Case Detail

CACC000666A/1995

IN THE COURT OF APPEAL

1995, No.666
(Criminal)

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BETWEEN
	HKSAR

	AND

	CHEUNG HUNG NGAI

_______________

Coram: Hon. Power, V.-P., Mayo, J.A. and Barnett, J.

Dates of hearing: 16 and 17 October 1997

Date of decision: 17 October 1997

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D E C I S I O N

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Power, V.-P. (giving the judgment of the Court):

1. The applicant was convicted on 22nd August 1995 after trial before Deputy Judge Duggan in the District Court of one charge of false accounting. The charge particularized that on a day unknown between 26th September 1992 and 31st October 1992, in Hong Kong, together with Ngau Muk-yuen and Wong Kam-fai, he had dishonestly and with a view to gain for himself or with intent to cause loss to another, falsified a document made or required for an accounting purpose namely an invoice of Che Siang Sewing Machine (Hong Kong) Company Limited No.STC-1668 dated 26th September 1992 addressed to Starlight Trading Co. by making or concurring in the making of an entry thereon which was or may have been misleading, false or deceptive in a material particular in that it purported to show that STC had paid US$587,800 for the purchase of sewing machines from the said Che Siang Sewing Machine (Hong Kong) Co. Ltd. His appeal against that conviction was dismissed on 18th October 1996. He now comes before this court asking us to certify under s.32 of the Hong Kong Court of Final Appeal Ordinance that a point of law of great and general importance is involved in the decision of the Court of Appeal. He has formulated two matters which he says are points of law of such importance:

1. A court of law in Hong Kong has no authority to overturn acts of state namely decisions of the National People's Congress.

He submits that the District Court did overturn such an act of state because Exh.P9, the contract between himself and a mainland entity which was at the centre of the matter out of which the prosecution arose, was a contract signed pursuant to the law of joint venture trading between Chinese and foreign parties promulgated by the People's Congress and supervised by the State Council. He submits that the court was never appraised of the full nature of the contract as it was never fully translated and that had this been done the court would have seen that it had no right to make any adjudication in relation thereto. It is true that the applicant had entered into a contract with a mainland entity but the offence with which he was charged was one of false accounting under the law of Hong Kong. Even if the applicant's argument that a court in Hong Kong has no power to deal with such a contract be right, and we must say that we have very grave doubts as to the correctness of that contention, there was no issue before the court as to the validity of that contract. There is no point of law of great and general importance involved in this first contention.
2. The Hong Kong Bill of Rights prevented the applicant at trial from obtaining a fair adjudication.

The applicant says that at trial he was seeking to show that he could not have been involved at the time when he was said to have been so involved with two others concerned in the offence and that this could have been proved by the records of the Immigration Department and the Department of Customs and Excise. He said that when he approached those departments he was in each case refused permission to view the records upon the basis that it would infringe the provisions of the Bill of Rights. He submits that he was, because of this refusal, prevented from obtaining a fair adjudication. It does not appear that this was a matter upon which any ruling was made at trial. It was never a ground of appeal and it was not raised before the Court of Appeal. We are, therefore, unable to see how it could be said to be a point of law of great and general importance involved in that court's decision. It was not a matter involved in that court's decision in any way.

2. The applicant also suggests that because of the absence of the records of the two government departments, a substantial and grave injustice was done to him as he was unrepresented at the time of his trial and did not know how he should have proceeded in the light of the departments' refusal to allow him access to their records. It is true that s. 32(2) provides for certification where it is shown that substantial and grave injustice has been done but this court has no power to grant such certification. That power is reserved to the Court of Final Appeal itself. In the circumstances we refuse to certify as requested.

(N.P. Power)	(Simon Mayo)	(N.J. Barnett)
Vice-President	Justice of Appeal	Judge of the Court of First Instance of the High Court

Representation:

Mr. Schapel (Consultant) & Mr. K.W. Leung, G.C. (D.P.P.) for the Respondent.

Applicant in person.

CACC000666/1995

IN THE COURT OF APPEAL

1995, No. 666
(Criminal)

BETWEEN
	THE QUEEN	Respondent

	AND

	CHEUNG HUNG NGAI	Applicant

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Coram: Power, Ag C.J., Bokhary, J.A. and Leonard, J. in Court

Date of Hearing: 18 October 1996

Date of Delivery of Judgment: 18 October 1996

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J U D G M E N T

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Bokhary, J.A.:

1. On August 22 last year, this applicant, a businessman in his late 40s, was convicted by Deputy Judge Duggan in the District Court on the one charge which he faced, which was of false accounting back in 1992. And on September 25 last year, he was sentenced to three years' imprisonment. He seeks leave to appeal against his conviction and sentence. We are at the moment dealing with conviction.

2. Shortly stated, the background to the case is as follows. The applicant and a Chinese company were engaged in a joint venture for the manufacture of footwear. That was done in a factory in Dongguan. And the factory was operated by a joint venture company. The applicant owned 51% of the shares in the joint venture company, while the remaining 49% was owned by the Chinese joint venture partner.

3. In September 1992, the applicant purchased a quantity of machinery. That machinery went to the joint venture company at its factory.

