FACC No.

11 of 2008

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 11 OF 2008 (CRIMINAL)

(ON APPEAL FROM CACC NO. 164 OF 2007)
_____________________

Between:

HONG KONG SPECIAL ADMINISTRATIVE REGION Appellant

- and -

CHEUNG KWUN YIN (張冠賢) Respondent

_____________________

Court : Chief Justice Li, Mr Justice Bokhary PJ,

Mr Justice Chan PJ, Mr Justice Ribeiro PJ and
Sir Anthony Mason NPJ

Date of Hearing : 29 June 2009

Date of Judgment : 17 July 2009

JUDGMENT

Chief Justice Li :
1. Section 18D(1) of the Theft Ordinance, Cap.210,
criminalizes the dishonest procuring by deception of the making of an
entry in a record of a bank. It provides :
“Any person who dishonestly, with a view to gain for himself or another or
with intent to cause loss to another, by any deception (whether or not such
deception was the sole or main inducement) procures the making, omission,
altering, abstracting, concealing or destruction of an entry in a record of a
bank or deposit-taking company, or any subsidiary thereof the principal
business of which is the provision of credit, shall be guilty of an offence and
shall be liable on conviction upon indictment to imprisonment for 10 years.”
 2

Section 18D(2)1 defines “deception” to have the same meaning as in s.172,

namely :
“‘deception’ means any deception (whether deliberate or reckless) by words or
conduct (whether by any act or omission) as to fact or as to law, including a
deception relating to the past, the present or the future and a deception as to
the intentions of the person using the deception or any other person.”

The question arising in this appeal concerns the correct interpretation of

s.18D(1). The issue is, whether on its proper interpretation, the deception
must be practised on the bank in question3.

Convictions at trial
2. On 24 April 2007, the respondent was convicted in the
District Court (HH Judge Yau) of an offence under s.18D(1) and an
offence of blackmail. He was sentenced to three years’ imprisonment for
each offence. One year of the sentence for the blackmail offence was
ordered to be served consecutively to the sentence for the s.18D(1)
offence, making a total term of four years. The present appeal is only
concerned with the s.18D(1) conviction.

The facts
3. The facts can be shortly stated. The respondent developed a
sexual relationship with the first prosecution witness (“PW 1”), a married
businesswoman, who was referred to as “X” at the trial. In

1
It also contains definitions of “bank”, “deposit-taking company”, “record” and
“subsidiary”.
2
Section 17 provides for the offence of obtaining property by deception.
3
Section 18D(1) refers to “a bank or deposit-taking company, or any subsidiary
thereof the principal business of which is the provision of credit”. Since the
present case concerns a bank, it is unnecessary to refer to the other financial
institutions.
 3

December 2004, the respondent borrowed sums totalling $200,000 from

PW1 on the pretext that he needed the money to be engaged in business.
In January 2005, the respondent informed PW1 that he would like to open
a premier account at HSBC in order to enable him to apply for a platinum
credit card. He said that a minimum of $1 million was required to open
such an account and asked PW1 to lend him the money. He said that
PW1 only needed to lend him $800,000 as he still had the $200,000 PW1
had earlier lent him. In order to please the respondent and to maintain
their relationship, PW1 acceded to his request.

4. On 24 October 2005, PW1 and the respondent opened a joint

account, into which PW1 deposited a cheque of $800,000. This was the
subject matter of the s.18D(1) charge. The respondent promised her that
after he obtained the platinum credit card in about one month’s time, he
would repay the $800,000 to PW1. At that time, PW1 was aware that the
respondent had used the $200,000 to buy shares but she trusted that he
would eventually sell the shares and put the money into the account.

5. On 13 November 2005, the respondent told PW1 that he had

used up the money in the joint account and that he would not repay the
money to her. Further, he threatened her that unless she gave him
another $1 million, he would disclose their relationship to her husband.
This was the subject matter of the blackmail charge. PW1 then
discovered that only $1,000 was left in their joint account and reported
the matter to the Police.

6. On the facts, in relation to the s.18D(1) offence, the relevant

entry in the record of a bank was the credit entry of $800,000 in the joint
account in the records of HSBC. The deception consisted of the false
 4

representation to PW1 that HSBC required to have $1 million in the

account for applying for a platinum credit card and that the respondent
was to apply for such a card, whereas in fact, the respondent had no
intention of applying. Such deception was practised on PW1 and not on
HSBC.

