LC Paper No. CB(2)2429/98-99
(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 Friday, 21 May 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 Jasper TSANG Yok-sing, JP
Hon Ambrose LAU Hon-chuen, JP
Hon Margaret NG
Public Officers Attending:
Clerk in Attendance:
- Mr Stephen WONG
- Deputy Solicitor General
- Mr John READING
- Senior Assistant Director of Public Prosecutions
- Ms Sherman CHAN
- Senior Assistant Law Draftsman
Staff in Attendance:
- Mrs Percy MA
- Chief Assistant Secretary (2)3
I. Discussion on the Administration's response to matters raised at the last meeting
- Mr LEE Yu-sung
- Senior Assistant Legal Adviser
- Mr Paul WOO
- Senior Assistant Secretary (2)3
(LC Paper No. CB(2)2052/98-99(01))
Proposed amendment to section 8(2) of the Theft Ordinance (clause 2 of the Bill)
Senior Assistant Director of Public Prosecutions (SADPP) advised that after careful consideration, the Administration was of the view that it was necessary to insert the words "except in section 16A" before the words "to be construed" in section 8(2) of the Theft Ordinance, in order to give full effect to the new offence of fraud set out in section 16A. He explained that the essential elements of the new offence of fraud, such as "benefit" and "prejudice" and "gain" and "loss", were specifically defined under the proposed section 16A(3). "Benefit" and "prejudice" were respectively defined as including any financial or proprietary "gain" or "loss", whether temporary or permanent. Whilst it was intended that "gain" in the definition of "benefit" and "loss" in the definition of "prejudice" were to have the same meanings respectively, as "gain" in section 8(2)(a) and "loss" in section 8(2)(b), the introductory words in section 8(2), i.e. "gain or loss in money or other property," were different to the words used in the definitions of "benefit" and "prejudice" in section 16A(3), i.e. "financial or proprietary gain/loss", although of similar meaning. SADPP said that the new offence of fraud had to be looked at in the context of the meaning of the definitions set out under section 16A. It would cause confusion and problems in interpretation if the meaning of the terms "gain" and "loss" where they appeared in the definitions of "benefit" and "prejudice" in section 16A was to be ascertained by reference to section 8(2). For the sake of clarity, therefore, it was considered appropriate to exclude the application of the definitions of "gain" and "loss" in section 8(2) to the new offence of fraud, by adding the words "except in section 16A" before the words "to be construed" in the existing section 8(2).
2. Members accepted the Administration's explanation and endorsed the amendment to section 8(2) as proposed in the Bill.
The definition of "deceit" (clause 3 of the Bill)
Reference to "relating to the past, the present or the future"
3. SADPP said that the proposed definition of "deceit" under the proposed section 16A(3) was similar to the definition of "deception" in the existing section 17 of the Theft Ordinance. He advised that the definition of "deception" in the English Theft Act 1968 differed from the Hong Kong definition in that the former referred to "deception as to the present intentions of the person", but made no reference to deceit relating to the "past" or "future". Arising from the research conducted by the Administration, it was noted that Professor Edward Griew in his book entitled The Theft Acts 1968 and 1978 considered that -
'"a deception...by words...as to fact" involves the making of an untrue statement as to some past or present fact...'
However, Professor Griew did not mention "future" fact, nor did he support his opinion by reference to any decided case.
4. SADPP further advised that an examination relating to the 1970 Theft Bill revealed that the then legislature's intention was that the definition should incorporate the best of the English definition whilst at the same time retaining the provisions derived from the definition of "false pretence" in the Larceny Ordinance (the predecessor to the Theft Ordinance), where "false pretence" was defined as including -
"...a false pretence or false representation relating to the past, the present or the future and a false statement or false representation of intention or opinion..."
The Administration felt that "deceit", in relation to the proposed offence of fraud, should also cover false representations as to future events. To illustrate this view, SADPP referred members to the situation given in paragraph 8 of the Administration's paper (LC Paper No. CB(2)2052/98-99(01)) where a person took possession of a property (a new car) from another person by deliberately making a false representation to the other person as to a future event (that he would pay for the car with interest after inheriting an estate from his father). SADPP said that, in order to make the law abundantly clear as to the legislative intention, the definition of "deceit" proposed in the Bill, which contained the reference to "the past, the present or the future", should remain intact.
