R v Wong

Court of Criminal Appeal (NSW)|2001-11-01|Before: Studdert J, Greg James J, James J

CITATION : R v Wong [2001] NSWCCA 444 FILE NUMBER(S) : CCA 60309/01 HEARING DATE(S) : 1 November 2001 JUDGMENT DATE : 1 November 2001

PARTIES : Regina v Kai Chee Wong JUDGMENT OF : Ipp AJA at 48; Studdert J at 1; Greg James J at 50

LOWER COURT JURISDICTION : District Court LOWER COURT FILE NUMBER(S) : 00/11/0462 LOWER COURT JUDICIAL Shadbolt DCJ OFFICER :

LEGISLATION CITED : Crimes Act Evidence Act M v The Queen (1994) 181 CLR 487 CASES CITED: R v Birks (1990) 19 NSWLR 677 Browne v Dunn (1894) 6 R.67 (HL) Allied Pastoral Holdings Pty Limited v The Federal Commissioner of Taxation (1983) 44 ALR 607 DECISION : Appeal dismissed.

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF CRIMINAL APPEAL

60309/01 IPP AJA STUDDERT J GREG JAMES J

Judgment 1 STUDDERT J: The appellant, Kai Chee Wong, stood trial in the District Court charged with an offence under s 176A of the Crimes Act of defrauding the Australian and New Zealand Banking Group Limited (ANZ) in his dealings with that bank when acting in his capacity as a director of Strategic Commodities Pty Limited. After a trial of five days, the jury found the appellant guilty and following his conviction an order was made that he enter into a good behaviour bond for a period of two years. 2 The appellant appeals against his conviction. 3 On the Crown case, the opportunity for the appellant to defraud ANZ arose when the bank duplicated a transaction involving the sum of $US288,562.50 ($AUD431,269.62) and the appellant acted on the bank's error to his own advantage by a series of investments. 4 The evidence disclosed that the appellant had considerable experience in working for banks and he had acquired a working knowledge of international banking transactions. The appellant came to Australia in 1987 and at the time of the alleged offence, and for some considerable time before that, he was employed by Pacific Asia Merchandise Pty Limited (PAM) in which Liu Chiu Wah had a controlling interest. Liu was the general manager and the appellant managed the paperwork for trade transactions and for investments. The appellant also performed clerical and administrative duties for a number of companies Liu had set up, which included Strategic Commodities Pty Limited, the company named in the indictment. 5 The appellant was a director of Strategic Commodities as well as being the manager of it. Strategic Commodities and other companies controlled by Liu were intermediaries for the sourcing of goods and commodities to sell to PAM and the goods were generally obtained from a company in Hong Kong called Wealth Court Limited, also controlled by Liu. According to the appellant, Liu carried out the necessary dealings and advised the appellant through which of the intermediary companies the arrangements were to be made, and then it was for the appellant to do the necessary administrative work. Ms Liu did not give evidence at the trial. 6 Strategic Commodities had its bank account with the ANZ Bank. The procedure for a typical transaction appears to have been that Liu would inform the company picked as the intermediary that money was to be received for a particular commodity and that intermediary would be directed to pay most of the money to Wealth Court through a designated bank in Hong Kong. The intermediary company would retain a modest commission. When Strategic Commodities was the intermediary company it would send a letter to ANZ directing what was to occur to the moneys being received by ANZ. The letter Strategic Commodities used to write to ANZ giving directions appears to have followed a standard format as reflected in the six examples tendered at the trial as Exhibit A and in Exhibit B. 7 In the erroneous transaction earlier mentioned, the bank credited $AUS431,269.62 to the ANZ account of Strategic Commodities. 8 The circumstances in which this occurred were addressed at length in the evidence at the appellant's trial. Suffice it to say here that an ANZ employee misunderstood an internal bank communication and failed to make such internal inquiries which would have revealed that that same amount had, on instructions from Strategic Commodities, been paid to Wealth Court on 21 June 1999 (except for a modest commission payment deposited to Strategic Commodities ANZ account). 9 The instruction on which the bank had acted was conveyed in a letter from Strategic Commodities dated 17 June 1999 which became Exhibit B: "We are expecting to receive a TT of US$28,562.50 in our favour from Sydney. We have requested them to forward these funds to us through your goodselves. Upon receipt of these funds kindly remit funds as follows:

Beneficiary: Wealth Court Limited Account No: 150-2-601246 With: The Hongkong and Shanghai Banking Corpn. Ltd. Causeway Tower Branch, Hong Kong

Please convert the balance into AUD$ and credit to our account No.012002-354253611 with your Cnr. Pitt Street & Martin Place, Sydney NSW 2000."

