HKSAR v. Zheng Shu Wu and Others

[English Translation 英譯本]
CACC406 / 2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 406 OF 2009

(ON APPEAL FROM DCCC NO. 539 OF 2009)

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BETWEEN

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Before: Hon Cheung JA,Yeung JA, and M. Poon J

Date of Hearing: 1 September 2010

Date of Judgment: 16 September 2010

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JUDGMENT

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Hon Yeung JA (giving the Judgment of the Court):

Introduction

1.The applicants, Zheng Shu Wu (“Zheng”), Shum Yung Sang (“Shum”) and Xu Wei (“Xu”) were jointly charged with one count of conspiracy to use false instruments with the intention to induce somebody to do some act to his own prejudice. Xu was further charged with one count of possession of false instruments.

2.The applicants pleaded not guilty and were convicted after trial before District Judge Douglas Yau on 19 November 2009. They were each sentenced to three years’ imprisonment. At one stage they sought leave to appeal against both conviction and sentence, but all of them subsequently abandoned their application against sentence. We only need to concern ourselves with their application against conviction.

The prosecution case and evidence

3.The prosecution alleged that the applicants conspired to use a batch of forged Hongkong and Shanghai Banking Corporation (“HSBC”) certificates of deposits worth hundreds of billions of dollars to demonstrate that they had sufficient financial resources to successfully participate in an intended project to build a geothermal power plant in China by an American company, Elemental NRG (“Elemental”). Since the partners in Elemental requested the applicants to produce proof of funds issued by the bank, they in turn asked HSBC to verify the batch of false certificates of deposits and issue proof of capital.

4.The prosecution called numerous witnesses, whose evidence was largely not in dispute.

5.There were three partners in Elemental, namely Robert Joseph Tomacari (“Tomacari”), Michael Edward Mckie (“Mckie”) and William Mayer (“Mayer”) (deceased). Tomacari and Mckie were called as prosecution witnesses at the trial.

6.In his evidence, Tomacari described how Elemental intended to build a power plant and went searching for investors. He indicated that he learnt through a friend, Cheung Sin Kong (transliteration), that some mainlanders who had huge deposits in HSBC were interested in making the investment. According to Cheung, such information came from his friend, Chan Chi Yong (transliteration).

7.On 18 January 2009, Tomacari, Mckie and Mayer arrived in Hong Kong to meet the applicants. Cheung was present to act as their interpreter. When the applicants learned about the investment project, they showed Tomacari, Mckie and Mayer some photos depicting what appeared to be certificates of deposits of huge amounts and indicated that the money was in HSBC. Mayer asked the applicants to provide information about the history of the funds as well as a copy of the investors’ passports, so as to avoid any possible connection with the crime of money laundering.

8.Ms Yam Chi Wah (transliteration), a friend of Zheng’s, said in her evidence that Zheng had asked her to arrange a meeting with the staff of HSBC so that the bank could issue proof of funds. Zheng told Ms Yam that the project would involve an enormous amount of money which had been kept in the bank for a long time and that the holder of the funds would soon come to Hong Kong from Shenzhen. Zheng even told her that she hoped the bank could send people to the hotel to meet them since they were high officials.

9.Having made some enquiries, Ms Yam told Zheng that she found the matter suspicious. Zheng, however, replied that the three Americans had said there were no problems with the funds, and she even claimed that the matter concerned the Chinese party representing China and the US Federal Reserve. Zheng also introduced Shum and Xu to Ms Yam as her superior and the funds holder respectively. Zheng further indicated that they did not really want to withdraw the money but were just hoping that HSBC could issue proof of the funds.

10.Ms Yam eventually arranged for the applicants and Mckie, who was allegedly from the Federal Reserve, to meet Ho Kai Tat (transliteration), Deputy Manager of the Bank’s Investigation Unit, Lee Siu Keung (transliteration), Manager of the Insurance Unit and a staff member surnamed Kuk at the Langham Place branch of HSBC on 20 January 2009.

11.In his evidence, Ho Kai Tat said that during the meeting, Xu produced a wad of certificates of deposits totaling 100 pieces. When he indicated that he wanted to make photocopies of the certificates, Shum insisted on being present. Zheng and Xu said that they hoped the bank could verify the genuineness of such certificates, which were related to some of Mckie’s investment projects. Mckie also indicated that there were some joint ventures and he had to see if the certificates of deposits were genuine. Xu claimed that he had about 200 certificates of deposits, which were obtained by his father from a Kuomintang high official and were given to him for handling in 2005.

