, and the Law Society circular to solicitors exhorting members to beware of property frauds with forged ID cards - a document not in itself incriminating but suggestive of one with an interest in such matters.

Someone had opened a bank account in the name of the shop owner using his correct ID card particulars without his knowledge and two men had gone to a secretarial service company without that owner's knowledge and paid a substantial sum to have him recorded as a customer. They had recorded him there with yet another man who was equally unaware of the use being made of his name and ID card particulars and that other man's particulars, also, were used to open a bank account without his knowledge. For that man they had given a correspondence address as the Chung Shing Company which just happens to be the same name as the non-existent estate agent on the sale and purchase agreement forms, the printing of which I have found was ordered by D2 on behalf of both defendants.

The address given to the secretarial service for Chung Shing Company, however, was that of yet another unsuspecting man who had lived at his address for years and never heard of the Chung Shing Company.

Finally, the someone who dealt with the secretarial service would have received, had the police not intercepted them, six letters from a bank within a short space of time referring to the two fraudulent bank accounts.

The overwhelming inference from all this is that a fraud was about to be perpetrated upon the shop owner or a bank, or both. No other innocent explanation is plausible.

There is no direct identification of who the two males who went to the secretarial service were. I am satisfied that the overwhelming inference is that they were either the two defendants or someone on their behalf and with their knowledge. I am satisfied that the two defendants knowingly had control of the false shop reassignment in D2's car at Queen's Pier with the necessary intent within section 75(1)."

13. Although counsel for both Applicants submit that there was insufficient evidence to establish an irresistible inference of guilt, bearing in mind particularly the double intent alleged in count 2 which must be proved over and above a knowledge and belief that the instrument was forged, it is hard to see what other conclusion the judge could have come to. We have seen the forgery itself. It is highly realistic and in almost every detail and every respect it appears to be authentic. All the evidence pointed one way. There was strong evidence that the envelope was in the custody and under the control of both of these applicants throughout the time they were under observation. It seems to be clear that the envelope was important, if not central, to the events which were taking place on the day these Applicants were arrested. Everything inside the envelope was associated with the shop premises at 6 Sun Kong House and the judge was fully entitled to draw the inference that the forged reassignment of the property was amongst those documents. Neither of the Applicants had any legitimate connection whatsoever with the shop premises. Furthermore, in the background were events which showed that fraud was clearly contemplated.

14. It will often be difficult for the prosecution, in the absence of specific evidence to indicate who the intended victim will be. In other words, it may be difficult for the prosecution to show who is to be induced to accept the false instrument as genuine and, by reason of so accepting it, to do or not to do some act to his own or any other person's prejudice. There is no obligation on the prosecution to prove precisely who the victim will be or how he will be prejudiced provided the evidence establishes that there is no other reasonable conclusion to be drawn that both intentions have been proved.

15. In the course of argument, we were referred to R v Chan Kein-wing & Another, (1994) 1 HKCLR 41, in which the Court of Appeal were considering the position of D2 who had been seen talking on a bench in a park with D1. D2 got up from the bench and met an unidentified person who passed a white envelope to him. D2 returned to the bench and passed the same envelope to D1 who then took the envelope with him. That was the entirety of the evidence against D2 who the jury had convicted of an offence under section 76(1) of the Crimes Ordinance before that section was repealed by the Crimes (Amendment) Ordinance No.49 of 1992. Section 76(1) was replaced by two new provisions namely, section 100(1) which made it an offence to possess counterfeit coins or notes intending to pass or tender them as genuine (possession with intent) and section 100(2) making it an offence to possess counterfeit coins or notes (simple possession). The maximum sentence for the former offence was 14 years' imprisonment and for the latter offence, simple possession, a maximum sentence of three years was available. By the time this case reached the Court of Appeal the new law was in effect. The Court of Appeal was only concerned with an application regarding sentence and at p.45 of the judgment, the court said this:

"It must be assumed that in convicting him (D2) of the offence of possession of forged banknotes, the jury was satisfied that the white envelope which he was seen to pass to the first applicant was exhibit P1 which contained the notes in question. However, the circumstances under which he passed the envelope to the first applicant do not necessarily establish the specific intent under s.100(1) of the amended Ordinance. He could have been a mere conduit pipe. The circumstances were highly suspicious, but, in our judgment, were not sufficiently cogent to establish the specific intent."

16. We have had some difficulty in following the reasoning in this case because it is difficult to imagine what other purpose there could be with regard to the possession of forged banknotes than the intention expressed under section 100(1) of the Crimes Ordinance which is expressed in similar terms to the intention under section 75(1) with which we are here concerned. Be that as it may, D1 in the present case was demonstrated to have been more than a mere conduit pipe. The evidence clearly showed that he was closely involved with the envelope both at the restaurant and in the motor car. In no sense could he be described as a mere "conduit pipe".