(The document was signed by Ms Liu and by the appellant, and bears an endorsement by a bank officer that their signatures had been verified.) 10 When, subsequently to the bank acting on the above instruction, the appellant was informed by the ANZ employee of what she believed still to be a pending transaction, the appellant provided a letter to ANZ in a form different from those earlier letters (in Exhibit A and Exhibit B). The instruction dated 9 July 1999 was expressed as follows: " Re: Inward US$ transfer in our favour

We are expecting to receive a TT of US$288,562.50 in our favour from Citibank Ltd. Sydney. Please convert this amount into AUD$ and credit to our account No.012002-354253611 with your Cnr. Pitt Street & Martin Place, Sydney NSW 2000."

(This document was signed only by the appellant.) 11 ANZ acted on the above instruction and $AUD431,269.62 was deposited to the ANZ account of Strategic Commodities on 12 July 1999. In the course of the next three weeks the appellant made a series of withdrawals, which withdrawals almost exhausted the deposit. The withdrawals were used for the purchase of shares, some in the name of the appellant, some in his brother's name and some in the name of a company controlled by the appellant. 12 The Crown relied essentially upon circumstantial evidence to establish the appellant's alleged dishonesty and the fraud charged. I shall consider this evidence more closely when addressing ground 4 of the grounds of appeal. 13 The appellant's case was that he acted at all times on the instructions of Ms Liu. When the bank officer telephoned him on 7 July to advise that the amount of $US288,262.50 had been received and sought instructions from him, the appellant said he sought instructions from Ms Liu and what was done thereafter was done on her instructions. Ms Liu told him to see to it that the money was deposited in Strategic Commodities ANZ account and told him he was to purchase shares on Wealth Court Limited's behalf. The appellant tendered what purported to be written instructions from Wealth Court Limited dated 9 July; the letter addressed to Strategic Commodities Limited directed the use of the funds "With reference to the abovementioned invoice, please do not remit the US$287,550/- (90%) to us. Please use these funds to purchase on our behalf in the following Australian mining shares:

140,000 shares in Anaconda Nickel 70,000 shares in Comet Resources 50,000 shares in Tanganyika Gold (Options)

We would appreciate if your company could purchase these shares (or nearest units) at best possible prices (at your discretion) on our behalf under your company's name or individual's names whichever is convenient to you and hold these shares in trust for us for the time being.

In so doing we agree to hold you and/or your agents acting for this matter free from all financial liabilities and responsibilities. We also agree to accept any financial loss (if any) arising from the purchases or sales of the said shares by you on our behalf."

14 The credibility of the appellant's version was very much in issue at the trial, as was the authenticity of the written instruction from Wealth Court Limited of 9 July 1999 and of a further letter of instruction from that same company of 15 October 1999: " Re: 135,000 Anaconda Nickel; 70,000 Comet Resources &50,000 Comet Resource

We would like to sell the above shares at best market price/s (at your discretion) as soon as possible and would like you to remit the nett proceeds out of the sale of these shares to our US$ Account No.150-2-601246 with The Hongkong and Shanghai Banking Corporation Limited. Causeway Tower Branch." 15 It is to be observed that the "above shares" referred to in that selling instruction did not tally with those in the earlier instructions to acquire. 16 I now turn to consider the grounds of appeal. 17 It is convenient to considers grounds 1 and 2 together.

Ground 1: His Honour erred in rejecting evidence in relation to the shares purchased with funds allegedly from the Australian and New Zealand Banking Group Limited after October 1999.

