A. B. Palmer v R.

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

CRIMINAL APPEAL No. 19 of 1947

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JUDGMENT

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1. In this case the accused appeals against his conviction by a Magistrate on two charges of fraudulent conversion contrary to section 32 (i) (iii) (a) of the Larceny Ordinance, 1935. The sums involved were respectively $7000 and $614.45 and it was charged that the former was converted on or about the 21st January, 1947, and was part of the proceeds of a cheque for $10,000 received on account of the Chinese National Relief and Rehabilitation Organization; the $614.45 was the proceeds of a similar cheque alleged to have been converted on or about the 25th February. The accused was also originally charged with embezzlement of these two sums and with larceny under section 27 of the Larceny Ordinance, 1935, of the goods in respect of the sale of which the two cheques abovementioned were received. The embezzlement charges were in effect dropped by the Crown and the accused was acquitted on the larceny charge.

2. I will not recapitulate in detail the facts of the case which are set out very fully in the judgment of the learned Magistrate, but will state generally the main features. It is admitted that the accused, being in charge of CNNRA Waterways Transport at Hong Kong, a division of CNNRA itself, sold certain property of that organization and received in respect thereof the two cheques abovementioned, for $10,000 and $614.45 respectively on or about the dates mentioned in the charges. It was established that he had no right to sell property belonging to CNNRA Waterways Transport but he asserted that he believed that in the interests of his organization he was justified in doing so by reason of the pressing claims continually being made by creditors and the lack of financial support from CNNRA. At a date not clearly fixed but in any event shortly before receiving the first cheque, the accused obtained from a firm called Ah Pong &. Co., two of their printed forms of bill heads and at his request this firm obligingly stamped the blank forms in a convenient position with the rubber stamp of their firm name. On the bill head Ah Pong & Co. were described as Ship & House Painters, Building & General Contractors. These two forms were used and issued by the accused as receipts for the abovementioned cheques - it thus appeared that the receipts were issued by Ah Pong & Co. though the 10 cent stamp in each case was placed on top of the rubber stamp impression and cancelled with indecipherable initials. The proceeds of these two cheques were never entered in the books of CNNRA Waterways Transport with the exception of an entry of $3000 made under date the 31st January and expressed to be in respect of revenue from sale or surplus stores or materials:- "For cash received from sale of surplus stores in order to balance the pays (sic) to Wan Hung". It will be necessary to refer to this matter later. Early in March Mr. R.B. Goodwin commenced on investigation into the affairs of CNNRA Waterways Transport as an investigator for UNRRA and interviewed the accused on the 8th, the 11th and the 27th of that month. The accused behaved very suspiciously and while he did admit the sale of some small items and on the 27th March pointed out the entry of $3000 in the books, he made more than one false statement, and undoubtedly attempted to conceal the substantial sale that he had made. On the 28th March he saw Mr. Fletcher, the manager of the Macao Electric Lighting Co., and as such the purchaser of the goods in question, and made a tentative arrangement for the return of some of them, subject of course to re-imbursement. On the 1st April, accused sent the sum of $7000 to Mr. Fletcher for that purpose, but investigations had by that time reached such a stage that no return of any goods was actually made. Finally, it should be stated that the accused is a man with a brilliant record in the recent war, was not at the material times personally short of money, and there is evidence that his methods were informal and unbusinesslike.

3. In my consideration of an appeal such as this, based as it is only upon the ground that the decision of the magistrate was against the weight of evidence, I am bound by settled principles which arise from the fact that the Magistrate who decided the case had the advantage of seeing and hearing the witnesses; this Court has available only the written record and judgment. The importance of having had that advantage varies according to the particular case under consideration, being at its highest where there is direct conflict of oral evidence, and at its lowest if indeed it may not completely disappear, where the question to be decided depends upon inferences to be drawn from admitted facts, or upon documentary evidence which may be considered equally well by both Courts. In the present case, there are a great number of admitted facts and a certain amount of documentary evidence; but there is one aspect of the case in which the Magistrate did have an advantage i.e. that of hearing and seeing the accused giving in evidence his explanations of the various suspicious acts proved against him. A close parallel to the present case is that contemplated in the following passage from the judgment of the Court of Criminal Appeal viz. R. v. Weise, 15 C.A.R. 85 at p.90. "There was evidence given by the prosecution which, unexplained, admittedly justified the conviction of the appellant if the jury chose to find a verdict against him. The real point in the case was that it was contended for the appellant that the explanation which he gave by his evidence and the other evidence called on his behalf, was evidence which the jury ought to have accepted, and therefore that it was unreasonable of the jury, having regard to the explanation given by the defendant, to convict him. That was the logical basis on which this case must rest. They must ask whether they were satisfied that the evidence given by the defence in explanation of the case made by the prosecution was of such a character that they should set aside the verdict and reject the conclusion of the jury, who did not accept the defence put forward". This is the principle that I must apply in the present case, though I must also take into consideration the fact that I have the advantage of being able to consider the Magistrate's detailed reasons in writing whereas the Court of Criminal Appeal has nothing to assist it beyond the bare verdict of the jury.

4. Applying the foregoing considerations to the present case, I find that it would only be proper for me to interfere with the decision of the learned Magistrate, if I found from such parts of the evidence as are undisputed, including documentary evidence, or from legitimate inferences from such evidence, that his rejection of the explanation put forward by the accused was unreasonable, having regard to settled principles as to onus of proof. Certain matters in the record, such as the claim of the accused to have told his clerk on instructing him to make the entry of $3000 abovementioned, that there was more to come, I must disregard as depending upon the unsupported evidence of the accused, which evidence the Magistrate, who heard it, must have rejected.

5. In brief, the explanation of the accused is that he had at no time any intention of converting the moneys in question to his own use; that he had in fact retained them in his personal possession and made use of them on CNNRA Waterways Transport's behalf for temporary purposes and that the sum of $3000, part of the proceeds of the $10,000 cheque had been so used and entered in the books. The proceeds of that cheque had been previously sent on board a ship on account of wages but had been returned to him as being insufficient. He admitted that the retention of a large sum of CNNRA Waterways Transport's money in his possession was unbusinesslike but stated that he frequently did such things to meet contingencies such as vessels arriving during the week end. He had not paid the money into CNNRA Waterways Transport because there was some question of return of some of the goods and he did not regard the transaction as finalized. The same reason applied to his not having issued a CNNRA Waterways Transport receipt. His concealment of the true facts from Goodwin he said was an act of stupidity only, and that he intended, on realizing that he had done wrong in disposing of the goods, to minimize the amount thereof by getting some returned. He had entirely forgotten about the $614.45 until reminded by his solicitor. I should perhaps mention that I consider that the charge as to this amount must stand or fall with the main charge - I do not think the Crown would contend otherwise. It remains therefore to consider the evidence as to this explanation insofar as the facts are admitted or fully substantiated.

6. In the first place, the accused relies upon certain facts as showing that his acts were open and not surreptitious. The sale was made to a well established and reputable concern which required the goods for its own use; not to an obscure dealer of goods of dubious origin. The delivery was made...