The Court of Appeal

7. The Court of Appeal (Cheung JA, Yuen JA and Barnes J)
upheld the conviction for blackmail but quashed the conviction for
the s.18D(1) offence. The Court of Appeal accepted that the wording
of s.18D(1) is capable of covering a case, such as the present, where the
target of the deception was not the bank. But it held that on its true
interpretation, the offence created by s.18D(1) required that the deception
must be practised on the bank. The Court of Appeal reached this result
on the basis of statements made by the Attorney General in the
Legislative Council in the course of the passage of the Theft (Amendment)
Bill 1986 which among other things introduced the s.18D(1) offence. It
read these statements as defining the purpose of s.18D(1) to be the
creation of an offence which required the deception to be practised on a
bank but not anyone else4.

8. The Court of Appeal was of the view that if its interpretation

of s.18D(1) were wrong, the respondent was properly convicted of
the s.18D(1) offence.

4
Subsequently, in HKSAR v Chan Tak Ping CACC 142/2008 (28 August 2008), the
Court of Appeal (Yeung JA, Yuen JA and Barnes J) followed its decision in the
present case on the interpretation of s.18D(1) as it considered itself bound and
quashed a conviction for an offence under s.18D(1).
 5

9. As to sentence, the Court of Appeal considered that : (1) The

appropriate sentence for the blackmail offence was 2½ years’
imprisonment; and (2) If the s.18D(1) conviction were sustained : (a) the
appropriate sentence for that offence would also be 2½ years’
imprisonment and (b) one year of the sentence for the blackmail offence
should be ordered to be served consecutively to the sentence for the
s.18D(1) offence, making a total sentence of 3½ years’ imprisonment
instead of the sentence of 4 years’ imprisonment imposed by the trial
Judge.

Leave to appeal
10. On 19 December 2008, the Appeal Committee certified the
following question of law and granted leave to appeal.
“Is the reference to “any deception” in section 18D(1) of the Theft Ordinance,
Cap.210 restricted to deception which targets a bank or deposit-taking
company?”

Approach
11. In interpreting a statute, the court’s task is to ascertain the
intention of the legislature as expressed in the language of the statute.
This is of course an objective exercise. The court is not engaged in an
exercise of ascertaining the legislative intent on its own. As Lord Reid
pointed out in Black-Clawson International Ltd v Papierwerke Waldhof –
Aschaffenburg AG [1975] AC 591 at 613G.
“We often say that we are looking for the intention of Parliament, but that is
not quite accurate. We are seeking the meaning of the words which
Parliament used.”

12. The modern approach is to adopt a purposive interpretation.

The statutory language is construed, having regard to its context and
purpose. Words are given their natural and ordinary meaning unless the
 6

context or purpose points to a different meaning. Context and purpose

are considered when interpreting the words used and not only when an
ambiguity may be thought to arise. In HKSAR v Lam Kwong
Wai (2006) 9 HKCFAR 574 at 606E, Sir Anthony Mason NPJ stated :
“The modern approach to statutory interpretation insists that context and
purpose be considered in the first instance, especially in the case of general
words, and not merely at some later stage when ambiguity may be thought to
arise.”

See also Medical Council of Hong Kong v Chow Siu

Shek (2000) 3 HKCFAR 144 at 154 B-C. As the Court pointed out in
Town Planning Board v Society for the Protection of the Harbour
Limited (2004) 7 HKCFAR 1 at 14 A-C, the mischief rule is an early
example of the purposive approach. And the purposive approach
(including the mischief rule) has been reflected in Hong Kong in s.19 of
the Interpretation and General Clauses Ordinance, Cap.15.

13. The context of a statutory provision should be taken in its

widest sense and certainly includes the other provisions of the statute and
the existing state of the law. See Town Planning Board v Society for the
Protection of the Harbour Limited at 13 I-J and Attorney-General v
Prince Ernest Augustus of Hanover [1957] AC 436 at 461.