Ground 2: His Honour erred in rejecting evidence from the accused as to his belief as to or on whose behalf he held shares after October 1999. 18 In the course of his evidence at the trial, the appellant was examined by his counsel concerning the acquisition of the shares after 9 July 1999, which he claimed he acquired on the instructions of Ms Liu. The share purchases in point were identified in a schedule which was tendered in evidence as Exhibit 8. The appellant said his last contact with Ms Liu was some time in October 1999, and that he did not know where she was. The appellant gave evidence that PAM went into liquidation and the liquidators had, to his knowledge, been unable to locate Ms Liu. The appellant was then asked this question, the rejection of which has prompted ground 1 of the grounds of appeal: "Q. These shares that you say you bought for Wealth Corp, there is I think about $430,000 worth of shares, what has happened to those shares? A. Those shares were frozen by the ANZ Bank and--

19 The question was rejected but the reasons for the ruling are not available to this Court. Counsel then asked the following question, which was also rejected, and to which ground 2 relates: "Q. Mr Wong you have told the Court that you believe you held these shares on behalf of Wealth Corp at the end of October 1999, who do you believe you hold the shares on behalf of after October 1999?"

20 It has been submitted that his Honour was in error in rejecting those questions and that it would have been relevant for the jury to be told of the fate of the shares as this would have assisted the jury in determining the state of mind of the accused as at 9 July 1999. It was argued that the matter was regarded as significant by the jury because during the course of the trial, and indeed on the same day as the above questions had been rejected, the jury asked the question "Where are all the shares now, have they been sold or does ANZ own them?"

21 This prompted the judge to give the jury the following direction (T 191): "I want to point out to you two or three things. The first is, that you have to decide this case on the evidence before you. Secondly, that that is not an issue in this trial and it'll become clear to you when I give you directions of law. In consequence, I've excluded any evidence in relation to where the shares are now, simply because it's not a matter which should concern you. Perhaps if you could just remove that from your considerations, just concentrate on the evidence as it comes."

22 Mr Bell submitted that it would have been relevant for the jury to be told, if such was the case, that the appellant had agreed to the shares being sold and the proceeds being returned to the ANZ bank. Such willingness, if established, would have been relevant when the jury was considering whether the appellant was guilty of the offence charged. 23 The fraudulent conduct the subject of the charge in the indictment was fraudulent conduct "on or about 9 July 1999" and the time relevant for assessing the appellant's state of mind was proximate to that. The Crown has submitted that it is not to the point to inquire about the situation in October 1999, three months later. There was evidence that by 19 July or thereabouts an officer of the bank had had a conversation with the appellant indicating he wanted to speak with the appellant about the duplicated payments. Any expressed willingness after that conversation to return the money to the bank may have been no more than an acknowledgement of wrongdoing, and was of no probative value in assessing the state of mind of the appellant when he acquired the shares. 24 It seems to me that the ruling made by his Honour on the questions which were rejected was strictly correct. Any response to these questions, if allowed, would have been a distraction for the jury which needed to focus on the issue as to whether the appellant acted dishonestly in July 1999, when he directed the deposit of the funds into the account of Strategic Commodities and when he made the subsequent withdrawals from that account to purchase shares. 25 In response to the earlier of the two questions before it was rejected as irrelevant, the appellant had informed the jury that the shares had been frozen by the ANZ bank. Even assuming the question was relevant, the answer would not have helped the jury in determining whether the appellant had been acting dishonestly at any relevant time. It seems to me that the appellant's case would not have been assisted had the jury been informed as to what happened to these shares. A convenient summary as to this is to be found in the following passage from the remarks on sentence of Judge Shadbolt: "The shares that were sold were 317,000 Comet Resources shares, 70,000 Tanganyika Gold Option, 30,000 Tanganyika Gold shares and 19,453 Anaconda Nickel shares. That sale realised a sum of $282,246.09. Of that, City Bank [sic] was paid AU$130,870.28 and ANZ was paid AU$151,375.81. What remains, 114,547 anaconda Nickel shares and the balance owing to the ANZ is 280,000. At October 2000, those remaining shares were worthy about $390,000 but the market has fallen in that regard and they are now worth only 177,000 in consequence of which about 100,000 is still owing. But, of course, the share may rise in value for all I know. They have not been sold because of a dispute between the two banks and an injunction sought by City Bank [sic] and undertakings in court in the ANZ proceedings."