17. We were also referred in the course of argument to the case of R v Lin Kuo-liang, David, Cr.App. 356/1996 (unreported), in which the Court of Appeal, on the particular facts of that case, which also required proof of the dual intent if the prosecution was to succeed, expressed the view at page 8 of the report:

"The charge is good on its face, but it is a pity that no particulars were sought as to who the 'somebody' might have been, and what the 'act' was, the doing of which or refraining from doing might have inured to that person's, or another person's, prejudice."

18. The court went on to consider a number of cases in which the prosecution had been able to point to those who would be prejudiced by the use of false documents. The court, having described the judge's findings as "amorphous", went on to express the view that they were "by no means sure that the bare findings made by the judge can properly sustain the convictions". However, the court did not resolve the point because there was a further matter which was fatal to the convictions.

19. In the present case, we are left in no doubt that there was ample evidence to show that if possession was established, the dual intent required for an offence of this kind was, in the absence of any explanation to the contrary, clearly made out. In his Reasons for Verdict, the trial judge had expressed the view that the overwhelming inference was that a fraud was about to be perpetrated upon either the shop owner or a bank or both, and that no other innocent explanation was plausible. In the circumstances of this case we cannot agree with the submission that that description is "amorphous" to adopt the expression taken from the Lin case. It may well be that a bank was in all likelihood the intended target, but the section requires proof that there was "the intention that he or another shall use it to induce somebody to accept it as genuine". That somebody was to be induced to accept it as genuine, and by reason of so accepting it, to do or not to do some act to his own or any other person's prejudice, could not be more apparent than it is in this case.

20. Before passing altogether from the application as it concerns the second charge, Mr. Macrae complains that the trial judge made a number of important errors of fact in recording his Reasons for Verdict. He first criticized the judge for having said the two defendants "interchangeably had possession of the envelope". Secondly he complained about the expression that the vehicle used at Queen's Pier was "the defendants' car" when the evidence established that it was D2's vehicle and that D1 was only a passenger. The third criticism is that the unsealed envelope, when briefly handled by D1 inside Mario's Restaurant, already contained the false reassignment which was found later in the same envelope on the back seat of D2's car.

21. It is apparent that D1 and D2 on different occasions had with them the envelope in their physical possession. The word "interchangeably" was not inapt. The vehicle was the "defendants' car", not in the sense that D1 owned it but in the sense that he was in it. The judge specifically referred to D2 as the owner at another stage of his Reasons for Verdict. In regard to the last of the criticisms we have already indicated that the judge was perfectly entitled to draw the inference that when D1 handled the envelope in the restaurant it already contained the false reassignment. The envelope was central to everything that was going on and both other items in the envelope were closely related to this false instrument.

22. As to count 1, the facts were rather more straightforward. In his Reasons for Verdict, the judge said this when summarizing the prosecution's case (p.12K of the Appeal Bundle):

"The Printing of the Estate Agents' Forms

The defendants have occasionally both worked, usually together, for Liko Printing Company Limited in Central. Liko Printing is operated by a husband and wife. In about August 1996, D2 commissioned a printing order of 50 estate agents' sale and purchase agreements with the wife proprietor. She printed 53 such forms and a standard form of terms and conditions and included 'Chung Shing Property Agency Limited' of 655 Nathan Road, according to D2's instructions.

The forms are in the form of a large pad of removable sheets and each is in coloured triplicate. The printing job was completed in early September and she notified D2 it was ready for collection. In fact she attempted to notify D1 also because she thought of the two defendants as being often associated together.

At the time of the defendants' arrest on 17 September this order had not been collected and the pad of printed agreement forms was recovered by the police from the printing company.

No company 'Chung Shing Property Agency Limited' existed at the Companies Registry in 1996 or 1997. The purported address for Chung Shing Company supplied by D2 and printed in the forms, however, happens to be the address of the secretarial service mentioned."

23. Later he said, at p.14N

"I am satisfied the 53 sets of estate agents' sale and purchase agreements were false instruments within the meaning of sub-section (1), (3), and (8) of section 69.

There was no limited company of the name pre-printed in the agreement form at the material time. Although the evidence was that D2 placed the order with the printing company, I am satisfied that D1 was associated with it. Both proprietors said that the defendant generally associated at the printing company and both, in fact, were together occasional employees of the printing company. This was so much so that the lady proprietress saw fit to communicate, or attempt to communicate, to both defendants that the job was complete.

The other evidence of the documents in the car leads me to the necessary inference that both defendants had an interest in forged documents, especially those relating to property and banking, and estate agency agreements are also documents of the same general nature.

I am satisfied beyond reasonable doubt that both defendants caused the printing of the false agreements in the furtherance of an overall scheme of property fraud and that in doing so they had the necessary intent within the meaning of section 71.

I find both defendants guilty of charge 1."