14. The purpose of a statutory provision may be evident from

the provision itself. Where the legislation in question implements the
recommendations of a report, such as a Law Reform Commission report,
the report may be referred to in order to identify the purpose of the
legislation. The purpose of the statutory provision may be ascertained
5
Section 19 provides : “An Ordinance shall be deemed to be remedial and shall
receive such fair, large and liberal construction and interpretation as will best
ensure the attainment of the object of the Ordinance according to its true intent,
meaning and spirit.”
 7

from the Explanatory Memorandum to the bill. Similarly, a statement

made by the responsible official of the Government in relation to the bill
in the Legislative Council may also be used to this end. See PCCW –
HKT Telephone Ltd v Telecommunications Authority (2005) 8
HKCFAR 337 at 351 F-J and Director of Lands v Yin Shuen Enterprises
Ltd (2003) 6 HKCFAR 1 at 15 A-H.

Pepper v Hart
15. Whilst as noted above, statements made by officials of the
Government in relation to the bill in the Legislative Council may be used
to identify the purpose of the statutory provision, employing it in order to
ascertain the meaning of the statutory words stands in a fundamentally
different position. In England, in Pepper v Hart [1993] AC 593, the
House of Lords decided that such statements may be referred to as an aid
to interpretation for the purpose of ascertaining the meaning of the
statutory language, where the following three conditions are met : (a) The
legislation is ambiguous or obscure or leads to an absurdity; (b) The
material relied upon consists of one or more statements by a Minister or
other promoter of the Bill together if necessary with such other
Parliamentary material as is necessary to understand such statements and
their effect; (c) The statements relied upon are clear.

16. The House of Lords has emphasised that the three conditions
should be strictly insisted on. See R v Environment Secretary, Ex parte
Spath Holme Ltd [2001] 2 AC 349 at 392 D-E, 408 C-D, 413 G-H and
Robinson v Secretary of State [2002] NI 390 at 405e. Under the approach
laid down in Pepper v Hart, where the three conditions are fulfilled, the
Minister’s statements may be used to resolve the ambiguity, obscurity or
absurdity. In R v Environment Secretary, Ex parte Spath Holme Ltd,
 8

Lord Nicholls (at 399 C-E) emphasised that even where the conditions
are met, Government statements, however they are made and however
explicit they may be, cannot control the meaning of legislation and it is
for the court when determining what was the intention of Parliament in
using the words in question, to decide how much importance, or weight,
if any, should be attached to a Government statement.

17. In Hong Kong, although the Court has applied the approach
in Pepper v Hart on isolated occasions on the assumption that it applies 6,
it has kept open the question whether and the extent to which that
approach is applicable in Hong Kong. See Lam Pak Chiu v Tsang Mei
Ying (2001) 4 HKCFAR 34 at 44 D-E and PCCW – HKT Telephone Ltd v
Telecommunications Authority at 352 F-H. It is unnecessary to determine
this question in the present case. When it arises for examination, the
practical as well as the conceptual and constitutional implications
involved in the Hong Kong context would have to be considered.

Section 18D(1)
18. Section 18D(1) in so far as relevant to the present case
provides :
Any person who dishonestly, with a view to gain for himself or another or
with intent to cause loss to another, by any deception (whether or not such
deception was the sole or main inducement) procures the making, … of an
entry in a record of a bank …, shall be guilty of an offence …. .

19. Section 18D was enacted by the Theft (Amendment)

Ordinance 1986 (“the 1986 Ordinance”). That Ordinance effected three
changes to the Theft Ordinance. In addition to introducing s.18D, the

6
See Commissioner of Rating & Valuation v Agrila Ltd (2001) 4 HKCFAR 83 at
104 A-B and Registrar of Births and Deaths v Syed Haider Yahya Hussain (2001)
4 HKCFAR 429 at 444 A-C.
 9

1986 Ordinance amended s.18 which provides for the offence of

obtaining property by deception. Section 18(2) provides for the cases in
which a pecuniary advantage is to be regarded as obtained for a person.
Section 18(2) was amended (1) to provide in s.18(2)(a) for the case where
the person concerned is granted a credit facility or credit arrangement, an
improvement to, or extension of its terms or a credit to or a set off against
an account, whether it is in his name or the name of another person or is
legally enforceable or not and (2) to provide in s.18(2)(b) for the case
where the person concerned is allowed to borrow by way of overdraft or
to take out any policy of insurance or annuity contract or obtains an
improvement on the terms he is allowed to do so, whether it is in his
name or the name of another person or is legally enforceable or not 7 .
Further, the 1986 Ordinance increased the level of penalty for certain
offences.