12.Ho Kai Tat inquired with the applicants and Mckie respectively as to whether they required oral or written confirmation. Both parties indicated that they wanted the latter.

13.Lee Siu Keung also stressed that during the meeting, all the applicants asked HSBC to issue a confirmation letter verifying the false instruments specified in charge 1.

14.Cheung Sin Kong testified that he came to know there were mainlanders who wished to invest in Elemental’s project after contacting Chan Chi Yung. Hence he arranged for Tomacari, Mckie and Mayer to meet the applicants. He confirmed that during the meeting, Tomocari indicated that he was not clear about the nature of the documents shown by the applicants and therefore asked them to provide verification certificates.

15.In fact, Lee Siu Keung had notified the police before meeting the applicants, which resulted in the arrest of the applicants at the scene for the offence of conspiracy to defraud.

16.Subsequently, the police found in the laptop computer inside Zheng’s hotel room images of the false instruments in question, including two deposit slips in the sum of US$217 billion, two monthly statements showing a balance of US$217 billion in the account, one confirmation letter issued by HSBC showing a deposit of US$217 billion in the account, one confirmation letter signed by Ms Diana Cesar of HSBC showing a deposit of US$55 billion in the account and guaranteeing that the funds were legitimate and “clean”. In fact, all those documents were false.

17.The police also found in Shum’s hotel room printed copies of the above images, a document bearing three deposit transfer notices, each in the sum of US$500 million and payable to “Lee Kwai Fa” (transliteration), two forged certificates of deposits in bearer form in the sum of US$500 million and other false documents.

18.The police found on Xu 104 forged certificates of deposits in the sum of US$500 million each, an envelope with the words “The Hong Kong Bank” printed on it, numerous forged certificates of deposits in the sum of US$500 million each, a copper plate engraved with the words “Hong Kong and Shanghai Banking Corporation account number 400 1523 72124, code 414153 Li Lie Jun (transliteration) 500,000,000” and a document holder containing two documents, namely, “Authenticated Power of Attorney” and “Authenticated Authorization Letter”, two copies of “Inheritance Letter”, two copies of “Power of Attorney” and one “Authorization Order” entitled “17 Plum Blossom Alliance of the Republic of China”. Xu also had on him a seal engraved with the words “Li Hou Long (transliteration) Money Withdrawal Seal”, a silver plate engraved with the words “Bestowed Copy from the Chiu’s Mansion of the Republic of China”, a metal seal and a handwritten “Acknowledgement of Receipt of Certificates of Deposits” dated 17 January 2009.

19.During her interview with the police, Zheng claimed that her company was involved in various investment projects and she had been seeking investors in eight of such projects but in vain. She said that when she met the partners in Elemental, she did not understand what Mckie was saying and just thought that he had funds and would invest in the projects that she devised, rather than they investing in Elemental’s geothermal project. Zheng admitted that the photos in her computer were photos of the certificates of deposits provided by Xu, which were taken by Shum on the morning of 17 January 2009. Those certificates of deposits were wrapped up and kept by Xu afterwards.

20.During his interview with the police, Shum said that he knew Xu had been in possession of the certificates of deposits in question for a month. At that time a female friend surnamed Zhang (transliteration) took a scanned voucher to their Yong He Company (transliteration) in Beijing and showed it to Xu. Since she knew that Zheng was seeking capital, she brought along the scanned voucher to see if it would be useful. Xu indicated then that he was able to find similar things. Shum stressed that both Zheng and Xu were present when Ms Zhang showed them the scanned voucher. Later, Shum changed to say that Xu was not present. In clarification, Shum said that when Ms Zhang took the voucher to Yong He Company to show Zheng, she indicated at the same time that the voucher was worth a lot of money.

21.Shum also claimed that all the documents seized by the police in his hotel room were given to him by a mainland lawyer surnamed Yao (transliteration) and that he did not know what documents they were. He just casually put them in the bag, while the other certificates of deposits were given to him by Xu for safekeeping.

22.Shum’s case was that he was only assisting Zheng in seeking capital and Xu happened to own many certificates of deposits that could be used. Shum claimed that their purpose was to test the genuineness of the certificates which, if found to be genuine, would provide them with funds. Shum also said that the lawyer surnamed Yao was the one arranging for the investment behind the scene.