5. Regarding the above example given in the paper, Mr TSANG Yok-sing opined that although the false representation concerned a future event, the intention to deceive was an existing fact. Furthermore, the fact which made the person's statement to the other person a false representation, i.e. that the estate had already been left in his father's will to his brother, was also an existing fact. Mr TSANG considered that prosecution for the new offence of fraud under section 16A might still proceed in that hypothetical case if the reference to "relating to the future" was removed from the definition of "deceit".
6. The Administration responded that a prosecution in like situations would be strongly contested in the absence of the reference to future events in the definition of "deceit".
7. Mr Martin LEE opined that there was a logical way of looking at the definition of "deception" in section 17 and "deceit" in proposed section 16A respectively. He said that the offence under section 17 had a fairly narrow focus, which referred specifically to the offence committed by any person of obtaining property belonging to another, by deception and with the intention of permanently depriving the other of such property. The offence of fraud under proposed section 16A, on the other hand, was a wider offence covering a much broader scope of fraudulent conduct. Therefore, for the purpose of consistency, the definition of "deceit" in section 16A should at least contain the same, if not more, elements than in the definition of "deception" in section 17. Since the existing definition of "deception" contained the reference to "the past, the present or the future", the same reference should also be included in the definition of "deceit".
8. Members agreed that to avoid the anomaly of inconsistency in law, the reference to "the past, the present or the future" should be included in the definition of "deceit" in section 16A.
Reference to "opinions"
9. The Administration advised that the term "opinions" was included in the definition of "deception" in section 17 for the same reason as representations as to past, present and future events were included, i.e. an intention to incorporate the best of the English definition whilst retaining provisions from the old legislation.
10. In elaborating, SADPP drew members' attention to the case of Bryan in 1857 (a copy of the facts of the case was attached to the Administration's paper). In that case, the prisoner was found guilty by the jury for obtaining money from pawnbrokers by false pretences, the pretences being that certain spoons were of the best quality and that they were equal to spoons of a specified brand (known as "Elkington's A"). The judges subsequently held that the prisoner had merely misrepresented the quality of certain spoons and that the misrepresentations merely amounted to puffing of goods, which was more a matter of opinion than a false pretence. The original conviction was quashed. SADPP advised that according to the opinion of Professor Griew and another eminent academic, Professor Sir John Smith, facts similar to those in the Bryan case would support a prosecution, although to date the concept did not appear to have been tested in Court. However, as pointed out by Professor Griew in The Theft Acts 1968 and 1978 -
"...Usually it is easy enough to identity a fact falsely asserted by words used. But difficulties can occur where the defence is in a position to argue that the statement was one of opinion rather than fact."
Professor Sir John Smith also opined in The Law of Theft that -
"The Theft Act gives no guidance as to whether a misrepresentation of opinion is capable of being a deception. In principle there is no reason why it should not be, where the opinion is not honestly held."
SADPP said that the Administration, in consideration of the offence of fraud, was of the view that the reference to "opinions" should remain intact in the proposed definition of "deceit", so that persons such as retailers were left in no doubt that if they falsely or recklessly express an opinion as to the value or quality of their merchandise, that such conduct would not be tolerated.
11. In response to Mr TSANG Yok-sing, SADPP said that a person who held a genuine belief or opinion about something, despite that opinion was wrong, would not be caught by the definition of "deceit". He admitted that it was difficult to prove a dishonest intention in relation to the offence of fraud, which was ultimately a matter of evidence relating to proof of the essential elements such as an inducement by deceit and the effect of the inducement etc.
12. Members were concerned that the inclusion of the word "opinion" in the definition of "deceit" could result in catching the "small flies", i.e. cases of mere commercial exaggerations by people with a view of selling a merchandise. The Chairman pointed out that such "trader's-puff" were common activities in the business world. She suggested that the Administration might consider making it clear in the speech at the resumption of the Second Reading debate what the new offence of fraud was not intended to cover.
13. The Administration replied that the proposed offence of fraud under section 16A was intended to focus on organized schemes of fraud rather the isolated, one-off type of deceptive acts. The Law Reform Commission (LRC)'s study, which recommended for the creation of a new offence of fraud, was triggered by the intended aim to deal with serious cases of fraud. The Administration added that relatively minor offences would be adequately covered by the existing section 17 of the Theft Ordinance.
