Evasion of Liability by Deception

Evasion of Liability by Deception

The offence of “Evasion of Liability by Deception” is provided under section 18B of the Theft Ordinance (Cap. 210). The maximum punishment is 10 years’ imprisonment. 

A person commits this offence if, acting dishonestly and using deception, he avoided paying a debt, delayed a payment, or reduced a liability they are legally required to discharge. There are three main categories of how a person may evade liability by deception. 

The first category covers the scenario where a person makes a deception dishonestly such that he does not need to pay for a debt he owes. For example, a man borrowed money from his neighbour. When the repayment was due, he told a false story about how it became impossible to find the money so as to persuade the neighbour to relieve him of the loan. 

The second category covers the scenario of stalling to pay the debt. Where a person dishonestly makes a deception to induce his debtor to wait for his payment or to give up, such that he does not need to pay for the debt, he would be guilty of the offence. Hence, when a person dishonestly issued a post-dated cheque to delay the repayment whilst knowing that the cheque will be dishonoured, he may be guilty of the offence. 

The third category covers the scenario where a person dishonestly gets out of his debt or gets to reduce the amount of his debt by deception. 

Examples include: attempting to avoid payment after consuming a meal in a restaurant by falsely claiming that payment had already been made; seeking to evade a fare on the underground railway by showing an inspector a season ticket that did not cover the journey; using a stolen credit card to pay for petrol.

A simple inability to pay a debt due to business failure is not a crime. The core of the offence is the dishonest deception used to make the creditor wait or stop asking for the money. If a debtor shows a genuine tendency or attempt to repay, it may help negate a finding of “dishonest intent”.

For the purposes of this section, “liability” refers to a legally enforceable obligation. This refers to debts that can be enforced in a court of law, such as payment for goods delivered, services rendered, or a business investment. The phrase “legally enforceable” is used to distinguish such liability from debts that cannot be enforced at law, such as gaming debts or debts arising from unlawful conduct.

It is not necessary that a liability already exists at the time of the deception. The offence can still be committed if the deception results in someone being excused from, or having a reduction in, a liability that would otherwise arise.