23.In his interview with the police, Xu claimed to be a son of General Li Lie Jun of the Kuomintang, who passed him to a foster father after his birth in order to cover his identity. It was only in 2005 that he realized his real name was Li Hou Long and he owned national assets in astronomical sums. He said the assets were jointly owned by the Communist Party and the Kuomintang.

24.Xu said that the documents in question and the other jewellery were obtained by him from a hill and they originally belonged to his family. The bonds were obtained by his father who exchanged a hundred taels of gold and jewellery for them with HSBC between 1922 and 1927. He described his illustrious family background, but at the same time he also said that his foster parents hanged themselves because of him during the Cultural Revolution.

25.According to Xu, in his home there was a set of coordinates which showed 108 armouries, while the bonds were hidden in a hilltop whose location was a secret that could not be revealed, with him being the only one who knew about it. When asked about the identities of the other people keeping the bonds, Xu said he was not willing to answer. Xu said that he chanced on Zheng and Shum and with their assistance, he brought the certificates of deposits/bonds to Hong Kong for verification.

Defence

26.Much of the prosecution case was not in dispute. The applicants agreed that they had the agreement to meet the partners in Elemental and show the certificates of deposits in question in order to demonstrate that they had the financial resources to participate in the relevant investment project. The applicants also agreed to meet the staff of HSBC and show them the certificates of deposits in question for the purpose of asking HSBC to verify them and issue proof of funds. The applicants even agreed that the certificates of deposits in question were false and that they voluntarily took part in the interviews with the police to give their explanation of the matter.

27.None of the applicants gave evidence in their defence, nor did they call any witnesses. Basically, their case was that they did not know or believe that the certificates of deposits in question were forged and that the prosecution evidence was not sufficient to prove that they did conspire to use false instruments. In respect of charge 2, Xu’s case was that although the instruments in question were false, he was not aware of that and the things that he had provided to the police, namely, the “Authenticated Power of Attorney” and “Authenticated Authorization Letter”, “Inheritance Letter”, “Power of Attorney”, “Authorization Order” and the “seal”, etc were all consistent with his case that he had no knowledge.

The trial judge’s findings

28.The trial judge rejected the explanation given by Zheng at her interview with the police and dismissed her description of the investment projects as a pack of lies. He did not accept her account of how she contacted Shum and Xu, nor did he accept her claim that she was not aware of the photos and documents in her computer and their contents. The trial judge totally rejected the explanation that Shum and Xu gave in their interviews with the police. He found that they were lying and engaged in fabrication.

29.The trial judge found that the certificates of deposits were forged and that Zheng was aware of the existence and nature of those forged certificates. He inferred that Zheng, Shum and Xu conspired to use those false certificates of deposits with the intention to induce HSBC to issue proof of funds, and that during their meeting with the staff of the bank on 20 January 2009, they intended to carry out their conspiracy to commit the offence.

30.The trial judge stressed that at the material times, Shum was in possession of some false certificates of deposits in the sum of hundreds of billions of dollars together with some false monthly statements and time deposits vouchers. He found that Shum must have known or believed that the documents presented to the staff of HSBC for verification were false and that their purpose was to defraud HSBC into issuing to them some proof of funds. The trial judge also found that Shum, Zheng and Xu did have an agreement to conspire to defraud and an intention to carry out such an agreement.

31.The trial judge was of the view that the applicants must have known of the falsity of the certificates of deposits in question, and their plan to defraud HSBC so as to obtain proof of funds was entirely feasible. The reason was that if HSBC said that the documents were false, all they had to do was just to insist their innocence; but if HSBC had said the documents were genuine, their plot would have succeeded. The trial judge regarded them as a group of organized, bold and scheming fraudsters, whose plot allowed for an excuse to get away in case of failure, namely if their fraud was exposed they would claim themselves to be victims as well.

32.The trial judge found that in respect of the first count of conspiracy to use false instruments with the intention to induce somebody to accept it as genuine and hence to do or not to do some act, the “somebody” referred to therein were the staff of HSBC who met them on the material day, i.e. Ho Kai Tat and Lee Siu Keung. The reason was that the applicants showed Ho and Lee those false instruments and asked them to verify their genuineness.

33.On that basis, the trial judge convicted the applicants on the first count.

34.In respect of the second count, the trial judge also rejected the explanation given by Xu at his interview with the police and dismissed his claim that he had obtained the false certificates of deposits in a cave as a pack of lies. The judge stressed that Xu’s explanation indicated that what he described was his personal experience rather than second hand knowledge, but his explanation was not true at all. The judge found that the only inference to be drawn was that Xu used an excuse to commit the fraud and he must have known that the certificates of deposits in his possession were false instruments. Since he had no lawful authority or excuse to possess those false instruments, the judge accordingly convicted him on the second count as well.