20. The context of s.18D included the existing state of the Theft
Ordinance. In 1986, it already included various offences involving
deception : obtaining property by deception (s.17), obtaining pecuniary
advantage by deception (s.18), obtaining services by deception (s.18A)
and evasion of liability by deception (s.18B).

21. The purpose of s.18D is evident from the provision itself. It

was to introduce a new offence involving deception. The Explanatory
Memorandum stated (in para 1) that the object of clause 3 proposing the
enactment of s.18D is “to make it an offence to procure by deception

7
Before the 1986 Ordinance, s.18(2)(b) already contained the case in (2). What
was added by that Ordinance were the words “whether any such overdraft, policy
of insurance or annuity contract – (i) is in his name or the name of another person;
or (ii) is legally enforceable or not.”
 10

certain changes to entries in certain records”. Paragraph 3 of the

Explanatory Memorandum states :
Clause 3 adds a new section 18D to the principal Ordinance to make it an
offence for a person to procure by deception the making, not making, altering,
abstracting, concealing or destruction of an entry in a banker’s record or the
record of a deposit-taking company where such action is for the purpose of
gain by that person or another or with intent to cause loss to another.

22. Section 18D(1) should be construed in the light of its context

and purpose. Given its context and purpose, it should be given its natural
and ordinary meaning. Its natural and ordinary meaning is consistent
with its context and purpose and there is no justification for giving the
statutory language any different meaning. The offence consists of the
dishonest procuring by deception of the making of an entry in a record of
a bank with a view to gain or intent to cause loss. Procuring involves
causing the making of the entry and the defendant must have the intent of
procuring the relevant entry. The procuring must be dishonest with a
view to gain or intent to cause loss and the means employed to procure
must be deception. If the means employed do not involve deception, the
offence under s.18D(1) would not be made out.

23. Section 18D(1) refers to a person who dishonestly, with a

view to gain or with intent to cause loss, by any deception procures the
making of an entry in a record of a bank. On the natural and ordinary
meaning of the statutory language, there is no limitation on the type of
person on whom the deception is practised and there is no requirement
that it must be practised on the bank where the relevant entry is made.
Where the deception by the defendant was practised not on the bank but
on another party, it is necessary to establish both that the relevant entry in
the record of a bank was procured as a matter of causation and that the
 11

defendant intended by deception on that party to procure the relevant

entry.

24. There may be cases where a defendant, practising deception

on a bank’s customer, has no intent to procure an entry in the record of
that bank, but an entry is nevertheless made in the bank’s record on the
customer’s initiative as a consequence of the deception. In such cases the
offence is not made out because there is no relevant dishonest intent to
procure an entry in the bank’s record. The present case is plainly not
such a case because both the requirements of causation and intent are
satisfied.

The Attorney General’s statements

25. The Court of Appeal in interpreting s.18D(1) to be restricted
to the case where the deception is practised on the bank in the record of
which the entry is made was decisively influenced by the Attorney
General’s speeches in the Legislative Council. The Attorney General
made two speeches in the Council during the passage of the Bill;
on 12 March 1986 in moving the second reading of the Bill and
on 16 July 1986 on resumption of debate on the second reading.

26. These speeches were extensively quoted in the judgment of

the Court of Appeal (at paras 21 and 22) and it is unnecessary to set them
out in this judgment. The Attorney General’s speeches of course related
to the entire Bill which proposed the enactment of the 1986 Ordinance.
As has been noted when referring to that Ordinance, apart from proposing
the introduction of the new offence in s.18D, the Bill had proposed
amendments to s.18(2) so that for the offence of obtaining a pecuniary
advantage by deception under s.18, a pecuniary advantage is regarded as
 12

obtained, (1) where the person concerned is granted a credit facility or

credit arrangement, an improvement to, or extension of, its terms or a
credit to, or a set-off against, an account or (2) where the person
concerned is allowed to borrow by way of overdraft or to take out any
policy of insurance or annuity contract or obtains an improvement on the
terms he is allowed to do so.