26 Turning to the second of the questions asked, it is implicit in the form of the question that the appellant had earlier stated his belief that he held the shares on behalf of Wealth Court at the end of October 1999. The expression of that belief was, in my opinion, irrelevant, and it follows that I do not consider an expression of the appellant's belief as to who held the shares from November 1999 was of any relevance. 27 In my opinion, grounds 1 and 2 fail.

Ground 3: His Honour erred in not instructing the jury as to the content and effect of evidence as to the ownership of the funds transferred into Strategic Commodities Pty Limited's account with ANZ bank. 28 This ground of appeal is to be considered with the evidence of Mr Baldi, the administration manager of ANZ. He gave evidence in relation to the first transaction which resulted in moneys being credited to Wealth Court's account in Hong Kong in June 1999. He was asked questions also directed to explaining how the bank processed the same amount of money a second time. Then, in cross examination, he was asked this question and gave this answer: "Q. It was Citibank Limited's money and they asked you to do something with it? A. No, ultimately it was Strategic Commodities' money. It wasn't ANZ's. It wasn't Citibank's."

29 Later, in re-examination, Mr Baldi was asked these questions and gave these answers: "Q. Whose money was it that the ANZ bank sent to - put into the Strategic Commodities account after receipt of the letter dated 9 July asking that all those funds be transferred to the bank account, exhibit F? The document marked number 7? A. Sorry whose funds--

Q. Yes? A. They were ultimately Citibank's funds from their customer.

Q. At the time of transfer whose money was it. Which account did it come from? A. Inward drawing suspense account."

30 This ground of appeal is to be considered against the background of the above responses. At the conclusion of the summing up and in the presence of the jury, this exchange occurred between the trial judge and counsel for the appellant: "HIS HONOUR: Mr Bell are there any matters of fact that you wish me to raise to the jury?

BELL: Only one matter and that was the evidence of Mr Bawldy [sic]. The question and answer of the Crown. His money that was transferred on July 1999 and the answer was ultimately money with Citibank Limited.

HIS HONOUR: That's right. I think that was his evidence and I'll leave it at that."

31 It is the above exchange upon which this ground is based. 32 The transcript does not indicate that his Honour was asked to give any instruction following the above exchange. In that exchange the jury was reminded that it was money from Citibank that went into the account of Strategic Commodities. However the judge was not asked to give any instruction to the jury to the effect that if that evidence was accepted the jury ought not to find that the ANZ Group Limited was defrauded, nor was there any submission made that the acceptance of what Mr Baldi said would have that consequence. No directions were sought as to any particular significance that the jury ought to attribute to those answers. 33 Whether or not the money, or strictly the right to the money, ultimately belonged to Citibank did not bear upon the case presented by the Crown. The issue was whether ANZ was defrauded by the appellant and to prove that case it was not necessary for the Crown to prove any matters not the subject of directions given by the trial judge to the jury. 34 In my view ground 3 fails.

Ground 4: That the verdict of the jury was unreasonable 35 It has been submitted, consistently with M v The Queen (1994) 181 CLR 487 that this conviction should be quashed upon the ground that it was not open to the jury to be satisfied beyond reasonable doubt that the appellant was guilty. 36 The jury was correctly directed that the Crown had to prove:

(a) that the appellant was a director of a body corporate (in this case Strategic Commodities Pty Limited); (b) that ANZ had dealings with Strategic Commodities; (c) that the appellant defrauded ANZ in those dealings. 37 Elements (a) and (b) were not really in issue and were clearly established. In seeking to prove (c), the Crown relied upon evidence to the following effect:

