LC Paper No. CB(2)2428/98-99
(These minutes have been
seen by the Administration)
Ref : CB2/BC/10/98
Bills Committee on Theft (Amendment) Bill 1998
Minutes of meeting
held on Thursday, 29 April 1999 at 8:30 am
in Conference Room B of the Legislative Council Building
Hon Mrs Miriam LAU Kin-yee, JP (Chairman)
Hon Martin LEE Chu-ming, SC, JP
Hon Margaret NG
Hon Jasper TSANG Yok-sing, JP
Hon Ambrose LAU Hon-chuen, JP
Public Officers Attending:
Clerk in Attendance:
- Mr John READING
- Senior Assistant Director of Public Prosecutions
- Ms Sherman CHAN
- Senior Assistant Law Draftsman
- Mr Llewellyn MUI
- Senior Assistant Solicitor General (Acting)
Staff in Attendance:
- Mrs Percy MA
- Chief Assistant Secretary (2)3
I. Withdrawal from membership
- Mr LEE Yu-sung
- Senior Assistant Legal Adviser
- Mr Paul WOO
- Senior Assistant Secretary (2)3
Members noted that Hon Andrew CHENG Kar-foo had withdrawn from the membership of the Bills Committee.
II. Meeting with the Administration
(LC Paper No. CB(2)1800/98-99(01))
Proposal to retain the common law offence of conspiracy to defraud
2. Miss Margaret NG informed members that as requested by her at the last meeting, in pursuance of the Hong Kong Bar Association's concern that a case had yet to be made out for the proposal to retain the common law offence of conspiracy to defraud, a meeting had been arranged by the Administration for her to discuss with representatives of the Department of Justice on how prosecuting officers could run into real difficulties in prosecuting prevalent offences should the common law offence be dispensed with. At the end of the discussion, she was satisfied that there was a considerable number of cases which would not have proceeded if the proposed statutory offence of fraud alone was all that was available at that time. In those cases such as the Kevin HSU case and the rest (paragraph 8 in LC Paper No. CB(2)1800/98-99(01) refers), there were difficulties in identifying an act of deception, or in proving a case of financial gain or loss induced by deceit, which were the essential elements of the proposed offence of fraud. Other substantive offences which might be used in dealing with those cases, such as an offence under the Prevention of Bribery Ordinance, would have been insufficient to reflect properly the criminality involved. Miss NG said that she tended to accept the Administration' view to retain the common law offence of conspiracy to defraud so that similar cases could be caught.
3. Senior Assistant Director of Public Prosecutions (SADPP) briefly took members through the cases listed in the paper. He advised that there were similarities in those cases in that they involved banks or public companies where some responsible persons acting for the companies were compromised in one way or another in the scheme of fraud, and as a consequence it could not be said that the companies as such were deceived. The bank managers, for example, were a part of the fraud themselves and therefore there was no deceit practised on them. So far as the shareholders were concerned, as they knew nothing of the fraud, there was no inducement directly perpetrated on them to commit an act (or make an omission) to result in financial benefit or prejudice to another person. SADPP said that under the proposed section 16A(1) of the Bill, it was essential for the commission of the statutory offence of fraud for the act or omission of the person who had been deceived to have been induced by deceit, and that the act or omission must result in a benefit or prejudice to some other person. In order to prove the offence, it was necessary to prove all these elements as well as a direct connection between these elements. In the cases cited, such proof could not be established.
4. Members also noted the Administration's advice that although the 1977 Criminal Law Act introduced in UK had the effect of abolishing conspiracies at common law and creating a statutory offence of conspiracy, the new law enacted specifically preserved the common law offence of conspiracy to defraud. In 1987, the UK Government amended the Criminal Justice Act to restore the full usefulness of the offence of conspiracy to defraud. Meanwhile, the English Law Commission had been reviewing all offences involving dishonesty and had deferred making a final recommendation on conspiracy to defraud until the review had been completed. Having taken all these factors into consideration, members agreed with the Administration's view that as the Theft Ordinance was virtually identical to the English Act, it would be advisable to preserve the common law offence of conspiracy to defraud until such time when the Administration had had a chance to examine the outcome of the English Law Commission's review and to decide on how the matter should be taken forward.
|5. Members requested the Administration to keep the matter in view and report to the LegCo Panel on Administration of Justice and Legal Service the progress of the review in UK in due course.||Adm
"Benefit" and "prejudice"
"Benefit" or "prejudice" a result of an act or omission induced by deceit
6. In reply to Miss Margaret NG's question, SADPP said that the legislative intent of the proposed section 16A(1), which set out the meaning of the new offence of fraud, was that there had to be a necessary and direct causal relationship between an act (or omission of an act) induced by deceit and the "benefit" or "prejudice" so resulted. He said that the offence of fraud being a criminal offence required a high standard of proof. This accounted for the difficulty in applying the new offence of fraud to cases such as the World Trade Centre case and the CHIM Pui-chung case where it could not be proved that the alleged deceit practised on the Securities and Futures Commission directly resulted in a financial gain or loss.