24. Mr. Macrae submits that there was insufficient evidence to prove that D1 had anything to do with the making of these provisional sale and purchase agreement forms so that there was no proper or sufficient evidential basis for the findings which were made. Furthermore he submits, the belief by PW4 that both defendants were closely associated did not establish joint complicity in the making of these forged instruments.

25. Mr. Kynoch, in his ground of appeal relating to this charge, submits that it was incumbent upon the prosecution to prove the necessary intention required for the offence of forgery under section 71 of the Crimes Ordinance yet this was never properly referred to by the judge beyond a bald statement that he was satisfied that both defendants had the required intent. He has also submitted that so far as D2 was concerned, the time of making the false instrument was when he placed the order for printing at Liko in about August 1996. He argues that on the evidence there is nothing to disprove the possibility that, when D2 placed the order for the forms to be printed, he genuinely intended to set up a company for a legitimate purpose and without the intention alleged under this section. Putting this another way, he submits that there was not an irresistible inference that D2 had the required intention at the time of the making of the documents because the necessary intent may have been formed after the documents were made on a date which is unknown.

26. Mr. Kynoch has very frankly conceded that there was a reasonable inference that at some stage the Sale and Purchase Agreement forms became intended to be used for a dishonest purpose for the same two principal reasons examined in relation to the second charge, namely:

(1) the name printed on the forms, namely Chung Shing Company, was the same as the name given by the two men who applied for secretarial services on the 29th August 1996 at World Trade Group, 655 Nathan Road, Kowloon. Also, the name provided by one of those men, namely Chan Yiu-sum, was the same as the name of the owner of the shop at 6 Sun Kong House in Sai Yeung Choi Street. Documents concerning that shop were found in D2's car at the time of his arrest on 17th September 1996.

(2) On 16th September 1996, someone using Chan Yiu-sum's name and identity card particulars opened two bank accounts at the Overseas Trust Bank giving as his correspondence address the Chung Shing Company of 655, Nathan Road, Kowloon.

27. These are, of course, not only realistic but important concessions. It is difficult to see, in the absence of any explanation to the contrary, how the judge in these circumstances could have drawn any other sensible inference to that which he drew.

28. Whilst the evidence against D2 may have been overwhelming, what is the position of D1 on this charge? He was alleged to have been jointly concerned with the placement of this printing order purely upon the basis of circumstantial evidence. However, the prosecution were unable in D1's case to provide a direct link between him and the bogus company name shown on these estate agents' provisional Sale and Purchase Agreements. In particular, the evidence failed to establish that he had himself been party to the use of the bogus company name at any stage of the enterprise.

29. PW4 gave evidence about how she had taken the order to print the estate agents agreement forms. She said she knew D1 and D2 as people who had been employed in the past by her printing company to collect the bad debts. The transcript reveals the following passages as to how the printing order came into being:

"Q. Now, besides your dealings with - we'll call them the 1st and 2nd defendant - in relation to debt collecting for you, were you given any other jobs, did you perform any other jobs for them?

A. Yes.

Q. What was that work?

A. A printing job.

Q. Printing what?

A. Provisional sale and purchase agreement was printed.

Q. Provisional sale and purchase for property, is that right?

A. Yes.

Q. And who asked you to do that?

A. When contacts were made, it was Robert. (D2)"

30. She then went on to identify the printing forms which are the subject of the charge. After this, the witness was asked:

"Q. And after you'd finished the job, what did you do?

A. I contacted them by phone to ask them to come to collect them.

Q. Yes. Can you remember who you phoned?

A. Robert (D2) and Sam (D1).

Q. And did one or both of them come to collect the forms?

A. No.

Q. Did you issue a receipt for this work though?

A. I prepared a bill.

Q. You prepared a bill but did you ever hand it over to either of the two defendants?

A. No.

Q. And did you try many times to contact them?

A. I made several attempts to contact them, sometimes the line could not get through."

31. Clearly, the evidence of PW4 alone was insufficient to establish D1's complicity in the offence with D2. It amounted at its highest to guilt by association. In our judgment, whilst there were general circumstances giving rise to a strong suspicion that D1 was involved, when this is linked to the other material showing D1's involvement in a fraudulent joint venture with D2 in the principal offence (charge 2), it is insufficient to establish an irresistible inference of guilt on this charge.

32. Accordingly, we shall grant leave to appeal so far as D1 is concerned and, treating the hearing as the appeal, we shall quash his conviction and sentence on the first charge. To this extent only, his appeal is allowed. The appeal so far as it concerns conviction on the second charge is dismissed.

33. We have not found any ground on which to interfere with the verdicts reached in the case of D2, and his application is dismissed.

34. [The applications relating to the sentence of D1 on the second charge and D2 on both charges were adjourned to a date to be fixed.]

Representation:

Mr. McWalters, S.A.D.P.P. for Respondent

Mr. Andrew Macrae instructed by Messrs. Littlewoods for Applicant/D1.

Mr. James Kynoch instructed by Messrs. Littlewoods for Applicant/D2.