(i) firstly the evidence established that the appellant had experience in banking and the inference that this experience would have put him on notice that a mistake had been made; (ii) there was no other transaction revealed by the evidence in which Strategic Commodities had been involved and in which a large sum had been banked to the ANZ account of that company. The usual procedure in the transactions with the bank had been that only a modest deposit for commission was credited to Strategic Commodities account. The balance of any large sum was sent on to Wealth Court. The pass sheets which were in evidence indicated that generally there was not much activity on the account of Strategic Commodities prior to 12 July. The very magnitude of the deposit on 12 July 1999 the Crown relied upon as being such as would have alerted the appellant to there being a mistake made by the bank; (iii) as observed earlier, it was only the letter of 9 July concerning this transaction which bore the appellant's signature alone and that letter was the only letter in evidence from Strategic Commodities directing the entire amount received by the bank to be credited to the account of Strategic Commodities; (iv) the very circumstances in which that letter was received were also unusual. The appellant hand-delivered the letter to ANZ. He had spoken to a clerk to check whether it was in order for him only to sign the letter. He did not go to those people with whom he normally dealt in the bank concerning international transactions, but rather he spoke to somebody in another section who apparently did not know him; (v) the appellant had been one of the signatories to the letter of 17 June. The sum of money to which that letter was directed was precisely the same amount as that concerning which the letter of 9 July was directed. As a signatory of both letters, the appellant must have been aware of this. Since he did not countermand the directions given on 17 June concerning the money received by the bank, he must have appreciated that the later direction contained in the letter of 9 July concerned an additional sum of money; (vi) then the Crown relied upon the expedition with which the appellant acted in using the money received in July for the acquisition of shares in his own name. 38 In my opinion, the above circumstances entitled the jury to find the necessary dishonesty and fraud by the appellant. 39 Mr Bell has submitted however that the appellant gave evidence in consequence of which the jury ought to find a reasonable doubt whether the commission of the crime had been proved. In particular, the appellant gave evidence:

(i) that Ms Liu had told him that the first payment had not been received and that he should deal with the second payment in precisely the way in which he did; (ii) then there was the communication from Wealth Court directing the purchase of the shares; (iii) the appellant expressed his belief that the first transaction had not been processed; (iv) the appellant gave evidence that when he received the later letter from Wealth Court Limited giving instructions to dispose of the shares, he had no reason to doubt the authenticity of that letter. 40 Moreover, Mr Bell submitted that it was not put to the appellant in cross examination that the conversations he claimed took place between the appellant and Ms Liu did not take place, and it was not put to the appellant that he did not receive the communications from Wealth Court, or indeed that he created those documents himself, or that they were known by him not to be genuine. 41 The credibility of the appellant's version of events was very much in issue, and essentially a matter for the jury to assess. Whilst the Crown Prosecutor did not put directly to the appellant that he was not acting on the instructions of Ms Liu in having the money banked to Strategic Commodities and thereafter in acquiring the shares, it seems to me that the cross examination of the appellant would have left an attentive listener in no doubt that the Crown challenged the truthfulness of the appellant's evidence. Indeed, the trial judge, when later sentencing the appellant, observed in his remarks on sentence (at p 4): "In the end his evidence was inadequate to raise a reasonable doubt. Indeed, there may have been more doubt at the end of the Crown case than at the end of the prisoner's cross examination."