7. Senior Assistant Law Draftsman (SALD) said that section 16A(1) in clause 3 of the Bill required that "benefit" or "prejudice" referred to in paragraphs (a) and (b) thereof respectively had to be a consequence of the whole chain of action specified in the preceding part of that subsection. In drafting section 16A(1), the Administration had looked into other legislation where the word "results" appeared. She quoted a judgment on an UK Workmen's Compensation Act case, which ruled that -
"Where death results from the injury (s.8 of the Workmen's Compensation Act 1925 (c. 84)), that means whether death in fact resulted from the injury. If it did in fact, it makes no matter how improbable or how unnatural the result may have been. The question whether one event 'results' from another involves an examination of the chain of causation. There must be no break in the chain. If there is a break, then the final event is not the result of the initial event. But the break must be an actual effective break,.............from which a new chain of causation commences...............Otherwise there is no such break in the chain as to prevent the final event from being the 'result' (though an improbable result) of the initial event."
As regards the use of the word "results" in other criminal offences, SALD said that a reference example could be found in section 3(1) of the Dentists Registration Ordinance (Cap.156), where it was stated that ".........any person, not being a registered dentist, who - .........(b) practises dentistry on a person within Hong Kong which results in personal injury to that person commits an offence ..............". She considered that the use of the word "results" in the present drafting of proposed section 16A(1) was consistent with the approach adopted for other legislation.
8. SALD further advised that the Administration had considered other alternative ways of drafting section 16A(1), such as to add the words "directly or indirectly" before "results", but was concerned that that would make the scope of the offence too wide. The Administration concluded that it was appropriate to leave the present drafting of section 16A(1) intact as proposed in the Bill.
"Benefit" or "prejudice" being restricted to financial or proprietary gain or loss
9. SALD tabled for members' consideration the draft Committee Stage amendments (CSAs) to section 16A(3) in clause 3 of the Bill to amend the definition of "benefit" and "prejudice" so that "benefit" and "prejudice" as amended referred to any financial or proprietary gain or loss, whether temporary or permanent. (The draft CSAs have been circulated to members vide LC Paper No. CB(2)1824/98-99(01)). The proposed new definitions were identical to those suggested by the Law Reform Commission (LRC). Members agreed to the draft CSAs.
Definition of "deceit"
10. Members noted that the definition of "deceit" under section 16A(3) in clause 3 of the Bill differed from that proposed by the LRC in that the former contained the additional references to "[deceit] relating to the past, the present or the future" and "opinions". Members enquired about the justifications for adding the references.
11. SALD replied that in the course of drafting, the Administration had made reference to the definition of "deception" in section 17 of the Theft Ordinance and took the view that "deception" and "deceit" should have a comparable meaning. As the definition of "deception" in section 17 contained the elements of "the past, the present or the future" and "opinions", the same references were included in the proposed definition of "deceit" in section 16A(3).
12. Miss Margaret NG opined that the specific reference to "the past, the present or the future" did not appear to serve any substantive purpose in the present context. She also considered that the word "opinions" should be removed because "misrepresentations" normally did not cover "opinions". She preferred to adopt the simpler definition as suggested by the LRC to avoid confusion in interpretation.
13. Mr Martin LEE considered that there could be a valid reason for including the reference to "the past, the present or the future" in the definition as it could serve to clarify that "as to fact" did not only cover an existing fact, but also a past or future event. Mr LEE added that he saw a basic difference between "intentions" and "opinions". A broader definition incorporating the element of "opinions" could cover situations where a person might be effectively deceived by another person making a deliberate or reckless statement of words and yet the defence was in a position to argue that it was only a statement of opinions rather than a dishonest representation.
14. SALD advised that the use of the phrase "including ......." was common in legal definitions. It was a device to clarify what the matters mentioned before such reference in a definition were referred to. She said that the precedent on which the definition of "deception" in section 17 was based might have contemplated the possibility that a reference to fact might not be capable of referring to past or future events. In addition, there could be arguments that "as to fact or as to law" did not include "opinions". Therefore, it was preferable to set these out in the definitions for avoidance of doubt, especially where such definitions were used in a criminal context.
|15. To facilitate the Bills Committee to come to a consensus view on the matter, members requested the Administration to conduct further researches into the UK precedents to explain why references to "relating to the past, the present or the future" and "opinions" were necessary in the definition of "deceit".||Adm|
Clause-by-clause examination of the Bill
Clause 2 - section 8(2)
|16. Members requested the Administration to consider whether the words "except in section 16A" were still required to be added before "to be construed" in section 8(2) of the Theft Ordinance, in view of the CSAs to be proposed to the definitions of "benefit" and "prejudice" in the new section 16A of the Ordinance, which confined "benefit" and "prejudice" to financial or proprietary gain or loss.
Consequential amendments -||Adm
17. In response to Mr Martin LEE, the Administration said that section 10(5) of the Independent Commission Against Corruption Ordinance (Cap. 204) specified offences which the Independent Commission Against Corruption could investigate. As a result of the enactment of the Bill, the new offence of fraud would be included as one of those offences listed under section 10(5) of Cap. 204.
Clauses 8 to 11
|18. Members requested the Administration to explain in more detail the effect of the proposed amendments in clauses 8 to 11 in relation to the relevant provisions dealing with forging of documents under the Merchant Shipping (Seafarers) Ordinance (Cap. 478) and its subsidiary legislation.||Adm
(Post meeting note : The Administration's response to the points raised at the meeting was circulated to members vide LC Paper No. CB(2)2052/98-99(01) dated 20 May 1999).
III. Date of next meeting
19. The next meeting was scheduled for 14 May 1999 at 10:45 am.
(Post meeting note : The meeting has been subsequently re-scheduled for 21 May 1999 at 8:30 am.)
20. The meeting ended at 10:45 am.
Legislative Council Secretariat
11 June 1999