A businesswoman from Hong Kong, who exploited a computer glitch to obtain free casino credits, argued before the Court of Appeal yesterday that she was not guilty of dishonest misappropriation - because she knew there was a system error.

Ho Man Yuk's lawyer, Mr R.S. Bajwa, said an accused person can be convicted of dishonest misappropriation only if he had an innocent or neutral state of mind when he first came into possession of the property in question. Mr Bajwa was relying on a High Court judgment in a case involving a person who found a wallet on the floor and kept the cash.

The apex court, comprising Chief Justice Sundaresh Menon and Judges of Appeal Judith Prakash and Tay Yong Kwang, did not accept this argument.

The court will give detailed reasons at a later date.

CJ Menon said that to make out a conviction, it is not necessary for the accused to have an innocent or neutral state of mind when he first comes into possession of the property.

He said the law was drafted to make it an offence even when the accused took the property innocently at first and later formed a dishonest intention.

But this does not mean that it is an offence only if he took it innocently and subsequently formed a dishonest intention.

Ho had roped in two others to redeem over $1 million in gambling credits after discovering a glitch that allowed her to redeem an unlimited number of credits. The trio eventually encashed winnings amounting to $875,133.56. Some of that amount was spent at the gambling table and some transferred to third parties.

The three were convicted of conspiracy to commit dishonest misappropriation and sentenced to between 12 and 26 months by a district court.

On appeal, they argued that the charge cannot be made out because the money did not come into their possession innocently or in a neutral manner.

This was dismissed by a High Court judge, who ruled that initial innocent possession was not a requirement for dishonest misappropriation.

Ho later referred the question of law to the Court of Appeal.

Yesterday, Deputy Public Prosecutor Leong Wing Tuck argued that it was clear from both a plain and contextual reading of the law that there was no such requirement. Ho was allowed to start her sentence on Sept 4.