42 Moreover, the appellant was cross examined extensively about his knowledge of banking matters and about his intimate knowledge of Strategic Commodities and its transactions. Questioning was directed to the taxation ramifications for Strategic Commodities in putting all the money into its account in July 1999. Cross examination tested the appellant's evidence that he acquired the shares for Wealth Court. He was cross examined as to why Ms Liu would have directed that the money be banked to Strategic Commodities account. Ms Liu had her own investment company, Alamain Investments. That company shared the same office as Strategic Commodities. He was tested on his failure to keep records which indicated which shares bought were purchased on his own behalf and which shares bought were for Wealth Court. He was questioned about putting shares in his company name and in the name of his brother when the transactions were supposed to be for the benefit of Wealth Court. He was cross examined about the photocopy nature of the letterhead on the document directing him to acquire the shares for Wealth Court and upon the fact that the shares purchased did not, in any event, accord strictly with the terms of the instruction in that document. Again, it was not suggested directly to him that he had made up the document but, to my mind, a fair reading of the cross examination would not leave the impression that the Crown was accepting the document as being genuine. 43 In the Crown's written submissions, reference was made to the dicta of Gleeson CJ in R v Birks (1990) 19 NSWLR 677 at 686 and following concerning the rule in Browne v Dunn. The Chief Justice said in that case (at 686): "It is accepted as a rule of professional practice in this State that there is a general requirement, subject to various qualifications, that a cross-examiner put to an opponent's witness the matters in respect of which, or by reason of which, it is intended to contradict the witness's evidence. (The rule is discussed, for example, by Hunt J in Allied Pastoral Holdings Pty Limited v The Commissioner of Taxation (1983) 1 NSWLR 1 at 16). The very subject matter of the rule, however, indicates a need for a degree of caution in its formulation; caution which is to be found in the speeches in Browne v Dunn itself. Cross-examination is an art, and the means that may be legitimately employed to cut down the effect of the evidence of a witness or to put a witness or a party upon fair notice of a point are multifarious."

44 Fairness requires that the rule in Browne v Dunn be observed, but I accept, as the Crown here submitted, that it must have been clear to the appellant and the jury after the Crown Prosecutor had completed cross examination that the appellant's version of events was being challenged. Subsequently, in the summing up, the trial judge completed a review of the Crown's submissions concerning the appellant's evidence by reminding the jury of the following submission: "Now he can remember all about the shares but he cannot remember about other matters of which he was taxed in cross examination and when one looks to his instructions on those very strange photocopy letterheads you would have very grave doubt that any of those transactions were on behalf of anybody else apart from the accused" (SU 28)

45 Counsel appearing for the appellant at the trial made no application for any direction to the jury because of a failure by the Crown Prosecutor to join issue with the appellant's version of events, and no complaint was made at the trial that matters had not been fairly put to the appellant in cross examination. Had it been perceived in the atmosphere of the trial that the Crown had been remiss in this respect, an application that the judge give the jury suitable instruction would doubtless have been made. 46 Having considered the appellant's evidence, and in particular his responses to questions asked in cross examination, it seems to me that the jury was entitled to reject the appellant's innocent explanation concerning the critical elements in the Crown case. It follows, in my opinion, that the verdict of the jury cannot be considered to have been unreasonable and this ground fails. 47 For the above reasons, I consider that this appeal against conviction should be dismissed. 48 IPP AJA: I agree with Mr Justice Studdert. I would add the following brief comments. In regard to grounds 1 and 2, in my view the evidence, the subject of those grounds, was neutral, and would not have assisted the appellant in any material way. 49 As regards ground 3, as a result of the first transaction, Strategic Commodities obtained rights as against the ANZ Bank. The bank transferred funds or, more correctly, rights to Strategic Commodities in consequence of its obligations in respect of those rights that Strategic Commodities had acquired against it. This conduct on the part of the bank was sufficient to give rise to the offence alleged. I agree that the appeal against conviction should be dismissed. 50 GREG JAMES J: I agree with what has been said both by the presiding judge and Mr Justice Studdert. I add the following. As to grounds 1, 2 and 3, had the material it was sought to put before the jury any relevance, it undoubtedly would have fallen within the application of s 135(b) of the Evidence Act and should, for that reason at least, have been excluded. 51 Complaint was made that the Crown had failed to cross examine the accused in respect of the authorship, authenticity and content of certain of the exhibits. The submission based upon that proposition was, at the least, confusing. In Allied Pastoral Holdings Pty Limited v The Federal Commissioner of Taxation (1983) 44 ALR 607, Hunt J (as he then was), set forth an extensive analysis of the application of the principles in Browne v Dunn (1894) 6 R.67 (HL) which is highly instructive and which enables one to see that where a party bears the issue in chief and seeks to discharge that issue, the relevant requirement of putting the opponent on notice is usually satisfied. There is no substance in the criticism. I agree with the orders proposed. 52 IPP AJA: Those will be the orders of the Court. **********

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