Theft (Amendment) Bill 1998
Proposed offence of "Fraud"
Response to the Request from the Bills Committee
Request from the Bills Committee
At the meeting of the Bills Committee of the above Bill held in the morning of 11 February 1999, members of the Bills Committee requested the Administration to consider the following options in handling the Bill:
- to restrict the proposed new offence of fraud to circumstances in which there is financial or proprietary loss or gain and to abolish the common law offence of conspiracy to defraud (Option (a));
- to restrict the proposed new offence of fraud to circumstances in which there is financial or proprietary loss or gain and to retain the common law offence of conspiracy to defraud (Option (b)); or
- not to proceed with the Bill, i.e. to maintain the status quo (Option (c)).
Response from the Administration
2. The Administration has carefully considered the views expressed by members of the Bills Committee during the meeting and the above options. Option (a) follows the recommendations of the Law Reform Commission in its Report on the "Creation of a Substantive Offence of Fraud" ("LRC Report") published on 15 July 1996. The Administration, however, considers that should option (a) be adopted, the law of fraud would become defective because the new offence of fraud would not cover cases in which:
- the benefit or prejudice involved is non-financial or non-proprietary, e.g. where a breach of public duty is involved; or
- no deceit is involved.
Therefore, the Administration considers that Option (a) is not acceptable.
3. Option (b) implements the major aspects of the recommendations of the LRC Report, i.e. by restricting the new offence of fraud to circumstances in which there is financial or proprietary loss or gain. However, the Administration is of the view that under this option the new offence of fraud would not be able to cover cases in which the benefit or prejudice involved is non-financial or non-proprietary. While Option (b) remains an open option, it is not considered to be entirely satisfactory.
4. The Administration also considers that Option (c) is undesirable and would be contrary to the whole object of the LRC Report, i.e. that there should be a general offence of fraud. The purposes of creating a general offence of fraud include that it enables cases fitting within the definition of fraud, committed by a person acting alone, to be charged. It also enables a single charge to be brought in respect of a course of conduct which induces a series of acts or omissions in circumstances where, to charge another Theft Ordinance offence and to adequately reflect the criminality of the defendant, would involve bringing numerous charges.
5. In order to meet the concerns of members that the scope of the new offence would be too wide, the Administration is prepared to redefine the terms "benefit" and "prejudice" under the Bill so that they will refer to "financial or proprietary gain or loss" and to "a breach of public duty". Under the revised proposal, the common law offence of conspiracy to defraud would still be retained.
6. Under this proposal, "benefit" and "prejudice" will be re-defined to include any gain or loss arising from a public officer being induced by deceit to commit an act or make an omission, which would be contrary to his duty if he knew the true position. "Public officer" will refer to a person employed by a public body which will mean the Government, certain specified public bodies and any board, commission, committee or other body, whether paid or unpaid, appointed by the Government. In defining the term "public body", reference will be made to the definition of the same term in the Prevention of Bribery Ordinance, Cap. 201.
7. By redefining the terms of "benefit" and "prejudice", the scope of the new offence of fraud is confined to circumstances in which there is financial or proprietary loss or gain or there is a breach of public duty. It is considered that this will meet the concerns of the members of the Bills Committee and the Administration.
Department of Justice