Grounds of Appeal

35.Basically, Mr Lawrence Lok SC on behalf of Zheng and Shum raised only one ground of appeal.

36.Mr Lok SC submitted that the prosecution clearly stated in their opening that the targets of the applicants’ fraud were Tomacari, Mckie and Mayer rather than the staff of HSBC, hence the applicants’ closing submission focused on the words and demeanor of the said three persons. The trial judge, however, in the absence of any indication, changed the targets of the applicants’ fraud to the staff of HSBC and convicted Zheng and Shum on that basis. Mr Lok SC submitted that in doing so the trial judge had caused grave injustice, which rendered his conviction of Zheng and Shum on the first count unsafe.

37.Apart from taking the same stance as Mr Lok SC on the above issue, Mr Kan Ding To on behalf of Xu also submitted that the trial judge had failed to appropriately analyze Xu’s record of interview with the police and wrongly found that his account was fabricated.

38.Mr Kan submitted that although Xu’s description of how he came to obtain the certificates of deposits was rather dramatic, the trial judge had no basis to reject his account in the absence of any evidence to the contrary adduced by the prosecution. Mr Kan stressed that part of the exhibits that Xu had provided to the police, including the “Power of Attorney”, “Letter of Authorization”, “Inheritance Letter”, “Authorization Order” and the “Seal”, etc could all lend support to his explanation. When the trial judge considered whether Xu’s explanation was credible, however, he made no mention of such documents, which showed that he had not fully taken that evidence into account.

Discussion

39.According to the evidence that was not and/or could not be disputed, at the material times the applicants were in possession of certificates of deposits worth hundreds of billions of dollars. They expressed an interest in investing in Elemental’s power plant project, and through the arrangement of a third party, they met the three partners in Elemental in Hong Kong on 18 January 2009. During the meeting, the applicants showed the partners in Elemental photographs relating to the funds for the purpose of convincing them that they owned the relevant funds. The applicants directly or indirectly revealed that the funds were deposited in HSBC, but they offered no proof as to the form in which the funds existed, nor did they explain how they intended to use the funds.

40.When the partners in Elemental requested the applicants to provide information about the history of the funds, Zheng, through Ms Yam Chi Wah, attempted to obtain “Proof of Sums” issued by HSBC.

41.Zheng even told Ms Yam that the matter concerned the Chinese side and the US Federal Reserve. Shum was her superior while Xu was the funds holder. Zheng said that the funds had been in the bank for a long time and they hoped that HSBC could issue proof of funds.

42.The applicants acted in concert, hoping first that they could convince the partners in Elemental that they owned sufficient funds to invest in the relevant project. When Mayer asked them to provide proof of the funds, they attempted to obtain proof of funds issued by HSBC.

43.The documents or images that the applicants possessed and showed to the partners in Elemental and/or HSBC were false instruments.

44.If the applicants acted jointly in showing the partners in Elemental and/or HSBC the false instruments in question or their images or copies while knowing or believing the same to be false, for the purpose of convincing the partners in Elemental to allow them to invest in the relevant project and/or asking HSBC to verify them and issue proof of funds, the applicants must have committed the offence of conspiracy to use false instruments.

45.The first charge against the applicants alleged that they, on or about 20 January 2009, in Hong Kong, used the false instruments in question with the intention 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.

46.The particulars of the above offence could cover the applicants’ act of meeting the partners in Elemental on 18 January 2009 and also their act of meeting the staff of HSBC on 20 January 2009.

47.In fact, the brief facts of the prosecution case set out the details of the applicants’ dealing with the partners in Elemental as well as their dealing with the staff of HSBC.