14. SADPP also quoted the comments expressed by Professor Sir John Smith in The Law of Theft -
"A view of commercial morality very different from that of the majority of the judges in Bryan now prevails and deliberate mis-statements of opinion would today be generally condemned as dishonest, no less dishonest, indeed, than mis-statements of other facts - for whether an opinion is held or not is a fact - and the law should follow the changed attitude."
15. Mr Martin LEE agreed that the change in social attitude towards dishonest acts was a relevant factor which should be considered in the context of the proposed offence of fraud. He considered that people nowadays were exposed to greater risk than before of damage caused by deliberate mis-statements of opinion made by others, especially by those who held out to be experts or professionals who easily captured the trust of other people. Mr LEE said that in the end it was a matter of striking a right balance when it came to enacting legislation to ensure that only the condemnable conduct would be caught.
16. In response to Mr Martin LEE, the Administration advised that reference had been made to the Queensland model in drafting the offence of fraud. The Queensland legislation on "cheating" stipulated that -
"any person who by any means of fraudulent trick or device obtains from any other person any thing capable of being stolen ...."
"Trick" in that context could be interpreted to cover "opinion". In the UK, the Theft Act did not include the reference to "opinion".
17. Senior Assistant Legal Adviser pointed out that the LRC appeared to have taken a view different from that of the Administration. He referred members to paragraph 5.30 of the LRC's Report, which stated that -
"It is clear from the case law in Scotland and South Africa that the deceit which forms the basis of the fraud offence does not extend to mere expressions of opinion nor to commercial exaggeration. Commercial claims that a particular product is "the best" are matters better left to consumer protection measures and we do not intend that such conduct should fall within our proposed offence of fraud..."
Consequential amendments to the Merchant Shipping (Seafarers) Ordinance (Cap. 478) and its subsidiary legislation (clauses 8 to 11)
|18. Members considered that whether or not the definition of "deceit" should include the word "opinions" should be further discussed at the next meeting. To facilitate members to come to a concluded view on the matter, the Administration was requested to revert at the next meeting with further justifications for the proposed definition, having regard to the LRC's view and the concerns raised at this meeting.||Adm
19. Senior Assistant Law Draftsman (SALD) advised that clauses 8 to 11 of the Bill sought to introduce consequential amendments to Cap. 478 and its regulations as a result of the creation of the new offence of fraud. The sections to be amended were -
- section 128(3) of the Merchant Shipping (Seafarers) Ordinance (Cap. 478);
- section 17(3) of the Merchant Shipping (Seafarers) (Certification of Officers) Regulation (Cap. 478 sub. leg.);
- section 7(2) of the Merchant Shipping (Seafarers) (Engine Room Watch Ratings) Regulation (Cap. 478 sub. leg.); and
- section 7(2) of the Merchant Shipping (Seafarers) (Navigational Watch Ratings) Regulation (Cap. 478 sub. leg.)
20. SALD said that the contents of the above provisions were basically similar, i.e. they provided that the power to cancel or suspend a certificate of competence or other relevant documents might be exercised against a document holder who had been convicted of offences relating to false representation, fraudulent using or conspiracy to defraud in relation to a document referred to in the relevant provisions. With the coming into force of the new offence of fraud, it was considered that the power to cancel or suspend the relevant documents under these provisions should similarly be extended to the new offence of fraud in relation to the relevant documents.
21. In response to the Chairman, SALD advised that the above provisions in Cap. 478 and its subsidiary legislation were the only provisions containing cross-references to the offence of conspiracy to defraud. Provisions relating to certificates or documents of a different kind were framed in more self-contained terms in other Ordinances and were not affected by the Bill.
22. Members agreed to the proposed amendments in clauses 8 to 11 of the Bill.
(Post-meeting note: The Administration's response to the points raised at the meeting was circulated to members vide LC Paper No. CB(2)2214/98-99(01) dated 7 June 1999)
II. Date of next meeting
23. The next meeting was scheduled for 9 June 1999 at 8:30 am.
24. The meeting ended at 10:05 am.
Legislative Council Secretariat
9 June 1999