27. In his first speech on 12 March 1986, the Attorney General

referred to the difficulties the prosecution had encountered under the
existing law in dealing with certain fraudulent transactions carried out for
the purpose of obtaining credit from banks or deposit taking companies.
He stated :
“The best course therefore is to enact new provisions to make these and
similar activities criminal, as they should be, and the Theft (Amendment) Bill
1986 is designed to achieve this object.”

He informed the Council that clause 2 of the Bill (proposing amendments

to s.18(2)) makes it an offence to obtain by deception credit from banks
or deposit-taking companies and that clause 3 (proposing the introduction
of s.18D) “creates a new offence for a person dishonestly to procure by
deception the making of an entry in the record of a bank or deposit-taking
company”. He concluded by saying that the two new provisions “will
bring the fraudulent activity of obtaining credit by deception clearly
within the ambit of the criminal law.”

28. In his second speech on 16 July 1986, he referred to the

amendments proposed to clauses 2 and 38 and stated that the amendments

8
The amendments are not material for present purposes. They were directed to
identifying and defining the financial institutions within the purview of s.18D(1).
 13

“will now clearly identify those bodies on which [t]his kind of fraud will
ordinarily be perpetrated, that is to say, banks and deposit-taking companies,
and subsidiaries of banks or deposit-taking companies whose principal
business is the provision of credit.”

29. Whilst the Attorney General directed attention to fraudulent

activities of obtaining credit from banks or deposit-taking companies, he
did not say that these were the only activities which would be covered by
the proposed legislation. On the contrary, he made clear by his reference
to “similar activities” in his first speech and to “will ordinarily be
perpetrated” in his second speech that these were not the only activities
which would be caught. His speeches cannot be read as identifying the
purpose of the introduction of s.18D to be to criminalize only those cases
where the deception is practised on banks or deposit-taking companies.
The purpose of s.18D, as is evident from the provision itself and as stated
in the Explanatory Memorandum to the bill referred to above, was
entirely consistent with what was stated in the Attorney General’s
statements.

Chow Wai-ming
30. The Court of Appeal distinguished its previous authority in
Attorney General v Chow Wai-ming [1992] 1 HKCLR 214 on the basis
that it did not authoritatively state that s.18D(1) covers situations other
than where the deception was practised on banks and deposit taking
companies. On the facts, the deception was practised not on the bank in
whose record the entry was made but on the retailer who accepted the
payment by credit card from the accused who dishonestly used it in
excess of the credit limit with no real intention of ever making repayment.
That decision is consistent with the proper interpretation of s.18D(1) as
held in this judgment.
 14

Answer to the certified question

31. The answer to the certified question (see para 10) is in the
negative.

Result
32. The appeal should be allowed and the conviction for
the s.18D(1) offence should be restored. On this basis, as noted in para 9
above, the Court of Appeal (1) would have imposed a sentence of 2½
years’ imprisonment for this offence and (2) would have ordered that one
year of the sentence for the blackmail offence should be served
consecutively to the sentence for the s.18D(1) offence. Since the
respondent has already served his sentence for the blackmail offence, the
orders, which the Court of Appeal would have made, are no longer
appropriate. Instead, in order to achieve the same effect, that is, a total
sentence of 3½ years’ imprisonment for both offences, the Court should
impose a sentence of one year’s imprisonment for the s.18D(1) offence
which should now be served.

Mr Justice Bokhary PJ :
33. I agree with the judgment of the Chief Justice.

Mr Justice Chan PJ :
34. I agree with the judgment of the Chief Justice.

Mr Justice Ribeiro PJ :
35. I agree with the judgment of the Chief Justice.
 15

Sir Anthony Mason NPJ :

36. I agree with the judgment of the Chief Justice.

Chief Justice Li :
37. The Court unanimously allows the appeal and restores the
conviction for the s.18D(1) offence. A sentence of one year’s
imprisonment is imposed for such offence and should now be served.

(Andrew Li) (Kemal Bokhary) (Patrick Chan)

Chief Justice Permanent Judge Permanent Judge

(R.A.V. Ribeiro) (Sir Anthony Mason)

Permanent Judge Non-Permanent Judge

Mr Kevin P Zervos SC and Mr Anthony Chau (of the Department of

Justice) for the appellant

Mr Paul C L Leung (instructed by Messrs Yaddy Cheung & Co and

assigned by the Legal Aid Department) for the respondent