48.However, when the parties were dealing with issues relating to the Practice Directions 9.1, namely the proper approach to be adopted when the indictment includes both a conspiracy charge and a substantive charge, the then prosecuting counsel made the following submission:

“In respect of the first charge, your Honour, the prosecution case is that the three defendants conspired to use these documents, the five documents set out in the charge, which are in fact 104 pages, in total, that is, to defraud, namely conspiracy to (original in English) – conspiracy to use these documents, well, to – I used the word “conspiracy” which may not be very appropriate, but basically they were hoping to induce two foreigners, … to believe that they were genuine, and then to allow the defendants to participate in some investment projects, well, that is… put simply, a summary of the facts relating to the first charge, well, what I’m talking about is the way in which they used these document to do such a thing… in respect of the second charge, …the facts are of a much narrower scope…”

49.The prosecuting counsel used words like “basically”, “put simply” and “a summary” to describe the particulars of the first charge, which, when considered together with the brief facts of the case, made the applicants’ allegation, namely, that the prosecution clearly stated in its opening that the target of the applicants’ fraud were only the partners in Elemental and had nothing to do with the staff of HSBC, very much debatable. Their criticism of having been misled by the prosecution was also far from convincing.

50.In fact, the defence did not ask the prosecution to choose between the partners in Elemental and the staff of HSBC as the targets of the applicants’ conspiracy to use false instruments, and accordingly the prosecution did not do so in the absence of any such request. Indeed, that matter was never in issue or of concern to the parties.

51.All the applicants complained that it was unfair to them for the prosecution to state in their opening that the victims in the case were the partners in Elemental while the judge found that the “victims” were the staff of HSBC. Mr Lok SC argued that if the “victims” were the partners in Elemental, the applicants would not dispute the allegations that they “induce them to accept the vouchers in question as genuine” and “by reason of so accepting them to do or not to do some act”, the reason being that the meeting with the partners in Elemental was only arranged for the purpose of discussing how to use the vouchers in question. If the victims were the staff of HSBC, however, the applicants would have to dispute the above two allegations, since the purpose of the applicants’ meeting with the bank staff was to verify the genuineness of the documents, and the possibility of inducing ordinary people to accept the vouchers in question was different from that of inducing the staff of a bank to accept them. Mr Lok SC also stressed that the applicants would definitely have addressed the court on the above issue.

52.The applicants met the staff of HSBC on 20 January 2009 for the purpose of asking the bank to verify the genuineness of the vouchers in question and to issue verification confirmation.

53.According to the evidence of the prosecution witnesses, including that of Yam Chi Wah, Ho Kai Tat, Lee Siu Keung and Cheung Sin Kong, the applicants’ ultimate purpose was to ask HSBC to issue verification confirmation.

54.HSBC, of course, would not issue any such confirmation. Right from the beginning the staff of the bank had suspicions about the genuineness of the vouchers in question, and the case had been reported to the police for record purposes even before the meeting with the applicants.

55.Nevertheless, the issue in the case was not whether the applicants did conspire to use false instruments with the intention to induce others to accept them as genuine or whether their intention could be successfully carried out. The issue in the case was simply whether the applicants were aware of the genuineness or otherwise of the documents in question. That was also the only defence put forward by the applicants.

56.Mr Lok SC submitted that the applicants would have disputed the allegations that they “induce them to accept the vouchers in question as genuine” and “by reason of so accepting them to do or not to do some act”. We are of the view that such an argument is not convincing. In our view, whether the applicants could successfully induce the “victims” to accept the vouchers in question as genuine and whether the “victims” would accordingly do or not do some act was irrelevant to the issue in the case.

57.Of course, the court and the defence are entitled to know the factual basis upon which the prosecution has conducted the case against a defendant (see R v Chan Kang To [1997] 2 HKC 281, HKSAR v Cheung Hing Man & another (CACC 91/2008, etc). However, when the court convicts a defendant on a different basis from that put forward by the prosecution, the decision to convict is not necessarily so unsafe that it has to be quashed. In R v Leung Mun Lam [1985] 1 HKC 535, the Court of Appeal clearly ruled that whilst a judge in his direction to the jury departs from the basis upon which the prosecution has conducted the case, such a departure is not invariably fatal. The Court of Appeal still have to consider whether the trial judge’s approach has rendered the verdict of conviction unsafe or unsatisfactory, and only in circumstances where the conviction is found to be unsafe or unsatisfactory would the conviction be quashed.

58.In support of the above views, Yang JA (as he then was) cited R v Oakwell [1978] 1 WLR 32 where Lord Widgery CJ said in these terms:

“We think the proper approach to the argument put forward on this point is this.  It is not the obligation of the judge precisely and exactly to follow the presentation of the case as put before him by the prosecution.  What the judge has got to do is to secure a fair and sound conclusion at the end of the case.  If the judge does not strictly follow the form of presentation which the prosecution have chosen to adopt, then it is always open to the defence to contend that that has resulted in a verdict which is unsafe or unsatisfactory.  It does not, in our judgment, in general amount to an irregularity at the trial within the meaning of the Criminal Appeal Act 1968.  But undoubtedly where the prosecution approach is departed from by the trial judge it is open to the defence to contend, if they can, that the verdict is thereby rendered unsafe or unsatisfactory.”