4. The applicant had purchased the machinery for HK$1,392,380. But the Chinese joint venture partner paid over HK$2 million in respect of that machinery.

5. Why did it pay so much?

6. According to the Chinese joint venture partner, it did so because the applicant had duped it into doing so.

7. This is the effect of the account which the Chinese joint venture partner gave of its dealings with the applicant. Their arrangement was for him to buy machinery for the factory. He would pay 51% of the price since he owned 51% of the joint venture company; and it would pay 49% of the price since it owned 49% of the joint venture company. He represented to it that the machinery costs US$587,800. So they paid 49% of that amount, which came to over HK$2 million.

8. If all that is true, then the case against the applicant makes sense. The false accounting laid to his charge was the making of a false invoice to him for US$587,800 from the supplier of the machinery, a Hong Kong company.

9. Turning to defence case, the applicant said that he had purchased the machinery on his own account and on-sold it at a profit as his Chinese joint venture partner was aware. And as for the false invoice (produced as Exhibit P4) he denied giving any instructions for its preparation or indeed of seeing it until the Independent Commission Against Corruption seized it under a search warrant.

10. The invoice, as we said, had been found. And there was evidence that it was prepared on the applicant's instructions. The judge was satisfied beyond reasonable doubt that the applicant had indeed duped the Chinese joint venture partner and that the preparation of false invoice was carried out as part of the scheme and on the applicant's instructions.

11. Now, a former employee came forward to say (as the 5th witness for the prosecution) that he received instructions from the applicant for the preparation of an invoice such as Exhibit P4 said the following things.

12. He received instructions from the applicant. He himself then passed those instructions on to another person (who gave evidence as the 6th witness for the prosecution). Eventually, that other person came back with Exhibit P4.

13. When he came to give evidence, the 6th witness for the prosecution denied having seen Exhibit P4 although he said that he did on instructions prepare an invoice rather like it : being one, it seems, from what appears to be the Taiwanese parent of the Hong Kong company shown as the supplier in Exhibit P4.

14. If the judge was entitled as he did to take the view that the 5th prosecution witness was reliable on all material matters, then the relevant facts would be made out on behalf of the prosecution. The judge did take that view.

15. A great number of points have been taken by Mr Macrae for the applicant with a view to questioning the judge's findings of fact including those which he made in regard to the credibility of the 5th prosecution witness. The points were well developed. But they were all "jury" points. And the judge was quite entitled to find as he did, notwithstanding that those points could be made.

16. Next, it was argued by Mr Macrae that even if the applicant had represented that the machinery purchased for $1.3 million had been purchased for over $4 million, so that the Chinese joint venture partner would pay 49% of over $4 million rather than of $1.3 million, the applicant was nevertheless not dishonest.

17. As to how that can be said, the argument seems essentially to be this. Even though the applicant made money like that and the Chinese joint venture partner parted with money like that, nevertheless the Chinese joint venture partner would recoup its investment and make the profits which the applicant had "guaranteed" that it would make. It is a rather strange submission for a number of reasons. It involves the proposition that it was part of the joint venture contract that the position would be misrepresented by one party to the other. It is also strange for this reason. Just because somebody has been "guaranteed" a minimum, it does not mean that you can deprive him of anything he may actually make over and above that minimum.

18. The case was really a very plain one. It became a little bit more complicated because a lot of names were used and a lot of labels were used. We have cut through all of that. For example, we have not described the applicant as anything other than the applicant. We have not bothered to mention the name under which he traded.

19. There were points that could be made; and they have made with great skill by Mr Macrae. But there was an overwhelming case in which the judge clearly came to the right conclusion. Leave to appeal against conviction is refused.

[Submissions on Sentence]

20. It is urged on the applicant's behalf that the punishment imposed on him is manifestly excessive when one takes into account all the circumstances which includes the fact that he has lost his stake in the joint venture out of which the charge for which he was punished arose. The facts and figures in this regard are vague in the extreme.

21. Doing the best we can, all we can say is that the applicant does seem to have lost his investment. Of precisely what value it was, we do not know. But we will assume it to be substantial. The question is whether, even assuming that, this sentence is one which is manifestly excessive. In our judgment, quite simply, it is not.

22. The sentencing judge did not make any detailed findings as to what financial loss the applicant had suffered. That would have been impossible for him to do on such material as he had, even as it is impossible for us to do it on such material as we have. He does seem to have taken into account that in all probability the applicant did suffer substantially in some such way. But even taking that into account, he was of the opinion that three years was the appropriate sentence. And in our judgment that sentence is within the appropriate range. So leave to appeal against sentence is also refused.

(N P Power)	(K Bokhary)	(D J Leonard )
Ag Chief Justice	Justice of Appeal	Judge of the High Court

Representation:

Mr A C Macrae (instructed by the Director of Legal Aid) for the Applicant

Mr A E Schapel & Mr K W Leung (of the Attorney General's Chambers) for the Respondent

Appeal by the applicant to Court of Final Appeal. Appeal dismissed. Please refer to the appeal judgment of FAMC9/1997.

HKSAR v. CHEUNG HUNG NGAI

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