59.Even if the trial judge has departed from the prosecution approach, as long as that does not result in any injustice, and given the elements of the basis of conviction are no different from the fundamental allegation of the prosecution, then the verdict of conviction will not be unsafe or unsatisfactory.

60.We wish to quote a passage from page 606 of the judgment in R v Japes [1994] Crim LR 605:

“The judge was not bound by the way in which the Crown opened the case.  If, in the light of the evidence as it developed, it became apparent that the same offence was or might have been committed on a somewhat different factual basis, it could not be right to consider, even though it might not be the primary basis put forward by the Crown, so long as it was plain that the defendant was not disadvantaged or prejudiced by the judge so doing.”

61.The applicants were not disadvantaged or prejudiced by the trial judge taking the staff of HSBC as the targets of their fraud rather than the partners in Elemental. The main ground of appeal put forward by the applicants fails.

62.Mr Kan submitted that the process of Xu’s obtaining the certificates of deposits was dramatic, but in our view Xu’s version was simply bizarre. Considering the nature of the certificates of deposits in question against the background of this case, the trial judge was absolutely justified and correct in completely rejecting the explanation that Xu gave in his record of interview.

63.The applicants made use of some false instruments to ask HSBC to verify them and issue confirmation. Their intention was specific and was not in issue. It was simply groundless for Mr Kan to contend that the trial judge had not fully considered whether the applicants had intended to induce the staff of HSBC to accept the instruments as genuine and by so accepting them to do or not to do some act to their own prejudice.

64.The fact that the applicants failed to successfully mislead the bank staff and that the bank staff did not verify the certificates of deposits in question and issue confirmation as per their request does not mean that the applicants had no intention to induce them to do so, nor does that mean that their purpose was not to make the bank staff do some act to their own prejudice.

65.Mr Kan submitted that the process of Xu’s obtaining the certificates of deposits in question was dramatic. In our view, his version of events was no more than a pack of lies. We have carefully read and analyzed the explanation that Xu gave in his interview with the police. We consider it so ridiculous that no person in his right mind would accept or believe. The trial judge must have carefully considered Xu’s explanation before he arrived at the conclusion that “Xu’s version was utterly bizarre and beyond belief.”

66.In his deliberation, the trial judge obviously took into account such documents and evidence as the “Power of Attorney”, “Letter of Authorization”, “Inheritance Letter” and the “Seal” that were in Xu’s possession at the material times. In fact he did set out those documents and exhibits in paragraphs 15 and 16 of his judgment.

67.The prosecution did not call any expert evidence to prove the falsity of the documentary exhibits, but considering the background of the present case, that would not affect the trial judge’s verdict at all.

68.Further, the explanation given by Xu in his interview was just his one-sided story which was not put to any test in terms of cross-examination. The trial judge was absolutely justified and correct in completely rejecting his explanation.

69.In respect of the two charges, the defence put forward by the applicants was merely that they had no knowledge of the false instruments in question.

70.The only inference that the trial judge drew was that the applicants had reached an agreement to obtain certain advantages with the false instruments set out in charge 1, which would include the inference that they must have known that the instruments were false when they were handed to the staff of HSBC for verification. In our view, the trial judge was entitled to reach the above conclusion, especially in circumstances where the applicants neither gave evidence nor called any witnesses to rebut or weaken the prosecution case against them.

71.Similarly, the trial judge was entitled to infer that Xu knew that the instruments in his possession, namely the false “certificates of deposits” set out in charge 2, were all false instruments. Xu did not have any lawful authority or lawful excuse about his possession of those false instruments. The guilty verdict that the trial judge reached was inevitable.

Conclusion

72.We are satisfied that the applicants’ conviction was neither unsafe nor unsatisfactory. The application for leave to appeal is dismissed.

Edmond Lee, Senior Public Prosecutor of the Department of Justice, for the Respondent

Lawrence Lok SC and Martin Wong, instructed by Sidney Lee & Co., for the 1^st and 2^nd applicants

Kan Ting To and Bruce Lau, instructed by Lee, Mok & Wong, for the 3^rd applicant

Translated by the Judgment Translation Unit of the Judiciary and approved by Mr. P. Y. Lo, Barrister-at-law.